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Too Many New Commercial Developments!!!

By
Commercial Real Estate Agent

Straight from the mouth of Fred Meyer development directors regarding the Hawks Prairie area just north of Lacey, WA they have identified this as a "over-retailed" corridor based on demographics alone.  To give you some perspective here is an abbreviated version of the whole story - 

Hawks Prairie has grown tremendously over recent years and the boom has seen retail landlords scrambling to pick up as much dirt as possible to land the next big box or brand name client.  This cut throat industry is mind numbing when you consider some of the updated statistics on how many developments are coming out of the ground.

One of the major developers "donated" 25 acres to Cabela's to draw them in, although that wasn't enough, the City of Lacey also had to provide $10M in improvements in that ultimately will come from taxpayers.

That development has over 3,000,000 SF of retail/office space available for lease.

Directly East of this is a 35 acre site that has 350,000 SF for lease and sits right on the interchange.

North of this is another site approximately 9 acres that has space for lease.

A national developer has a 20 acre chunk up for lease just NW of this particular space.

We already have Costco, Home Depot, Walmart, Safeway, LA Fitness, and many other national retailers in the market......who else do they think they are going to fill these spaces with???

Are we over retailed? Or will this turn into the "Field of Dreams" and "If you build it, they will come?"

Comments(10)

Geno Petro
GenoPetro.House - Chicago, IL

Ryan, thank you for leaving a comment on my recent AR post. 'over retailed'...I like that phrase.

 

G

Oct 09, 2007 04:56 AM
Anonymous
Anonymous
Sounds to me like you don't like Lacey.  It's a nice town with the best schools and "next to no" crime.  If you don't want any more businesses to move in and buy up more dirt then move to Tillicum!  No enterprise would dream of buying up any land there.  We need more business.  Flashing lights bring more bus., persons, dollars, and a better economy.  I-5 will do it's job and ensure that Lacey will never die.  I love pouring money into Lacey and watching it grow.  I just came from Tokyo...let's try to reach that level.
Feb 18, 2008 03:20 AM
#2
Anonymous
Ryan Haddock

Actually I love Lacey, I do almost 50% of my work in Lacey.  I agree that businesses bring higher levels of economy, however I don't think that the City of Lacey is prepared for what they have started.  Not only are they unable to supply the water to outlying Urban Growth Area parcels but they aren't even allowing the predevelopment meetings to take place.

My suggestion of over retailed is predicated only on the sheer population and current demographics of the City itself.  Obviously businesses can help cities grow, but without the population many retailers won't be looking to relocate in this vicinity.  Yes it is a chicken or the egg scenario, however the City is not ready for what it started without guidance from some of the larger developers, business owners, and local population.

Feb 18, 2008 03:28 AM
#3
Anonymous
Anonymous

...and what demographics are you referring to?  Do you live in Lacey?  Own a home? Do you know the current pop of Lacey?  What do you believe is the worst possible outcome of Lacey if more big business moves in? ...the best?

Feb 18, 2008 03:35 AM
#4
Anonymous
Ryan Haddock

The demographics that I am referring to are household incomes, not necessarily population as much as the income levels as well as employment (although it is getting much better). The median income for a household in the city is $43,848, and the median income for a family is $50,923, I'm sure these stats need to be updated, but if you compare the growth here to say......South Hill in Puyallup and compare population and income, they are drastically different.

No I do not live in Lacey, yes I own a home in Lacey, The current population is around 40,000 as it was around 31,000 as of the last census.   The best possible scenario is that the City is able to fulfill their promises and permits with all the land owners inside and just outside the Urban Growth Boundary, and the developers are able to pull together a regional shopping center as planned.

The worst case scenario is that the City realizes the amount of power they have in permitting and development and turn into the City of Olympia and many other jurisdictions who overanalyze their data.  Currently the City of Lacey is much easier to deal with than any of the other jurisdictions in this county....for now.

Feb 18, 2008 03:54 AM
#5
Sandy Nelson
Riley Jackson Real Estate Inc. - Olympia, WA
your Olympia area Realtor

I just wonder if the demographers figure only the Lacey/Olympia residential pool into their calculations. I think Lacey is unique due to it's close location to Ft. Lewis. On the military installation there are 20,000 soldiers without localized retail access (other than the PX). The 7000 residents of Dupont also don't have any large retailers in town and are likely to shop in Lacey. I would bet that most businesses don't operate under the motto "build it and they will come". They base their expansions on carefully crafted market and demographic studies. I remember a few years ago, after there was already a Starbucks, a Subway sandwich shop and your pre-requisite Teriyaki place in Dupont, people wondered what businesses could possibly fill the remaining retail spaces in town. Soon there was a second Starbucks, a second Subway and another Teriyaki restaurant, and they're all thriving.

Sandy

Feb 18, 2008 03:56 AM
Anonymous
Ryan Haddock

Great point Sandy.....I think if one is to take the time to understand commercial activity and the demographic studies that these retailers do you would be amazed to see that they are already comparing Hawks Prairie to South Hill in Puyallup.

Very early stages but imagine what this could be if a similar boom occured here.  Not only was Cabela's expected to bring 4,000,000 people per year which would provide the need for more retail, but also an insurgence of 35,000 new troops is also expected.

Starbucks is a good example of a company that will outposition their competition on almost every block to make certain they have the market cornered.

Feb 18, 2008 04:02 AM
#7
Anonymous
Anonymous

Sandy's glass is half-full  and backed up w/historical proof...ouch half-empty guy!  (Sandy) Obviously you're married b/c of obvious cognitive ablilities.  Do you have sisters...kidding.  Have a great day!  You too Ryan...just not as good as Sandy's.

T

Feb 18, 2008 04:07 AM
#8
Anonymous
Anonymous
put a hooters in lacey!
Feb 18, 2008 04:36 AM
#9
Ann-Marie Clements
Candidate for an Ed.D. in Educational Leadership - Saint John, NB
Ed.D. candidate, Innovative Proactive Principa
This has happened in many parts of Florida also.  I believe development should be regulated to increase the value, not to flood the market with too many homes at once.  This ultimately decreases the value of the homes and the buyer and seller lose out significantly.
Mar 30, 2008 11:06 AM