Noting the downgrade of Saks Fifth Avenue on the corner of Carrillo and State to its discount store, Saks Off 5th, Michael Martz, a founding partner at Hayes Commercial Group, stated demand had dropped for downtown’s prime shopping blocks. “There used to be five or more credit tenants looking at any available space on these blocks,” Martz is quoted as saying in a Hayes press release. “Now the interest level is noticeably quieter.”
A walk up and down downtown State Street shows marked improvement in tenancies compared to the depths of the Great Recession, when about 15 empty storefronts echoed in the area in 2011. The 1000 block is full, while the 900 block has one empty spot where Global Feet had been, and the old Boon Mee storefront at 915 State Street is under reconstruction. Seasonal stores World of Halloween and the Yes Store have staked claims to the two empty storefronts on the 800 block. And the 700 block has two empty spots where Panera Bread and Coldwater Creek had been, which total 11,753 square feet of empty space. Added to the empty spots along the 600 block of State, there’s roughly 30,000 square feet available, the most since 2011, according to Hayes.
The leasing, sales, and investment company attributed the “tepid” interest among potential tenants to the arrival of low-end retailers like Marshall’s and H&M, which it sees as diminishing State Street’s appeal as a boutique shopping area, and robust competition for tourist dollars from Funk Zone and Urban Wine Trail merchants. It also pointed to the perception of increased panhandling downtown as another downward factor. Nonetheless, the overall retail vacancy rate in the area is 2 percent, compared to a forecast 13 percent nationwide by Statista.com for 2015’s third quarter.