When Tricia Melvin, owner of Dragonflies and Dragonflies Babies, notified Steve Anderson that she was vacating her space at Anderson Square Shopping Center to move to another location, it didn’t take long for other potential tenants to inquire about her old spot. 

“We met at 9:30 that morning, and she let me know that she was vacating the space. And within six hours, I already had two clients ask me to reserve [the space] for them,” Anderson said. “It was crazy.” 

But things soon morphed when Anderson was approached by two other prospective national tenants – one, a potential 9,000-square-foot user, the other a 15,000-square-foot user – about the 40,000-square-foot shopping center that sits in the middle of Oleander Drive’s retail renaissance.  

“I know I can accommodate one national retailer and another local business looking to relocate to my center,” Anderson said. “But it’s going to require some juggling.”  

That could be tough, considering Anderson Square is nearly 100 percent occupied. 

And it’s not alone. 

A number of shopping centers across Wilmington – including Oleander Place, Racine Commons, The Cotton Exchange and Hanover Center – are seeing occupancy rates approaching, or meeting, 100 percent – a sign that more retail units may be needed in the area. 

While Independence Mall officials do not release occupancy rates for the center, Helen C. Lewis, general manager for Independence Mall, said she has noticed a surge in retail activity.

Lewis said representatives with Madison Marquette, which owns and manages the regional shopping center, recently returned from the National New York Leasing Convention where featured retailers were bullish on Wilmington. 

“There was very strong interest in the center,” Lewis said of the mall, adding that new store announcements would be coming soon. “November sales have been up, and we're continuing to see strong sales.” 

Resurgent market 

According to Commercial MLS data collected from the Realtors Commercial Alliance of Southeastern North Carolina, more than 60 retail transactions were reported in New Hanover, Brunswick and Pender counties since January 2012 – filling more than 225,000 square feet of commercial space across the region.

Paul S. Loukas, vice president and broker with Wilmington-based Cape Fear Commercial, said the demand was market driven. 

“It was one of the first product types to feel the effects of the downturn,” he said. “And conversely, it has been one of the first areas to experience a rebound.” 

Loukas said as consumer spending tanked during the recession, many retailers spent much of their time downsizing and closing stores as well as rethinking their business models. But with unemployment numbers falling and consumer confidence beginning to strengthen, retailers are back on the prowl for new retail space in Wilmington. 

“We have retailers new to Wilmington looking to enter the market,” he said. “Previously vacant spaces are being absorbed at a healthy rate.” 

Loukas should know. 

Before Wilmington-based Thomas Construction Group broke ground this year on a 7,900-square-foot retail center at 5301 Market St. near Costco, Loukas’ firm secured two new market retail tenants: Jason’s Deli and Eyemart Express. 

“The rebound came as a rush of activity as there was a fair amount of repressed demand from both retailers themselves and their consumers,” Loukas said. 

Anderson agreed, adding that some of the retailers targeting his shopping center, and others, were closely riding the coattails of Whole Foods, Hobby Lobby and Trader Joe’s. 

“You can’t ignore that,” Anderson said of the trend. “I’ve got two national retailers, one that’s already in the market and a second that’s looking to enter the market. While having retailers like Whole Foods and Trader Joe’s here has helped with leasing, I certainly wouldn’t say it’s the only deciding factor … but it helps.” 

Jason Swain, principal broker with Wilmington-based Swain & Associates, added that the nearly four-year lull caused by the recession has also given property owners and brokers time to regroup and aggressively recruit new retailers to the market. 

At The Forum, which is approaching full occupancy, Swain said some of the tenants expanded and switched spaces to best accommodate their business models. He said that has allowed his firm to better market the center and recruit tenants that are a good match for the region. 

“During the recession, the first thing developers did was focus on their vacancies in their existing assets,” Swain said. “For three to four years, we have had a chance to look at how best to fill these vacancies, and a lot of that work is beginning to pay off.” 

Swain said retailers were jockeying for class-A sites along proven corridors, but even those units are beginning to reach the 100 percent threshold. 

“We’re starting to see opportunities for new development,” Swain said, adding that his firm was close to announcing five new retail projects, including three that might occur in New Hanover and Pender counties. 

“To have that much construction will be great for our area because not much new development has happened.”  

Pending inventory 

More than 200,000 square feet of new retail space is slated to come on board in the coming months for the Wilmington area. 

One of the largest projects in the region under construction is the Hampstead Town Center, a $14 million, 81,970-square-foot development at the intersection of U.S. Highway 17 and Ravenswood Road on 14.12 acres.

The project is anchored by a 44,170-square-foot Lowes Food, and its remaining retail units and three outparcels are currently being marketed for future leases and development.

Loukas, whose firm is the primary leasing agent for S&H Centre Development’s 13 acres of property near the intersection of Market Street and Lennon Drive, said there would soon be 30,000 square feet of retail space for lease in that development. He said another junior box retail site for build-to-suit would anchor the development.  

“We expect to officially hit the market with the new plans in the coming weeks,” he said. 

Meanwhile, officials with Wilmington-based Oleander Company plan to roll out a new phase of redevelopment at the Hanover Center that will add 8,000 square feet of new retail space to the shopping center along Independence Boulevard early next year. 

Officials are also actively courting potential tenants to occupy 26,000 square feet of space in the former Sears building behind Stein Mart at the center. 

Racine Commons is looking to launch phase three of its expansion at 240 Racine Drive to include 8,000 square feet of new retail space. 

And Wilmington-based Cameron Management Inc. is looking to woo users to 12,000 square feet of proposed retail flex space on South College Road – across the street from Trader Joe’s.  

But one of the largest expansions announced this year was at Mayfaire Town Center, where officials launched phase three preleasing for the future $21 million development of 96,000 square feet.

Construction on the large retail project could begin by the end of 2013.  

H.J. Brody, a Greenville-based codeveloper of Mayfaire Town Center, said the planned expansion was being fueled by demand. 

“We’re 97 percent full, and we feel now is the time to start our expansion,” Brody said.,” Brody said.