Columbus Retail Market Report 2Q2011
 

Columbus Retail Market Report 2Q2011

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Columbus Retail Market Report 2Q2011

Columbus Retail Market Report 2Q2011

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Columbus Retail Market Report 2Q2011 Columbus Retail Market Report 2Q2011 Document Transcript

  • Q2 2011 | RETAILGREATER COLUMBUS REGIONRETAIL TRENDS REPORT Growth Sustained COLUMBUS REGION OVERVIEW The Columbus retail market finished the second quarter 2011 with a bump in positive absorption of 30,507 square feet. This marks the fourth consecutive quarter of positive absorption for retail space. Unemployment has increased by 1.1 percent since March 2011 and this may alter consumer spending throughout the rest of the year. The strong identity of entrepreneurship and creative restraunteering remains a significant growth advantage for Columbus as new concepts are being rolled out all over the city. Continued on page 2...MARKET INDICATORS Q2 Q3 FORECASTS AND REFLECTIONS 2011 2011* • The retail vacancy rate edged downward from • One major construction project wrapped up VACANCY 11.5 percent by 1 basis points to 11.4 percent. this quarter. Menard’s completed a 240,000 The retail market has experienced a full year square foot store completed a super store in NET ABSORPTION of positive absorption and seen asking rates the Northeast submarket. CONSTRUCTION — — rise significantly over that time. • Consumers have generally been back in force. • There are a few ongoing construction projects The unemployment news over the next half of RENTAL RATES — such as a 44,000-square-foot Rave movie the year will dictate discretionary demand as *Projected change to following quarter theatre next to the 55,000-square -foot Hobby consumers have been sensitive to changes in Lobby Project in Grove City, as well as a national unemployment numbers X-square-foot Kohl’s RENTAL RATESSTEADILY UPWARD VACANCY RATE OVER COMPLETIONS AND ABSORPTIONSAsking Rates Average asking rental 1,200,000 13.5% rates decreased in strip $16.00 and neighborhood but 1,000,000 increased in community. Completions and Absorptions 13.0% $14.00 800,000 The softening of prices 600,000 this quarter was not a Rental Rates 12.5% Vacancy Rate $12.00 400,000 significant drop in the 200,000 12.0% average $10.00 0 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 11.5% $8.00 ‐200,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 08 08 08 09 09 09 09 10 10 10 10 11 11 08 08 08 08 09 09 09 09 10 10 10 10 11 11 ‐400,000 11.0% Strip Neighborhood Community ‐600,000 ‐800,000 10.5% Completions Absorption Vacancy Ratewww.colliers.com/columbus
  • RESEARCH & FORECAST REPORT | Q2 2011 | RETAIL | GREATER COLUMBUS REGION LANDLORDS double the amount of movement in second Delaware County Landlords are in a much better position in second quarter 2009 and 2008, and half of the amount Union County quarter 2011 than second quarter 2010 as of second quarter 2010. North / leasing has been positive throughout the year. Northwest Northeast Licking County Landlords have more options and can choose the CONSTRUCTION best tenant . Depending on the capital position of Menard’s construction of a 240,000-square-foot the landlord, they are either on par with tenants power center on Morse Road finished asMadison CBD or are still uphill with build-out and rental rate expected in early second quarter 2011. NewCounty Southeast negotiations. construction began in late 2010 on a Southwest 44,000-square-foot Rave movie theatre next to Fairfield County TENANTS the 55,000-square-foot Hobby Lobby Project in Pickaway County Tenants are spending a little more time on site Grove City. HL scheduled to open in August and selection. As the market turns, they want to be Kohl’s in September. Kohl’s and Hobby Lobby positioned for either a long or full recovery. will vacate their stores on W. Broad St.The Columbus retail market includes 11suburban submarkets and the Central There are a few new concepts entering the fray Some smaller retail locations are also underBusiness District. A total inventory of 55 in multiple locations throughout the city such as construction. Tire Discounter has broken groundmillion square feet of space with only 1 a resurgence of frozen yogurt establishments. for a freestanding store next to Aldi’s acrossmillion of that space in the CBD. from Glenwood Common’s on Rte. 36/37 in MARKET ACTIVITY Delaware. Telhio Credit Union is constructing a The story for the quarter is quieter than average freestanding building will soon open on Buckeye market activity. Market Volume Activity is the Parkway in Grove City. In Tuttle Mall’s parking lot, absolute value of the absorption in each building a new freestanding BJ’s Restaurant & Brewhouse and it gives us a measure of how much space is is under construction. in transition. The market in the second quarter experienced slightly more than 515,000 square feet of square footage in transition. This level is UPDATE New Supply, Absorption and Vacancy Rates SALES ACTIVITY PROPERTY ADDRESS SIZE SF SALE PRICE SALES PRICE / SF SALES DATE SUBMARKET TYPE 650 N. State Street 77,070 $15,828,247.00 $205.37 May 2011 May 2011 Freestanding 1111-1221 Hill Road 90,780 $2,050,000.00 $22.58 April 2011 April 2011 Strip Center 3944 Powell Road 2,782 $1,905,000.00 $684.75 May 2011 May 2011 Freestanding 8 Coshocton Street 7,350 $1,100,000.00 $149.65 April 2011 April 2011 Freestanding 1207 Maple Avenue 10,029 $990,000.00 $98.71 May 2011 May 2011 Strip LEASE ACTIVITY PROPERTY ADDRESS LEASE SF ASKING PRICE / SF (NNN) TENANT LEASE DATE SUBMARKET TYPE 4632-4640 E. Main Street 60,000 - Rose’s May 2011 Southeast Strip 2605-2777 Northland 27,556 $8.00 (Gross) Ohio Twistars Cheerleading June 2011 Northeast Strip Plaza Drive Academy 6084-6360 Busch Blvd. 13,375 - - May 2011 Northeast Neighborhood 7557 Gooding Blvd 12,000 $13.50 Pet Palace June 2011 Northeast Community 612-690 Harrisburg Pike 11,047 $5.00 Godfrey Athletics Bingo May 2011 Southwest Community 1760-1790 East Dublin 8,400 $10.00 Family Dollar April 2011 Northeast Strip Granville Road 300-368 South Hamilton 8,400 $12.00 Tuesday Morning April 2011 Northeast Strip RoadP. 2 | COLLIERS INTERNATIONAL
  • RESEARCH & FORECAST REPORT | Q2 2011 | RETAIL | GREATER COLUMBUS REGIONUPDATE Market ComparisonsRETAIL MARKET Net Absorption Construction Asking Rental RatesSUBMARKET Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions Neighborhood PowerCBD 986,975 65,370 6.6 (5,311) (13,267) - - - -FAIRFIELD 3,418,174 405,092 11.9 33,475 39,675 - - $9.81 -LICKING 3,250,240 308,195 9.5 6,532 14,609 - - $9.23 -MADISON 443,304 5,285 1.2 - - - - $10.00 -NORTH DELAWARE 1,780,118 288,434 16.2 (177) 10,431 - - $12.75 -NORTHEAST 15,377,808 1,059,336 6.9 2,127 62,390 - 240,000 $13.59 $12.50NORTHWEST 13,017,379 1,156,203 8.9 (64,224) (8,382) - - $13.65 $20.00PICKAWAY 694,724 17,582 2.5 (6,615) (6,615) - - $8.50 -SOUTHEAST 9,459,758 1,264,687 13.4 69,842 98,991 - - $10.42 $19.50SOUTHWEST 6,806,523 1,806,426 26.5 (7,392) 30,979 109,000 - $8.14 $22.00UNION 1,157,257 48,852 4.2 2,250 (2,275) - - - $19.65TOTALS 56,392,260 6,425,462 11.4 30,507 226,536 109,000 240,000 $11.43 $18.31 Net Absorption Construction Asking Rental RatesPROPERTY TYPE Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current CompletionsCOMMUNITY 8,999,075 1,126,156 12.5 (6,766) 58,488 - - $14.01FREE-STANDING 7,832,067 549,280 7.0 (6,500) 19,968 109,000 240,000 $9.01NEIGHBORHOOD 17,397,813 2,415,238 13.9 (21,075) 65,378 - - $12.71OTHER 27,000 4,610 17.1 - 4,010 - - -OUTLET 184,000 - 0.0 - - - - -POWER 5,272,202 426,267 8.1 30,250 27,653 - - $18.31REGIONAL 3,828,626 439,162 11.5 98,046 97,353 - - $8.04SPECIALTY 250,000 59,560 23.8 (5,311) (21,622) - - -STRIP 5,448,505 755,834 13.9 (58,137) (29,037) - - $12.97SUPER REGIONAL 6,530,997 648,155 9.9 - - - - -URBAN 621,975 1,200 0.2 - 4,345 - - -TOTALS 56,392,260 6,425,462 11.4 30,507 226,536 109,000 240,000 $12.55QUARTERLY COMPARISON AND TOTALS Net Absorption Construction Asking Rental RatesQUARTER, YEAR Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions Neighborhood PowerQ1, 2011 55,896,613 6,439,929 11.52 195,989 195,989 336,000 255,647 $11.46 $17.89Q4, 2010 56,019,350 6,663,024 11.9 57,808 274,518 541,647 110,000 $11.05 $12.50Q3, 2010 56,019,350 6,720,832 12.0 236,129 216,710 595,647 176,250 $11.68 $14.57Q2, 2010 55,843,100 6,950,296 12.4 197,025 (19,419) 771,897 - $12.71 $12.56 BIG BOX CONSTRUCTION There have been significant leasing and growth in big box stores in the first half of the year. Rose’s took 60,000 square feet in the Southeast. Construction was completed on the massive 240,000-square-foot Menard’s and in Q1 construction was completed on the Giant Eagle Market Place in Upper Arlington. Construction began on two Hobby Lobby’s and a Kohl’s store. COLLIERS INTERNATIONAL | P. 3
  • RESEARCH & FORECAST REPORT | Q2 2011 | RETAIL | GREATER COLUMBUS REGIONCBD FUNDAMENTALSThe Central Business District (CBD) incurred5,311 square feet in negative absorption and The U.S. retail sector had grown since March but took a dip in June. Three sources are 480 offices inincreased the vacancy rate by 1 percent from last instructive for retail consumer activity. First, the 61 countries onquarter to 6.6 percent. consumer confidence index, the second is a weekly poll conducted by Gallup, and the third is 6 continents the Beige Book produced by the Federal ReserveNORTH United States: 95 Bank semi-quarterly. Canada: 17The north submarkets include Northwest, Latin America: 17Northeast, and North Delaware. The year to date The consumer confidence index is produced by Asia Pacific: 52absorption in the Northeast submarket edged up The Conference Board and is a survey of how EMEA: 85by 2,147 square feet. The Northwest submarket confident consumers are in the current economic • $1.6 billion in annual revenuehad been a strong performer this year but took a conditions by their spending and saving habits. • 672.9 million square feet underdip of 64,224 square feet of absorption. In April, the index was 65.4 decreasing by management roughly 16 basis points from 63.8 in March. In • Over 10,000 professionalsSOUTH June the index had decreased to 58.5. The index was 112.5 in July 2007, six months before GREATER COLUMBUS REGIONThe southern submarkets are Southeast and beginning of the recession.Southwest. The Southeast gained 69,842 square Richard B. Schuen SIOR CCIM CEO | Principal | Columbusfeet and was the strongest submarket. Rose’s Gallup’s consumer spending measure tracks the 8800 Lyra Driveled the surge by leasing the former Big Bear average dollar amount Americans report Suite #150store on Main road. The Southwest recorded spending or charging on a daily basis, not Columbus, Ohio, 432407,392 square feet of negative absorption. counting the purchase of a home, motor vehicle, TEL +1 614 410 5612However, the biggest story in the Southwest is or normal household bills. Over the three month FAX +1 614 410 3312the vacancy of Hobby Lobby and Kohl’s at the period between April and June the 14-day rollingcorner of Georgesville Road and Broad Street. Leslie Hobbs average rose from $61 to $67 with a high of $73 Marketing and Research ManagerBoth companies are not citing the new casino as on June 15. The high mark of the 3-day rolling 8800 Lyra Drivethe impetus for the move, but rather that the average was on June 6 at $86. Suite #150casino wasn’t a strong enough factor to remain Columbus, Ohio, 43240in that particular trade area. The Cleveland Federal Reserve reports on TEL +1 614 410 5640 consumer spending twice a quarter in the Beige FAX +1 614 410 3310EAST Book. The data for these reports comes from Jonathan BadgleyThe east submarkets are Licking and Fairfield qualitative surveys of retailers in the fourth Research AnalystCounties. Fairfield County experienced a sizable district, which includes Columbus. In June, the 8800 Lyra Drive reserve bank reported that retailers indicated an Suite # 150uptick with 33,475 square feet of space from a increase in sales in the low to mid single digits Columbus, Ohio, 43240large lease of 1111 Hill Road. Licking County TEL +1 614 410 5652experienced a small increase in absorption with and that there was an increase in discretionary FAX +1 614 410 33276,532 square feet. spending. Concerns about the rising cost of fuel and food have caused vendors to increase prices. Capital outlays remain on plan and areWEST slightly hire than a year ago. In July, retailersThe west submarkets include Union and Madison reported that sales over the past 6 weeks wereCounties. Low population in these submarkets This document/email has been prepared by Colliers again generally higher than year-ago levels. Formeans that competition between retailers is less International for advertising purposes. Colliers a few chains, the rate of growth was lower than International statistics and data are audited annually andfierce than higher populated areas of Columbus. may result in revisions to previously reported quarterly expected and this was attributed mainly toSubsequently, the vacancy rates are low because and final year-end figures. Sources include Columbus inclement weather. A majority of retailers Dispatch, Business First, Xceligent, Wall Street Journal,the retail offering is already maximized relative Bureau of Labor Statistics, Bureau of Economic reported that they plan to expand the number ofto population. Madison County remained Analysis, Gallup, and the Cleveland Federal Reserve. their retail outlets.unchanged while Union saw a small uptick inpositive absorption. Accelerating success.www.colliers.com/columbus