The Ocean State now has their share of national retailers to add to the Rhode Island marketplace - by Dan Feiner

MG Commercial" width="150" height="150" /> Dan Feiner, MG Commercial

Rhode Island’s retail leasing market continues to be active and expands its footprint with several national retailers. Those retailers spurring the activity are not dissimilar to the ones in previous years. They include full service national and local restaurants, fast food establishments, dollar stores, automotive parts, health and fitness centers and an array of other retailers including laundromats and cellular phone stores. In addition, we are seeing resurgence in activity in land development. For example, Dowling Village in North Smithfield has been hugely successful in attracting tenants and is close to being 100% leased with a healthy mix of tenants and there may be an opportunity to expand that power center footprint. Furthermore, at Mayfair Shoppes right over the border on Rte. 1 in Attleboro, Mass. Carpionato is in the beginning phases of construction with a new retail power center to include several national food chains. In addition, there are rumors of a new grocery anchored shopping plaza in northern Rhode Island

It has taken a little time, but the Ocean State now has their share of national retailers to add to their retail landscape. LA Fitness is under construction for their third Rhode Island store on North Main St. in Providence, Chick-fil-A is now open and doing very well at the former Boston Market in Warwick and CarMax is now open at the former Building 19 location also in Warwick. Sonic Burger is entering the Rhode Island market at the former Wendy’s on Putnam Pike in Smithfield. Also rumored at the Rhode Island Mall is a transformation into an outlet mall.

Along Rte. 2 in Warwick, we continue to see relatively good activity and lower vacancy rates with regard to class “A” retail centers. For example, at 1000 Bald Hill Rd. with Trader Joe’s, Panera Bread and Eastern Mountain Sports and at 300 Quaker Lane with Stop & Shop and Christmas Tree Shops they are able to attract national tenants and maintain close to 100% leased centers. However, we also continue to see vacancy spiking up a bit in the rest of the retail market. There are approximately 6,000 s/f of vacancy at 824 Bald Hill Rd. in the Men’s Warehouse space and about 8,000 s/f of vacancy at 1020 Bald Hill Rd. Also, at 1276 Bald Hill Rd. there is vacancy at Summit Sq. However, we did see some absorption further south at 555 Quaker Lane where Morning Star, a multi-unit chain signed a lease for 6,000 s/f  and 325 Quaker Lane is close to filling 6,000 s/f with a medical use.

Rhode Island continues to capitalize on its reputation of being a strong local restaurant market. This sector has continued its steady growth in the Ocean State and restaurants have continued to open at a high rate. This is beneficial for landlords because restaurants are able to pay higher lease rates and attract more shoppers to the trade area. For example, restaurants that continue to be on the growth path are Sonic Burger opening soon on Rte. 44 in Smithfield; Moe’s Southwest Grill, Cilantro Mex, Walt’s Roast Beef, Dairy Queen, IHOP, Buffalo Wild Wings, Chipotle Mexican Grill, Piezoni’s and Starbucks are looking diligently at opening more stores in Rhode Island.  Furthermore, upscale buffet style restaurants are also on the search for locations from up to 10,000 s/f.

In addition, other types of retailers that continue to open new stores in Rhode Island are the dollar stores.  Also, O’Reilly Auto Parts and Advanced Auto Parts continue to scouring Rhode Island for 6,000 s/f to 7,000 s/f locations in busy areas with high traffic counts. We continue to see regional-size laundromats; pawn shops, auto-part stores, beauty salons and cellular phone stores looking to expand in the market. While they may not be the most glamorous tenants, they do show evidence of being financially stable and capable of further growth.

Rhode Island’s retail market has definitely matured over the last few years and that has been accomplished in part due to reasonable lease rates that have not fluctuated much over the years. Rhode Island has taken the slow and steady approach to attract national retailers. It will need to continue to attract national tenants to keep up with neighboring states and also rely on its local retail businesses to help fill the vacancy. Its ability to develop new shopping centers and attract class “A” retailers will be important to sustain the momentum it created over the last year or two. National retailers have helped mature the Rhode Island retail landscape and new construction will certainly help maintain it. The fact that new construction is underway is a very positive sign for the retail market and the economy overall.

Dan Feiner is a senior vice president with MG Commercial Real Estate in Providence, R.I.