Grandview Yard Seeks Retail Anchors for Next Phase of Development
Construction is progressing quickly on the new Grandview Yard Apartments, which includes three four-story buildings that will house 154 rental units. The first residents of this new development are expected to begin moving in this November to enjoy the existing amenities that Grandview Yard has to offer.
The future amenities at Grandview Yard are still in the process of being determined. We spoke recently with Brian Ellis, President of Nationwide Realty Investors, who explained what lies in store for the retail component of this development, and what national retail trends are driving the next phase of Grandview Yard.
Our full interview with Brian can be found below:
Walker Evans: When we last spoke about Grandview Yard, it was right as Phase 1 was completed. And now we’re nearing the completion of the new apartment addition.
Brian Ellis: We’re anxious to get our first apartments at Grandview Yard open in October. It’s going to be a really terrific location, and we’re already seeing some pretty high demand. The integration of residential units is an important step for Grandview Yard.
WE: Phase one included a hotel, office space, a gym, two restaurants and a parking deck. Is this addition of residential units market driven?
BE: Everything is ultimately market driven. From a commercial standpoint, our leasing of the building on Yard Street is almost complete. That’s gone very well during an economic time that has some challenges. We landed Willis, which is a strong tenant for that building. Right now we have a significant amount of activity for anchors for the next office building. We’re in talks right now with some major tenants that will allow us to move on to the next building. So that will be market driven. We also have some activity on the medical office side. We don’t have any commitments right now, but that should be coming down the road.
Retail has always been a significant part of our vision for Grandview Yard. We’ve realized a portion of it with the new Giant Eagle which has been announced, which will open in the latter half of 2013 on the north side of Third Avenue. With that will likely come a bank and two or three restaurants, but we have no commitments so far.
WE: A few months ago, there was a newer site plan rendering of Grandview Yard that was added to the Grandview Yard website, which appeared to be a revision from previous plans. Some of our readers noted that it looked like the project was moving more suburban in design as it progressed toward Third Avenue, with more single use parking lots and big box style developments. Is that accurate to say?
BE: It’s still to be determined and it’s all user driven. The plans for Grandview Yard are changing and evolving all the time. But if we’re going to do any significant retail development in Grandview Yard, we need to have anchor tenants. Right now we’re in the phase where we’re trying to attract strong anchors, which are inherently large. We’re looking to accommodate them, and like virtually all retail in Columbus or in the Midwest, they’re going to require surface parking lots to support them. As much as we’d love to accommodate that in a parking structure, it’s not likely that most of the retail will be done that way.
We’re trying to create a critical mass from a retail standpoint along Third Avenue so that we can develop Yard Street as a great walkable street between Goodale and Third. To do that, we’ve got to create space for anchor tenants on Third. If we’re going to have retail, we’re going to have some parking lots.
WE: Some of the concerns that I have heard was that out of the gate, Grandview Yard’s plans were very dense and very urban. The first phase has the parking structure that services the hotel, the restaurants, the gym and the offices. So I think people were expecting more of that type of mixed-use parking. Similarly, NRI has set a very strong precedent for mixed-use parking structures in The Arena District. It seems that some of our readers are concerned that if a retail anchor like Best Buy could easily come in to Grandview Yard and demand their own dedicated parking lot that can’t be used for any other purpose. How does that change the average person’s expectation as to what Grandview Yard is going to be?
BE: To use your example — if Best Buy were to come to Grandview Yard, they would certainly demand parking for their store, but not necessarily for their exclusive use. The anchor retail tenant’s demand for parking is the reality of the world. The model that we see in Phase One is the model that we hope to be able to utilize throughout all of Grandview Yard with the possible exception of supporting some of the anchor retail tenants. We will continue utilizing parking structures to support residential and office use.
There is still no certainty that we’re going to have a significant retail component in Grandview Yard in this tough retail market, but we hope that we’re going to be able to accomplish that. It’s really the mix of uses that create the strength of the overall project.
As the developer, we can shape the parking scenario, but it will ultimately be dictated by our tenants. They are focused on how they can best serve their customers.
WE: I think that some of our readers are also watching national trends that show that some of these larger, traditional big box stores are experimenting with smaller urban stores. I think some of our readers are ready to see something like that happen in Columbus. And on the flip side, not a week goes by where you don’t see a prominent national publication running a story about the Millennial Generation and how they place higher value on walkable communities and mixed-use urban density. If Millennials are expected to be interested in Grandview Yard, is it the right fit to bring traditional big box retail to the development?
BE: Our objective is to create a great, urban, walkable neighborhood at Grandview Yard that appeals to all types of people. To do that, we’ve got to create a strong mix of uses and amenities including restaurants, coffee shops, shopping, fashion and other retail. We’re really trying to get the right mix so that we can make Yard Street a great, walkable street and one that is seen as an amenity.
One of the attractive things about The Arena District is that we have great restaurants there. And the reason that those restaurants and coffee shops are there is because of Nationwide Arena, Huntington Park, The LC and The Arena Grand Theatre. We’ve been able to use those amenities to attract restaurants. Grandview Yard doesn’t have that same opportunity, so instead we want to offer anchor retail to lure restaurants, bars and coffee shops and more of the day-to-day retail.
It’s all still up in the air as to whether or not we can attract the anchors that we need. They love the location, but the retail market is difficult right now. We have great examples of outdoor shopping areas at Easton and to a lesser extent, Polaris. Those good examples are really few and far between in terms of what’s successful right now. Retailers across the country are largely turning their noses up at town center developments. It attracted retailers for awhile, but now they’re backing away from it and going back to more traditional shopping environments.
WE: To shift gears back to the residential side… the rental market is very strong right now in Columbus, and there seems to be a heavy concentration of new rental developments happening along the Olentangy corridor between Grandview Yard, Edwards Communities and the Lennox Flats. Do you think that as a whole we are overbuilding rentals in Columbus, or will the market be able to sustain around 3,000 new units coming online in the next year?
BE: The trends look very good right now, and the nearer to Downtown the development is positioned, the better. These projects that are either being considered or are in various stages of development, both in and around Downtown are going to be successful. The housing market will always ebb and flow. I think we’ll see some softness occurring first in the suburban neighborhoods while the urban neighborhoods will stay strong. That doesn’t mean that we won’t have a period of time where the urban rental market will soften a little bit, but right now I feel pretty good about the fact that there’s more people who want to live in and around Downtown. We’re very bullish on it. And when we do experience softness in the rental market, that will be an indicator that the for-sale market is starting to pick up again, and we’ll see a shift from apartments to condos.
WE: Thanks again for the updates, Brian.
BE: My pleasure!
More information can be found online at www.grandviewyard.com.