At a time when empty storefronts are distressingly common at shopping centers, Chandler could almost post a neon “no vacancy” sign at the entrance to its downtown.
The downtown retail vacancy rate has plummeted to just 0.9 percent as demand for space in the area continues to grow.
The downtown’s appeal has expanded with the popularity of its restaurants and shops, as well as a nearly $10 million streetscape project completed in 2010 to make Arizona Avenue more inviting. Downtown’s vacancy rate was 14.1 percent two years ago.
Downtown could support more businesses – if only there were more buildings to house them, said Teri Killgore, downtown redevelopment manager.
“I have a waiting list of people who have reached out to us looking for space, and we just don’t have anywhere to put them,” Killgore said. “It’s getting to the point where we desperately need to build.”
Office vacancies are also low, dropping to 5.5 percent in June. The rate was 22.9 percent two years ago.
Downtown’s most active developer is responding to the demand with plans to begin a 140,000-square foot project that will include offices, retail, restaurants and a 540-space parking garage. Desert Viking expects to break ground in 9-12 months on San Marcos Commons at the southwest corner of Arizona Avenue and Chandler Boulevard.
Desert Viking President Neils Kreipke said he’s wants to bring entertainment venues to downtown, such as a comedy club, jazz club or a bowling alley/nightclub like downtown Phoenix’s Lucky Strike.
“The sense of creating a mixed-use environment is what helps drive the downtown,” Kreipke said.
Desert Viking would build only part of the project at once, but Kreipke said he’d like to complete it in as little as two years. The company has found a number of potential tenants who are interested in the project, he said.
Kreipke said he expects to announce another downtown project soon, but he wouldn’t disclose where the company wants to start another mixed-use development.
“Our goal with the various projects we’ve got going is to double the amount of retail and restaurant and entertainment space that we’ve got down here currently,” Kreipke said.
Downtown has about 224,000 square feet of retail space, and 280,000 square feet of office space.
In the short term, Chandler will see its retail vacancy rate rise 1 or 2 percent with the closing of Urban Tea Loft and Sushi Eye. Killgore said the storefronts probably won’t stay empty for long.
“In talking with the property owners, there’s already been significant interest, so I look for those spaces to fill quickly,” she said.
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