Orlando retail vacancy will rise again in 2010, partly as a result of significant blocks of vacant space in properties built during the past few years. While slumping demand has affected all vintages of assets, the vacancy rate in shopping centers constructed since 2007 topped 20 percent last year, much more than the marketwide rate for all properties. Continuing softness in the job market will reduce store visits and suppress spending, further influencing spacial demand and limiting the number of tenants available to fill new shopping centers. Additions to supply will not be a major factor this year, however, as completions will fall to the lowest annual level in at least 30 years. Housing starts, typically a precursor of retail property development, declined for four consecutive years through the end of 2009. Home building will likely remain depressed in 2010 while the economy continues to stabilize, thereby deterring retail developers. Following a year in which 39,400 jobs were eliminated, employers in Orlando will trim 1,000 positions this year, a 0.1 percent decrease. Completions will drop from 900,000 square feet in 2009 to 300,000 square feet this year. Falling rents and rising vacancy will force the delays of some developments currently …
Retail
Do you remember how it feels to be on a wild rollercoaster ride, excited and confused, trying to make sense of the ride yet wondering when it will end? That’s exactly what developers, brokers, retailers and landowners are feeling in the commercial retail market. Although Macon finds itself somewhat insulated from what major retail markets are feeling during the “Great Recession,” it is certainly not immune to the prolonged effect of this economic downturn. With the lack of financing, local and regional developers have had to adjust the delivery of their projects in the wealthy submarket of North Macon and the South Bibb County area. While they too recognize Macon as somewhat of an insulated market, they are not blind to the fact that nationally some major retailers have closed, rental rates are declining, vacancy exceeds 20 percent and negative absorption is beginning to rear its ugly head. The Shoppes at River Crossing, Macon’s newest lifestyle center on Riverside Drive, hit a speed bump with the departure of Circuit City, but has quickly recovered with the recent announcement of Jo-Ann Fabrics & Crafts’ lease of a 20,331-square-foot building. With a commitment from a major anchor, Fickling and Co. is moving …
The Austin retail market is holding steady in the current economy due in no small part to positive media coverage. According to Sherry Sanchez of NAI Austin, numerous media organizations have placed the city near the top in many “best of” ranking lists. These honors have helped keep the retail market stable because job seekers from all over Texas have been coming to Austin, moved by reports of finding better jobs in the Capitol City. “There's a big huge flight of people moving to central Texas who don't even have jobs yet,” she says. “We have job opportunities all over the map for people from blue-collar workers to white-collar workers.” Companies in the city are also spurred on by stimulus money aimed at green energy projects. Finally, the stability of government jobs means a large number of Austinites are gainfully employed. But because no markets anywhere in the country are thriving, these factors mean that Austin is simply staying ahead of the glut. “We're not seeing attrition as rapidly as they are in a lot of parts of the country. Our service providers are hanging in there — some are expanding — and our restaurants are doing well,” Sanchez says. …
Recent news: The leasing activity in Connecticut has been very healthy in recent months as evidence by the new leases signed in the marketplace. Some junior anchor box examples include a 24,000-square-foot REI deal in Norwalk; a 37,000-square-foot Stop & Shop Supermarket in West Hartford; a 30,000-square-foot PC Richards deal in Milford; and numerous other deals. Also, the recent sale of the Shaw’s Supermarket sites to existing supermarket chains demonstrate that retailers feel that Connecticut is still a very healthy market. Another trend, which has been very apparent in Connecticut, has been the surge in franchise concepts leasing smaller spaces within supermarket anchored shopping centers and community centers. Some franchises that are active include Massage Envy, Sport Clips, Robeks, Five Guys, Doctors Express and numerous others. Submarket update: The luxury-oriented streets (Greenwich Avenue in Greenwich and Main Street in Westport) had a weak 2009. However, the outlook for 2010 is much more promising with recent signature stores openings, including Apple and Ralph Lauren. Leasing activity has increased dramatically and leasing inquiries are at its highest levels since the summer of 2008. Predictions for the next year: The “Year of Fear” (2009) is over, thankfully, and the “Year of Caution” (2010) …
At the end of 2009, the Southeastern Wisconsin retail market showed a vacancy rate of 11.6 percent, according to the CB Richard Ellis Fourth Quarter MarketView. In 2009, the market witnessed a dramatic increase in vacancy rates, compared with a 9.3 percent rate in the fourth quarter of 2008. Most of this change occurred in the first and second quarters, and we are now seeing the market bottom out, as the vacancy rate continues to climb at a much less dramatic pace. Average asking rents fell from approximately $19.50 per square foot triple net at the end of 2008 to approximately $16.50 per square foot triple net at the end of 2009. Several mid-box retailer bankruptcies led to this rapid increase in the vacancy rate. Other store closures also played a significant role in rising vacancy rates. One bright spot in 2009 was the activity that occurred in the grocery category. Active retailers in this category include Aldi, Piggly Wiggly, Woodman's and Roundy's dba Pick ‘n Save. Aldi opened stores in Brookfield, Grafton and Wauwatosa, Wisconsin. Piggly Wiggly announced plans to open additional locations by taking over three former grocery store boxes. These sites include a former Supersaver in Kenosha …
The retail market in Chicago, mirroring that of the nation, has been plagued with vacancies as a result of retailers suffering from lack of consumer demand. From 2003 to 2008, roughly 80 percent of the American GDP was comprised of spending. This means that the country’s output, or contribution to the world, has been focused on consumption. By contrast, from 1990 to 2006, the earnings of individual workers in the United States increased by less than 0.5 percent per year, while the GDP increased about 3.6 percent per year. This consumer psychology led to increased debt and home equity lines of credit given to many unqualified borrowers. The additional debt introduced to the American economy enabled people to spend money on items they were not, in reality, able to afford. How does this shift in consumption impact retail real estate in the third largest metropolitan statistical area in America? It moves the consumer to buy goods based on need and reduces the retail therapy or impulse buy. In the same way, business owners also make cuts in acquiring goods for luxury and begin focusing on the items needed for basic survival. Add to that a staggering 11 percent unemployment rate …
The metropolitan Phoenix market differs from other western cities in terms of its affordability of housing, from first-time buyers to retirees. As the market comes out of this recession, Phoenix is poised with available, affordable residential and commercial properties. Also, there still is plenty of land area in which to expand, unlike our counterparts, who are bounded geographically from growth. Columbus, Ohio-based Glimcher Properties is developing the $270 million Scottsdale Quarter, a mixed-use, destination development that opened its first phase in March 2009. Phase II is scheduled to open this March. Located at the southeast corner of Scottsdale Road and the Greenway-Hayden Loop in the North Scottsdale submarket, the entire three-phase project totals nearly 1.25 million square feet and features retail, entertainment, residential/hotel and office components. While many other new Phoenix-area developments have been put on hold or canceled altogether, Scottsdale Quarter’s development continues. Located across from Kierland, Glimcher’s major infill development is able to piggyback on the first successful lifestyle center on the West Coast. Currently, Scottsdale Quarter has attracted national tenants new to Arizona, such as Williams-Sonoma Home, H&M, Brio Tuscan Grille, Oakville Grocery and west-elm. Others tenants, such as Gold Class Cinemas, Nike and Sunglass Hut, are …
Although retail developments and construction cooled during 2009, the Omaha retail sector is now experiencing an influx of completed projects, with most planned projects being set on the back burner. Retail projects in the final phases of construction include the 600,000-square-foot L Street Marketplace, located at the corner of 120th and L streets in Omaha; Midtown Crossing, a mixed-use project offering 200,000 square feet of retail space at 33rd and Dodge streets; and the forthcoming retail and entertainment component of Aksarben Village, which is located at 72nd and Center streets. The new projects are bringing Target, Best Buy, Sports Authority, Prairie Life Fitness Center, Marcus Theaters and Wohlner’s Grocery to the market. Neighboring retail developments in Council Bluffs, Iowa, include the JC Penney- and Shopko-anchored 24th Street Marketplace and Target-, Hobby Lobby- and Kohl’s-anchored Metro Crossing. A handful of new retailers and restaurants have entered the Omaha market, including Garden Ridge, Books A Million, Jump & Shout Play Center, Brix, Five Guys and Smashburger. Active developers include Cormac Company, Seldin Company, Noddle Company, Lerner Company and Magnum. Many developers are looking to infill sites for untapped development opportunities. Both the Midtown Crossing and Aksarben Village projects are helping to revitalize …
With little demand for new retail space and even less money to fund new development, developers and owners have been focused on improvements at existing properties, tenant retention and strategic redevelopment. Westfield has plans to relocate the food court at Great Northern Mall in North Olmsted, Ohio, to allow for a new anchor and restaurant space with exterior entrances, which continues with the trend of turning malls inside out. In Solon, Giant Eagle has won a rezoning effort to replace its store at Solar Shopping Center with a new 99,000-square-foot store and Getgo fuel station. The remainder of the center is slated to undergo a complete redevelopment as well. Giant Eagle has also replaced its stores at Southland Shopping Center in Middleburgh Heights and the Day Drive location in Parma with new larger prototypes. Coral Company has revised its development agreement with the city of South Euclid to allow for the Cedar Center North redevelopment project to be completed in phases; leasing for the all-retail first phase is currently under way. The largest retail development in the Cleveland market is Visconsi Companies’ Plaza at Southpark in Strongsville, which has just opened with Costco, Bed, Bath & Beyond and Best Buy …
Boston has the third largest investment management center in the world, eclipsed only by New York and London. It’s the birthplace of the mutual fund and is now arguably the “mutual fund capital of the world,” with literally trillions of dollars invested in funds managed there. The Boston retail market has certainly had its share of woes along with the rest of the country, but high barriers to entry, its infill nature and the city's promising long-term results keep the retail market pretty strong. Boston, perhaps more than any other Northeast market, has been nearly impossible for developers to crack and has become a notoriously challenging market in which to build. Because of this, the demand for retail space has remained light, but the vacancy rate for the area is nominal, hovering around only 5 to 7 percent. Although the amount of retail space in the city has increased by 12 percent since 2003, it has failed to keep pace with demand, which has grown 19 percent during the same time frame. Facing stiff economic headwinds, several developers have announced they will scale back on projects proposed for Boston. Earlier this year, plans for a massive urban shopping center in …