Q4 2011 - Cincinnati Retail


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Q4 2011 - Cincinnati Retail

  1. 1. Q4 2011 | RETAILCINCINNATI, OHTHE KNOWLEDGE REPORT 2011 PROVES TO BE A STRONG YEAR FOR RETAIL EXECUTIVE SUMMARY 2011 ended on a good note for the Greater Cincinnati retail market as overall net absorption totaled 78,540 square feet for the quarter. This pushed yearend net absorption to 630,236 square feet and the vacancy rate for all retail property types totaled 12.8%. Several submarkets helped fuel the momentum throughout the year, including the CBD/Midtown Submarket, Tri-County’s North Central Submarket and the West Submarket. Although demand remained strong, the average overall asking rate for retail space dropped MARKET INDICATORS slightly to $11.55 per square foot. This was a clear sign that owners of retail properties Q4 11 Q1 12* remain cautious about the overall economic recovery and will do whatever it takes to land quality tenants for their properties. VACANCY DEVELOPMENT NET ABSORPTION As noted throughout most of the year, construction of retail projects continues to flourish. The area’s largest retail project under construction is the mixed-use development at The CONSTRUCTION Banks. This project was active for most of the year and will transform into a retail hotspot RENTAL RATE when the first phase of the development is completed. Retailers and restaurants such as Ruth’s Chris, Tin Roof, Johnny Rockets, Holy Grail, Crave, The Wine Guy, Mahogany’s and *Projected Change to Toby Keith’s I Love This Bar all signed leases for the development, resulting in an occupancy the following Quarter. rate of 70 percent for the first phase of the project. In Norwood, the developer of the long-anticipated Rookwood Exchange broke ground on the site which sat vacant for three years. Jeffrey R. Anderson Real Estate will kick off the first phase of the $125 million development, which will consist of a 123-room Courtyard by Marriott Hotel and a 16-screen movie theater that includes a 7,000-square-foot restaurant and bar with VIP balcony seating. Earlier this year, Oakley Station landed the first anchor tenant at the $120 million mixed- OVERALL VACANCY RATE use development planned for the site of the former Milacron factory in this central submarket. Cinemark NexGen, a Plano, Texas company, said it will open its first local15% theater at this site developed by Vandercar Holdings. In addition to the 55,000-square-foot theater, the developer is planning 350,000 square feet of retail space, 250,000 square feet14% of office space, and 300 apartments.13%12% In 2012, there will be a handful of smaller projects as developers like Brandicorp move forward with plans for several neighborhood developments around the city. Brandicorp’s11% development plans include a $2.5 million retail strip center next to the Fort Wright10% Wal-Mart and the development of a site in Anderson Township, which could possibly include 3Q 11 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 4Q 11 a First Financial Bank and a Buffalo Wild Wings, at the corner of Beechmont Avenue and Asbury Road.www.colliers.com/cincinnati
  2. 2. THE KNOWLEDGE REPORT | Q4 2011 | RETAIL | CINCINNATI RETAIL INVESTMENT SALES and 313% of the $85 million in sales from 2009. Even after stripping out the Blackstone sale, we Sales of retail properties in 2011 could be saw year-over-year sales increases of 59% and interpreted as “steady progress” when you 91% when comparing 2011 to 2010 and 2009. compare activity to 2009 and 2010. At yearend, Amazing progress given the challenges faced over Colliers tracked fifty-five retail shopping center that time. sales in southern Ohio since January 1, 2011. These sales totaled more than $351 million in property FORECAST dispositions and have a very interesting makeup of The Greater Cincinnati retail market had a good sale types. We compared current activity levels to year in terms of activity and lease signings, and those from 2010 and 2009, and noticed several this momentum is expected to continue throughout trends emerging. The underlying trend being that 2012. The overall health of the economy still transactions are occurring, which means capital is remains a question mark, but there are positive flowing back to retail again which is great news for signs we are headed in the right direction. Although the overall market. unemployment remains high, consumers are spending their discretionary income and fueling the June marked the largest retail investment of 2011 growth of retailers across the country. Vacancy when Blackstone completed their $9.4 billion mega rates will continue to fall slightly, possibly 25 to acquisition of Centro Properties. This portfolio 50 basis points in 2012. Construction will move encompassed 2.77 million square feet of space forward and additional smaller projects are within 11 shopping centers located between expected to be announced by the end of the year. Cincinnati and Dayton, and the allocations of those assets exceeded $189 million. Combining this with the $162 million in traditional sales, we saw an increase of more than 245% of sales from 2010UPDATE Recent TransactionsFOURTH QUARTER ACTIVITYPROPERTY TRADE AREA TENANT SIZEPlanfield & Ronald Reagan Hwy Blue Ash Target Opening 135,000Florence Square on Mall Rd North Central Kroger 123,678Kentucky 18/Burlington Pike Boone Morris Furniture Co. 100,000Former Hobby Lobby West Ollie’s 55,169Rookwood Commons CBD/Midtown Recreational Equipment Inc, REI 21,000West Chester Uptown Northwest Fresh Market Store 20,500Cox & Tylersville Rd Northwest Marlin & Ray’s Seafood Bar & Grill 20,500Brentwood Plaza Northwest Planet Fitness 19,000Bridgewater Falls North Central Staples 17,000537 East Pete Rose Way CBD/Midtown Whisky Bar 12,0008991 Kingsridge Dr North Central Marions Pizza 11,0001711 State Route 28 East Red Rooster ‘Blast to the Past’ Diner 10,125The Banks CBD/Midtown Ruth’s Chris 9,600Bridgewater Falls North Central Charming Charlie 7,800505 Vine Street CBD/Midtown Tiffany & Co. 7,500435 Elm Street CBD/Midtown Jimmy G’s 7,5006380 Glenway Ave Forest Park/West Willie’s Sports Café 7,40011749 Princeton Pike North Central Play It Again Sports 7,400Kenwood Place Northeast Massage Envy 7,229Seventh & Race CBD/Midtown Blue Wisp Jazz Club 7,1007th Street CBD/Midtown PLAY 6,700The Banks CBD/Midtown Wine Guy Bistro 6,4009343 Colerain Ave Northwest Show Me’s 6,0009521 Fields Ertel Road Northeast Lighting One 5,100Transactions are believed to be accurate but not guaranteed. P. 2 | COLLIERS INTERNATIONAL
  3. 3. THE KNOWLEDGE REPORT | Q4 2011 | RETAIL | CINCINNATI SUBMARKET DATA Total Vacant Quarterly YTD SUBMARKET Total Inventory Vacancy Rate Avg. Rate SF Absorption Absorption Boone County 4,443,274 570,326 12.8% (6,000) 59,718 $11.54 Campbell County 2,598,774 281,751 10.8% 0 148,511 $11.59 CBD/Midtown 4,024,267 318,844 7.9% 205,000 390,585 $11.75 East 6,454,147 861,312 13.3% (54,744) 58,833 $10.76 Kenton County 2,697,225 225,955 8.4% 0 (15,006) $13.12 North Central 10,803,166 1,461,567 13.5% 7,156 102,312 $11.76 Northeast 8,830,430 1,028,478 11.6% (13,728) (217,524) $13.61 Northwest 6,774,187 1,162,503 17.2% (61,128) (8,897) $8.85 West 4,697,596 641,900 13.7% 1,984 111,704 $12.24 Market Totals 51,323,066 6,552,636 12.8% 78,540 630,236 $11.55 AVG. ASKING RATES (PER SF-FULL SERVICE GROSS) QUARTERLY NET ABSORPTION Strip Centre Neighborhood All Property Types$15 1,500 The Retail Market Net Absorption saw 78,540 square$14 feet of positive Square Feet 1,000$13 absorption this quarter.$12 500$11$10 0$9 -500 3Q 10 3Q 11 4Q 11 4Q 09 1Q 10 2Q 10 4Q 10 1Q 11 2Q 11 3Q 10 4Q 10 3Q 11 4Q 11 4Q 09 1Q 10 2Q 10 1Q 11 2Q 11 COLLIERS INTERNATIONAL | P. 3
  4. 4. THE KNOWLEDGE REPORT | Q4 2011 | RETAIL | CINCINNATI RETAIL SUBMARKETS 512 offices in 61 countries on 6 continents United States: 125 Canada: 38 NORTH NORTHEAST Latin America: 18 CENTRAL Asia Pacific: 214 EMEA: 117 • $1.5 billion in annual revenue NORTHWEST • 979 billion square feet under management • Over 12,000 professionals EAST CBD WEST MIDTOWN CEO | PRINCIPAL: Shenan P. Murphy, CCIM +1 513 721 4200 Colliers International | Greater Cincinnati 425 Walnut Street, Suite 1200 Cincinnati, OH 45202 BOONE KENTON CAMPBELL Colliers International statistics are audited annually and may result in revisions to previously reported quarterly and final year-end figures Accelerating success.Retail Services | Greater CincinnatiMichael P. Ziegler, CLS Ken Arbino Morton A. Schwartz Justin T. RexBrokerage Senior Vice President Brokerage Vice President Brokerage Vice President Brokerage Associatemike.ziegler@colliers.com ken.arbino@colliers.com morton.schwartz@colliers.com justin.rex@colliers.comDIR +1 513 562 2224 DIR +1 513 562 2238 DIR +1 513 562 2277 DIR +1 513 562 2218www.colliers.com/cincinnati