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Q4 2012 Cincinna


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Q4 2012 Cincinna

  1. 1. THE KNOWLEDGE REPORTCINCINNATI, MARKET CLOSES OUT THEYEAR ON A RESPECTABLE NOTEEXECUTIVE SUMMARYIn the first quarter of 2012, the vacancy rate stood at 12.5%. At the close of the year, deal momentumaccelerated and the vacancy rate for the fourth quarter improved to 10.41%. With this activity, themarket saw 525,355 square feet of positive absorption in the last three quarters of 2012, and 57,667square feet occurring in the fourth quarter. The biggest lease transactions during this period included:91,723 square feet by Pease Warehouse and Kitchen Showroom at Hamilton Crossing ShoppingCenter; 54,956 square feet by Hobby Lobby at Governor’s Pointe Shopping Center; and 31,260 squarefeet by Ollie’s Bargain Outlet at Glenway Crossing.Major purchases had a role in the overall market during fourth quarter as well. The City of Cincinnatitook the lead and purchased the distressed 70,000-square-foot Tower Place Mall in theCentral Business District. The proposed plan is to demolish the existing parking structure, Pogue’sGarage, and build a 30-story mixed use high rise at the site. The development will contain 300 luxuryapartments, 1,000 parking spaces, and a 15,000 square-foot grocery store. The project also includesthe renovation of Tower Place Mall into 500 additional parking spaces and street level retail. Thismajor purchase, and several others, are all great signs for retail going into 2013.DEVELOPMENTConstruction projects are moving forward as scheduled throughout the city. Excitement surroundingthe Horseshoe Casino development increased with the announcement of several premiere restaurantsjoining the mix. Restaurants joining the development include: Margaritaville State of Mind, First JackBinion’s Steakhouse, and celebrity Chef Bobby Flay’s Bobby’s Burger Palace.In May, it was announced that the Yard House Bar and Grill would join The Banks development at thecorner of Walnut Street and Freedom Way. This is one of the first steps in next major phase ofconstruction at the $600 million project. An additional 300 apartment units and 60,000 square feetof retail space are planned and will be delivered throughout the year in 2013.With the opening date set for March 5, 2013 for the casino, and construction at The Banks movingahead smoothly, 2013 is setting up as a strong year.MARKET INDICATORS*Projected Change tothe following Quarter.Q4 12 Q1 13*VACANCYNET ABSORPTIONCONSTRUCTIONRENTAL RATEQ4 2012 | RETAILOVERALL VACANCY RATE10.0%10.5%11.0%11.5%12.0%12.5%13.0%13.5%1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12Overall Vacancy Rate
  2. 2. UPDATE Recent TransactionsFIRST QUARTER ACTIVITYPROPERTY TRADE AREA TENANT SIZE TYPEStone Creek Towne Center Northwest Oakbrook III 143,000 SaleHamilton Crossing Shopping Center Northwest Pease Warehouse and Kitchen Showroom 91,723 LeaseShoppes of Mason Northeast Optimus Investment 80,800 SaleTower Place Mall CBD City of Cincinnati 70,000 SaleGovernor’s Pointe Shopping Center Northeast Hobby Lobby 54,956 Lease7755 Montgomery Road Northeast U.S. Bank 40,500 SaleGlenway Crossing West Ollies Bargain Outlet 31,260 Lease10400 Reading Road Central Cincinnati Asian Market 31,000 LeaseCincinnati Mall Northwest Place 2 B Night Club 29,000 LeaseGovernor’s Pointe Shopping Center Northeast Marshall’s 28,600 LeaseNewport Plaza NKY Planet Fitness 28,000 LeaseNorthgate Mall Northwest Marshall’s 27,000 Lease3960 Red Bank Road Central Pet Medical & Cancer Care 25,000 Sale7720 Voice of America Centre Drive Northwest Fresh Market 23,600 LeaseCincinnati Mall Northwest Bee Active Adventure Zone 22,917 LeaseShoppes of Deerfield Northeast Square Hill Properties LLC 20,156 SaleLatonia Plaza Shopping Center NKY ACB American 18,150 Lease8255 Colerain Avenue Northwest Victory Lady Fitness 15,000 Lease3061 Madison Road Central David Millet Interiors 13,500 LeaseNewport Shopping Center NKY Ace Hardware 12,500 LeaseHarrison Center West Dollar Tree 12,000 LeaseDelhi Plaza West Dollar General 11,737 LeaseTri-County Towne Center Northwest Casual Male DXL 11,240 LeaseLatonia Plaza Shopping Center NKY Aarons Rents 10,500 LeaseNATIONAL RETAIL SPOTLIGHTWith the urgency of the deficitsituation taking center stage at theclose of 2012, many national retailersunderestimated the magnitude ofconsumer pullback that occurred inDecember. This has been a highprofile issue for more than a year, butit appears that it wasn’t untilDecember that many people realizedthe potential negative impact to their2013 tax liability. While we believedthat Congress would eventuallyreach a deal to push off the “cliff”ahead of the January 1st deadline,discussions surrounding the last-minute agreement kept consumersand retailers on edge throughout theholiday season. After Christmas,heavy shopper turnout helped tosalvage the season for many stores.FORECAST2013 will be an interesting one towatch. As employees’ first 2013paychecks reflected the revision ofthe Social Security payroll tax ratefrom 4.2% to 6.2%, retailers worrysoft sales may occur at the beginningthe year. This lull in buying activitymay persist for a couple of months ashouseholds recalibrate their budgets.Transactions are believed to be accurate but not guaranteed.UNEMPLOYMENT5.0%5.5%6.0%6.5%7.0%7.5%8.0%8.5%9.0%9.5%10.0%10.5%11.0%Jan-09Mar-09May-09Jul-09Sep-09Nov-09Jan-10Mar-10May-10Jul-10Sep-10Nov-10Jan-11Mar-11May-11Jul-11Sep-11Nov-11Jan-12Mar-12May-12July-12Sep-12Nov-12US Unemployment RateOhio Unemployment RateCincinnati Unemployment RateColumbus Unemployment RateCleveland Unemployment RateJMMJSNJMMJSNJMMSNJMMJSNoTHE KNOWLEDGE REPORT | Q4 2012 | RETAIL | CINCINNATIP. 2 | COLLIERS INTERNATIONAL
  3. 3. SUBMARKET Total InventoryTotal VacantSFVacancy RateQuarterlyAbsorptionYTDAbsorptionAvg. RateCentral 4,856,891 390,990 8.05% 59,385 115,875 $11.50East 7,108,541 646,176 9.09% 28,584 206,341 $13.70Monroe/Middletown 3,254,481 299,869 9.21% (29,621) (32,251) $10.26Northern Kentucky 10,864,972 566,991 5.22% 5,946 30,483 $13.63Northeast 9,081,505 867,086 9.55% 107,689 247,433 $12.72Northwest 17,379,700 2,424,210 13.95% (9,529) 189,644 $8.10West 6,292,265 930,118 14.78% (104,787) (7,692) $12.29Market Totals 46,872,923 6,125,440 10.41% 57,667 749,833 $10.77SUBMARKET DATAQUARTERLY NET ABSORPTIONSquareFeet050,000100,000150,000200,000250,000300,000350,000400,0001Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12Quarterly Net AbsorptionThe Retail Marketsaw 57,667 squarefeet of positiveabsorptionthis quarter.THE KNOWLEDGE REPORT | Q4 2012 | RETAIL | CINCINNATICOLLIERS INTERNATIONAL | P. 3
  4. 4. CEO | PRINCIPAL:Shenan P. Murphy, CCIM+1 513 721 4200Colliers International statistics are audited annuallyand may result in revisions to previously reportedquarterly and final year-end figuresColliers International | Greater Cincinnati425 Walnut Street, Suite 1200Cincinnati, OH 45202Retail & Investment Services | Greater CincinnatiMichael P. Ziegler, SCLSBrokerage Senior Vice Presidentmike.ziegler@colliers.comDIR +1 513 562 2224Ken ArbinoBrokerage Vice Presidentken.arbino@colliers.comDIR +1 513 562 2238Justin T. Rex, MICP™Brokerage Associatejustin.rex@colliers.comDIR +1 513 562 2218NORTHWESTNORTHEASTMIDDLETOWN/MONROEEASTWESTNORTHERNKENTUCKYCENTRALRETAIL SUBMARKETSAccelerating success.522 offices in62 countries on6 continentsUnited States: 147Canada: 37Latin America: 19Asia: 36ANZ: 165EMEA: 118• $1.8 billion in annual revenue• 1.25 billion square feet undermanagement• Over 12,300 professionalsSteven L. Timmel, CCIMBrokerage Senior Vice Presidentsteve.timmel@colliers.comDIR +1 513 562 2221Jeffrey E. Johnston, CPABrokerage Senior Vice Presidentjeff.johnston@colliers.comDIR +1 513 562 2231Christopher B. Prosser, CCIMBrokerage Senior Vice Presidentchris.prosser@colliers.comDIR +1 513 562 2232THE KNOWLEDGE REPORT | Q4 2012 | RETAIL | CINCINNATI