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Minnesota Spring Retailer Update

Originally published in the Spring 2016 MSCA State of Retail Report

Written by Jesseka Doherty, Vice President of Leasing in association with Laura McGraw, Cushman & Wakefield/NorthMarq and Jeff Mitchell, Hoyt Properties


fresh thyme

Junior/Big Box

In February At Home opened in the vacant 107,000 square foot vacant Kmart building in Burnsville. The retailer currently has 104 stores, 58 of which opened in the last three years.

Target announced plans for a 21,000 square foot store in Uptown, scheduled to open in 2017.

After filing for bankruptcy protection, Hancock Fabrics announced the closure of three of the six Twin Cities locations. The three locations they’re closing are Bloomington, Roseville and Woodbury. All of the out of the metro locations will remain open. In March Sports Authority filed bankruptcy protection. At that time plans were to close 140 stores and two distribution centers. In most recent news the company has decided not to reorganize but rather pursue a sale instead. According to one news article they will be liquidating and closing operations in the months to follow. Their Minnetonka store was backfilled by PGA Tour Superstore.

Total Wine and Sierra Trading Post recently signed leases for CSM’s Central Park Commons in Eagan, joining Hy-Vee.

Planet Fitness is one of the more active fitness concepts, scouting sites to add to their nine unit count. Five Below is looking to enter our market and are in lease negotiations on several locations. Five Below is a discount retailer aimed at teens.

Due to the rapid growth in ecommerce more brick and mortar retailers are jumping on the band wagon. Some big box retailers are using their sites for distribution centers to fill online orders, striving for efficiency and fast delivery in order to compete with the online superstar Amazon.

Grocery Wars Continue

It was announced in March that Michigan-based Meijer purchased 30 acres of land in Brooklyn Park at Highway 610 and Zane Avenue. Time will tell if or when they build a store, with 200,000 square feet being their prototype. This could potentially be a definite game changer and adds yet another grocer into the already competitive market. According to a recent interview with the current CEO, Meijer’s plans to expand in the market are four to five years out. Also in March, Costco purchased a 175,000 square foot warehouse in northeast Minneapolis just a few months after submitting plans to the City of Woodbury for a 164,200 square foot warehouse at Tamarack Road and Weir Drive. Hy-Vee’s current stores in Oakdale and New Hope have been open since last fall and appear to be doing well. New Hy-Vee stores under construction are in Lakeville, Eagan and Brooklyn Park, and in the planning stages for Maple Grove (again, but on a different site this time), Cottage Grove, Savage and Austin, Minnesota. 

Fresh Thyme Farmer’s Market opened in Bloomington last fall and recently announced it will replace Festival Foods in Vadnais Heights, along with having stores planned in Plymouth, Saint Louis Park and Savage.

Restaurants

Consumers want healthier eating options in a fast format and want to know where the ingredients come from. Café Zupas is one of a couple of groups looking to capitalize on this demand. They make soups, salads, sandwiches and desserts by hand from chef-crafted recipes. Café Zupas opened in Woodbury last year and is following up with growth in Eagan and Maple Grove. They are pursuing other options throughout the market. Others in this market segment are Zoup!, Mod Market, Agra Culture, Good Earth fast format, Sprout, Freshii, Panera and Greenfield Natural Kitchen.

Along the same lines on the health front comes Naf Naf Grill. They have added four more locations (Mall of America, City Center Skyway, Woodbury and Eagan) and are looking at the University of Minnesota for a fifth. The chain specializes in now-mainstream Middle Eastern foods like hummus, pita and shawarma. They are looking to add another three to four locations per year.

Now the bad news in regard to some of the sit down restaurants. Many larger restaurants in the 6,000+ square foot size, or those not fulfilling the needs of consumers, are shuttering. To name a few: Parella, La Belle Vie, Cheeky Monkey, Brasserie Zentral, Louie’s Wine Dive, Republic, Chiang Mai Thai, Masa, Vincent and Origami. These restaurants have had a good run and trends have changed on them. Others just missed the mark on the concept, saturation or location.

Last year in Minneapolis alone, over 100 new restaurants opened. Concepts like Revival, Harriet’s Inn, Saint Genevieve, Upton 43, Mucci’s and Nighthawks are all multiple unit operators. They have all opened a new or proven concept in a new neighborhood with a smaller footprint in the 2,000 to 4,000 square foot range. Thus far they seem to have found good initial traction with consumers according to multiple food reviewers at the Star Tribune, City Pages and Pioneer Press.

Coffee

Dunkin’ Donuts has secured franchisees for the metro area and is negotiating on a number of sites, focusing on 1,800 to 2,400 square foot end caps or stand-alone sites with a drive-thru. Starbucks has signed on most recently in White Bear Lake, an outlot to Cub Foods, in Plymouth, an outlot to Fresh Thyme Farmer’s Market, and in Edina off Industrial Boulevard. They are continuing to focus on metro sites along with out-state markets. Caribou has not been very active as of late but rumblings of the new co-branded Caribou/Einstein’s are in the works. Scooter’s Coffee continues to survey our market with no sites yet committed, targeting 1,000 to 1,600 square foot sites with a drive-thru, with a mix of corporate and franchisee owned stores.

Clothing Stores

 Zara will open a two-story, 30,000 square foot store at the Mall of America by the 2016 holiday season. Women’s clothing Scout and Molly’s is opening a location in the 50th & France shopping district of Edina. Primp is opening a men’s concept called John Henry next to their store in White Bear Lake and is on the hunt for more locations for both concepts. Kittsona came down from North Dakota to open their first store in Minnesota at The Shops at West End.  J.Novachis, men’s clothing store, closed its store in the 50th & France area after a 45 year run after the death of its founder John. His son Tony lives in Excelsior and likes the vibe and the energy of downtown Excelsior; they had planned on opening in March. J. Crew Factory is opening a 6,500 square foot store in June at Shoppes at Knollwood. It appears the major renovation is paying off as Shoppes at Knollwood attracts another big name brand. Fabletics, the fashion athletic wear brand co-founded by Kate Hudson, is opening a store at Mall of America this spring. Len Druskin is leaving the Galleria for Southdale. It was one of the larger stores within Galleria and enjoyed a 24 year run.

Jesseka Doherty
| Vice President of Leasing
Mid-America Real Estate – Minnesota, LLC
5353 Wayzata Boulevard, Suite 650 | Minneapolis, MN 55416
Direct: 952.563.6693 | Fax: 952.563.6633
jdoherty@midamericagrp.com | www.midamericagrp.com


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