Retail slots all rented in orbit of Fayetteville's Whole Foods

Site near I-49, and grocer called a magnet for well-heeled

Lisa Webb leads a class at her Fayetteville Pilates and Barre studio. Webb anticipates that the nearby Whole Foods will attract health-conscious customers interested in her business.
Lisa Webb leads a class at her Fayetteville Pilates and Barre studio. Webb anticipates that the nearby Whole Foods will attract health-conscious customers interested in her business.

FAYETTEVILLE -- The soon-to-open Whole Foods Market is acting like a magnet.

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Josh Nescott, assistant manager at Joplimo Mattress, straightens a bed at the company’s new Fayetteville location, where Whole Foods will be a neighbor.

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Arkansas Democrat-Gazette

This graphic shows the location of the College Marketplace site to be anchored by Whole Foods.

With months to go before its grand opening in Northwest Arkansas, the specialty grocer is making its presence felt. Despite what is likely the highest rent in the region, the nearly 62,000-square-foot development that the Whole Foods Market anchors is fully leased.

Businesses like Deluxe Burger, Joplimo Mattress and Fayetteville Pilates and Barre, along with national chains like Chipotle Mexican Grill, Zoe's Kitchen and Alumni Hall, have all put down stakes in the retail center in hopes of capitalizing on Whole Foods' draw.

"It's not something you see every day," Alan Cole, principal and executive vice president covering Arkansas for real estate company Colliers International, said of the demand. Cole declined to give exact rates for particular tenants, but he said the development's leases are in the neighborhood of 20 percent higher than the region's top rates for commercial retail space -- so somewhere in the neighborhood of $30 a square foot.

"We're still getting calls," he said. "Tenants want to be in this area."

The new development, dubbed College Marketplace, is owned by Georgia-based, privately held commercial real estate firm S.J. Collins Enterprises. It sits on North College Avenue just south of Millsap Road. The Whole Foods store takes up a little more than 35,000 square feet in the development; retail shop space is just shy of 24,000 square feet and restaurant space stands at a tad more than 3,000 square feet.

Lisa Webb, owner of Fayetteville Pilates and Barre, moved her operation to the development, opening her doors just a few days ago. The primary reason for the move, she said, is Whole Foods' core customers, which include the health conscious and women between the ages of 35 and 65.

"It's exactly who you want to walk in the doors of a Pilates studio," she said.

Webb declined to say specifically how much she was paying in rent but said she and husband crunched the numbers and decided it was a good investment. The proximity of a nearby flyover bridge that opened last year provides easy access to Interstate 49, and thereby the entire area, she said.

"The flyover allows us to expand our client base to outside the Fayetteville area," Webb said.

Jeff Cooperstein, a researcher at the Center for Business and Economic Research at the University of Arkansas at Fayetteville, said it's no surprise College Marketplace is claiming top rents and rapidly filled up.

He said the commercial real estate in the area around the store will likely see its value rise and that will likely encourage redevelopment. It's a phenomenon that analysts call "The Whole Foods Effect," referring to the company's canny site selection and its ability to increase property values when it moves in.

Whole Foods, Cooperstein added, has a lot to gain by moving into Northwest Arkansas.

He said the company realized the region -- with executives at Wal-Mart, Tyson Foods and J.B. Hunt, the vendors to those companies and the University of Arkansas -- is stocked with well-heeled customers who typically like to shop at Whole Foods. The recent roadway improvements will mean the center will be easy to reach from all the major cities in the region.

"They'll capture everybody," Cooperstein said.

Austin, Texas-based Whole Foods is projecting continued strong growth, with plans to eventually have more than 1,200 stores in the U.S. Currently, it has 424 stores, including one in Little Rock. The grocer plans to cross the 500-store mark in its fiscal 2017.

A Wall Street darling for years, the company missed some third-quarter earnings estimates in late July and saw its stock drop 12 percent, hitting a 52-week low and continuing to slide. Shares traded in the $35 range last week. The stock has traded as high as $57.57 over the past year.

The company also is feeling more pressure from grocers like Kroger and Wal-Mart that are adding more organic and natural items to their shelves. Recently, Whole Foods suffered a blow to its credibility when a New York City audit showed pricing irregularities.

"In this rapidly changing marketplace, we believe we are taking the necessary steps to position ourselves for the longer term," said Walter Robb, Whole Foods' co-CEO, in a statement regarding earnings. "We remain focused on innovating and evolving to best serve our customers' diverse purchasing preferences."

A Whole Foods regional spokesman did not return requests for interviews or answer email questions concerning the Fayetteville operation.

Brian Croft, owner of Joplin, Mo.-based Joplimo Mattress, said the the development -- with its health-conscious bent -- was a natural fit for his newest store. J0plimo Mattress sells specially engineered mattresses, designed and built in Springfield, Mo.

"In this environment, it's not hard to educate people about the value of sleep," Croft said.

Scott Bowman, owner of the Bowman Restaurant Group, is putting a Deluxe Burger into the new development. He said a big enticement to go into College Marketplace was Whole Foods, but the mix of the other tenants, including national and local companies, is attractive as well.

"We love competition," he said. "We love it when people go out to eat."

The new Deluxe Burger location will be the first to offer a drive-thru and counter service. Locations in Fayetteville and Rogers are sit-down restaurants. Bowman said the new development was a good spot to try the new concept.

"It was kind of a no-brainer for us," he said.

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