Vacancies are up, but so are rents. And speculative construction has returned to the market. That’s the news from CBRE’s second-half 2014 look at the retail sector in Lansing, Mich.
Vacancy rates in Lansing’s retail sector did go up in the second half of last year, rising to 16.2 percent from 16 percent. But this only tells part of the story. Retail space is in demand in the market’s high-traffic areas, and the city’s East submarket is especially strong, seeing the return of speculative construction.
New retailers are also arriving in the Lansing market, including Phoenix-based Fresh Thyme Market, a high-end grocer that will soon open in the East Lansing submarket.
Fresh Thyme isn’t the only grocer arriving in the market. Whole Foods will soon fill a stand-alone 35,000-square-foot store on Grand River Avenue in the East submarket. Also in this market, two mixed-use projects are in the middle of construction: Lake Lansing Place, a three-story, 30,000-square-foot office and retail building, and Trowbridge Village, a multi-building redevelopment project. This project will bring 13,000 square feet of new retail space to the western border of Michigan State University.
The market will also welcome a new 7,500-square-foot strip center for development at the former Goodyear site on Grand River, just east of Marsh Road in Okemos.
New construction in this sector will get a boost in 2015, according to CBRE. The company points to a Lansing Urgent Care breaking ground in Haslett, a future Auto Zone on West Saginaw in Grand Ledge and a new branch of financial institution MSUFCU in Okemos. O’Reilly’s Auto Parts will soon break ground on North East Street in Lansing and on Grand River in East Lansing.
The Lansing market did see plenty of retail spaced absorbed during the second half of 2014. CBRE pointed to Fresh Thyme Market’s lease of 31,000 square feet formerly occupied by Goodrich Shop Rite. TJ Maxx will soon fill 22,000 square feet at the Frandor Shopping Center, and Family Farm & Home has leased 28,000 square feet in the Charlotte Exchange retail center.
Even with these moves, the greater Lansing market saw negative absorption of more than 24,000 square feet. Blame that on the recent vacancies left behind by retailers such as Dots, Family Dollar, Dollar Palace and ACO Hardware.
