Commercial Real Estate, Capital, Insurance, Leasing & Management

More building, more retail: The strategy behind the development of River City Marketplace

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The owner of the River City Marketplace announced that it had selected Franklin Street to be its leasing agent at the more than 900,000-square-foot North Jacksonville power center.

The owner of the River City Marketplace announced Tuesday that it had selected Franklin Street to be its leasing agent at the more than 900,000-square-foot North Jacksonville power center.

Whitney Kantor and Carrie Smith of Franklin Street will be the leasing brokers for the property.

The Ramco-Gershenson Property Trust developed the center located along Interstate 95 and east of the Jacksonville International Airport.

The center opened in 2006 and is anchored by Regal Cinemas, Lowe’s, Walmart, Ross Dress for Less, Michaels, Bed Bath & Beyond and Best Buy.

JJ Bujalski, a regional leasing manager with RGPT, said that the company plans to build another 40,000 square feet of space at the center, with nearly 14,000 square feet “spoken for” already.

Both Bujalski and Kantor, Franklin Street North Florida’s director of retail leasing, sat down with the Jacksonville Business Journal to discuss the change.

Can you tell me a little about how the property is doing today.

JJ: Even during the recession, a lot of the retailers at the River City Marketplace experienced increases in their sales comps, which was an anomaly and spoke to the strength of the asset. Sales to this day continue, for the most part, experience year-over-year positive comps. We have one vacancy right now and we see additional opportunities to construction more space at the center. We’ve come to the conclusion that now is the right time to develop additional retail space and have made the decision to bring on Franklin Street to assist with that process. One of the things we are honed in on is bringing additional local retailers to the property. The ones that we do have are a great part of our center.

That’s really interesting about the future development. What are you seeing in the center that leads you to believe that more development will be supported?

Kantor: River City Marketplace is a property that has not yet reached it’s full potential. It’s the perfect storm that’s happening across the Northside [of Jacksonville]. Preceding the Amazon announcement, you have UF Health that is growing and will continue to grow, Amazon choosing to locate on the Northside is only fueling what has long been a underserved market. You layer into that the multifamily development that’s happening, Ramco sees this as an opportunity to further River City Marketplace and the entire infrastructure that sits there to the east side of the interstate, as a community center and gathering place. The success of the retailers in that area was prior to much of the growth that’s happened in the area in recent years. The very high sales volumes proved what Ramco saw in this underserved market. This center is pulling as far away as South Georgia and the growing Yulee communities. It also pulls up from the Avondale, Riverside and even the Westside areas. We see this center as an evolving epicenter that is the community center of the Northside.

How much space would Ramco look to build there?

JJ: We have 14,000-square-foot building that’s furthest along in the planning process that will go in front of Lowe’s. Most of that 14,000 square feet has been spoken for. We are also looking at building up to 25,000 square feet that has visibility from Interstate 95. That’s composed of two different pads. Just shy of 40,000 square feet. We just opened 6,000 square feet of space in front of Lowe’s as well.

Kantor: That’s just inside River City proper. The entrance into River City is really at Main Street and Airport Drive. We have about two acres there that is prime for industrial, medical or commercial use. It’s not retail, but ability to add to the density and the unique nature of the business that are on the Northside.

How does Ramco view the changes that online retail has had on retail?

JJ: There is no doubt that we are being impacted by it. As a company, Ramco has been really focused on owning Class A assets. Our whole portfolio has transformed over the past several years and we have disposed of the assets that do not fit that classification. River City is a great example of a Class A asset. It continues to experience year-over-year positive comps that keep getting better and better. But to be a Class A asset, I think it’s important to note that we feel that center needs to offer the right merchandising mix, it needs to offer value and convenience. And it has to provide an experience to the community. We are very focused on providing those things for the community. We have the opportunity to build another 120,000 square feet of additional retail, Phase two of the Parkway Shops across from the UF Health campus is located. That’s one of the things that we looked at. We feel that the health campus is a very important economical driver to the success of our retail, in addition to the Integra River Run apartments being developed to the north on Max Leggett Parkway. The residential is doing very well in this area. There’s a lot of opportunity for additional growth and we have identified other things that go into making a Class A retail asset. Convenience is very important. With Interstate 95, our projects hit that bar. We are also very dialed into the GPS data. Historically this center has always been looked at as OK, the Northside is underserved and River City is capturing by drawing a customer from such a large area. We hear all the time from our retailers that our customers are coming in Georgia. But for all the customers that are shopping from a distance, we are also serving our local customers very very well. One of the things that we have identified is that its’ a very strong grocer market. We feel that it’s underserved from that perspective. It may not be at River City, but it may be at Parkway Shops. We want to bring in a grocer. It may end up being a local grocer to the market. Fitness is another example. There’s a lot of categories that are void from the market, and that’s what we are focusing in on.

How does Franklin Street see its role as leasing broker for the property?

Kantor: I think why we are excited about this is in part because it is a Class A asset. They are successful because the owners are committed to experience. The one thing you can not have online is a true social, personal, interactive experience. We want to supplement that and add to that from the local level. We want to add great quality, local restaurants. There is absolutely a void in the market for healthcare. Our goal is to work hand-in-hand with JJ and how do we complement the national retailers.

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