retail report 4q 2012
DESCRIPTION
Retail Market Report: 2012 Summary Prepared by: Dan DuttonTRANSCRIPT
780 North 114th Street • Omaha, NE 68154 • 402.697.8899 • worldgroupllc.comInformation furnished is from sources deemed reliable but not guaranteed by us and is subject to change in price, corrections, errors and omissions, prior sales or withdrawal without notice.
MARKET
Prepared by: Dan Dutton
Associate Vice President
2012 Summary
REPORT
Retail
780 North 114th Street • Omaha, NE 68154 • 402.697.8899 • worldgroupllc.comInformation furnished is from sources deemed reliable but not guaranteed by us and is subject to change in price, corrections, errors and omissions, prior sales or withdrawal without notice.
By: Dan Dutton, World Group Commercial Real EstateCity Wide HighlightsA Few Notes this Coming Year...
The retail real estate market in the Omaha area expe-rienced its best year since the downturn began. So that we have something to compare, let’s take a quick look back. In 2011, we saw a net absorption of 140,701 square feet. At the end of 2011 the vacancy rate was 11.2%. Activity was healthy in the retail market in 2011 but it was nothing like we experienced in 2012.
In 2012, the metro area positively absorbed 574,665 square feet, and the vacancy rate dropped to 9.6%. This can be attributed to a couple of reasons. Devel-opment activity in the retail market is still a minimum with no major projects coming on-line in 2012. Retail-ers and restaurants expanded at a faster pace than any other time since the recession.
Demand for Class A real estate continues to be very high with several new restaurants entering the market such as Firehouse Subs, Jersey Mike’s Subs, Raising Cane’s, Dunkin Donuts and a few to be named in 2013. Several restaurants already located in the metro are actively seeking additional locations.
2012 brought the announcement of the first major retail development in Omaha for several years. Set-tler’s Creek truly got off the ground with Hobby Lobby signing a lease for a building to be built at 72nd & Corn-
Source: XceligentMarket Research
Lease Rate Low
Lease Rate High
Avg. Lease Rate
Council Bluffs $9.00 $14.00 $11.44
East $4.00 $19.00 $11.75
North Central $5.00 $16.00 $11.32
Northwest $8.50 $20.00 $13.62
Sarpy West $2.50 $19.50 $11.59
South Central $5.00 $28.00 $11.70
Southwest $1.87 $25.00 $13.05
West Dodge Corridor $7.50 $20.00 $11.91
Sarpy East / Bellevue $4.77 $22.00 $10.86
GRAND TOTAL $1.87 $28.00 $12.33
Lease Rate by Type (Q4 2012)
100,914
45,545
168,974
138,541
110,938
19,991
(10,238)
100,000
120,000
140,000
160,000
180,000
80,000
Free-standing
Conv/Strip Center
Big BoxNeighborhood Center
Regional Center
CommunityCenter
Power Center
60,000
40,000
20,000
0
(20,000)
Net
Abs
orpt
ion
(SF)
YTD Total Net Absorption (SF)
husker Road. Another major retailer has a lot under contract at Settlers Creek.
Big box spaces were active in 2012. Big Lots signed a lease and opened a store on 72nd Street. The most exciting big box retailer to sign a lease this year was HomeGoods, which opened its first store in Nebraska at Montclair-on-Center located at 132nd & West Center. It’s not often that a new retailer to the market can generate lines of 200 people deep on the morning it opens.
780 North 114th Street • Omaha, NE 68154 • 402.697.8899 • worldgroupllc.comInformation furnished is from sources deemed reliable but not guaranteed by us and is subject to change in price, corrections, errors and omissions, prior sales or withdrawal without notice.
West Dodge Corridor
Source: XceligentMarket Research
In 2012 the West Dodge Corridor experienced a slight uptick in the vacancy rate from 4.8% in 2011 to 5.2% in 2012. There was a net negative absorption rate of 14,175 square feet. The West Dodge Corridor is the smallest submarket covered in the report, so a small
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
Vaca
ncy
Rate
(%)
Vacancy Rate by Type (Q4 2012)
11,1319.5%
(10,680)
9.7%
7,636
1.0%
10,000
15,000
5,000
0
5,000
Conv/StripCenter
Conv/Strip Center
NeighborhoodCenter
RegionalCenter
NeighborhoodCenter
Regional Center
10,000
15,000
Net
Abs
orpt
ion
(SF)
YTD Net Absorption by Type (SF)
amount of activity can swing the numbers. This sub-market continues to be the strongest in Omaha and we suspect that will continue in 2013.
By: Dan Dutton, World Group Commercial Real Estate
By: Dan Dutton, World Group Commercial Real EstateSouth Central
Source: XceligentMarket Research
The South Central submarket had a very strong year in 2012 with a net positive absorption of 131,955 square feet and a decrease in the vacancy rate to 7.8%. Big Lots opened a new store on 72nd Street, the former Borders building sold for a still undetermined use and the Best Buy building was sold to the owner of Cross-
roads. We also saw the announcement of Charles-ton’s going into the former Old Country Buffet at 76th & Dodge. Crossroads continues to be the subject of redevelopment, although we don’t foresee any an-nouncements on that in 2013.
13,000
(25,556)
52,149
92,362
20,000
40,000
60,000
80,000
100,000
0
20,000
40,000Conv/Strip
CenterNeighbor-
hoodCenter
Community Center
Free-standing
Net
Abs
orpt
ion
(SF)
YTD Net Absorption by Type (SF)
25.0%
30.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Vaca
ncy
Rate
(%)
Vacancy Rate by Type (Q4 2012)
3.4%
19.1%
7.1%
3.6%
24.8%
Free-standnig
Conv/Strip
Center
Neighbor-hood
Center
Community Center
Regional Center
780 North 114th Street • Omaha, NE 68154 • 402.697.8899 • worldgroupllc.comInformation furnished is from sources deemed reliable but not guaranteed by us and is subject to change in price, corrections, errors and omissions, prior sales or withdrawal without notice.
Southwest
Source: XceligentMarket Research
Source: XceligentMarket Research
The Southwest submarket had the strongest year of any submarket in 2012. The submarket experienced a net positive absorption of 229,939 square feet and a decrease in vacancy rate to 8.2%. Montclair-on-Center at 132nd & West Center added a 25,000 square foot HomeGoods store. Baker’s Square added an Alegent Health clinic. L Street Marketplace saw the addition of Mattress People and Kirkland’s, but also the closing of Best Buy. A mattress store filled the former Blockbuster on 177th & West Center. This submarket promises many more announcements in 2013, including new restau-rants and retailers.
Vacancy Rate by Type (Q4 2012)
0.0%
40,000
2.0%
20,000
4.0%
0
6.0%
20,000
8.0%
40,000
10.0%
60,000
12.0%
80,000
14.0%
100,000
Vaca
ncy
Rate
(%
)
Freestanding
Freestanding
Conv/Strip Center
Conv/StripCenter
Neighborhood Center
Neighborhood Center
Community Center
CommunityCenter
Big Box
Big Box
RegionalCenter
Power Center
Power Center
8.6%
59,789
12.6%
13,874
10.7%
43,969
10.2%
37,347
3.8%
85,198
3.7%
5.6%
(10,238)
Net
Abs
orpt
ion
(SF)
YTD Net Absorption by Type (SF)
By: Dan Dutton, World Group Commercial Real Estate
780 North 114th Street • Omaha, NE 68154 • 402.697.8899 • worldgroupllc.comInformation furnished is from sources deemed reliable but not guaranteed by us and is subject to change in price, corrections, errors and omissions, prior sales or withdrawal without notice.
Sarpy WestThis submarket continued to show growth in 2012. There was a net positive absorption of 49,808 square feet and a vacancy rate of 12.8%. This area saw one of the first new developments announced in the entire metro since the downturn began. Settler’s Creek at
50.0%
60.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Vaca
ncy
Rate
(%)
Vacancy Rate by Type (Q4 2012)
23,725
11.9%
21,537
13.8%
(10,269)
(526)
15,341
59.1%
3.8%
20,000
30,000
40,000
10,000
0
10,000
Free-standing
Neighbor-hood
Center
Conv/Strip
Center
Community Center
Conv/Strip
Center
Community Center
Regional Center
Neighbor-hood
Center
RegionalCenter
20,000
Net
Abs
orpt
ion
(SF)
YTD Net Absorption by Type (SF)
72nd & Cornhusker was announced with the signing of Hobby Lobby. We expect another major announce-ment for this development in 2013. We also expect to see more construction at Market Pointe located at 72nd & Giles in 2013.
By: Dan Dutton, World Group Commercial Real Estate
Source: XceligentMarket Research
Sarpy East/Bellevue
Source: XceligentMarket Research
10.0%
12.0%
14.0%
16.0%
8.0%
6.0%
4.0%
2.0%
0.0%
Vaca
ncy
Rate
(%)
Vacancy Rate by Type (Q4 2012)
12,579
14.2%
(3,502)
8.7%
(6,600)
2.7%
10,000
15,000
20,000
30,000
40,000
5,000
0
5,000
Conv/Strip Center
Conv/Strip Center
Community Center
NeighbohoodCenter
NeighborhoodCenter
Community Center
10,000
Net
Abs
orpt
ion
(SF)
YTD Net Absorption by Type (SF)
By: Dan Dutton, World Group Commercial Real Estate
This submarket saw little change in 2012 with a net positive absorption of 2,477 square feet and low vacancy rate of 6%. The centers in this market have stayed strong with little vacancy and there also has
been very little new retail construction. One deal that took place in 2012 was Godfather’s signing a lease for the former Smashburger at Twin Creek.
780 North 114th Street • Omaha, NE 68154 • 402.697.8899 • worldgroupllc.comInformation furnished is from sources deemed reliable but not guaranteed by us and is subject to change in price, corrections, errors and omissions, prior sales or withdrawal without notice.
East
50.0%
60.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Vaca
ncy
Rate
(%)
Vacancy Rate by Type (Q4 2012)
4,8646.5%
57,312
6.2%
13.7%
33.6%
60,000
50,000
40,000
30,000
Conv/StripCenter
NeighborhoodCenter
Conv/Strip Center
Neighbor-hood
Center
Community Center
Big Box
20,000
10,000
0
Net
Abs
orpt
ion
(SF)
YTD Net Absorption by Type (SF)
This submarket had a strong year bringing the va-cancy rate down from 17% in 2011 to 10% at the end of 2012. The net positive absorption for this submarket
By: Dan Dutton, World Group Commercial Real Estate
Source: XceligentMarket Research
was 63,776 square feet. This speaks loudly about the turnaround in the retail market with new tenants looking to add locations or new businesses.
This submarket was the hardest hit in 2012 with a negative absorption of 45,351 square feet. Although the vacancy rate for this market is still strong at 5.8%.
North Central
Source: XceligentMarket Research
2,806
(9,493)
(35,678)
(2,986)
30,000
40,000
20,000
10,000
0
Community Center
Regional Center
Conv/Strip Center
Neighbor-hood
Center
10,000
20,000
30,000
40,000
Net
Abs
orpt
ion
(SF)
YTD Net Absorption by Type (SF)
30.0%
20.0%
10.0%
0.0%Vaca
ncy
Rate
(%)
Vacancy Rate by Type (Q4 2012)
11.6%
5.7% 3.1%
11.8%
Community Center
Conv/Strip Center
Regional Center
Neighbor-hood
Center
By: Dan Dutton, World Group Commercial Real Estate
Landlords will remain aggressive in this area looking for deals. There should be a small uptick in 2013 with more tenants leasing space.
780 North 114th Street • Omaha, NE 68154 • 402.697.8899 • worldgroupllc.comInformation furnished is from sources deemed reliable but not guaranteed by us and is subject to change in price, corrections, errors and omissions, prior sales or withdrawal without notice.
Northwest
Source: XceligentMarket Research
20,822
46,638
10,049
25,740
40,000
50,000
60,000
30,000
20,000
10,000
Community Center
Conv/Strip Center
Big BoxNeighbor-hood
Center
0
Net
Abs
orpt
ion
(SF)
YTD Net Absorption by Type (SF)
25.0%
30.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Vaca
ncy
Rate
(%)
Vacancy Rate by Type (Q4 2012)
15.2%
10.0%
1.5%
Community Center
Conv/Strip Center
NeighborhoodCenter
This submarket had a very strong year keeping its vacancy rate low at 6.1% with a net positive absorption of 103,249 square feet. Walmart closed on the former Borders store at 132nd & West Maple. That building has
By: Dan Dutton, World Group Commercial Real Estate
been torn down and construction is ongoing for a Walmart Neighborhood Market. Expect to see more announcements in 2013 and probably a new retailer and restaurant or two for the area.
Council Bluffs
Source: XceligentMarket Research
4,400 5,7501,250
41,58740,000
50,000
60,000
30,000
20,000
10,000
Conv/Strip Center
Neighbor-hood
Center
CommunityCenter
Freestanding0,000
Net
Abs
orpt
ion
(SF)
YTD Net Absorption by Type (SF)
50.0%
60.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Vaca
ncy
Rate
(%)
Vacancy Rate by Type (Q4 2012)
0.3%5.5%
11.5%
1.9%
57.8%
Conv/Strip
Center
Comm-unity
Center
Neighbor-hood
Center
Regional Center
Free-standing
Council Bluffs did see a net positive absorption for 2012 of 52,987 square feet. The market continues to struggle with a vacancy rate of 16.1%. The Mall of the Bluffs has been put up for sale and it will be interesting to see what the future holds for that property. There should be more positive growth in 2013, although
landlords will need to continue to be aggressive and tenants should expect to see good deals. There is a chance that there will be a major announcement before the end of the year, but we will have to wait and see.
780 North 114th Street • Omaha, NE 68154 • 402.697.8899 • worldgroupllc.comInformation furnished is from sources deemed reliable but not guaranteed by us and is subject to change in price, corrections, errors and omissions, prior sales or withdrawal without notice.
Inventory - The total square feet of all single and multi tenant retail properties greater than 5,000 square feet.
Total Available Square Feet - All of the available leas-able space within a building, whether it is occupied or vacant, for direct lease or sublease space. Space can be available but not vacant, for example, if the landlord, or his agent, is marketing space that will be coming available at a future date because a tenant is planning to move.
Total Vacant Square Feet - The total of all of the vacant square footage within a building, including both direct and sublease space.
Direct Vacant Square Feet - The total of the vacant square footage in a building that is being marketed by an agent representing the landlord.
Sublease Square Feet - Space that is offered for lease by a current tenant, or his agent, within a property.
Omaha - Market Area Map
Terminology
Source: XceligentMarket Research
Report Prepared by Dan DuttonWorld GroupCommercial Real EstateAssociate Vice President780 North 114th StreetOmaha, NE [email protected]
Dan Dutton is a member of the retail advisory board for Xceligent. This report proudly uses market information from Xceligent considered by most real estate professionals in Omaha to be the most accurate market information.
Whether the tenant is paying rent or not, the space is considered vacant only if it is unoccupied.
Net Absorption - The net change in occupancy from quarter to quarter, expressed in square feet.