The San Diego retail market has always been one of the strongest markets in the nation with respect to commercial real estate indicators. Many regions greatly affected by the housing downturn like Las Vegas and Phoenix are still experiencing double-digit retail vacancy rates, while San Diego ended 2012 with an overall vacancy rate of 7.1 percent. Even the overall availability rate dropped to 9.5 percent, down from 9.7 percent last quarter and 10.6 percent at the end of fourth quarter 2011. Since the beginning of 2012, both power centers and community centers have outperformed the rest of the market. Vacancy rates came in at 2.4 percent and 6.1 percent, respectively, with both rates representing decreases compared to last quarter and last year. Net absorption for these two products accounted for about 82 percent of the total activity in 2012. Other center types, such as specialty centers and strip centers, have experienced mixed results throughout the year. The drop in vacancy rates can primarily be attributed to basic supply and demand. Many sectors of the retail market are becoming more creative and took advantage of market conditions during the downturn. Discount retailers are expanding in Southern California as Wal-Mart, Dollar Tree …
Retail
Blessed by location and good quality of life standards, the Danbury, Conn., retail market has grown in the recent 18 months and should continue to expand in 2013. Key among growth indicators are: • Whole Foods is opening its first store in the Danbury market in 2013. • Panera Bread and Petco recently opened second stores in this market. • Toll Brothers is under way with a new 1,200-home community in anticipation of regional population growth and changing demographics. • Danbury has the lowest unemployment rate in the state (around 6.5 percent). Location and Demographics Danbury is located in northern Fairfield County on the border of New York State and is approximately 50 miles north of New York City. (The Metro train to NYC takes just over an hour.) The population is approximately 80,000. Danbury serves Fairfield and Litchfield County in Connecticut as well as Westchester, Putnam and Dutchess counties in New York. Stamford, Conn.; White Plains, N.Y.; and Hartford, Conn., are each about an hour away. The relatively short commutes to these larger urban hubs entice real estate occupiers for office space and retail tenants with lower rental costs — on average, 20 to 25 percent less for comparable …
Retail operations struggled in the Jacksonville metro through the first half of 2012, but residential construction across the area will contribute to increased leasing activity in the coming months. In the bustling region around the already-expanding St. John’s Town Center, several new housing developments will add between 2,400 and 3,100 residential units, while more than 2,000 apartments are planned in the Arlington/Baymeadows/Mandarin submarket. High-end retailer Nordstrom has signed a lease to anchor the addition to St. John’s with a 124,000-square-foot store set to open in the fall of 2014, and another 30,000 square feet is planned for smaller stores. In other areas of the metro, retailer H&M has opened its first Jacksonville location at the Avenues mall. Winn-Dixie is planning six new stores, and retailers Family Dollar and Dollar General are poised to open a combined six new stores as well. These retailers moving into the region will help attract smaller tenants to nearby locations, filling in dark space and enabling owners to lift rents. After third quarter 2012, employment was down 500 positions although employers created 5,300 jobs during the third quarter. Employment over the quarter was broad-based, as 10 of the 11 sectors realized gains. Employment growth was …
The Pheonix economy is recovering slowly, with accelerating employment growth and rising housing prices outpacing national averages. These drivers have begun to stabilize the local retail market, and with future economic expansion likely going forward, retailers are expected to become more active. In 2013, retailers are forecast to absorb about twice as much space as they did in 2012. While vacancy rates remain above 10 percent in many of the valley’s primary trade areas, the overall retail outlook is more promising than in recent years. Following a pre-recession wave of retail construction, development activity has been limited to just a handful of projects over the past several years. The largest project to deliver in 2012 was the 328,000-square-foot Tanger Outlet Mall at Westgate. The center came online during the fourth quarter almost entirely pre-leased and accounted for about 30 percent of the total net absorption in the West Valley in 2012. No projects of this size are expected to be delivered in 2013, and developers will remain on the sidelines for a few more years before bringing additional shopping centers to the market. With vacancy still elevated throughout much of the valley, the development that occurs in 2013 will likely …
The Nashville metropolitan retail market remains strong in comparison to the rest of the United States as the overall vacancy rate dropped to 5.7 percent at the end of the third quarter. Nashville’s MSA has grown to more than 1.6 million residents and ranks as the 38th largest MSA in the country with Nashville being the largest core population in the state of Tennessee. The strong economy is supported by diverse sectors of industry including healthcare, entertainment, education, and automotive. At the end of the third quarter, the unemployment rate dropped to only 7.3 percent compared to the national average of 8.6 percent. Highly sought after retail submarkets, such as Green Hills, Brentwood, and Midtown/West End Avenue corridor, have little to no vacancy which has spurred a new trend in Nashville: urban and mixed-use redevelopments. The lack of available large tracts of land for development in and around metro Nashville has created significant demand back into the core urban markets of Nashville. For example, following the success of the highly touted Hill Center retail/office project a few years ago, the Green Hills Mall underwent a major expansion to accommodate Tennessee’s first Nordstrom and Container Store in 2011. In Brentwood, Bristol …
The dense markets of northern and central New Jersey are showing some encouraging signs of momentum. Over the past 18 months, retailers have flocked to places like Paramus, Millburn, Wayne, Totowa, Springfield/Union, Livingston, East Hanover and Jersey City/Secaucus, to name a few. They are well aware that the major malls and retail corridors of Northern New Jersey, in particular, draw lots of traffic from nearby New York City. The pace of new construction has been sluggish in part because lenders now demand equity stakes of around 40 percent on projects that used to be financed at 70 or 80 percent. Therefore new supply is limited, which is helping to push up rents and drive down vacancies. In the northern and central parts of the state, in fact, the vacancy rate now stands at about 10 percent—a big improvement over the 20 percent average of 2010. Paramus, the state’s top retail market, has seen quite a nice recovery. Here, rents of smaller stores of less than 3,000 square feet now range from $35 to $60 per square foot. At stores of 5,000 to 10,000 square feet, space is leasing for between $30 and $40 per square foot. Paramus’ medium boxes, which …
Washington, D.C. continues to grow and thrive but in a very different manner than it did in the past. While the national debt surpassed $16 trillion, the local economy has benefited from the government spending — which has resulted in the metro area having the lowest unemployment rate in the country. Additionally, D.C. continues to reap the benefits of having seven out of the top 10 wealthiest counties in the United States located within the metropolitan trade area. Furthermore, Generations X and Y are changing the real estate landscape by rejecting the baby boomer suburban ideology and opting to migrate to the city for non-committal rental housing, public transit, and a closer proximity to work and shopping. As many retailers will attest, if you are not growing, you are dying. The District has always been a vital market for retailer expansion. Today, with a floundering American economy and fewer opportunities for growth in the middle of the country, Washington has become a focal point for retailer expansion. For example, YO! Sushi, the British conveyor belt sushi concept, elected to open its first North American unit at D.C.’s Union Station. In addition, Walmart spent significant time and money creating unique store …
With all the construction vehicles on retail sites as you circle metro Boston, we can now quantify the retail slowdown attributable to the recession as a three-year window. Never has the local retail market been healthier than it is today. WS Development is under construction with its Whole Foods-anchored Meadowbrook Walk in Lynnfield. The Nordblom Company has begun 3rd Avenue, a Wegmans-anchored lifestyle project in Burlington. Market Basket is well under way at the former Polaroid site in Waltham. New England Development is building its Wegmans project in Chestnut Hill while WS redevelops the former Macy’s further east on Route 9. Also moving forward, though at a slightly earlier stage, is NED’s long-awaited Westwood project. A total of almost 3 million square feet of new high-profile — even iconic — retail space along Boston’s inner ring beltway is now upon us, exactly three years later than originally anticipated. Notably, grocery is driving all of these larger projects. While traditional market leader Stop & Shop makes only narrowly strategic moves and Shaw’s languishes, grocery chains of a wide range of sizes targeting distinct demographics have inspired development at both the local and regional level. Wegmans, Market Basket, Whole Foods, Price Rite …
The San Diego retail market has posted five consecutive quarters of positive net absorption with strong activity in power centers and several vacant big box spaces coming off the market. Through the third quarter of 2012, year-to-date gross leasing activity totals more than 1.8 million square feet with about 330,000 square feet of positive net absorption. So far, we have already surpassed the 2011 gross leasing total of about 1.4 million square feet. The steady leasing activity and positive net absorption dropped the direct vacancy rate from 7.4 percent at the beginning of the first quarter 2012 to 6.9 percent at the end of the third quarter. The current overall vacancy rate, including sublease space, is 7.2 percent. Vacant big box spaces are attracting tenants from national credit retailers to specialty markets. Dick’s Sporting Goods recently opened a 46,019-square-foot location in a redevelopment of a former Mervyn’s site in the Sports Arena submarket. Meanwhile, Zion Market, a Korean-focused grocery and specialty store, subleased a vacant 94,000-square-foot Sears Essentials building in Kearny Mesa. In addition to tenants taking big box spaces, several high-end fashion retailers are entering the San Diego market or opening new stores. Kate Spade New York opened its …
The Twin Cities retail market continues to steadily improve from the economic depths of 2008 and 2009. There has been 549,194 square feet of positive absorption since the first quarter of 2011. Another encouraging sign is the increased activity among landlords, tenants and developers. One example of the positive outlook is the investment that landlords are making at regional malls to upgrade and reposition them. The Mall of America in Bloomington seeks to add 550,000 square feet of retail, medical office and hotel space. Southdale Mall, Ridgedale Mall, and Maplewood Mall are also investing in their centers to better compete in this rising market. Another sign of increased activity can be seen among food tenants. Quick service restaurants are betting that Minneapolis-St. Paul residents have a large appetite for yogurt, sandwiches, and burgers and are actively seeking space. Burger and sandwich concepts include Smashburger, Which Wich, Firehouse Subs, and Freddy’s, which are growing in popularity along with Freeziac, Tutti Frutti, Menchies, and CherryBerry yogurt shops. Also active are Noodles, Chipotle, and Starbucks. These types of tenants have gobbled up smaller spaces and end-cap spaces vacated by tenants such as defunct Hollywood Video and Blockbuster. They are pursuing the same spaces …