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Page 2 of 2 • Competitor Home Depot also has been active with a new store in Union Crossing in Monticello and stores under construction at The Grove in Maple Grove and Cedar Point Commons in Richfield. Demand for community centers continued to outpace supply during the past six months. Seven centers totaling Z.34 million square feet are under construction (some have portions already open), so a large chunk of space is set to come on line in late 2006/early to mid-2007. • In addition, another nine centers totaling 1.37 million square feet are planned with anticipated start dates in 2007. Approximately 70% of these centers are being developed in outer-lying areas. There is still a lot of activity in Maple Grove, and other strong markets include Woodbury, Lakeville, Blaine, Rogers, Monticello_ and Coon Rapids. The remaining 30% of construction is inner-ring redevelopment and infill development as a response to pent-up demand. • While intense competition among big-box retailers will continue throughout 2007, demand for small-shop retail construction-particularly in outer-ring pockets-may begin to soften mid-year as small-shop users feel the effects of the residential slowdown and lighter daytime population. • A slowdown among some franchised concepts is impacting community and smaller neighborhood centers. Part of it may be the improving economy as fewer people are "buying" themselves jobs by opening franchises. Where in the past, for example, there may have been three or four sandwich shop franchises competing for a new retail center, today there may be just one. • Anew concept hitting the market is full-service health club LA Fitness, which is approximately 70,000 sq. ft. It is in the process of completing deals at Park Place Promenade in Brooklyn Park and Brighton Village in New Brighton, and it's under contract to acquire an old industrial site in Roseville, near Cleveland Avenue and County Road 62, The company is also negotiating to take a former anchor space at Northtown Mall. • Dave & Buster's, a large restaurant, bar and entertainment center, has opened its first Minnesota location at Fountains at Arbor Lakes in Maple Grove. The restaurant is looking at other metro sites for locations, which are 50,000 to 60,000 sq. ft. • Also looking at the metro is office supplies retailer Staples. The retailer has outstate locations in Rochester, Austin and St. Cloud. The stores are approximately 20,000 to 25,000 sq. ft. They need 12 locations secured before they come to a market. • An active restaurant in community centers is Granite City Food & Brewery, which has locations in Eagan, Maple Grove, Rosedale Mall in Roseville and St. Louis Park. • Community banks have been very active opening new branches in community centers and neighborhood centers. In future development, Ryan Companies US Inc. is working toward redeveloping the former Twin Cities Army Ammunition (TCAAP) site in Arden Hills into a huge, mixed-use project. The Arden Hills City Council approved a resolution to purchase 585 acres of the former TCAAP site for $45 million for amixed-use development. The city plans to acquire and redevelop the site in conjunction with CRR, a partnership between Ryan and Glenn Rehbein Cos. Plans for the site, which the city approved last year, call for 2,400 residential units, 3.3 million square feet of commercial space, public developments and parks. • Chicago-based Tri-Land Properties Inc. acquired two well-positioned, yet outdated Cub Foods stores in Fridley and Burnsville. The developer will either raze both stores and redevelop the sites into new, updated Cub Foods stores or use the existing structures. The Outlook With 2.34 million square feet under construction and 1.37 million square feet planned with construction dates set for 2007, community centers will continue to be the retail market's big growth engine. Big-box retailers will continue to drive new development, both in outer-ring suburbs and inner-ring redevelopments. However, demand for small-shop retail construction may begin to soften mid-year, as small-shop retailers feel the impact of the residential slowdown. Although landlords and developers have not reached the point of offering concessions on unleased small-shop space, this may occur in the future. Net rates remain flat at $18.22 per square foot. Print this Page Close Window http://outlook.uproperties.com/PagePrinter.aspx?InstanceID=e8b69470-Oe4e-4c39-8061-90... 3/7/2007