Anchorage commercial property looking good: some withdrawal, but overall Alaska holds strong.

• Author: Phelps, Jack E.
• Position: REAL ESTATE

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On a recent afternoon, Grace Mischenko pulled her red suburban into the parking lot at Tikahtnu Commons, the new 950,000-square-foot shopping complex off Muldoon Road in northeast Anchorage. The mother of seven from Wasilla says she likes having a shopping choice near the north end of town.

"It's convenience," she says, "having Best Buy, Kohl's and Target all together just off the highway coming into town. The guys can go their way and I can go mine. I like shopping at Kohl's, and the Target is nice too."

Her teenage boys like Best Buy and the Game Stop. "We also like the movie theater," Mischenko says, "we've already gone to the movies there a couple times."

YES! SUCCESS!

Tikahtnu Commons is one of the recent success stories in commercial lease space in the Anchorage Bowl. Located on 95 acres of land acquired from the federal surplus property program by Cook Inlet Region's real estate development group, the $100 million project broke ground in 2007. It has attracted major national retailers, including Kohl's, which opened its first-ever Alaska location at the Commons in April 2009.Just six months earlier, Target, America's second-largest retail chain, opened two stores in Alaska, one of them at Tikahtnu Commons.

"Retail lease space in Anchorage is doing well," says Jan Sieberts, a longtime expert in Alaska commercial lending, adding: "2011 is going to be a good year for the commercial market. It could be better if the private sector could get moving again. I don't see a lot of new private construction starting up this year. Most of the construction we see is public construction."

PRIVATE DOWN/EXPANSIONS UP

Sieberts cites the "Gulf of Mexico effect" for some of the slowdown in private-construction spending. The regulatory uncertainty surrounding new development in Alaska's oil fields is having a negative effect on private-construction spending, Sieberts says.

Expansion of existing retail space is also a positive factor in the overall commercial space picture. Wal-Mart is adding nearly 55,000 square feet to its existing store in midtown. Kendall Toyota is expanding its automotive retail center on the Old Seward Highway by 80,000 square feet at a cost of approximately $20 million. The project is expected to be finished before summer 2011.

SOME IN SURVIVAL MODE

Two shopping centers in northeast Anchorage have been struggling. Glenn Square in Mountain View, which began construction about the same time as Tikahtnu Commons...