DATE: Friday, October 10, 1997              TAG: 9710100680

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER 

DATELINE: RICHMOND                          LENGTH:   59 lines

COMMERCIAL BUILDING BOOM IS MAKING ROOM AS SHOPPERS SEE MORE LARGE STORES, OTHER RETAILERS CARVE SMALLER NICHES.

The people who swing the deals that bring you everything from Boston Market restaurants to Super Kmarts see no slowdown in Hampton Roads' explosive commercial real estate growth.

``If they keep coming, they'll keep building,'' said Mike Zarpas of Robinson Sigma Commercial Real Estate Inc. in Virginia Beach.

Last year, workers broke ground on 12 shopping centers in Virginia, including two apiece in Richmond and Hampton Roads, according to the International Council of Shopping Centers, a New York-based industry group.

Zarpas - one of about 500 real estate brokers, retailers and others attending a conference Thursday in Richmond - said he expects at least seven shopping centers to be built in Hampton Roads next year.

While shoppers should continue to see more gargantuan outlets like Barnes & Noble and Home Depot, real estate officials expect other retailers to carve niches in tinier stores.

Sears Roebuck & Co., for example, has chosen to debut smaller hardware stores in communities rather than compete with the likes of Lowe's, HQ-Home Quarters Warehouse and Home Depot.

``I think there is a definite return to small shops,'' said Gerald Divaris, president of Divaris Real Estate in Virginia Beach. ``I mean, I don't need to see 25 types of hammers.''

Still, the average store size is increasing, said John Konarski III, staff vice president at the International Council of Shopping Centers. Last year, the average store was 58,000 square feet, but that has since climbed to 66,000 square feet, he said.

Ironically, the average shopping center is shrinking, Konarski said. That's mainly because developers are building more small, neighborhood strip centers, he said.

Konarski, who spoke during Thursday's real estate conference, said he sees other retail trends shaping Virginia.

First, he said, he sees retailers reinventing themselves to answer customers' demands. Circuit City's CarMax, he said, is a good example. CarMax, which plans to open one of its no-haggle, used-car dealerships in Chesapeake, takes a ``store'' approach to selling used cars, he said.

With suburban areas filling up, retailers also are beginning to look more favorably on urban areas they once eschewed, Konarski said. Old Town Alexandria, he said, has become the ``new Georgetown.'' And downtown Norfolk will soon get MacArthur Center, an upscale mall, as well as other development.

But the growth in Hampton Roads and other markets is expected to meet with some casualties. There should be more consolidation in several sectors, including drugstores, supermarkets, bookstores and home improvement stores, Konarski said.

That could present some challenges to managers who need to fill gigantic box-like buildings in their shopping centers. But as long as the retail boom continues, they may be able to fill those spots with other merchants.

``That's the optimal situation,'' Konarski said.

Konarski said he also sees some danger in the growing number of retailers, mainly smaller merchants, filing for bankruptcy protection merely to ``get out of'' shopping-center leases.

``That's not what bankruptcy is for,'' he said. ``That is wrong.''

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