Most retail brokers in Des Moines are cautiously optimistic in their expectations for 2013. For the first time in years, I’m seeing a lot of site plans for new retail developments come across my desk. Several projects that had been on the back burner for the last few years have finally begun to take shape. Des Moines, like most markets, got hurt when the Great Recession hit. However, with its major industry based in insurance, it weathered the storm better than many other markets. At its high point, the unemployment rate was 6.8 percent, and the rate as of May was 4.3 percent. The Des Moines retail market didn’t get nearly as overbuilt as many of the other nearby larger markets. There wasn’t a ton of first-generation space that sat vacant on the retail market in Des Moines once the recession hit. Most of the retail developers here are conservative. Much of the first-generation space that sat vacant was the result of lenders taking back the properties and not wanting to invest any money in those assets. Lessons Learned The developers in today’s market have a more disciplined approach than many of their predecessors. There was a time when real …
Retail
As a global player, New York City enjoys top-shelf retail advantages that continue to support the market as they always have — by keeping one foot on the gas pedal and one eye on the rearview mirror, as the recessionary cycle fades further out of view. From an economic perspective, New York City is recovering by leaps and bounds, posting 1.5 percent year-over-year growth between February 2012 and February 2013, and a liberal 4.3 percent rise in the professional and businesses services sector that includes 35,000 new jobs. Add to that the overall uptick in the global economy (read: consumer confidence) and the market’s inherent strength as an international tourist destination, and all bets are on New York to remain one of the tightest retail markets in the country for the next few years. New York City boasted an enviable 2.2 percent vacancy rate for all types of retail at the end of first quarter 2013 — an impressive figure when compared to the average U.S. first quarter vacancy rate of 6.8 percent. Quoted rents in New York’s five boroughs also rebounded 12.7 percent year-over-year to $50.90 per square foot on average. This is about three times higher than the …
The Orange County retail market, which consists of about 140 million square feet of space, continues to thrive as it sees an overall vacancy rate of just 5.5 percent. With strong income demographics, an improving job market and a limited supply of retail property, Orange County continues to be a target for both retailers and investors. As job growth is an indicator of a positive retail market due to increasing demand from the county’s consumer base, the positive data coming supports a well-held belief that the investor protects his or her downside risk by targeting ideally located retail property in Orange County. Through this, they benefit from consistent appreciation by virtue of owning retail property in a market characterized by very high barriers to entry. In its 2013-2014 Economic Forecast & Industry Outlook, the Los Angeles County Economic Development Corp. says that the county’s job market over the next couple of years will be strong. It anticipates an increase of nearly 52,000 jobs. LAEDC also reports that retail jobs will increase, and that taxable retail sales reached $39.3 billion last year. Those sales are expected to reach $42 billion this year and $43.7 billion next year. With that said, from …
The Houston metro retail market is attracting retailers and investors from across the world because of its booming economy and impressive job growth, primarily in the energy and healthcare sectors. Since 2012, Houston’s local employment has grown, on average, around 4 percent year over year. As developers continue building and leasing large office and medical developments, notably in The Woodlands and Energy Corridor, retail space has been and will continue to be in high demand. ExxonMobil is currently developing its 385-acre campus near the intersection of Interstate 45 and the Hardy Toll Road in The Woodlands. The development alone has more than 3,000 workers on site every day. With completion slated for 2015, nearly 10,000 workers will re-locate to the campus from the Houston area, as well as from Virginia and Ohio. Another notable development recently announced is ConocoPhillips’ 850,000-square-foot lease of Trammell Crow’s Energy Center Three and Four in the Energy Corridor. Energy Center Three, with expected occupancy in the second quarter of 2015, and Energy Center Four, with expected delivery in the second quarter of 2016, will house approximately 2,100 employees in the submarket. In addition to ConocoPhillips, The University of Texas MD Anderson recently acquired approximately 35 …
Charlotte's retail sector has been robust with activity in the past several months, with positive signs on the horizon. Residential development in Charlotte has been driving a rise in retail projects, particularly in the city’s infill areas, such as SouthPark and the South End. For instance, more than 1,200 apartment units are under construction or planned in the South End area. This has led to more urbanized retail, including a 55,000-square-foot Publix that is under construction on four acres at South Boulevard and Iverson Way. The site will also include structured parking and additional shops. Publix has also announced a new location in Ballantyne Town Center, located at Providence Road West and Johnston Road, which is scheduled to open in early 2014. When Harris Teeter announced that it had hired JP Morgan to sell the company, rumors were rampant and there has been a lot of speculation that Publix was a likely buyer. Most industry insiders do not think that this is likely, so it will be interesting to see how this dynamic plays out. In the meantime, Publix continues to scour opportunities for new locations throughout the Charlotte market, adding a new player in the highly competitive grocery sector. …
National retailers have slowed their progress into the market now that City Creek and Fashion Place Mall have completed the majority of their renovations. The discount segment continues to expand in infill locations along the Wasatch Front. Ross, TJ Maxx and Marshalls continue to lead the charge in this category, with Rue 21 and Dress Barn as the larger tenants. Rural areas are the new frontier within the State of Utah. Many small communities are riding the wave of the energy boom, from natural gas, oil and wind power. These smaller towns are growing at a rapid pace, and with the influx of expendable income, retailers are flocking to these areas. The challenge that many developers face in these towns, however, is the lower rent numbers that national tenants can afford due to the immediate lack of population within the trade areas. Ross, JoAnn Fabrics, Petco, Sportsman’s Warehouse, Sports Authority, Rue 21 and Dress Barn are the retailers that lead the charge in these areas. The grocery sector continues its movement within the state, with Walmart’s Neighborhood Market, Sprouts and Smith’s being the most active. Smith’s is in the process of remodeling many of its existing locations and is looking …
The top 10 fastest growing subdivisions in San Antonio had a combined 1,832 housing starts in fourth quarter 2012, according to a recent report from housing-market research firm Metrostudy. And that number is already up with 2,042 new home starts in first quarter 2013, a 24.3 percent increase over the same time period last year. So far, builders are on track to build 8,478 homes this year, as major markets in Texas continues to outperform the nation. Alamo Ranch is the bright star in the bunch. Statistics solidly place this northwest subdivision in the top spot of San Antonio’s fastest growing subdivisions with 649 new housing starts in fourth quarter 2012. Bulverde Village, in second place, saw 169 new home starts during the same time. April single-family home sales rose 14 percent over last year and 4.5 percent from last month, according to the San Antonio Board of Realtors. In keeping with the boost in housing, retail is showing solid, if slow, growth. San Antonio retail occupancy rates increased for the fourth consecutive quarter, reaching 94.5 percent in first quarter 2013. And while rental rates remain fairly flat, according to research from Delta Associates, the second half of 2013 is …
The Washington, D.C., area boasts the lowest unemployment rate among major metros, at 5.5 percent as of February 2013, which is about two percentage points below the total U.S. unemployment rate of 7.6 percent. In the 12 months prior to February 2013, the area fell only behind New York, Los Angeles Basin and Houston in terms of job growth, with 39,700 new jobs created. At the same time in 2012, retailers shed approximately 1,100 jobs. While the effects of sequestration legislation are still unknown, the projected job growth from 2013 to 2017 is estimated to average 48,100 per annum. Two rapidly growing industry sectors are cybersecurity and healthcare. The Washington area also has an average household income of $108,400, making it an impressive 59 percent higher than the U.S. average. Incomes grew by 43 percent from 2000 to 2012, compared to 20 percent nationally. By 2017, the area’s average income is estimated to rise 14 percent, still higher than 13 percent nationally. Retail inventory (all types) for the Washington metro area totals approximately 220 million square feet. As of March 2013, the overall vacancy rate was 4.8 percent — the lowest in the nation. The market has seen no overall …
Cleveland's retail market is continuing to slowly recover from the effects of the recent recession. This recovery is sparked by a number of factors. One of the brightest spots in the Cleveland retail market is the revival of downtown, which is bringing businesses, residents and retailers to the area, stabilizing the metro’s core. The number of visitors to downtown Cleveland is expected to double from 3 million in 2012 to 6 million in 2013, largely drawn by the opening of the Horseshoe Casino Cleveland last year. The completion of the highly anticipated Cleveland Medical Mart & Convention Center is also contributing to increased traffic. Several large conferences have already been booked and area retailers will benefit greatly from convention center traffic as visitors eat at local restaurants and shop at nearby stores. In addition to tourism, the daytime population of downtown is increasing as several employers move or expand offices. This growth is encouraging many residents to locate in proximity to these jobs, and the rising housing demand has spurred apartment development throughout downtown neighborhoods. As retailers expand in the area to serve this residential population, retail operators will benefit from rising occupancies and rents. Improving Vital Signs Cleveland’s economy …
Fueled by an increase in population and job growth, Denver’s robust housing market and the constant influx of young professionals to the region has attracted some attention. Both new and existing retailers and investors are now looking to either penetrate or expand within this ever-growing market. Metro Denver added a total of 37,300 jobs last year. This was an increase of 2.7 percent from 2011, according to the Metro Denver Economic Development Corp. The region’s growth rate has consistently outpaced the national rate in every decade since the 1930s. By 2020, the region’s population is expected to increase from 2.9 million today to more than 3.2 million. Retailers are definitely taking note. Cabela’s, a Nebraska-based outfitter of hunting, fishing and outdoor gear, has two stores under construction that should be completed in the third quarter of this year. These will represented Cabela’s second and third Colorado locations. The chain already has a Grand Junction outpost. THF Realty also recently completed the 147,806-square-foot Walmart in the Lakeside Shopping Center redevelopment area. Metro Denver has seen quite a few Walmart Neighborhood Markets pop up throughout the region recently. Also new to the Denver market is Trader Joe’s. The California-based specialty grocer plans …