As all of us in the retail market know, the past few years have been downright tough. It’s safe to say that we all felt a slight shift in mid-2011 where it seemed that we may — just may — have stabilized. With Tivioli’s success, Sportsman’s Warehouse re-entering the market and Hobby Lobby taking the plunge into Las Vegas, it seems we may have overcome the black “X” looming over our market.
Our asking rent numbers are hovering around $1.50 per square foot, and retailers like Nima Accessories, Firestone Tires, Children’s Place, Winco and Dollar General are taking advantage of these rents and expanding valley wide. More than half of the leases completed in the past year were local retailers either relocating or expanding.
The retail vacancy rate valley wide is about 11 percent, up from the fourth quarter of 2010. The Southwest submarket shows the lowest vacancy rate, about 9 percent, with the West Central submarket at the highest, about 15 percent. The market absorbed more than 119,000 square feet of retail product throughout the year. Two new Winco stores add 195,000 square feet to our retail inventory, and to the net absorption for 2012.
Retail sales also picked up tremendously in 2011. Investment sales in shopping centers topping out at more than 2.2 million square feet. The average sales price for these transactions was about $108 per square foot. These new buyers seem to want to stabilize their investments before attempting to put the centers on the market for sale, which will cause rents to be very competitive in 2012.
This year is bound to show more stabilization as tenants realize the rental rates are not going to go any lower. Hopefully they will start to fill in some of the overbuilt product as anchors become more realistic about the types of deals they are willing to do in our market, thus helping our economy to thrive once more.
— Cathy Jones, president, Sun Commercial Real Estate