Deer Springs Town Center gives minor boost to Valley’s retail absorption rate

By Brian Sodoma

Friday, July 24, 2009 | 6 a.m.

Deer Springs Town Center is doing its part in making horrible retail absorption numbers almost look respectable, according to John Stater, the research manager for Colliers International brokerage in Las Vegas. At a recent conference, Stater indicated a year-to-date negative net absorption of retail space to the tune of 176,000 square feet valleywide. But without the opening of Deer Springs Town Center at the corner of North Fifth Street and the Clark County 215, that number would have been in the negative by more than 600,000 square feet.

“They helped to sort of juice up the power center market a little. Take that project away, and the numbers are very weak,” Stater said, while adding that the opening of Deer Springs Town Center is positive but still a risk in a very troubled commercial building environment. “You’ve had a lot of people moving into the Aliante area and into the northwest. It (stores opening their doors in the northwest) could be a matter of retailers trying to follow the population. … But, oftentimes, you also find retailers trying to get to an area before much of the population growth has arrived. … It all comes down to how long the retailers are willing or able to take a loss while things are slow.”

Deer Springs Town Center is home to Target, Babies R Us and Toys R Us, as well as a few smaller retailers. The first phase, in which buildings are going up and contractors are doing tenant improvements, encompasses a little more than 450,000 square feet and is about 80 percent leased, said Mike Leonard, a vice president of investments for Deer Springs owner Regency Centers, a real estate investment trust with 440 grocery-anchored or community centers around the country. Regency also owns Anthem Highlands Shopping Center in Henderson and Centennial Crossroads Plaza in northwest Las Vegas.

Leonard remains optimistic about a growing daytime population in the area, with the Veterans Affairs hospital under construction up the street and other medical centers coming online, in addition to jobs created by the million-plus square feet of retail in the area.

Home Depot, Ross Dress for Less, PetSmart, Staples and other tenants will be coming online in the fourth quarter of this year. The second phase of the 65-acre parcel, which will bring the total leasable space to 700,000 square feet, should open in late 2010 and early 2011. The hope for the second phase is to find a grocery store anchor, along with more restaurant and smaller retail offerings, said Paul Loubet, who is also a vice president of investments for Regency.

“We almost have three centers within one center out there,” Loubet said. “You have home improvement and home furnishings with Home Depot, soft goods components with Ross and then a department store in Target. … But we can still have parts of the center be more of a neighborhood center, as opposed to a regional draw. You want the sandwich shops, nail salons, the things that serve the demographic base that’s closer to the center.”

While leasing has been strong at the center, finding a grocery anchor for the second phase has been a challenge, Loubet said.

“The grocers have definitely been feeling the economy, too, and are really cautious about expanding,” he said.

In a unique twist for a retail center, Regency is seeking a Leadership in Energy and Environmental Design certification from the U.S. Green Building Council on the project. It is one of six sites Regency submitted for LEED certification companywide. LEED certification is more common for office buildings, added Loubet.

“We’re partnering with the USGBC on trying to get a retail LEED certification. We’re going in and taking some of the LEED components established from the office (sector), and we’re using things like high-efficiency equipment; low-flow, zero-flush urinals; very efficient heating and air-conditioning systems; drought-tolerant landscaping … a whole litany of things our architects have incorporated,” Loubet said.