HEARTLAND SNAPSHOT, JANUARY 2005

St. Louis Retail Market

The current trend in retail development in St. Louis is the development of larger power centers, anywhere from 700,000 to 1 million square feet, containing mostly big box retailers such as grocers, home improvement centers, theaters and other super store concepts, according to Mark Pearl, the director of development with St. Louis-based Walpert Properties. Another trend in retail development includes the town center concept, which contains retail on the first level and residential and/or office on the upper levels. Some town center concept developments currently under construction include sites in Wildwood at Manchester and Taylor Road; in Kirkwood at Kirkwood and Monroe roads; and in Creve Coeur at Ballas and Old Ballas roads.

In West County, The Boulevard is a planned urban village with an estimated cost of $250 million. It is centrally located in Richmond Heights on Brentwood Boulevard across from the Galleria, and will contain a diverse mix of lifestyle shopping and dining, upscale rental apartments and condominiums, and Class A office. Retailers include Crate & Barrel, P.F. Chang’s China Bistro, Maggiano’s, Ann Taylor, Jared Jewelers and The Bombay Company.

“Chesterfield Valley has been a hot spot for retail development during the past few years,” Pearl says. “The construction of a 500-year floodplain levy along the Missouri River opened up a vast area of land for new development.” The resulting developments include an open-air power center that extends 1 mile and contains big box retailers such as The Home Depot, Circuit City, Wal-Mart and Sam’s Wholesale, Wehrenberg Theater, Super Target, Lowe’s Home Improvement Warehouse, Best Buy, Golf Galaxy and many more.

Two other power center developments in the St. Louis area include Gravois Bluffs in South County containing Target, Shop ‘N Save and Wal-Mart, and Greenmount in Shiloh, Illinois, which includes Target and Dierberg’s. “Both areas are showing a significant growth in residential population and there is a good supply of open land available for expansion of the retail sector,” Pearl says.

Two destination malls have also made an impact on the market. West County Mall went through a redevelopment phase and now includes Nordstrom, Lord & Taylor, JC Penney and Famous Barr. St. Louis Mills features retail and entertainment including Off 5th Saks Fifth Avenue Outlet, The Children’s Place Outlet and Off Broadway Shoe Warehouse.

“Even with the addition of St. Louis Mills, an entertainment mall, we have seen a shift in retail sales away from the mall concept and toward open-air center shopping,” Pearl says. “Additionally, with the success of multiple power centers, we see competitors located in the same retail development, basically feeding off each other’s retail traffic.”

Some of the most active developers in St. Louis include Pace Properties, which is developing The Boulevard in Brentwood, and G.J. Grewe, Inc., the developer of Gravois Bluffs Plaza in Fenton. Koman Group, another very active developer, is currently involved in developments in Wildwood, called Wildwood Town Center, and MLK Plaza in St. Louis. Sansone Group, another strong developer in St. Louis, is actively developing Shoppes at Cross Keys in Florissant; Plaza on the Boulevard in Jennings; and Southtown Center in St. Louis. THF Realty, noted as one of the largest private developers in the nation, is behind the development of two power centers in St. Louis — Chesterfield Commons in Chesterfield and Maplewood Commons in Maplewood.

“Strong development activity and urban sprawl have sparked the interest of both existing and new retailers to the St. Louis market,” Pearl says. Notable new businesses include American TV and Appliance, Crate & Barrel, Golf Galaxy, Maggiano’s, Cold Stone Creamery, Hemispheres, Hobby Lobby and Trader Joe’s. Other companies seriously considering this market include Sears Grand and Ross Dress For Less.

According to a report provided by Dave Randolph of Grubb & Ellis/Krombach Partners, the average vacancy rate for the metropolitan area is 7 percent, which has been consistent for several years, with very little fluctuation. Out of the seven counties reported, most occupancy rates were above 95 percent, with the exception of St. Louis City and North County. Some residential developers are concentrating their efforts on the revitalization of the City of St. Louis. Older buildings are being converted into loft-style condominiums and apartments. “As this revitalization continues, we anticipate that the residential population will grow and occupancy rates for retail properties will slowly increase,” Pearl says.

As part of the revitalization taking place in downtown St. Louis, the St. Louis Cardinals baseball team will soon have a new ballpark. Construction is underway and the team is expected to be able to start the 2006 season in the new park. The site is located next to the existing ballpark and referred to as Ballpark Village. Along with the new park, plans are underway to construct the village to include entertainment venues, retail facilities and office space. Plans to redevelop existing buildings surrounding the stadium complex are being discussed as well. Many of the warehouse buildings in the area will be converted into loft apartments, which is currently happening in other areas of downtown St. Louis.

Retail development activity in St. Louis has occurred at a steady pace for the past several years, with Western St. Charles County as the hub of the majority of this activity. “As urban sprawl continues to occur to the west of the city, a vast new market for retail development has been established,” Pearl says. “The western corridor of Highway 40 — encompassing O’Fallon, Dardenne Prairie and Wentzville — is the hottest market, attracting expansion of both established retailers in the market as well as new ones. The residential community is growing at a phenomenal pace.” Strong residential growth in this area has stirred interest from every type of retail business, including grocers, home improvement centers, theaters, restaurants and discount stores. “Many developers already have a presence in the St. Louis market and see Western St. Charles County as a new submarket,” Pearl says.

Another area of interest for retail developers is in Illinois. Across the Mississippi River from downtown St. Louis, communities such as Fairview Heights, O’Fallon, Shiloh and Edwardsville are experiencing residential growth, along with infrastructure improvements, that have enticed merchandisers to position themselves in this market.

“We believe that retail development in this area will significantly increase within the next 18 to 24 months,” Pearl says.



©2005 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.