Once again, retail will lead all sectors in the Wichita area commercial real estate industry in 2015 with new store openings and strip centers, according to area real estate developers and brokers.
They said they expect retail to lead largely because of an improving economy nationally and locally.
“With lower gas prices, with more consumer confidence and a stable job market, consumers are more confident about making purchases, which helps improve and drives retail sales,” said Dan Unruh, a partner in InSite Real Estate Group, a commercial real estate developer and brokerage.
But economic growth locally hasn’t been sufficient to lead to meaningful job growth, which will continue to challenge the office real estate market, brokers said.
Tom Johnson, president of NAI Martens, which annually produces an area real estate forecast before the start of a new year, said he remains bullish on retail as the leading sector this year.
“We really are,” he said, adding the only other sector of commercial real estate that will be as active will be in real estate investment.
“There is still demand for quality investment properties, lots of investment money chasing deals,” Johnson added.
He said the two retail hotspots for new development this year will be along the Greenwich corridor in northeast Wichita and north of NewMarket Square on Maize Road in northwest Wichita.
The so-called Greenwich corridor extends north from 13th Street to about the K-96 interchange and “is still very active,” Johnson said. Last year saw the opening of a temporary site for Wichita Luxury Collection’s Audi of Wichita dealership just north of its Mercedes-Benz and Lexus stores at 1545 and 1555 N. Greenwich, and the dealership plans to open a Jaguar Land Rover store near there this summer.
Farther north, on the south side of K-96, Texas-based Academy Sports and Outdoors plans to open its second Wichita store in a 71,000-square-foot building on the east side of Greenwich, across from the Regency Lakes retail development.
That store is expected to open sometime this spring, Academy Sports spokesman Allan Rojas said in an e-mail.
On the northwest side of town, plans for the NewMarket Square retail development at 21st and Maize call for it to extend farther north in what Slawson Cos. developers are calling NewMarket North. The new phase will include smaller retail and restaurant spaces, as well as office space.
Unruh said he’s also planning to develop a 10,800-square-foot retail strip center at 29th and Maize, which he said is in front of the 136,000-square-foot Sam’s Club that opened at 3048 N. Maize Road last year.
Back on the east side, Unruh thinks the area around the Costco store under construction near Kellogg and Webb could see some activity.
Costco is building a 150,000-square-foot store and fuel station on nearly 17 acres on the northeast corner of the intersection. The store is expected to open in early summer, officials now say.
Unruh said he thinks the Costco opening will lead to future retail development along Webb. “I see a continuation of that kind of trend,” he said.
While Unruh and Johnson said they expect the overall office market to be flat this year, Jeff Fluhr is hoping that won’t be the case for downtown, where Occidental Management’s $54 million redevelopment and expansion of Union Station downtown into a mix of office and restaurant uses kicks off this year.
Fluhr also is hopeful that Security National Life’s multimillion-dollar investment in the 125 N. Market building over the past couple of years will lead to more new tenant announcements at the 17-story building this year.
He said completion of the city’s $9.6 million rehabilitation to the former Macy’s parking garage downtown will help a number of nearby office buildings attract more tenants.
“That becomes important to Sutton Place, the Board of Trade building, the (former) Merrill Lynch building and the next utilization of the Finney office building,” Fluhr said.
While Johnson noted that there have been some small office expansions downtown in the past year, office activity throughout the core area has been largely “people moving from one building to another, kind of a lateral movement.”
Johnson said the bulk of office real estate activity continues to be in northeast Wichita, along the Rock Road area and at the Waterfront development near 13th and Webb.
“I think the quality Class A properties in the northeast areas … those rents and occupancies are well above the marketplace,” Johnson said.