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Trends in Real Estate 2003 Presented by   LSU Real Estate Institute and Commercial Investment Division of the Greater Bato...
Typical Shopping Center
Center in the Eyes of the Developer
Major Tenant Concept
City Father’s Concept
REINVENTING RETAIL  1973 – 2003 A TOUR OF SOME OF THE MOST PROMINENT CENTERS IN BATON ROUGE
Esplanade Mall
Esplanade Mall <ul><li>The first enclosed mall built in Baton Rouge </li></ul><ul><li>Built in 1973- anchored by Rubenstei...
Cortana Mall
Cortana Mall <ul><li>Built in 1974 </li></ul><ul><li>Slowly evolved as the retail climate changed </li></ul><ul><li>Fashio...
Cortana Mall
Cortana Mall <ul><li>Wal-Mart Super Center </li></ul><ul><li>Bed, Bath and Beyond </li></ul><ul><li>Shoe Carnival </li></ul>
Oak Villa Extension
Mall of Louisiana
Mall of Louisiana <ul><li>Mall was built in 1997 </li></ul><ul><li>Bluebonnet Parc was built in 2002 </li></ul><ul><li>Sep...
STRIP  CENTERS
Concord Park
Concord Park <ul><li>Built in 1972- Anchored by Kmart and National Grocery Store. </li></ul><ul><li>Tenants have changed b...
Village Square
Village Square <ul><li>Built in three phases with construction starting in 1976. </li></ul><ul><li>Anchored by Kroger, Ser...
COMING SOON! YOUR FRIENDLY  NEIGHBORHOOD  WAL-MART SUPERCENTER
Village Square
Siegen Village
Siegen Village
Siegen Village <ul><li>Built in 1985 but later expanded. </li></ul><ul><li>United Artist and Kmart were the original tenan...
THE POWER CENTER
Hammond Aire Plaza
Hammond Aire Plaza <ul><li>Built in 1985 </li></ul><ul><li>First Power Center in Baton Rouge </li></ul><ul><li>Value Orien...
The Mixed Use Concept
Citi Place
Citi Place <ul><li>Built in 1995 </li></ul><ul><li>First mixed use project in Baton Rouge  </li></ul><ul><li>Combines offi...
Siegen Lane Regional Shopping District 2003
Siegen Lane Regional Shopping District 2003 <ul><li>Zero to 1.2 million square feet of discount and off price retail in 20...
The State of Wal-Mart <ul><li>$240 Billion in sales annually </li></ul><ul><li>3 Million Associates </li></ul><ul><li>Most...
The State of Wal-Mart (cont.) <ul><li>Two daily non-stop flights from LaGuardia Airport to Bentonville daily.  Zero non-st...
The State of Wal-Mart (cont.) <ul><li>Small Marts– Neighborhood Grocery Store </li></ul>
The State of Wal-Mart (cont.) <ul><li>Newest Wal-Mart concept </li></ul><ul><li>40,000 sq. ft. grocery store with drive th...
The New Kid on the Block Life Style Centers <ul><li>Caters to the needs and lifestyle of their customers. </li></ul><ul><l...
The New Kid on the Block Life Style Centers (cont.) <ul><li>Typical tenants may include Ann Taylor, Banana Republic, Barne...
Town Center at Cedar Lodge <ul><li>Proposed new development to be built on the Witter Tract at Corporate Blvd. and Jeffers...
Town Center at Cedar Lodge (cont.) <ul><li>440,000 mixed use development  </li></ul><ul><li>Office  </li></ul><ul><li>Reta...
Sales Tax Collections East Baton Rouge Parish 1999-2000 Year to date 2003 Sales Tax (Jan.-Feb.) is up 4.7%
Rents and Vacancies <ul><li>Overall rents are up and vacancy is down. </li></ul><ul><li>Overall 2002 rents are up 18% over...
Rents and Vacancies (cont.) <ul><li>Community Centers experienced an increase in vacancy from 16.63% to 18.37%.  Rents inc...
Rents by Shopping Center Type Community Overall
Vacancies by Shopping Center Type  Community Overall
Total Retail Building Permits
New Big Box Construction 2001 Petsmart   Siegen  19,250 sq. ft. Wal-Mart   Central   184,435 sq.ft. Kirschman’s Furniture ...
New Box Construction 2002 Best Buy Bluebonnet 45,416 sq. ft. Linen’s N Things Bluebonnet 32,380 sq. ft. Books A Million Si...
Big Box Space Proposed and  Under Construction Year To Date 2003 Ross Dress For Less Siegen  30,187 Sq. Ft. Petco Siegen  ...
Small Strip Centers 2001-2002 Floorscapes Center Coursey at Cedarcrest   24,000 sq. ft.  2001 Coursey Plaza Coursey at Ame...
Proposed Strip Centers 2003 Pearson's  7949 Jefferson Hwy. 29,500 sq. ft. Marblegate Phase II George O’Neal at Jones Creek...
Large Tract Land Sales Condo Development $4.50 10.03 $1,965,744 12/02 Brightside Dr. $4.25 3.09 $571,000 02/03 Brightside ...
Small Tract Land Sales TOP OF THE MARKET PRICES $20.00 1.661 $1,447,000 03/03 Highland @ Perkins  (Exxon Mobil Oil) $22.77...
Conclusions <ul><li>Overall rental rates on existing space increased across the board in 2002. </li></ul><ul><li>Vacancy r...
Conclusions (cont.) <ul><li>Discount and value retailing dominate retail growth.  Department stores are carrying more and ...
Why? <ul><li>The growth is most predominate in Livingston and Ascension Parishes which are the two fastest growth Parishes...
Trends in Real Estate 2003 Presented by   LSU Real Estate Institute and Commercial Investment Division of the Greater Bato...
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Centers Are Usually Open Air And Include At Least 50,000 Sq. Ft. Devoted To National Upscale Chain Specialty Stores Offering Apparel

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Transcript of "Centers Are Usually Open Air And Include At Least 50,000 Sq. Ft. Devoted To National Upscale Chain Specialty Stores Offering Apparel"

  1. 1. Trends in Real Estate 2003 Presented by LSU Real Estate Institute and Commercial Investment Division of the Greater Baton Rouge Association of Realtors Dottie Tarleton, CCIM Vice President Stirling Properties The Baton Rouge Retail Market
  2. 2. Typical Shopping Center
  3. 3. Center in the Eyes of the Developer
  4. 4. Major Tenant Concept
  5. 5. City Father’s Concept
  6. 6. REINVENTING RETAIL 1973 – 2003 A TOUR OF SOME OF THE MOST PROMINENT CENTERS IN BATON ROUGE
  7. 7. Esplanade Mall
  8. 8. Esplanade Mall <ul><li>The first enclosed mall built in Baton Rouge </li></ul><ul><li>Built in 1973- anchored by Rubenstein’s Department Store. </li></ul><ul><li>Reinvented itself into an Entertainment Mall as hotels and offices users crowded the landscape after the extension of Corporate Blvd. in the late 80’s. </li></ul>
  9. 9. Cortana Mall
  10. 10. Cortana Mall <ul><li>Built in 1974 </li></ul><ul><li>Slowly evolved as the retail climate changed </li></ul><ul><li>Fashion Park </li></ul><ul><li>Cortana Square </li></ul><ul><li>Freestanding retailers-Lowe’s, Just for Feet, Old Navy </li></ul>
  11. 11. Cortana Mall
  12. 12. Cortana Mall <ul><li>Wal-Mart Super Center </li></ul><ul><li>Bed, Bath and Beyond </li></ul><ul><li>Shoe Carnival </li></ul>
  13. 13. Oak Villa Extension
  14. 14. Mall of Louisiana
  15. 15. Mall of Louisiana <ul><li>Mall was built in 1997 </li></ul><ul><li>Bluebonnet Parc was built in 2002 </li></ul><ul><li>Separate ownership </li></ul><ul><li>The retail mix between the two centers compliment each other </li></ul>
  16. 16. STRIP CENTERS
  17. 17. Concord Park
  18. 18. Concord Park <ul><li>Built in 1972- Anchored by Kmart and National Grocery Store. </li></ul><ul><li>Tenants have changed but the center is still discount oriented. </li></ul><ul><li>Good design </li></ul>
  19. 19. Village Square
  20. 20. Village Square <ul><li>Built in three phases with construction starting in 1976. </li></ul><ul><li>Anchored by Kroger, Service Merchandise, and K & B Drugs. </li></ul><ul><li>Precursor to the power center. </li></ul><ul><li>Design is functionally obsolete in today’s market. </li></ul>
  21. 21. COMING SOON! YOUR FRIENDLY NEIGHBORHOOD WAL-MART SUPERCENTER
  22. 22. Village Square
  23. 23. Siegen Village
  24. 24. Siegen Village
  25. 25. Siegen Village <ul><li>Built in 1985 but later expanded. </li></ul><ul><li>United Artist and Kmart were the original tenants. </li></ul><ul><li>Newest Discount Store—Big lots </li></ul>
  26. 26. THE POWER CENTER
  27. 27. Hammond Aire Plaza
  28. 28. Hammond Aire Plaza <ul><li>Built in 1985 </li></ul><ul><li>First Power Center in Baton Rouge </li></ul><ul><li>Value Oriented </li></ul><ul><li>Category Killer Stores— Shoe Station, Michaels, Home Depot </li></ul><ul><li>Neighborhood Component— Jr. Department Stores: </li></ul><ul><li>Stein Mart, Burlington Coat Factory, Marshall’s </li></ul>
  29. 29. The Mixed Use Concept
  30. 30. Citi Place
  31. 31. Citi Place <ul><li>Built in 1995 </li></ul><ul><li>First mixed use project in Baton Rouge </li></ul><ul><li>Combines office, entertainment, restaurants, and retail all in one project </li></ul>
  32. 32. Siegen Lane Regional Shopping District 2003
  33. 33. Siegen Lane Regional Shopping District 2003 <ul><li>Zero to 1.2 million square feet of discount and off price retail in 20 years </li></ul><ul><li>And so – the point is that the mall is no longer the king of regional retail!!!! </li></ul><ul><ul><li>Marketplace at Siegen Lane 700,000 sq. ft. </li></ul></ul><ul><ul><li>Target Plaza 353,000 sq. ft. </li></ul></ul><ul><ul><li>Siegen Village 174,378 sq. ft. </li></ul></ul><ul><ul><li>TOTAL 1,227,378 sq. ft. </li></ul></ul>
  34. 34. The State of Wal-Mart <ul><li>$240 Billion in sales annually </li></ul><ul><li>3 Million Associates </li></ul><ul><li>Most respected company on Fortune 500 List </li></ul><ul><li>Biggest employer in 21 States </li></ul><ul><li>World’s biggest grocer, driving down prices an average of 13% in the markets they enter. </li></ul><ul><li>One of the contributing factors for low inflation “Everyday Low Prices” </li></ul>
  35. 35. The State of Wal-Mart (cont.) <ul><li>Two daily non-stop flights from LaGuardia Airport to Bentonville daily. Zero non-stop flights to any other cities in Arkansas from LaGuardia </li></ul><ul><li>Baton Rouge MSA-New Super-centers to begin construction in 2003 </li></ul><ul><li>Location </li></ul><ul><li>Baker 186,000 Sq. Ft. </li></ul><ul><li>Cortana 223,000 Sq. Ft. </li></ul><ul><li>College Dr. 188,000 Sq. Ft. </li></ul><ul><li>Prairieville 207,000 Sq. Ft. </li></ul><ul><li>TOTAL NEW SQ. FT. 2003 804,000 Sq. Ft. </li></ul>
  36. 36. The State of Wal-Mart (cont.) <ul><li>Small Marts– Neighborhood Grocery Store </li></ul>
  37. 37. The State of Wal-Mart (cont.) <ul><li>Newest Wal-Mart concept </li></ul><ul><li>40,000 sq. ft. grocery store with drive thru pharmacy. </li></ul><ul><li>Gas pumps in some locations where space permits. </li></ul><ul><li>Scouting sites in Baton Rouge now. </li></ul>
  38. 38. The New Kid on the Block Life Style Centers <ul><li>Caters to the needs and lifestyle of their customers. </li></ul><ul><li>Are usually upscale projects located near affluent neighborhoods. </li></ul><ul><li>Size is usually 150,000 – 500,000 sq. ft. </li></ul><ul><li>Centers are usually open air and include at least 50,000 sq. ft. devoted to national upscale chain specialty stores offering apparel, home goods, books and music. </li></ul>
  39. 39. The New Kid on the Block Life Style Centers (cont.) <ul><li>Typical tenants may include Ann Taylor, Banana Republic, Barnes and Noble, Bath and Body Works, Gap Concepts, Pottery Barn, Talbot’s, William Sonoma, Chico’s and a mixture of local successful mom and pop operators. </li></ul><ul><li>Specialty grocery stores such as Whole Foods may also be found in lifestyle centers. </li></ul>
  40. 40. Town Center at Cedar Lodge <ul><li>Proposed new development to be built on the Witter Tract at Corporate Blvd. and Jefferson Hwy. </li></ul>
  41. 41. Town Center at Cedar Lodge (cont.) <ul><li>440,000 mixed use development </li></ul><ul><li>Office </li></ul><ul><li>Retail </li></ul><ul><li>Restaurants </li></ul><ul><li>Zoning has been approved </li></ul>
  42. 42. Sales Tax Collections East Baton Rouge Parish 1999-2000 Year to date 2003 Sales Tax (Jan.-Feb.) is up 4.7%
  43. 43. Rents and Vacancies <ul><li>Overall rents are up and vacancy is down. </li></ul><ul><li>Overall 2002 rents are up 18% over 2001. </li></ul><ul><li>Overall vacancy has fallen 4.74% over 2001. </li></ul><ul><li>Neighborhood centers experienced a decrease in vacancy from 26.57% to 16.62%. Rents increased from $10.43 psf to $11.99 psf. </li></ul>
  44. 44. Rents and Vacancies (cont.) <ul><li>Community Centers experienced an increase in vacancy from 16.63% to 18.37%. Rents increased from $9.07 psf to $11.13 psf. </li></ul><ul><li>Regional centers experienced a decrease in vacancy from 6.79% to 1.56 % with an increase in rent from $20.85 psf to $29.72 psf. *Market place a Siegen Lane was added to the survey which contributed to the decline in the vacancy rate. </li></ul>
  45. 45. Rents by Shopping Center Type Community Overall
  46. 46. Vacancies by Shopping Center Type Community Overall
  47. 47. Total Retail Building Permits
  48. 48. New Big Box Construction 2001 Petsmart Siegen 19,250 sq. ft. Wal-Mart Central 184,435 sq.ft. Kirschman’s Furniture Siegen 55,000 sq. ft. Rack Room Shoes Siegen 8,000 sq. ft. TOTAL 266,685 sq. ft.
  49. 49. New Box Construction 2002 Best Buy Bluebonnet 45,416 sq. ft. Linen’s N Things Bluebonnet 32,380 sq. ft. Books A Million Siegen 12,540 sq. ft. Cost Plus Bluebonnet 18,349 sq. ft. David’s Bridal Bluebonnet 9,867 sq. ft. Lifeway Christian Books Bluebonnet 10,000 sq. ft. Rave Movie Theatre O’ Neal Lane 73,292 sq. ft. TOTAL 201,844 Sq. Ft.
  50. 50. Big Box Space Proposed and Under Construction Year To Date 2003 Ross Dress For Less Siegen 30,187 Sq. Ft. Petco Siegen 13,500 Sq. Ft. Co-Op Book Store Burbank Dr. 26,124 Sq. Ft. Stoma’s Furniture Addition Perkins Rd. 10,000 Sq. Ft. Walgreen’s Perkins Rd. 14,490 Sq. Ft. Wal-Mart Cortana 223,000 Sq. Ft. Wal-Mart Baker 186,000 Sq. Ft. Wal-Mart College Dr. 188,000 Sq. Ft. Wal-Mart Prairieville 209,000 Sq. Ft. Academy Siegen 75,000 Sq. Ft. Bed, Bath and Beyond Cortana 20,000 Sq. Ft. Shoe Carnival Cortana 10,000 Sq. Ft. TOTAL 1,005,301 Sq. Ft.
  51. 51. Small Strip Centers 2001-2002 Floorscapes Center Coursey at Cedarcrest 24,000 sq. ft. 2001 Coursey Plaza Coursey at American Way 18,000 sq. ft. 2001 Sherwood Square Sherwood at Florida 26,000 sq. ft. 2001 University View Burbank Dr. at LSU 20,000 sq. ft. 2001 Albertson’s Plaza Airline at Highland 32,000 sq. ft. 2002 Central Plaza Wax at Sullivan 49,000 sq. ft. 2002 TOTAL 169,000 sq. ft.
  52. 52. Proposed Strip Centers 2003 Pearson's 7949 Jefferson Hwy. 29,500 sq. ft. Marblegate Phase II George O’Neal at Jones Creek 70,000 sq. ft. Wal-Mart Strip Wax Rd. 13,850 sq. ft. Coursey Plaza III Coursey at Sherwood 46,333 sq. ft. Southgate Retail Burbank 15,260 sq. ft. Highland Greens Highland at CCLA 15,444 sq. ft. TOTAL 190,387 sq. ft.
  53. 53. Large Tract Land Sales Condo Development $4.50 10.03 $1,965,744 12/02 Brightside Dr. $4.25 3.09 $571,000 02/03 Brightside Dr. Future Development $4.47 6.68 $1,300,000 01/03 Airline Hwy. $5.10 15.82 $3,516,076 12/02 Reiger Rd. Teche Fed Bank $6.85 4.13 $1,300,000 07/02 Sherwood at Southfork All Star Auto $4.29 9.13 $1,706,749 10/02 Airline at Jefferson $5.30 17.32 $4,000,000 10/02 Hatteras Ave. at I-12 Future Development $5.66 3.78 $932,000 6/02 Coursey at Hickory Ridge $4.07 5.36 $950,000 6/02 Coursey at Hickory Ridge Price/SF Size Acres Price Sale Date Location
  54. 54. Small Tract Land Sales TOP OF THE MARKET PRICES $20.00 1.661 $1,447,000 03/03 Highland @ Perkins (Exxon Mobil Oil) $22.77 1.210 $1,200,000 12/02 Coursey @ Airline (Amsouth Bank) $23.66 1.515 $1,561,866 12/02 Coursey @ Airline (Exxon Mobil Oil) Price/SF Size Acres Price Sale Date Location
  55. 55. Conclusions <ul><li>Overall rental rates on existing space increased across the board in 2002. </li></ul><ul><li>Vacancy rates decreased across the board as building permits dropped during 2001 and 2002. </li></ul><ul><li>The greatest vacancies are found in centers anchored by grocery stores built before 1980. Twelve centers fall into the category, followed by three centers built between 80-84 and two centers built between 85-94. </li></ul><ul><li>Florida Blvd. has the greatest number of vacancies, which can be attributed to changes in traffic pattern and growth along I-10 and I-12. </li></ul>
  56. 56. Conclusions (cont.) <ul><li>Discount and value retailing dominate retail growth. Department stores are carrying more and more private label items as consumers continue to look for value. </li></ul><ul><li>Hugh influx of new retail construction is dominated by new Wal-Mart Super centers. </li></ul><ul><li>The Baton Rouge MSA will continue to lead the rest of the state in growth with a projected population increase of over 33,000 people during the next five years. </li></ul>
  57. 57. Why? <ul><li>The growth is most predominate in Livingston and Ascension Parishes which are the two fastest growth Parishes in the State. </li></ul><ul><li>As a comparison, the Lafayette and New Orleans metro areas will both see projected increases of roughly 18,000 people, about half of the Baton Rouge growth. </li></ul><ul><li>Baton Rouge also has the highest average household income (53,000+/-) and the most educated work force in the state with 16% of the population having attained a Bachelor degrees and 8.8% having graduate degrees. </li></ul><ul><li>These demographic influences should help fuel continued retail growth in our market. </li></ul>
  58. 58. Trends in Real Estate 2003 Presented by LSU Real Estate Institute and Commercial Investment Division of the Greater Baton Rouge Association of Realtors Dottie Tarleton, CCIM Vice President Stirling Properties The Baton Rouge Retail Market
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