Retail sector stages a comeback in Utah
The Wasatch Front economy, wobbly but standing straighter than many rivals, is attracting a host of retail expansions that in 2012 are bringing dozens of new retail concepts to the state and prompting expansion by dozens of retailers already here.
Among those arriving this year: Utah's first Tiffany & Co. and Michael Kors shops are coming to the City Creek Center shopping center in downtown Salt Lake City; the state's first humongous Scheels sporting goods store will open in Sandy, with a 65-foot-tall Ferris wheel and a 16,000-gallon saltwater aquarium inside; and several smaller chains, such as Johnny Rockets hamburger restaurant, will open in Farmington in the Station Park shopping center.
"We're seeing a lot of tenants looking at the Utah market right now," said Stuart Thain, a retail specialist with Coldwell Banker in Salt Lake City. Although the battered real estate market has yet to fully recover from the worst downturn since the Great Depression, "it's coming back, slowly but surely," he added.
The same can be said for the Wasatch Front's office and industrial sectors, both of which also suffered during the downturn and are in recovery mode. But retail activity is perhaps the most visible symbol of the revival in Utah's commercial real estate sector.
Scores of new tenants are moving into formerly "dark" stores emptied during the recession, bringing new life to shopping centers and malls along the Wasatch Front. In Layton, Dick's Sporting Goods is operating in a long-vacant Meryvn's location at Layton Hills Mall. In Centerville, Jo-Ann Fabric and Craft is moving into a spot left empty by Roberts Arts & Crafts. In South Jordan, thrift store chain Savers has claimed another former Roberts location.
There's also the new-to-Utah phenomenon. Chains of all sizes, including The Container Store, a retailer of storage items, and The Habit, a growing hamburger chain, are out scouting for space for their debuts. They join other chains that recently opened their first Utah locations, including home decor chain Crate & Barrel; apparel store H&M, which opened in Fashion Place Mall; and Marshalls, which opened in the Station Park shopping center in Farmington.
Although many retailers are moving into existing space left empty during the downturn, others are building new space, providing a boost to the beleaguered construction industry.
According to Coldwell Banker, Wasatch Front retail vacancies declined from 10.5 percent in 2010 to 9.6 percent at the end of last year even with the closures of Borders bookstores and several Fresh Market grocery stores.
Thain said Utah's economy in the top five in terms of job creation is one factor in the increased retail activity. But perhaps even more so, he said, companies such as Crate & Barrel and H&M are reporting that the performances of their first Utah locations have exceeded expectations. "The numbers speak for themselves," Thain said.
Strong sales, for example, have prompted Cheesecake Factory to open a second Utah location, in City Creek Center in downtown Salt Lake City, as a companion to its first, at Fashion Place Mall, which opened in 2007.
City Creek Center, which is part of the LDS Church's office-retail-residential City Creek development, is set to open March 22. Owned by Taubman Centers, the shopping center will be anchored by Nordstrom and Macy's, and feature about 80 specialty stores and restaurants, a number of which are new to the state.
The center is one of the few mall-type structures being built anywhere in the country.
Station Park in Farmington, although not as upscale, also is one of only a few shopping centers its size being built nationally. The open-air center has had success in getting first-to-Utah stores, such as Gordman's, a discount-oriented department store set to open in the development in the spring.
"Utah is in remarkably better shape than surrounding states," said Chris Hatch, a principal with Salt Lake City-based commercial brokerage Mountain West Retail/Investment in Salt Lake City. "This is a good place to be."
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Coming in 2012
Tiffany & Co., Coach and Michael Kors • Big names in upscale retailing will move into City Creek Center in downtown Salt Lake City. The center, anchored by Macy's and Nordstrom, will have an estimated 80 specialty shops.
Johnny Rockets • The hamburger chain is opening its first Utah location in the Station Park shopping center in Farmington, joining Gordman's department store, which also is new to the state. Station Park, anchored by a Harmons grocery store and Cinemark movie theaters, is adding a number of new retailers this year.
Scheels sporting goods and apparel store • This 220,000-square-foot store in Sandy will compete with Cabela's in Lehi.