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 Heinen’s. In the big box arena, Wal-Mart, Target, Sam’s Club, Costco, Lowe’s Home Improvement Warehouse, The Home Depot, and Kohl’s 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 Dick’s 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 chain’s second largest store in the U.S.), Joseph Beth Booksellers, Galyan’s, 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 Kaufman’s, 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, Kohl’s, Dick’s 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 Cleveland’s west side, and they are competing for many of the same retailers. Crocker Park will be anchored by Van Maur and Galyan’s 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, Kohl’s, Old Navy, Linens ‘N Things, Michaels, Marshalls, World Market and Heinen’s grocery store. Wal-Mart is also under construction in Avon.

Cleveland’s 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, Galyan’s, 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, Atria’s Restaurant & Tavern, Claddagh Irish Pub, Mitchell’s Seafood, Coldwater Creek and Trader Joe’s. 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 Ohio’s 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 Ohio’s 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 city’s 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.




©2003 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.




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