February 29, 2016
Make Way for Retail
By Kate Miller Morton
– The Memphis Business Journal –
With a population just under 40,000 Collierville doesn’t yet boast the rooftops required for a retail boom, but plenty of retailers and retail developers have their eyes on this affluent community.
Rapid growth and higher-than-average household incomes have attracted the interest of big box retailers such as Target and Kohl’s as well as department stores such as Dillard’s and Parisian.
Though it has just 1.2 million square feet of retail space, retail experts say it’s just a matter of time before Collierville is a major player.
“Collierville will eventually make its way to become one of the three super-regional trade areas in the city,” says Danny Buring, a retail real estate broker with the Shopping Center Group of Tennessee.
From 1991 to 2001, Collierville’s population grew by 153%. Not surprisingly its registered businesses grew by 250%.
“It’s still green out there in context of population, but if you look at the growth it’s probably the highest growth in the county,” Buring says. “What’s really driving it is the income. You’re looking at median income north of $100,000. That’s a pretty staggering number. In context of the city, it’s two-and-a-half times the average for the MSA.”
Collierville’s median household income is $115,000. Germantown has the second highest median income at $107,318 and 50,330 respectively.
Collierville’s existing retail facilities are 96.7% occupied, but no new space is expected to hit the market this year.
“The people that move out there are used to having to go to Germantown, used to having to go to Wolfchase and maybe as far as East Memphis to go shopping and it’s not that inconvenient,” Buring says.
CB Richard Ellis vice president Scott Barton says zoning and the reluctance of retailers to locate off Poplar are also obstacles to new construction. With nearly all viable Poplar sites gone, he says residentially zoned land will have to be rezoned commercial or commercial developments will have to move on.
Much like Germantown, rezoning in Collierville isn’t easy, and Baron says a more likely scenario will be the migration of commercial developments to Byhalia toward Nonconnah and Houston Levee. Two developments are already going up in the area with Target and Schnucks as the main anchors.
Collierville’s retail space will nearly double when the 850,000 square-foot, open-air lifestyle center Carriage Crossing is completed. The center will be located on the southeast corner of Houston Levee and Nonconnah. Built by Montgomery, Ala.-based Jim Wilson & Associates, Inc., the center already had commitments from anchor tenants Dillard’s and Parisian, an upscale department store owned by Saks, Inc.
“If they get Parisians they’ll automatically have the nicest department store in town,” Burning says. “It’s a slightly higher brand than what Goldsmith has to offer. It would be something unique, their first entrance into the market.”
Buring says new retail space will undoubtedly pop up near the center, including an already planned power-center, but he doesn’t anticipate anything to the degree of what’s occurred around the Wolfchase Galleria mostly due to the fact that it’s not near an interstate.
Buring says Collierville doesn’t have the density to support many big box retailers, but that is beginning to change.
“Kohl’s coming out there at Gallina is going to be a huge coup for Collierville because they could have gone anywhere with their first three stores,” Buring says. “With this location they feel like they’re going to pull Germantown, Collierville and to some degree, Southeast Memphis, and it’s all going to converge there at Houston Levee.”
Boyle began building its first Collierville retail project in 1998. Located at the corner of Poplar/Houston Levee and Winchester. Gallina Centro now totals 150,000 square feet leased to Kroger, Steinmart, Walgreen’s, and McDonald’s.
Boyle senior vice president Carey Whitehead says the center will eventually total 400,000 square feet, but development has been slowed by the economy.
“The economy is slow and although the market is excellent the retailers in general are just a little more conservative than three of four years ago,” he says.
Given a choice between Cordova and Collierville, Whitehead says Collierville is a better choice.
“The Cordova market has got unbridled retail growth and unbridled retail opportunity all up and down Germantown Parkway and Highway 64, which we don’t think is very good land planning,” he says. Collierville is taking a better land-use approach by concentrating major retail at major road intersections rather than allowing continuous retail zoning all up and down all major roads like they did at Germantown Parkway and Highway 64.”
In addition to reducing traffic congestion, Whitehead says Collierville’s approach encourages investment.
“If you build a center and there are only going to be three more centers in the area, it’s generally more valuable than if you build a center and there will be 50 more in the area,” Whitehead says.