The retail leasing market is picking up steam this year as business fundamentals around the Portland area continue to provide fertile ground. Thanks in large part to the population and job growth in the region, developers are aggressively pursuing development projects of all shapes and sizes. In addition to retail-centric projects, Urban Works Real Estate is currently representing developers that are including retail components within office, multi-family, hotel and flex-industrial properties.Those same market drivers are encouraging new tenants to enter the marketplace, while also fueling growth plans for existing market tenants. Fast-casual restaurants continue to be a bright spot with local concepts such as Garden Bar, Little Big Burger, Boxer Ramen and Blue Star Donuts on track to open additional locations by year-end. The demand for mid-sized restaurant spaces has picked up considerably in 2015 with groups like ChefStable and other start-up minded food and beverage pros vying for good locations, especially if there’s any existing restaurant infrastructure. Market heavyweight Starbucks has ramped up activity in recent months as they relocate stores in existing trade areas to add more drive-thru locations while also planning stores for new trade areas. Portland’s appetite for local coffee, beer, and spirits continues to fuel new roaster, brewery and distillery openings in various parts of town.
Grocery anchors continue to be a key element in activating retail and mixed-use developments. Local trendsetter New Seasons has multiple stores in the pipeline, with the most anticipated being at the new Slabtown Marketplace mixed-use project at NW 21st & Raleigh. Market of Choice is following up their impressive store opening at Timberland Town Center this year with plans to anchor Killian Pacific’s mixed-use LOCA (a.k.a. the Goat Blocks) project at SE 10th & Belmont. Both of these grocers have been very effective at essentially offering different restaurant experiences within their stores, giving customers added reasons to visit a store multiple times within a single week.
The retail market continues to see the strongest growth on a “per store” basis in all things health and wellness. Growing fitness related concepts have expanded beyond yoga as cycling studios, barre concepts, boxing, cross-fit and other group oriented workouts are all the rage. Hair, skin, massage, chiropractic and other life maintenance services are filling in many of the spaces between food and fitness. FRANdata, an industry group that reports on franchising activity, reports that the health-and-fitness category saw the most new brands debut in 2014, with 25 names entering the market versus 11 in 2013. In the Portland area, the expanding concepts are a mix of franchises and powerhouse local concepts such as Burncycle. Overall we are repeatedly seeing business models that are targeted on a specific consumer and go the extra mile in creating a unique experience.
On-Demand Urgent Care tenants have been a welcome shot in the arm for retail. Portland based ZoomCare (now Zoom+) disrupted the traditional healthcare model and has created a new retail category. Traditional medical providers such as Providence and Legacy are following in Zoom+’s footsteps, opening their own On-Demand Urgent Care clinics in retail settings. At last count, Zoom+ had 18 clinics in the Portland area alone, with more doors set to open in 2015.
More and more national brands want to be in Portland as well with the chief obstacle being the lack of available “Main and Main” retail locations. With national brands, franchise concepts, chef driven restaurants, and independent retailers all active in the marketplace; the retail leasing market around Portland is experiencing the most demand since the Great Recession.