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Retail Market ReportWest Michigan Q1 2015
100 Grandville Ave SW Suite 100Grand Rapids, MI 49503616. 776. 0100 www.naiwwm.com
Wisinski ofWest Michigan
Office • Industrial • Retail • Multi-Family
The physical store remains a critical component of the shopping experience - For retailers, brands and consumers.
* The information contained herein has been given to us by sources we deem reliable. We have no reason to doubt its accuracy, however, we do not make any guarantees. All information should be verified before relying thereon.
* Source: NAIWisinskiofWestMI, CoStar Property®, & U.S. Bureau of Labor Statistics
“The West Michigan Retail Market is vibrant and active in several major corridors and cities. Recently USA Today named Grand Rapids as the #1 City in the Country as a must go visit. These sorts of accolades for our region including the amazing beaches in South Haven, Saugatuck and Grand Haven to the Meijer Gardens & Sculpture Park to Beer City USA have retailers and retail investors coming to our region, and expanding.”
GRAND RAPIDS, MI
The Market
The West Michigan retail market experienced a slightimprovement in market conditions in the first quarter2015. The vacancy rate went from 6.6% (all areas, all product type) in the previous quarter to 6.4% (all areas, all product type) in the current quarter. Net absorption was positive 339,174 square feet. Quoted rental rates increased from fourth quarter 2014 levels, ending at $9.38 per squarefoot per year. A total of 3 retail buildings with 44,512 square feet of retail space were delivered to the market in the quarter, with 459,800 square feet still under construction at the end of the quarter.
New retailers like Trader Joes, Fresh Thyme Farmers Market, West Elm and the Tanger Outlet Center are finding their way to West Michigan. Center Point Mall was sold in 2014, Westshore Mall in Holland was also sold and approved to be “de-malled” and several other power centers changed hands throughout the region. Panda Express, Pot Belly, Fire House Subs are all new restaurants along with Chick-fil-a expected to open multiple units in 2016. Costco recently opened a new store in Kalamazoo. All of this points to a great 2015 and continued activity into 2016…if you’re a retailer and you’re in West Michigan…the time is now to expand or do another location and we can help you. If you’re a retailer and you’re not yet in our West Michigan marketplace, call anyone on our NAI Wisinski Retail Team…we’d be happy to help you learn about and secure prime locations in West Michigan.
- Rod Alderink Principal | Associate Broker
Total Employment GrowthHighlight Total Number of Jobs Added per Year
Recent Lease Transactions, January - March 2015Address Size (SF) Tenant Lease Type by size
3100 44th St 6,800 SF Kesslers Diamond New1970 Division 2,385 SF Henry & Josh Inc. New
4981 Plainfield 2,000 SF Super T. Karate New5200-5202 Northland Dr. 3,600 SF New Beginings Restaurant New
Recent Sales Transactions, January - March 2015Address Size Final Sale Price Price PSF Sale Date
5701 28th St. 5,300 SF $1.2 Million $226.42 3/25/20157455 Oakland Dr. 4,700 SF $180,000 $38.30 3/15/2015
860 84th St. SE vacant land $285,000 N/A 3/04/20152360 Metro Way SW vacant land $900,000 NA 3/04/2015
Annual GDP growth of 2.5-3.5 percent in West MI
West Michigan’s Vacancy decreases to 6.4%
Economic Trends
Occupancy & Rental Rate
The unemplopyment rate in Grand Rapids is down 2.2% from March 2014
West MichiganRetail Submarket Statistics
Retail Statistical Changes Year-over-Year and Quarter-over-Quarter
CONSTRUCTION
CONSTRUCTION
ASKING RATES
ASKING RATES
VACANCY RATE
VACANCY RATE
NET ABSORPTION
NET ABSORPTION
1Q14 vs. 1Q15
4Q14 vs. 1Q15
Q1 Retail Snapshot Submarket Total RBA Total
Available SFVacancy
RateTotal AverageRate ($/SF/Yr)
Total Net Absorption (SF)
LakeshoreCommunity 1,488,209 110,428 6.4% $7.66/nnn 11,085 Neighborhood 1,488,209 110,428 6.4% $7.66/nnn 11,085 Strip 998,795 126,567 10.5% $8.37/nnn 7,162 Total 3,975,213 347,423 8.74% $7.90/nnn 29,332NortheastCommunity 445,573 180,294 36.0% $5.07/nnn -44,401Neighborhood 1,094,518 158,334 13.4% $10.22/nnn -1,955Strip 680,347 108,742 12.8% $9.77/nnn 6,525 Total 2,220,438 447,370 20.15% $8.35/nnn -39,831NorthwestCommunity 861,454 61,346 4.1% $13.41/nnn -Neighborhood 421,082 85,490 16.0% $9.00/nnn -Strip 531,519 126,717 15.3% $8.71/nnn 4,863 Total 1,814,055 273,553 15.08% $10.37/nnn 4,863SoutheastCommunity 744,146 30,355 2.2% $18.39/nnn 6,816 Neighborhood 2,473,378 591,623 20.7% $10.62/nnn 30,965 Strip 1,737,306 267,088 11.5% $9.58/nnn 698 Total 4,954,830 889,066 17.94% $12.86/nnn 38,479SouthwestCommunity 1,697,150 255,139 14.3% $11.49/nnn 1,422 Neighborhood 1,005,150 204,683 17.0% $8.14/nnn 1,200 Strip 949,805 138,390 10.5% $10.52/nnn 2,770 Total 3,652,105 598,212 16.38% $10.05/nnn 5,392
Retail Total Market Report
0.00%
5.00%
10.00%
15.00%
20.00%
2013Q1 2013Q2 2013Q32 013Q4 2014Q12 014Q2 2014Q3 2014Q4 2015Q1
Vacancy Rate
Vacancy Rates-
Neighborhood Vacancy Rates-
Community Vacancy Rates-
Strip
02000400060008000
10000120001400016000
2013Q1 2013Q2 2013Q3 2013Q4 2014Q12 014Q2 2014Q32 014Q4 2015Q1
$8.00
$8.50
$9.00
$9.50
$10.00
$10.50
2013Q1 2013Q2 2013Q3 2013Q4 2014Q12 014Q2 2014Q32 014Q4 2015Q1
Triple Net Rental Rates
Rental Rates- Neighborhod Rental Rates- Community Rental Rates- Strip
Vacancy Rate Across All Submarkets
-100000
-50000
0
50000
100000
150000
2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1
RBA Delivered Neighborhood RBA Delivered Community
RBA Delivered Strip
Methodology | Definitions | Submarket Map
Community CenterA shopping center development that has a total square footage between 10,000 - 350,000 SF. Generally will have 2-3 large anchored tenants, but not department store anchors. Community Center typically offers a wider range of apparel and other soft goofs than the Neighborhood Center. Among the more common anchors are supermarkets and super drugstores.
Strip CenterA strip center is an attached row of stores or service outlets managed as a coherent retail entity, with on-site parking usually located in front of the stores. Open canopies may connect the storefronts, but a strip center does not have enclosed walkways linking the stores.
Neighborhood CenterProvides for the sale of convenience goods (food, drugs, etc) and personal services (laundry, dry cleaning, etc.)
Absorption (Net)The change in occupied space in a given time period.
Available Square FootageNet rentable area considered available for lease; excludes sublease space.
Average Asking Rental RateRental rate as quoted from each building’s owner/management company. For retail, a triple net rate is requested.
RBAThe total square footage of a building that can be occupied by, or assigned to a tenant for the purpose of determining a tenant’s rental obligation.
DeliveriesBuildings that have their certificate of occupancy and are allowed to be moved into by the tenant/purchaser.
Vacancy RateAll physically unoccupied lease space, either direct or sublease.
SF/PSFSquare foot/per square foot, used as a unit of measurement.
Southwest
Northeast
Southeast
Northwest
Lakeshore
Methodology: The retail market report includes community, neighborhood, and strip retail buildings within each of the defined submarkets. For definition of product type, please see below.
Through our affiliation with NAI, we can also assist you with your needs throughout the US & globally right here from West Michigan.
Doug Taatjes, CCIM, SIOR616 292 [email protected]
Hillary Taatjes-Woznick616 242 [email protected]
Tim Platt616 575 [email protected]
Gary Steere616 575 [email protected]
Russ Bono616 242 [email protected]
Jeremy Veenstra616 242 [email protected]
Marc Tourangeau269 207 [email protected]
Stanley Wisinski III, SIOR, CCIM616 575 [email protected]
Bill Tyson616 242 [email protected]
Meet Our Team
Retail SpecialistsRod Alderink616 242 [email protected]
Dane Davis269 459 [email protected]
Dick Jasinski616 575 [email protected]
Scott Nurski616 242 [email protected]
In the spring of 2011, two successful and reputable companies, The Wisinski Group and NAI West Michigan merged. The merger represents collaboration, rich traditions, innovative technologies, unique cultures and diversity of skills and specialties which ultimately benefit our clients. We’re going back to our fundamentals, strengthening our core and becoming stronger in the services we provide our clients. Our focus is simple - building client relationships for life by offering market appropriate advice and then executing. Our success is a direct result of its unwavering commitment to providing the best possible service to each and every client. Our Brokers, with their 562 plus years of combined experience (20.1 years average), possess the knowledge and expertise to manage the most complex transactions in industrial, office, retail and multifamily specialities throughout West Michigan.
NAI Wisinski of West MichiganAt a Glance
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100 Grandville Ave SW Suite 100Grand Rapids, MI 49503616. 776. 0100 www.naiwwm.com
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Wisinski ofWest Michigan
Office • Industrial • Retail • Multi-Family