Surprisingly strong. That’s the best way to describe the retail sector in West Michigan.
According to the second quarter retail report from NAI Wisinski of West Michigan, the overall retail vacancy rate in Grand Rapids and the rest of West Michigan fell to 5.7% in the second quarter. At the same time, asking rents have increased.
That might be considered a surprise. During the height of the pandemic, the consensus was that the retail sector was ready to experience a surge of vacancies. That didn’t happen, mostly because retailers became creative: They enhanced their delivery services, online storefronts and added new perks such as curbside pick-up.
Those tweaks kept the customers and business coming. The retailers serving West Michigan are no different, and are now reaping the rewards of their creativity.
Retailers seem especially interested in Grand Rapids and its surrounding communities. NAI Wisinski reported that several are expanding their footprint in this market, including fuel stores such as Kum and Go; high-end car washes including Drive and Shine and Tommy’s Express; and Take 5, Jiffy Lube and other quick-lube retailers.
But it’s not just auto-related retailers making an impact here. NAI Wisinski said that Ross Dress for Less has begun its expansion into West Michigan with stores in Muskegon, Grandville, Wyoming and Benton Harbor, while Pop Shelf, an affiliate of Dollar General, is increasing its store locations in the region, too.
Experiential retailers are targeting West Michigan, too. A good example? Main Event, a 48,000-square-foot entertainment center, is planning a 2024 opening at Woodland Mall in Grand Rapids, according to NAI Wisinski.
That doesn’t mean that the West Michigan retail sector doesn’t face challenges. The region offers limited inventory for expanding retailers. Increased interest rates and construction costs have boosted rental rates at new retail projects to an an all-time high in the West Michigan area. Higher interest rates have also affected the sales volume of retail shopping centers.
According to NAI Wisinski, the total average rental rate for retail properties in the West Michigan market stood at $12.62 in the second quarter. In a less positive stat, total net retail absorption for the market was negative 31,118 square feet for the quarter.
