For years, Fredericksburg's Central Park has been the undisputed king of area retail centers.
Its lineup of national restaurants and retailers and strategic location at the intersection of State Route 3 and Interstate 95 has made it the "New York Yankees of Fredericksburg retail," in the words of area commercial Realtor Brian Cunningham.
But like the baseball Yankees, Central Park is in a bit of a slump lately. "For lease" signs and empty storefronts now abound.
Central Park isn't the only area retail center struggling in the face of significantly lower consumer spending that's been hit by a combination of falling housing prices, tight credit, rising unemployment, low confidence and increased savings.
But Central Park has been hit harder than most, according to a review of vacancy rates at some of the area's biggest shopping centers. The data were provided by commercial real-estate firm Thalhimer/Cushman & Wakefield.
Central Park's vacancy rate is now 10.5 percent. The rate of the greater Fredericksburg area--the city and Stafford and Spotsylvania counties--is about 6 percent.
Central Park has been hit hard by retailers announcing bankruptcy and closing stores on a national level. Tweeter, Mattress Discounters, Linens 'N Things, Circuit City, Bassett Furniture and 5 & Diner all had or have locations at Central Park.
The decision to close those businesses was made at a corporate level rather than being based on the individual performance of the Fredericksburg store, noted Sheryl Simeck, spokeswoman for the major Central Park owner The Rappaport Cos. She said Rappaport is seeing interest from companies that have wanted to be in Central Park and see the vacancies as opportunities to enter the market.
Cunningham, associate director for GVA Advantis' Fredericksburg office, said he's seeing similar interest at Central Park Town Center, where he handles a good bit of leasing. He recently brokered a lease there for Wegmans and SunTrust Mortgage, and he said he has two users now looking at office space. One is interested in about 35,000 square feet.
Still, Cunningham said, it's a tough time for retailers to expand.
"Retailers are gun-shy right now to really do anything," he said. "The current economic conditions make them nervous."
Cunningham said commercial rents are dropping as much as 25 percent to 35 percent in the area as landlords renegotiate leases with existing tenants and entice new ones. Rents in Central Park--along with Stafford Marketplace and Cosner's Corner--are among the highest in the region, according to the data.
Simeck noted that the timeline of Central Park's comeback depends on how quickly the economy turns and whether retailers can get financing to open stores and buy inventory.
That comeback can't come quickly enough for Fredericksburg officials. Earlier this decade, Central Park was the main engine driving double-digit percentage growth in the city's sales-tax revenue. Now the city is facing double-digit declines in year-over-year sales tax revenue, which is challenging the budget.
Vacancy rates may rise in the short term at Central Park and other area centers, said Jud Honaker, president of commercial development for the Silver Cos. He noted that Central Park now has retail competition that it never had before in the area. He said Central Park is "clearly as stressed as it has ever been."
But Honaker thinks Central Park will bounce back in a big way. He noted that a major part of the problem is luck of the draw, as the shopping center happened to have many failed national retailers. He thinks two new developments at Celebrate Virginia South will give Central Park "its edge back."
Wegmans is opening a grocery store there in June that should draw ample traffic. Honaker believes that Kalahari Resorts is going to open in Celebrate Virginia despite troubles obtaining financing. "It's a matter of when, not if," he said about the massive planned water park and resort hotel.
Cunningham noted that Central Park has businesses--including Carrabba's Italian Grill, Bonefish Grill and soon Wegmans--that are nowhere else in the area and choose their sites carefully. Partly for that reason, he's also bullish long-term.
"They're opening there for a reason," Cunningham said. "Central Park will continue to stand the test of time."
Bill Freehling: 540/374-5405
Email: bfreehling@freelancestar.com
| Area vacancy rates Here are estimated vacancy rates at some of the area's biggest shopping centers. Data are courtesy of Thalhimer/Cushman & Wakefield. Central Park: 10.5 percent Cosner's Corner: 5.8 percent Stafford Marketplace: 3.3 percent Southpoint I and II: 3.3 percent Downtown Fredericksburg*: 3.2 percent Doc Stone Commons: 1.9 percent Spotsylvania Towne Centre: 1.1 percent *Caroline Street between Lafayette and Lewis streets, William Street from Prince Edward to Sophia |