REAL ESTATE NEWS

Ground-up retail development in Fresno and Clovis is gaining meaningful traction as developers responded to tightening supply, stable occupancy and a clear shift in tenant demand toward necessity-based retail formats.

Across both cities, construction pipelines expanded modestly, supported by market fundamentals that remained unusually steady for an elevated interest rate environment.

Fresno's retail vacancy held at 5.5% through mid-2026, signaling balanced conditions and encouraging new development activity.

Developers advanced roughly 350,000 square feet of ground-up retail projects—slightly above the region's historical average—reflecting confidence that well-located, needs-driven retail could outperform even as discretionary categories softened.

Clovis mirrored this momentum through active leasing and selective new construction, particularly in neighborhood-serving centers anchored by fitness, medical, grocery and daily-needs tenants.

Major leases at properties such as Sierra Pavilion underscored the strength of experiential and service-oriented anchors, which continue to drive foot traffic and support smaller shop tenants. These patterns reinforced the viability of new ground-up projects designed around necessity-based uses rather than traditional big-box formats.

Lender sentiment in 2026 aligned closely with this shift. Financing sources—especially non-bank lenders, CMBS programs and competitive multi-lender platforms—demonstrated heightened confidence in necessity-based, grocery-anchored, medical, wellness and daily-needs retail, while remaining cautious toward discretionary or mall-anchored concepts.

Lenders increasingly underwrote to properties showing in-place cash flow and proven tenant performance, requiring stronger pre-leasing thresholds for ground-up projects, often 60% to 70% for conventional financing.

Necessity-based retail in Fresno and Clovis met these criteria more readily due to stable trade-area demographics, consistent sales productivity and limited competing supply.

Two Construction Deals Get Done

HKS Real Estate Advisors is capitalizing on these markets, arranging $7.8 million in construction financing for two ground-up retail developments in Fresno and Clovis.

Alex Dobosh and Andrew Pilchick of HKS secured the financing through North American Savings Bank for Bottom Line Group.

Both loans exceeded 90% loan-to-cost, with one supporting a 4,771-square-foot 7-Eleven convenience store and gas station at Belmont and Fowler avenues in Fresno. The other was for an 11,353-square-foot development at Temperance and Alluvial avenues in Clovis, featuring another 7-Eleven and a three-unit retail building with Chipotle and Phoenician Express already committed.

"Both projects benefit from strong locations in growing Central Valley markets, where there is consistent demand for convenient, daily-needs retail," Pilchick told GlobeSt.com.

"With national credit tenants already committed, the lender saw strong fundamentals and a clear path to execution."

Source: GlobeSt/ALM