CLEVELAND RETAIL MARKET
Randall J. Goodman
The
predominant trends in the Cleveland metropolitan area are the continued
expansion of grocery stores and big box retailers, either in freestanding
locations or shopping centers, in association with smaller box tenants
and national and regional small tenant stores, says Randy Goodman,
principal with Beachwood, Ohio-based Goodman Real Estate Services Group.
The primary grocery stores expanding are Giant Eagle, Tops, and Heinens.
In the big box arena, Wal-Mart, Target, Sams Club, Costco, Lowes
Home Improvement Warehouse, The Home Depot, and Kohls are the major
players. Smaller box retailers expanding into the typical shopping center
concept include Marshalls, TJ Maxx, TJ Maxx N More, JoAnn ETC, Bed
Bath & Beyond, Linens N Things, Circuit City, Barnes & Noble,
Babies R Us, and Dicks Sporting Goods.
The most dramatic change to the retail landscape in the metropolitan area
is the addition of the lifestyle center concept in the suburban markets.
Legacy Village is a lifestyle center in Lyndhurst. The project is situated
on the former TRW property in northeast Ohio across the street from Beachwood
Place. Legacy Village, which is under construction and opening in October,
has secured many high-end retailers and restaurants including Crate &
Barrel, The Cheesecake Factory, Z Gallerie, Anthropologie, Viking Culinary
Arts Center, EXPO Design Center, Talbots Collection (the chains
second largest store in the U.S.), Joseph Beth Booksellers, Galyans,
Brio Tuscan Grill, California Pizza Kitchen, Coldwater Creek and Restoration
Hardware. Most of the tenants are new and unique retailers in the market
and will only have one or, at most, two locations in the entire four million-person
trade area.
The market has been underserved in this type of retail, Goodman
says. This project provides a solid lineup of quality tenants and
a unique shopping atmosphere, something the customer currently has to
travel to other cities to enjoy. Beachwood-based First Interstate
Properties is developing Legacy Village.
Another unique and significant project is University Square in University
Heights. The developer, Providence, R.I.-based Starwood Wasserman, has
taken a 13-acre site in a dense, strong demographic area and is constructing
a 600,000-square-foot, multi-level, vertical power center around a 2,500-car,
five-level parking structure. The architecture is interesting and each
shopping level has direct access to the parking deck. Currently open is
a two-floor, 160,000-square-foot Kaufmans, and opening soon are
a 160,000-square-foot Target, a Tops grocery store, TJ Maxx N More
and many other power center-type retailers.
Heritage Development is completing a power center, The Marketplace at
Four Corners, in Bainbridge. Although it is a typical power center anchored
by Wal-Mart, Kohls, Dicks Sporting Goods, Linens N Things,
Babies R Us, and Michaels, its location is significant. For
years, major retailers have tried to capture the prime suburbs of Solon,
Twinsburg, Bainbridge and Aurora, by having locations in the southeast
sections of the market. Until Heritage took an overlooked site and assembled
the listed retailers, all other attempts have been unsuccessful to capitalize
on these fast-growing communities.
Other significant developments include Crocker Park being developed by
Robert Stark Enterprises and The Shops at West End being developed by
a joint venture of CenterPoint Properties and Jeffrey R. Anderson. Both
of these are projects are mixed-use lifestyle centers on Clevelands
west side, and they are competing for many of the same retailers. Crocker
Park will be anchored by Van Maur and Galyans Trading Company; however,
construction has been delayed and the opening date is uncertain. The Shops
at West End, projected to open in 2004, has proposed a theatre, multiple
restaurants, a high-end grocery store and all of the Williams Sonoma concepts
among its initial stores.
Cleveland is experiencing development or redevelopment in the established
suburbs, as well as in the new suburbs, where commercial development is
chasing residential growth, Goodman says. On the east side, there
has been activity in Mayfield Heights, Streetsboro, and Macedonia and
the previously mentioned projects in Lyndhurst, University Heights and
Bainbridge. On the west side, Brooklyn has experienced new development,
and redevelopment is currently proposed in Lakewood with The Shops at
West End. The west side also has experienced growth in the newer suburbs
of Westlake, Sheffield and Avon, where Avon Commons was recently completed.
It is an 800,000-square-foot power center anchored by Target, Costco,
The Home Depot, Kohls, Old Navy, Linens N Things, Michaels,
Marshalls, World Market and Heinens grocery store. Wal-Mart is also
under construction in Avon.
Clevelands primary developers specializing in retail projects are
Heritage Development, First Interstate Properties, The Visconsi Companies,
Developers Diversified, Carnegie Development, Robert L. Stark Enterprises,
Starwood Wasserman and CenterPoint Properties. The Visconsi Companies
has developed numerous types of retail property throughout the area, but
recently has been the most active in the grocery-anchored community centers.
First Interstate, Visconsi and Heritage put up the most space, and CenterPoint
Properties is the leader in redevelopment in the inner-ring suburbs.
The Cleveland Metro consumer will have many new retailers and restaurants
to explore in 2003. New retailers to the area include Expo Design Center,
Crate & Barrel, Galyans, Z Gallerie, Restoration Hardware, Organized
Living, Viking Culinary Arts Center, Anthropologie, TJ Maxx N More,
The Cheesecake Factory, Brio Tuscan Grill, California Pizza Kitchen, Stir
Crazy, Atrias Restaurant & Tavern, Claddagh Irish Pub, Mitchells
Seafood, Coldwater Creek and Trader Joes. Costco recently opened
their first two stores in the area.
The north/south corridors of Route 8 and Interstate 77 between Akron and
Cleveland have long been viewed as a gap between two cities. These
areas have been growing together residentially and, in the future, should
see more commercial activity, Goodman says.
Cleveland is a major market, the 16th largest Designated Market Area (DMA)
in the United States. The city contains 34 percent of Ohios population
according to the Greater Cleveland Growth Association. The area
has many attractions, such as its museums, live theater, amusement parks,
Lake Erie and sporting events, that draw northeast Ohios four million
residents to it, however, it is long overdue to become more of a regional
draw for shopping, Goodman says. With the exception of Beachwood
Place, a regional high-end mall, the regional malls and shopping centers
are virtually identical whether you shop in Akron, Canton, Youngstown
or Cleveland. This homogeneity is evident throughout the United States,
but in many major markets there are usually one or two exceptional shopping
centers or shopping areas featuring different tenants and atmospheres
not duplicated throughout the entire metropolitan area. The citys
new lifestyle centers, with the unique tenants they attract and the ambiance
of the outdoor main street design, should fill this retail void.
Randall J. Goodman is principal of Goodman Real Estate
Services Group.
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