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Posted 20 Jul 15 By: No comments yet

A retail desert no more

In the heat of a summer afternoon last week, heavy machinery beeped and coursed around Carmike Cinemas’ under-construction, 12-screen movie theater at Coors and Rio Bravo.

Nearby, a two-man crew positioned a sign for a forthcoming Sushi King restaurant.

In the meantime, gym-goers broke a sweat at the area’s new Planet Fitness, and cars queued up in the drive-through at the 1½-year-old Dion’s.

It was a bustling scene at Las Estancias, a 79-acre, $70-million project that developers say will address demand for retail, restaurants, entertainment and services in the southwest corner of the metro area.

Located next to Walmart and on former alfalfa fields, the project has generated 100,000 square feet of new buildings so far. The theater – slated for a fall opening – will add about 50,000 more. Steve Maestas, who has partnered with Mike Mechenbier to develop the project, said the next phase will include 100,000 square feet more of “name-brand” retailers he cannot yet announce.

As planned, Las Estancias will comprise 500,000 square feet at full buildout.

Marketing materials used to lease space at Las Estancias show the site plan for the 79-acre development at Coors and Rio Bravo. (Courtesy of NAI Maestas & Ward)

“I believe it’s the No. 1 market opportunity in the community today,” Maestas said of that corner of the metro area. “There’s more opportunity in the southwest than there is on Paseo del Norte today.”

Commercial real estate data speak to the dearth of retail in the larger South Valley “submarket,” an area that stretches as far east as Interstate 25 and is bounded to the north by Bridge east of the river and, west of the river, by Central. That area today has 10 square feet of retail space per person compared to the city average of 40 per person, according to Ken Schaefer, research director at Colliers International’s Albuquerque office. To reach the same level as the city as a whole, the submarket would need 3.2 million more square feet of retail, Schaefer says.

That’s a lot of ground to make up, but Maestas said it’s become easier to lure businesses to that part of the community, which has seen a little uptick in retail interest.

Las Estancias – approved by Bernalillo County in 2008 – really started gaining momentum in the past 18 to 24 months, he said.

At the same time, the area’s old Kmart – a 104,000-square-foot vacant box at Central and Atrisco – has attracted significant interest, according to commercial real estate broker Lia Armstrong, who has spearheaded its leasing efforts with her CBRE colleagues Jim Dountas and Jeremy Nelson.

“We expect to have an announcement of a fully leased lineup soon,” Armstrong said outside the store recently, as afternoon traffic flooded the nearby intersection.

Retailers responding to need

The area certainly hasn’t achieved full bloom yet. The Unser Crossing project at Central and Unser, approved by city councilors in 2008 with $1.8 million worth of incentives, remains stalled, with only a CVS Pharmacy to its credit.

Lowe’s in 2010 called off plans to build a home improvement store there and Defined Fitness – which owns a parcel in the property – has yet to start construction. Damon Bader, vice president of operations for the local gym chain, said it will be the company’s next project, but there is still no timeline for development.

Tom Jones of Colliers, who markets the property with Bob Feinberg, said even though that CVS location does particularly well, the project remains on hold “until the growth in the market returns.”

But there are indeed signs of hope.

Armstrong – who noted that the area’s retail needs span just about every category – said brokers have long tried to sell potential tenants on the greater southwest quadrant, highlighting the opportunity to enter an under-served market and noting that companies that have made the jump have reaped high sales.

And finally, she said, they are getting a response.

“I think we’ve been pitching that story now for years, and the timing is right now for retailers to listen and say ‘Yes,'” she said. “A lot of retailers come (to town) and say ‘OK, it’s going to be a one-store market’ or ‘It’s going to be a two-store market or three-store market.’ (In deciding) how many stores they can do, now they’re starting to say ‘Hey, we can fit one in the South Valley.’ I think timing is right; the economic storm is right.”

Take Wendy’s, for example. The national fast food chain has a heavy presence around Albuquerque, but didn’t have a South Valley location until last month.

Ben Mansoor, whose company acquired the Albuquerque Wendy’s restaurants last year, quickly recognized the opportunity in Southwest Albuquerque. In addition to the month-old store at Coors and Blake SW, he already has another under construction at Coors and Central, and believes the general vicinity can support one, if not two, more restaurants.

“It’s doing very well,” he said of the Coors/Blake store, which boasted a nearly full parking lot during last Tuesday’s lunch hour. “As we expected, our consumer has been waiting over there. It’s beating our expectations.”

Considered something of a given in other parts of Albuquerque, the new South Valley Wendy’s prompted one Journal reader to comment online, “It’s great to have Wendy’s in the (South Valley). People here have money to spend and it’s nice not to have to travel!”

Marcella Rael, who lives near Coors and Gun Club, said she still must drive out of her way for places she likes to eat, like Texas Roadhouse, Applebee’s and Furr’s. But Rael, a lifelong South Valley resident and current president of the Valley Gardens Neighborhood Association, said she’s thrilled to see what’s happening at nearby Las Estancias. Though some residents vehemently fought the development in its early stages, she has long supported it.

“We need it here,” she said in a recent interview. “We need the jobs, especially the jobs for the kids out here.”

The Dion’s at Las Estancias, for example, has 43 employees, according to a company spokeswoman.

In an ideal world, Rael said her neighborhood would keep landing new restaurants and get some more places to buy clothing, “like stuff they have in the Northeast Heights.”

“Consumer potential”

Maestas said he thinks misconceptions have likely contributed to the long-standing shortage of retail offerings in the southwest quadrant. The area is about 81 percent Hispanic, compared to about 44 percent citywide, he said.

“I think the Hispanic market and the Hispanic consumer – not just in Albuquerque, but really across the country – wasn’t really discovered as an attractive option until maybe 10 years ago, plus or minus,” he said. “When demographers and businesses and others started to understand the numbers of Hispanics, the growth of Hispanics, the consumer potential, the characteristics and shopping patterns – as soon as people were educated on those facts, you started to see pretty strong response to addressing that consumer, everything from food to automobiles to fashion.”

Las Estancias’ design will reflect its community. Maestas said research shows Hispanic consumers tend to spend more time shopping and to go out in larger family groups, so the new development will feature wider sidewalks, ample seating, extra lighting and a more festive, colorful design.

Maestas said it will also focus on some “micro-retail” spaces to encourage local entrepreneurs – who, he noted, are abundant in that area – to operate their own small business at Las Estancias.

But even at full buildout, Maestas said his project won’t fill the entire retail void. He expects others to follow Las Estancias’ lead in the coming years.

“I think what you’re going to see after Las Estancias reaches a place of stabilization and matures a little bit, I think you’re going to see several more relevant projects in terms of size come on the market because the need still exists,” he said.

By:  Stephanie Guzman, Reporter-Albuquerque Business First

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