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Columbus OH Retail Trends Q3 2011
Columbus OH Retail Trends Q3 2011
Columbus OH Retail Trends Q3 2011
Columbus OH Retail Trends Q3 2011
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Columbus OH Retail Trends Q3 2011

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  • 1. Q3 2011 | RETAIL GREATER COLUMBUS REGIONRETAIL TRENDS REPORT Slow Growth Continues COLUMBUS REGION OVERVIEW The Columbus retail market finished the third quarter 2011 with moderate positive absorption of 118,454 square feet. This marks the sixth consecutive quarter of positive absorption beginning in the second quarter 2010. It hasn’t been smooth sailing as news that consumer demand and confidence remains generally stagnant over the past six months. Economic data released recently such as jobs report, the economy added 103,000 jobs in September, and The Conference Board’s analysis of leading economic indicators at .03 percent growth suggests that the economy is not headed for MARKET INDICATORS another recession. This will hopefully engender more consumer confidence. Continued on page 2 Q3 Q4 2011 2011* FORECASTS AND REFLECTIONS VACANCY • The retail vacancy rate has steadily decreased between the Campus Gateway and the Short through leasing as well as expansion of North. The 44,000 square foot Rave Theatre NET ABSORPTION product. The additional 340,000 square feet and the 55,000 square foot Hobby Lobby was CONSTRUCTION — of new product and the moderately strong completed in Grove City. 40,000 square feet positive leasing this year in first and third are going up at New Market Mall, 7588-7674 RENTAL RATES — quarters have driven the vacancy rates lower. New Market Center Way, and Earth Fare • In construction news, the Kroger in the Short organic grocery is building a 27,000-square- *Projected change to following quarter North was rebuilt and now stands at 59,302 foot space in Polaris. square feet and anchors the block of transition RENTAL RATES STEADILY UPWARD VACANCY RATE OVER COMPLETIONS AND ABSORPTIONS Asking Rates The average asking 1,200,000 13.5% rental rates decreased in $16.00 strip, neighborhood, and Completions and Absorptions 1,000,000 13.0% community. The 800,000 $14.00 600,000 12.5% softening of prices this Vacancy Rate quarter was a fairlyRental Rates 400,000 12.0% 200,000 significant drop in the $12.00 0 11.5% average. One explanation ‐200,000 may be that asking rates 11.0% $10.00 ‐400,000 are better reflecting ‐600,000 10.5% leasing rates or another $8.00 explanation may be that ‐800,000 10.0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q general demand for 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 08 08 08 09 09 09 09 10 10 10 10 11 11 11 product is not as strong as some of the larger Strip Neighborhood Community Completions Absorption Vacancy Rate leases would suggest. www.colliers.com/columbus
  • 2. RESEARCH & FORECAST REPORT | Q3 2011 | RETAIL | GREATER COLUMBUS REGION Asking rates fell steeply for a majority of product CONSTRUCTION Delaware County type. As explained on page one, there are Both the 44,000-square-foot Rave movie theatre Union County numerous possible explanations. It may be that and the nearby 55,000-square-foot Hobby Lobby North / asking rates are better reflecting leasing rates or Project in Grove City completed in the third Licking Northwest Northeast County it may be that general demand for product is not quarter. as strong as some of the larger leases would On Sawmill Rd. & I-270, a portion of New Market suggest. The activity in the third quarter suggests mall is being demolished and they will beMadison CBD the latter explanation with a majority of theCounty constructing a the building that formerly housed Southeast absorption coming from Shopper’s World’s lease Comp USA will make room for two additional Southwest of the Great Western Shopping Center. Another Fairfield restaurant spaces (Logan’s Steakhouse and an County possible explanation may be that the better IHOP), an 80-room, yet-to-be-announced hotel Pickaway County positioned markets are more fully leased than and an additional 40,000 square feet of retail the least well positioned product. We suspect it space. is a combination of the two of these factors. TheThe Columbus retail market includes 11 strongest prices had generally been in Northwest,suburban submarkets and the Central Some smaller construction projects areBusiness District. A total inventory of 55 Northeast and North Delaware. These are underway as well. A small strip center and anmillion square feet of space with only 1 submarkets for which the vacancy rates have IHOP are under construction at Renner andmillion of that space in the CBD. decreased substantially. Hilliard-Rome Road. Freestanding Piada (Italian fast casual eatery) under construction along MARKET ACTIVITY Sawmill Rd. in Dublin. Block walls are up for the Market Activity Volume is the sum of the 27,000 square foot Earth Fare organic grocery absolute value of each absorption change in the on Gemini Parkway in Polaris market which is market and it tells us a little more about what scheduled to open in early 2012. exactly happened to the market behind the absorption number. The Market Activity Volume was 500,960 square feet which is the largest amount of change in one quarter since before Q1 2009. Net positive absorption in the market, 1.8 million square feet, explains only 28 percent of the changes that occurred this quarter. UPDATE New Supply, Absorption and Vacancy Rates SALES ACTIVITY PROPERTY ADDRESS SALES DATE SALE PRICE SIZE SF GRANTOR GRANTEE PRICE / SF TYPE SUBMARKET 8457 Sancus Blvd 8/3/2011 $5,975,000.00 34,316 Polaris Sancus Retail MFC Polaris I Venture $174.12 Neighborhood Northeast LLC Investments LLC 2812 Fishinger Rd 7/29/2011 $40,000.00 26,657 - - $1.50 Neighborhood Northwest 765 High St 7/29/2011 $130,000.00 25,000 Lahoti Properties LTD CMH Midtown Properties $5.20 General Central 5200 Post Rd 9/2/2011 $1,250,000.00 17,314 $72.20 Automotive Northwest 4339-4367 East Main 7/12/2011 $525,000.00 11,800 Farber Holdings LLC Ioannis Zissis $44.49 Neighborhood Southeast Street 5805 Chantry Drive 7/14/2011 $1,060,000.00 11,500 Brian Ross Haim Sakal $92.17 Free-standing Southeast LEASE ACTIVITY PROPERTY ADDRESS LEASE SF LESSOR LESSEE ASKING PRICE TYPE SUBMARKET 1214 Hill Rd 65,000 Meyer Development Enterprises LLC Variety Wholesale $5.00 Neighborhood Fairfield 2100 Morse Road 47,500 Mc-Nc LLC N/A $10.00 Neighborhood Northeast 9100 Jacksontown Road 30,000 N/A N/A $2.00 Other Licking County 2640-2736 Brice Road 15,426 Hk New Plan Exchange Property Family Dollar - Power Southeast Owner Ii LP 2-98 Consumer Drive 10,400 Midwest Motoplex LLC Halloween City - Lifestyle NortheastP. 2 | COLLIERS INTERNATIONAL
  • 3. RESEARCH & FORECAST REPORT | Q3 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 22,918 2.3% 42,452 29,185 - - - -FAIRFIELD 3,418,174 440,942 12.9% (35,850) 3,825 - - - $10.17LICKING 3,250,240 329,901 10.2% (21,706) (7,097) - - - $8.97MADISON 443,304 9,285 2.1% (4,000) (4,000) - - - $10.00NORTH DELAWARE 1,780,118 291,870 16.4% (3,436) 6,995 - - $22.50 $11.82NORTHEAST 15,377,808 1,064,210 6.9% (4,874) 57,516 - - $10.00 $12.76NORTHWEST 13,017,379 1,160,454 8.9% (10,651) (19,033) 67,000 - $20.00 $11.77PICKAWAY 694,724 17,582 2.5% - (6,615) - - - $8.50SOUTHEAST 9,459,758 1,250,063 13.2% 14,624 113,615 - - $19.50 $7.90SOUTHWEST 6,905,523 1,665,731 24.1% 140,695 171,674 - 109,000 $6.26 $8.60UNION 1,157,257 47,652 4.1% 1,200 (1,075) - - $18.00 -TOTALS 56,491,260 6,300,608 11.2% 118,454 344,990 67,000 109,000 $12.05 $10.35 Net Absorption Construction Asking Rental RatesPROPERTY TYPE Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current CompletionsCOMMUNITY 8,999,075 1,119,308 12.4% 448 58,936 - - $13.42FREE-STANDING 7,931,067 549,280 6.9% - 19,968 - 109,000 $7.02NEIGHBORHOOD 17,397,813 2,497,705 14.4% (82,467) (17,089) 67,000 - $10.35OTHER 27,000 4,610 17.1% - 4,010 - - -OUTLET 184,000 - 0.0% - - - - -POWER 5,272,202 286,627 5.4% 139,640 167,293 - - $12.05REGIONAL 3,828,626 439,162 11.5% - 97,353 - - $10.39SPECIALTY 250,000 17,108 6.8% 42,452 20,830 - - -STRIP 5,448,505 737,453 13.5% 18,381 (10,656) - - $11.53SUPER REGIONAL 6,530,997 648,155 9.9% - - - - -URBAN 621,975 1,200 0.2% - 4,345 - - -TOTALS 56,491,260 6,300,608 11.2% 118,454 344,990 67,000 109,000 $10.76QUARTERLY COMPARISON AND TOTALS Net Absorption Construction Asking Rental RatesQUARTER, YEAR Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions Neighborhood PowerQ2, 2011 56,392,260 6,425,462 11.4 30,507 226,536 109,000 240,000 $11.43 $18.31Q1, 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 $14.57 MINIMUM WAGE The minimum wage will be increased across Ohio by $.30 to $7.70 effective January 1, 2012. The minimum wage for tipped employees will climb 15 cents to $3.85 an hour. The rise is a part of a scheduled increase tied to consumer prices. COLLIERS INTERNATIONAL | P. 3
  • 4. RESEARCH & FORECAST REPORT | Q3 2011 | RETAIL | GREATER COLUMBUS REGIONCBD Marginal vacancy changes occurred in bothThe Central Business District (CBD). Leasing Madison and Union Counties. Staples shoppingwas driven by South Campus Gateway as the center torn down on the west side. 512 offices insubmarket gained more than 40,000 square feetof space. FUNDAMENTALS 61 countries on Three sources are instructive for retail consumer 6 continentsA new plan is in motion for Nationwide Arena to activity. First, the consumer confidence index,become a publicly owned venue leaving United States: 125 the second is a weekly poll conducted by Gallup, Canada: 38Nationwide Insurance and the Dispatch Printing and the third is the Beige Book produced by the Latin America: 18Co. as minority owners. The Convention Facilities Asia Pacific: 214 Federal Reserve Bank semi-quarterly.Authority, the government entity that is the EMEA: 117landlord for the Greater Columbus Convention The consumer confidence index is produced by • $1.5 billion in annual revenueCenter, would purchase arena for $42.5 million The Conference Board and is a survey of how • 978.6 million square feet underand assume management of the property. The confident consumers are in the current economic managementConventional Facilities Authority would borrow conditions by their spending and saving habits. • Over 12,500 professionals$43.3 million from Nationwide and $10 million In August, the index was 45.2, decreasing byfrom the Ohio Department of Development. roughly 16 basis points from 59.5 in July. In GREATER COLUMBUS REGION September the index had increased slightly toNORTH Richard B. Schuen SIOR CCIM 45.4. The index was 112.5 in July 2007, six CEO | Principal | ColumbusThe north submarkets include Northwest, months before beginning of the recession. 8800 Lyra DriveNortheast, and North Delaware. Sears Hardware Suite #15027,000 is vacating the Graceland Shopping Gallup’s consumer spending measure tracks the Columbus, Ohio, 43240Center at High Street and Morris Road in average dollar amount Americans report TEL +1 614 410 5612Clintonville is. Big Lots opened in the front half of spending or charging on a daily basis, notformer-Big Bear site on Hill Road and Refugee counting the purchase of a home, motor vehicle, Leslie HobbsRoad. or normal household bills. Over the three month Marketing and Research Manager period between July and September the 14-day 8800 Lyra Drive rolling average fell from $65 to $63 with a high Suite #150SOUTH of $75 on July 31. The high mark of the 3-day Columbus, Ohio, 43240The southern submarkets are Southeast and TEL +1 614 410 5640 rolling average was also on July 31 at $91. ThereSouthwest. Hobby Lobby and Kohl’s at the corner was very little variation over the three monthof Georgesville Road and Broad Street. The period as retail sales stagnated. Jonathan Badgleylargest lease of the quarter happened in the Research AnalystSouthwest at the Great Western Shopping The Cleveland Federal Reserve reports on 175 South Third StreetCenter, as Shopper’s World leased more than consumer spending twice a quarter in the Beige Suite # 285136,000 square feet. Book. The data for these reports comes from Columbus, Ohio 43201 TEL +1 614 437 4495 qualitative surveys of retailers in the fourthEAST district, which includes Columbus. In September, the reserve bank reported that retailers indicatedThe east submarkets are Licking and Fairfield an increase in sales in the period from early JulyCounties. Licking and Fairfield Counties lost through mid-August were on or ahead of35,000 square feet and 21,000 square feet schedule. Most retailers surveyed expectedrespectively. This document/email has been prepared by Colliers sales to rise in the low to mid-single digits on a International for advertising purposes. Colliers year-over-year basis. Capital outlays remain on International statistics and data are audited annually andWEST plan and the hiring outlook shows no expansion. may result in revisions to previously reported quarterly and final year-end figures. Sources include ColumbusThe west submarkets include Union and Madison Dispatch, Business First, Xceligent, Wall Street Journal, Bureau of Labor Statistics, Bureau of EconomicCounties. Low population in these submarkets Analysis, Gallup, and the Cleveland Federal Reserve.means that competition between retailers is lessfierce than higher populated areas of Columbus. Accelerating success.www.colliers.com/columbus

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