Retail development is booming at Christiana, fast becoming a regional powerhouse for tax-free shopping.
Currently, five major centers are in varying stages of development, all within a radius of less than three miles. Expect more stores, more theaters and trendy newcomers to the market.
Highlights of some of the projects in the works include:
- At 915,000 square feet, Colonnade at Christiana will be almost as big as the 1.1 million-square-foot Christiana Mall. Construction of the first phase is expected to be complete this fall, about the same time construction workers start packing up their orange cones after completing long-awaited improvements at the interchange of Del. Route 1 and Interstate 95.
- Fresh off a massive redevelopment, Christiana Mall continues to grow. In addition to adding a 17-screen Cinemark theater this fall, Christiana gained a trophy in bagging Cabela’s, a wildly popular outfitter of hunters, anglers and outdoor aficionados. The 109,000-square-foot big box store debuts in 2014. Macy’s obtained approval for an 85,000-square-foot expansion when the department store was built in 1978 but has yet to act on it, according to mall management.
- The 456,000-square-foot Christiana Town Center, home to Boscov’s, Old Navy and DSW Shoes, has been approved for an additional 200,000 square feet. Both the town center and The Colonnade are owned by Allied Properties, founded by Frank Acierno, developer of Concord Mall and Merchants Square in northern New Castle County, as well as properties in Pennsylvania and Maryland.
- The Promenade at Christiana will be built on the site of the old Sears warehouse on Eagle Road in Newark. Plans on the Kimco Realty website call for 443,000 square feet of space, to include a movie theater, six big box stores ranging in size from 55,000-25,000 square feet, three stores of 10,000-12,000 square feet and four sites on pads ranging in size from 4,800 to 12,000 square feet.
- Adjacent to the Promenade, The Market Place at Christiana will be a mixed-use development where people shop, work and lodge. Plans approved by New Castle County call for 221,555 square feet of retail, 15,600 square feet of office space and a 119-room hotel.
The jewel in the crown
In the middle of it all is Christiana Mall. The landmark center is the jewel in the crown of Diamond State shopping, with nearly half its patrons lured from out of state by tax-free shopping and A-list retailers, including one of the top-performing Apple stores in the nation.
WDDE discusses the retail expansion in Christiana with commercial real estate lawyer Benjamin "Buddy" Berger.
WDDE discusses the retail expansion in Christiana with commercial real estate lawyer Benjamin "Buddy" Berger.
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Average sales in the food court are a jaw-dropping $1,380 per square foot, according to General Growth Properties, the Chicago-based owner of the mall. The average sales per square foot for mall food courts in the U.S. is $823, says the International Council of Shopping Centers, a trade group headquartered in New York.
It makes sense for other retailers to try to capture some of that sparkle, says Douglas Nickel, senior managing director of Integra Realty Resources, a property-consulting firm in Wilmington.
"Christiana Mall is one of the best-performing malls in the country,” he says. “As a result, retailers want to cluster around that mall."
Currently, many shoppers have a hard time driving to the mall and neighboring centers, due to extensive roadwork. But over the long haul, that infrastructure will make retailers more accessible to consumers.
“Improved traffic flow will bring more people to that tax-free shopping area,” Nickel says.
A rising tide
Overall, retail is gaining ground in New Castle County, with 500,000 additional square feet of space leased since the end of 2009, according to Integra statistics. The vacancy rate is hovering at 6 percent, below the national average of 9 percent. In all, there are 25 million square feet of retail space in the county, excluding Christiana and Concord malls.
On its website, Kimco provides prospective tenants with a bird’s-eye view of the local retail scene, an aerial map highlighting the competition stores at The Promenade at Christiana will face. The roster of existing merchants reads like a Who’s Who of Retail. Among the players: Burlington Coat Factory, Costco, Dick’s, Home Depot, Michael’s, Modell’s, PetSmart, Toys R Us and TJ Maxx. The mall is anchored by Macy’s, JCPenney, Nordstrom and Target.
“If you draw a two-mile circle around that mall, there is nothing you can’t buy in that area,” says Benjamin “Buddy” Berger of Berger Harris in Wilmington, an attorney who focuses on commercial real estate.
Berger notes that a number of nimble retailers that require less space than big boxers are responding to niches in the market. Wawa, Chick-fil-A and Dollar Tree are all in growth mode.
“Demand for retail space is strong right now, especially compared to office,” he says.
Shopping for marquee merchants
Still, several large chains have closed their doors in recent years, including Borders, Circuit City and Linens ‘N Things. Retail is an inexact science, a combination of the tried-and-true and the flavor-of-the-month.
“Twenty years ago, everybody wanted BlockBuster,” Berger says.
He says today’s landlords are focused on signing the strongest players with established track records.
“You know if you sign an agreement with a Lowe’s or a Home Depot, they will pay their rent like clockwork,” he says.
There’s also a push to attract new-to-the market merchants to engage shoppers with a greater variety of hip, fashion-forward merchandise. Last year, Christiana Mall brought in the state’s first Microsoft, A/X Armani and True Religion stores.
“Christiana Mall is always looking for opportunities to keep our center and its mix of merchants current and compelling for our customers,” says Steven Chambliss, the mall’s senior general manager.
Expect that to continue. There are still a number of marquee merchants who don’t have a presence in the First State, including Burberry, Crate & Barrel, Henri Bendel, Sur La Table, The Container Store, Tiffany & Co., and Wegmans Food Markets.
Berger predicts centers in the Christiana hub will compete hard for the hottest stores. Colonnade at Christiana lists Nordstrom Rack, the luxury speciality store’s popular discount sister, and Frank Theatre as anchors on its website, although neither the developer nor the prospective tenants responded to requests for comment.
May I help you? Fewer sales people
Despite an uptick in storefronts, retail employment is expected to remain stagnant in Delaware, according to projections from the state Department of Labor. Between 2010 and 2020, jobs are expected to rise from 49,890 to 54,350, an increase of less than 1 percent. The biggest boost is in the home supply category, which is expected to add 790 workers to the payroll. General merchandise merchants are expected to lose 340 jobs.
That’s due to a combination of factors, says George Sharpley, an economist and chief of the state’s Office of Occupational and Market Information.
Growth in online shopping has reduced the need for cashiers and clerks at brick-and-mortar stores. In addition, grocers and big box merchants are investing in technology that allows shoppers to ring up their own sales.
“Also, retailers are trying to get by with the least possible sales associates,” Sharpley says. “It’s often hard to find someone to wait on you even during the holiday shopping season, when in the past sales people were underfoot.”