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What you need to know for 07/21/2017

Demand for retail space on the rise

Demand for retail space on the rise

A medical urgent-care center on Wolf Road in Colonie? Why not?

A medical urgent-care center on Wolf Road in Colonie? Why not?

“Medical wants to be where the retail is,” says Ann MacAffer, an associate broker at commercial real estate firm CBRE-Albany.

MacAffer offered a perspective on the retail sector at CBRE’s invitation-only MarketView gathering last month, an annual event at which the company crunches numbers on the year just passed and presents an outlook for the region’s office, retail and industrial markets.

MacAffer takes the temperature of the retail segment by watching leasing activity at 89 properties of at least 50,000 square feet in the four core counties of the Capital Region — malls, shopping centers, strip plazas and popular retail corridors.

As of the fourth quarter last year, she said, the properties in her index — representing about 19 million square feet — showed a vacancy rate of 5.68 percent, down from a year earlier.

But very little new retail construction occurred over the course of 2013, she said, a year in which leasing activity started strong, but slowed in the summer — typically a peak period as prospective tenants look to lock into place for the all-important holiday shopping season.

Demand now is increasing, so stalled projects likely will get a kick-start this year. (Think the long-awaited redevelopment of Latham Circle Mall into The Shoppes at Latham Circle.) Otherwise, MacAffer explained to me this week, “If somebody doesn’t start building, we’re going to be out of product.”

Last year, she said, retail developers were busy “scraping,” or rehabbing/razing existing structures, rather than building on open space. For instance, the former Infiniti car dealership on Route 9 near Latham Farms became a strip plaza, and CarMax, a nationwide used-car retailer, identified a then-liquidating Kmart site on Central Avenue for its first Capital Region location.

At the same time, though, more hotels elbowed their way into retail corridors, MacAffer said.

Off Wolf Road, near the Macy’s end of Colonie Center, work started on a Staybridge Suites; in downtown Saratoga Springs, part of Congress Plaza near Broadway was demolished to make room for an Embassy Suites by Hilton.

This year, construction on two more hotels could begin in the Wolf Road corridor: a Home2 Suites by Hilton on Metro Park Drive and a Holiday Inn & Suites at the site of the Lazare Lincoln car dealership near Wolf Road Shoppers Park. (The latter project also is expected to include two restaurants and retail storefronts; Lazare would relocate.) It is because of the abundance of hotel rooms along Wolf Road — estimated at more than 3,000 — that MacAffer mentioned the possibility of an urgent-care center locating there one day.

Hotels cater to business travelers who can become ill on the road, she told me this week, so having an urgent-care center nearby makes sense as an ancillary service or “convenience.”

“Retail follows easy traffic patterns,” or where the people are, MacAffer said. So, too, do hotels and medical facilities.

Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at marlenejkennedy@gmail.com.

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