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Q4 2011 - Columbus Retail
 

Q4 2011 - Columbus Retail

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    Q4 2011 - Columbus Retail Q4 2011 - Columbus Retail Document Transcript

    • Q4 2011 | RETAILGREATER COLUMBUS REGIONRETAIL TRENDS REPORT Slow Growth Continues COLUMBUS REGION OVERVIEW The Columbus retail market finished the fourth quarter of 2011 with moderate positive absorption of 108,000 square feet. This is the seventh consecutive quarter of positive absorption beginning in the second quarter of 2010. Difficulty getting financing is creating pressure for tenants, but retailers also seem to be in a wait-and-see mode as they consider further news about the economy’s direction. In economic data recently released, many factors are helping to illustrate the direction of the economy. For example, the U.S. economy added 200,000 jobs in December according to the jobs report.MARKET INDICATORS Another example is The Conference Board’s analysis of leading economic indicators which showed a 0.4 percent growth that suggests the economy will grow for the next three to six months. Q4 Q1 2011 2012* FORECASTS AND REFLECTIONS • Theretail vacancy rate has steadily decreased million and the 100,000-square-foot lifestyle VACANCY through leasing as well as expansion of center at 4305 West Dublin Granville Road for NET ABSORPTION product, dipping 20 basis points from the third $6.1 million. quarter 2011 to 11.0 percent. • Inconstruction news, a number of smaller CONSTRUCTION — • A number of larger retail outlets were locations are underway including IHOP and RENTAL RATES — transferred this quarter including the Hills Market. Construction continues for the 443,000-square-foot power center 1299 40,000-square-foot New Market Mall and the *Projected change to following quarter Polaris Parkway for $80 million. Other 27,000-square-foot Earth Fare organic transfers include the 120,000-square-foot strip grocery in Polaris. center 55 Meadow Park Avenue for $19.5 RENTAL RATESSTEADILY UPWARD VACANCY RATE OVER COMPLETIONS AND ABSORPTIONSAsking Rates The average asking  1,200,000 14% rental rates increased in  $16.00 strip and neighborhood  1,000,000 12% but decreased in Completions and Absorptions  $14.00  800,000 community. Asking  $12.00  600,000 10% rates for different Vacancy Rate  400,000 8% property types continue  $10.00  200,000 to show the disparate  $8.00  ‐ 6% value to tenants and the 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q financial situations of  (200,000) 4%  $6.00 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 larger landlords who are 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q  (400,000) able to wait out the 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 2%  (600,000) appropriate tenants. Strip Neighborhood Community  (800,000) 0% Completions Absorption Vacancy Ratewww.colliers.com/columbus
    • RESEARCH & FORECAST REPORT | Q4 2011 | RETAIL | GREATER COLUMBUS REGION CONSTRUCTION underway at New Market Mall (7588-7674 New Delaware County Currently, there are a few projects under Market Center Way). Organic grocer, Earth Fare, Union County development that are smaller than we have seen continues with construction of their North / in the past few quarters with larger retailers 27,000-square-foot space in Polaris. Licking Northwest Northeast County such as Rave Theaters and Kohl’s. Liberty Crossing, a roughly 30,000-square-foot MARKET ACTIVITY community center is underway at 4020-4060 Market Activity Volume is the sum of theMadison CBD Powell Road. No future tenants have been listed. absolute value of each absorption change in theCounty Southeast Shoppes at Westerville Road on the south-west market and it tells us a little more about what Southwest corner of Innis Road and Westerville Road is a exactly happened to the market behind the Fairfield County 15,000-square-foot convenience/strip center absorption number. The Market Activity Volume Pickaway County currently under construction. No future tenants was slightly more than 160,000 square feet. have been listed. The fourth quarter of 2011 was the slowestThe Columbus retail market includes 11 quarter since third quarter 2006, as measuredsuburban submarkets and the Central The future site of Hills Market is an 11,000-square- by total market volume.Business District. A total inventory of 55 foot general/street retail in the central market atmillion square feet of space with only 1 95 North Grant Avenue. IHOP is setting up shop The typical tenant in the market currently ismillion of that space in the CBD. at 5500 Renner Road. The 10,000-square-foot quick serve restaurants and casual dining. space will be a stand-alone restaurant space. Smaller, well-located shop space seems to be in 648-656 Grandview Avenue is a 10,000-square- high demand as well. Nervous tenants and foot convenience/strip center currently under availability of money from the lenders has construction in the central market. No word on prevented deals from closing. future tenants. 40,000 square feet is still UPDATE New Supply, Absorption and Vacancy Rates SALES ACTIVITY PROPERTY ADDRESS SALES DATE SALE PRICE SIZE SF GRANTOR GRANTEE PRICE / SF TYPE SUBMARKET 1299 Polaris Parkway December $80,000,000 443,165 Glimcher Realty Trust DDR $180.52 Power Center Northeast 55 Meadow Park Avenue October $19,510,000 120,000 Worthington 1 LLC Cole RE Investments $162.58 Strip North Delaware County 4305 W Dublin Granville December $6,125,000 103,000 Fifth Third Bank Mr Tsarr Owner LLC $59.47 Lifestyle Northwest Road Center 3599 Park Mill Run Drive December $5,504,000 127,058 Cadle Company A&C Ventures Inc $43.32 Super Northwest 4675 Karl Road November $721,000 58,994 Chesrown Norman L TR KM 22 Investments LLC $12.22 Automotive Northeast 8139 East Broad Street December $2,120,000 4,092 One Reynoldsburg Co. CK Broad LLC $518.08 Stand-alone - LEASE ACTIVITY PROPERTY ADDRESS LEASE SF TOTAL SIZE LESSEE ASKING PRICE TYPE SUBMARKET 1821 Henderson Road 33,000 160,702 Show & Sell Merchandise - Community Northwest 104 Vine Street 10,000 10,000 - $12.00 Restaurant Central 5504 Livingston Avenue 9,000 46,362 Bingo hall $4.67 Strip Southeast 1004 Memorial Drive 7,355 7,355 Grover Motor Sales $7.34 Automotive Fairfield 5091 Main Street 7,320 45,395 Payless Furniture - Strip Southeast 5796 Karl Road 6,350 6,350 -- $7.95 Restaurant Northwest 2831 Olentangy River Road 6,000 130,600 Sunspot Tanning $14.00 Anchored Strip Northwest 3703 Broad Street 5,250 489,617 - $12.00 Power Center Southeast 5091 Main Street 5,100 45,395 Everything Goes $13.50 Strip Southeast 695 Hill Road 4,104 4,104 - $14.62 Freestanding Fairfield 471 Morrison Road 4,000 16,069 - $13.00 Strip NortheastP. 2 | COLLIERS INTERNATIONAL
    • RESEARCH & FORECAST REPORT | Q4 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 5,810 0.6 17,108 46,293 21,000 - - -FAIRFIELD 3,418,174 447,642 13.1 (6,700) (2,875) - - $10.06 -LICKING 3,250,240 329,901 10.2 - (7,097) - - $8.97 -MADISON 443,304 9,285 2.1 - (4,000) - - $10.00 -NORTH DELAWARE 1,780,118 246,230 13.8 45,640 52,635 - - $11.08 $22.50NORTHEAST 15,437,110 1,013,801 6.6 50,409 107,925 15,000 - $13.27 $10.00NORTHWEST 13,017,379 1,101,967 8.5 58,487 39,454 107,000 - $12.12 $20.00PICKAWAY 694,724 17,582 2.5 - (6,615) - - $8.50 -SOUTHEAST 9,459,758 1,291,195 13.6 (41,132) 72,483 - - $7.98 $19.50SOUTHWEST 6,905,523 1,682,354 24.4 (16,623) 155,051 - - $8.57 $7.53UNION 1,157,257 46,752 4.0 900 (175) - - - $18.00TOTALS 56,550,562 6,192,519 11.0 108,089 453,079 143,000 - $10.48 $12.50 Net Absorption Construction Asking Rental RatesPROPERTY TYPE Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current CompletionsCOMMUNITY 8,999,075 1,121,862 12.5 (2,554) 56,382 30,000 - $12.69FREE-STANDING 7,990,369 582,426 7.3 (33,146) (13,178) 58,000 - $7.02NEIGHBORHOOD 17,397,813 2,390,797 13.7 106,908 89,819 - - $10.52OTHER 27,000 4,610 17.1 - 4,010 - - -OUTLET 184,000 - 0.0 - - - - -POWER 5,272,202 286,627 5.4 - 167,293 - - $12.50REGIONAL 3,828,626 456,714 11.9 (17,552) 79,801 40,000 - $9.54SPECIALTY 250,000 - 0.0 17,108 37,938 - - -STRIP 5,448,505 700,128 12.8 37,325 26,669 15,000 - $11.63SUPER REGIONAL 6,530,997 648,155 9.9 - - - - -URBAN 621,975 1,200 0.2 - 4,345 - - -TOTALS 56,550,562 6,192,519 11.0 108,089 453,079 142,000 - $10.70QUARTERLY COMPARISON AND TOTALS Net Absorption Construction Asking Rental RatesQUARTER, YEAR Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions Neighborhood PowerQ3, 2011 56,491,260 6,300,608 11.2 118,454 344,990 67,000 109,000 $12.05 $10.35Q2, 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 11.5 195,989 195,989 336,000 255,647 $11.46 $17.89Q4, 2010 56,019,350 6,663,024 11.9 57,808 274,518 541,647 110,000 $11.05 $12.50 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
    • RESEARCH & FORECAST REPORT | Q4 2011 | RETAIL | GREATER COLUMBUS REGIONCBD retailers is less fierce than higher populatedThe Central Business District (CBD) had positive areas of Columbus. Marginal vacancy changesabsorption of more than 17,000 square feet. occurred in Union county. 512 offices inLeases included Big Mama’s Playhouse and USHair at the South Campus Gateway. FUNDAMENTALS 61 countries on Three sources are instructive for retail consumer 6 continentsNORTH activity: the consumer confidence index; aThe north submarkets include Northwest, weekly poll conducted by Gallup; the Beige Book United States: 125 produced by the Federal Reserve Bank semi- Canada: 38Northeast, and North Delaware. In North Latin America: 18Delaware Do It Best Hardware and Carquest quarterly. Asia Pacific: 214took 43,000 square feet at Big Walnut Plaza. EMEA: 117 The consumer confidence index is produced by • $1.5 billion in annual revenueIn the Northwest, Show & Sell Merchandise took The Conference Board and is a survey of how confident consumers are in the current economic • 978.6 million square feet under33,000 square feet in two suites at Arlington managementSquare (1821 Henderson Road). Worthington conditions by their spending and saving habits. In January, the index was 61.1, increasing by • Over 12,500 professionalsSquare (64 Wilson Bridge Road) showed heavyactivity occurred at with more than 26,000 roughly 15.7 basis points from 45.4 in September,square feet of positive absorption. Two tenants the end of third quarter. In December, the index GREATER COLUMBUS REGIONexpanded and there were four new tenants: had a year-high peak of 64.8. As a guide, the Richard B. Schuen SIOR CCIMLearning Expressions, Bill’s Buckeye Stuff, index was 112.5 in July 2007, six months before CEO | Principal | Columbus 8800 Lyra DriveWorthington Craft Guild and Simply Baby ‘n Me. beginning of the recession. Suite #150Sunspot Tanning also took 6,000 square feet at Columbus, Ohio, 43240University City Shopping Center, 2831 Olentangy Gallup’s consumer spending measure tracks the TEL +1 614 410 5612River Road. average dollar amount Americans report spending or charging on a daily basis, notIn the Northeast, there was more than 50,000 counting the purchase of a home, motor vehicle, Leslie Hobbs Marketing and Research Managersquare feet of positive absorption. Roses Variety or normal household bills. Over the three month 8800 Lyra DriveWholesale leased more than 23,000 square feet period between October and December the 14- Suite #150of Granville Center, 1481 Dublin Granville Road. day rolling average rose slightly from $63 to $64 Columbus, Ohio, 43240Parties on the Square Hall leased 10,600 square with a high of $81 on December 23. The high TEL +1 614 410 5640feet at Columbus Square, 5727 Emporium Drive. mark of the 3-day rolling average was also onOther tenants taking space across the Northeast “black friday”, November 28, at $103. There waswere Salon Lofts, Westerville Carryout, Exertion very little variation over the three month period Jonathan Badgley Research AnalystTraining and Eden Pure. as reported retail sales did not grow substantially. 175 South Third Street Suite # 285SOUTH The Cleveland Federal Reserve reports on Columbus, Ohio 43201The southern submarkets are Southeast and consumer spending twice a quarter in the Beige TEL +1 614 437 4495Southwest. In the Southeast, Barrel 44 leased Book. The data for these reports comes frommore than 9,000 square feet in the Bexley qualitative surveys of retailers in the fourthSquare, 2212 Main Street, and a bingo hall district, which includes Columbus. In January,leased 9,000 square feet at 5504-5532 East the reserve bank reported that retailers indicatedLivingston Avenue. sales were stable or slightly higher relative to October sales. Electronics and home furnishings This document/email has been prepared by Colliers International for advertising purposes. ColliersEAST were better than expected while consumers held International statistics and data are audited annually and back from purchasing cold-weather related may result in revisions to previously reported quarterlyThe eastern submarkets are Licking and Fairfield and final year-end figures. Sources include Columbus items. Retailers expressed caution about 2012Counties. There were no substantial changes in Dispatch, Business First, Xceligent, Wall Street Journal, given the fragility of household balance sheets. Bureau of Labor Statistics, Bureau of Economicthese submarkets this quarter. Analysis, Gallup and the Cleveland Federal Reserve. Inventories were categorized as good except for apparel items which are higher than desired.WEST Any outlays planned for 2012 will mainly be forThe western submarkets include Union and technology enhancements and remodeling.Madison Counties. Low population in these Other than seasonal hiring, employment changedsubmarkets means that competition between very little. Accelerating success.www.colliers.com/columbus