Illustration by Tim Cook
The words “retail apocalypse” have appeared in so many news reports around the country during the past two years that the term now has a Wikipedia entry. But brokers and economic development officials insist that the greater Richmond retail market is healthy.
“We’re actually seeing more retail activity than we’ve seen in a long time,” says Garrett Hart, director of the Chesterfield Economic Development office, noting that Wegmans has demonstrated the area has an appetite for high-end food and groceries.
With the rise of online shopping, traditional retailers such as Macy’s, J.C. Penney and Sears have been closing stores by the dozens. In 2016, Macy’s announced its departure from Regency Square and Virginia Center Commons in Henrico County. The loss of a major department store anchor can be devastating, but some Richmond-area shopping centers have found ways to adapt. Fitness centers have been prime replacement candidates, says real estate broker Jim Ashby of Cushman & Wakefield | Thalhimer. At Willow Lawn, for instance, Gold’s Gym took some of the space vacated by Dillard’s department store.
“Children’s entertainment concepts — bounce houses and laser tags — can typically go into second-generation-type boxes where a large retailer has left,” Ashby says. “We continue to see major fashion retailers like Ross [Dress for Less] and T.J. Maxx looking at new locations. The pet stores — Petco and PetSmart — seem to be on a rapid expansion as well.”
Mixed-use projects, such as West Broad Village in Short Pump, also have potential as a model. There are some drawbacks, says Joe Emerson, Henrico County’s planning director: “The mixed-use development, in terms of having apartments or condos above retailers, is a little more challenging for developers because you have to build that lower level of nonresidential space without being able to really react to the market.”
Makeover Prospects
Dumbarton Square Shopping Center
Built in 1973 along Staples Mill Road, Dumbarton Square lost its anchor when Martin’s closed its store there in 2015. Though 58,000 square feet are unoccupied, Jim Ashby of Cushman & Wakefield | Thalhimer says the property is receiving a second wind, with nearly 45,000 square feet of new leases in negotiation.
Azalea Mall
Opened in 1963, the 49-acre property has remained largely vacant and unused since the mall’s demolition in 1999. Bordered by Brook Road, Dumbarton Road and Westbrook Avenue, the site is mostly in Henrico County, with a portion in Richmond. Atlanta-based developer Dewberry Capital Corp. bought the property in 1998. In 2014, Cushman & Wakefield | Thalhimer proposed Azalea Square, a mixed-use development with shops, apartments and condominiums. In 2016, Arizona-based Bromont Developments, which redeveloped eastern Henrico’s Fairfield Commons as the Eastgate Town Center, expressed interest in buying the site and creating a similar mixed-use development there. Officials at Dewberry and Bromont both declined comment on plans for the property.
Virginia Center Commons
New York-based Kohan Retail Investment Group, which specializes in reviving older malls, bought Virginia Center Commons, in Glen Allen, from Ohio-based Washington Prime Group for $9 million in January. “We have several tenants that we are in discussion with and hope we will be able to bring in,” says company president Mike Kohan. Given the challenging retail climate, he says, “We are considering all the options.”
