Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, June 12, 1994 TAG: 9406210046
SECTION: BUSINESS PAGE: F1 EDITION: METRO
SOURCE: By SANDRA BROWN KELLY| |STAFF WRITER
DATELINE: LENGTH: Long
Three more theaters for Tanglewood?
The Gap and the theater expansion are being negotiated. In fact, there could be a flurry of activity at the Roanoke Valley's shopping centers in coming months.
The Kroger Co. will leave Crossroads Mall at the end of this month replacing the supemarket with a new store next to Lowe's Superstore at Towne Square shopping center. This will free up 54,000 square feet at Crossroads, the area's oldest mall, but there's a hot prospect for the space, Books-A-Million of Birmingham, Ala.
Shifts can also be expected among small retailers as Tanglewood's new owner works on a long-range plan for the property and Valley View reviews its leases, many of which expire next year.
The total amount of selling space for Roanoke retailers remains at about 4 million square feet although there was a slight increase last year when Wal-Mart expanded at Hunting Hills Plaza. The overall occupancy for the Valley's retail real estate went up 6 percent, however, with the arrival of three new anchor stores - Goody's Family Clothing at Crossroads and Tanglewood malls and MJ Designs at Towne Square.
Commercial leasing agent Millie Moore, who for six years has surveyed the area's retail space, says there are tenants waiting in the wings, but there's not much space for them to consider.
For centers of 50,000 square feet and larger, the size cutoff for Moore's survey, occupancy stands at 92 percent in centers on the north side of the metro area and 95 percent on the south side. The figure for north-side shopping centers reflects a 10 percent improvement from 1992 to 1993.
The local occupancy is comparable to national rates, she said.
"We're ripe for a new center," said Moore, who runs Boone & Co.'s commercial real estate department.
"While one year ago, we had both anchor and small shop space to offer to prospects, now we are just about out of both," she said.
Does this mean the area will get a new mall?
Not likely, said Moore, unless it's a Wal-Mart Supercenter, which already is in the works for three locations in the larger region: Roanoke, Franklin County and the New River Valley.
Moore doesn't include small strip facilities, such as neighborhood-oriented centers anchored only by a supermarket, in her report, but she said those are the places with tenant drought. Such centers have an abundance of 1,200-square-foot to 1,400-square-foot vacancies that depend on small, often local retailers, who find it hard to get start-up money, Moore said.
"Even hair salons want to be in major centers," she said.
The leasing agent for Valley View Mall agrees with Moore's assessment that retail space is reaching saturation.
"But it's not there yet," said Steven E. Sacks, vice president for special projects for Faison Associates in Charlotte, N.C.
Faison owns Valley View and Hunting Hills Plaza in Roanoke and Market Place in Christiansburg. Sacks handles the leasing for them and two other properties. He says the existing shopping power in the area doesn't justify another regional mall.
He and other mall operators are putting their energies into improving the mix of tenants in their facilities, fine-tuning the presentation of current tenants, and finding ways to get shoppers to come in.
Sacks does confirm that he is trying to close a deal with The Gap, the San Francisco chain that dominates the casual clothing field and sister store of upscale Banana Republic. The word from workers in Gap stores outside Roanoke is that the popular clothier will be in town by November. Gap's corporate office won't say anything except that Roanoke is somewhere on its expansion list.
Sacks said he also is talking with four other retailers who are not currently in the area, and he has had conversations with several department stores about their filling the last anchor spot at Valley View.
He said the department store contacts are not far enough along to say if anything will come of them in a year or even three years.
The space for a sixth anchor store at Valley View may not be conspicuous to shoppers, but the mall's original plans provide space for another department store across from Leggett at the Sears end of the mall.
Setting up a new anchor would require construction and would be a long-term project. Sacks, meanwhile, is thinking of making some changes soon in that part of the mall. He's noted that Valley View doesn't have space for a food court - a standard feature of malls its size. And if most of Valley View's food vendors were brought together, he could expand eating space into the mall common area.
Sacks said now is the time to make changes, because the center's original 10-year leases are coming up for review. He won't say which stores might leave Valley View, however, although two tenants, Brooks' Fashions and Ormond are in Chapter 11 bankruptcy and have announced plans to close.
Across town at the Roanoke Valley's second largest mall, Tanglewood, the focus also is on attracting another anchor tenant and perhaps rearranging some others.
For example, Brendle's has too much space and TJMaxx needs more, said John Kane, whose Raleigh, N.C., company recently purchased the center.
From the time John M. Kane Co. bought Tanglewood this spring, Kane has talked about the need to add a two-level tenant to the Brendle's end of the mall. He wants to increase traffic on the upper level. The opposite end of the mall where J.C. Penney is located got more shoppers to come upstairs when Goody's Family Clothing opened upstairs last year. But it's still hard to get people upstairs.
Kane, just like Sacks, is talking with a variety of prospects. He said he and Carmike Cinemas Inc. have been discussing the three-screen expansion, doubling the size of its current operation, for several months.
"Both parties are trying to get the deal done," Kane said.
The expansion of the theater complex on the mall property would use now-vacant space next to the theater. Through the years, that space has housed a variety of short-lived restaurants.
Kane said his plans are to build on Tanglewood's position as a local mall. "We're not trying to be a Valley View," he said.
Kane's company also is trying to buy Towne Square, anchored by a collection of superstores, but he said the deal has not closed mainly because he doesn't have the financing settled yet.
Towne Square, near Roanoke Regional Airport is owned by a unit of First Union Corp., which acquired it several years ago in a foreclosure sale. It has steadily added new tenants. MJ Designs, Wicker World, a kitchen cabinet store and S&K Famous Brands Inc. opened at the center in recent months.
S&K's move to Towne Square was one of two expansions by clothing stores in the area. Liz Barudin, who owns Present Thyme at Tanglewood Mall opened at Towers Mall last month. The Roanoke Valley seems certain to get a new clothing store, too.
Jos. A. Banks Clothiers Inc., the Hampstead, Md., retailer of men's and women's tailored apparel is negotiating for two sites for catalog stores.
Skip Briggs, vice president of catalog operations, won't say where the stores might go, but he said the company likes to be outside malls because it doesn't keep mall hours.
The catalog division is a new direction and there are only five stores so far. The catalog stores display the entire line of merchandise so that customers can try it on for size, "but you can't take it with you when you go," Briggs said.
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