Cassidy Turley - Retail Forecast 2014
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CASSIDY TURLEY
Retail Forecast2014
Cassidy Turley 2014 Retail Forecast | 2
Contents
Economic Outlook 2014 ................................................................................ 3-6
Housing Vs. Policy, Redux .......................................................................... 3
Despite Policy-Induced Hiccups, Consumer Confidence Rising ....................... 3
Consumer Spending Anemic but Income Growth Picking Up .......................... 4
It’s Still All About Housing… ...................................................................... 5
But the Same Challenges Will Remain… ...................................................... 6
Retailer Outlook 2014 ................................................................................ 7-14
Challenges of Weak Economy Supplanted by Challenge of E-Commerce .......... 7
Population Shifts Still a Factor ................................................................... 8
What Are Retailers Looking For? .................................................................. 9
Trends to Watch in 2014: M&A Activity… .................................................... 9
Trends to Watch in 2014: Grocery-Go-Round… .......................................... 11
Holiday Shopping Outlook 2013 … ........................................................... 14
Shopping Center Outlook 2014 .................................................................. 15-20
National Overview .................................................................................... 15
Neighborhood Centers on the Rebound ...................................................... 15
Top Malls Continue to Strengthen .............................................................. 15
Specialty Centers; All About the Outlets..................................................... 16
Adaptation Keeping the Power in Power Centers… ...................................... 17
Construction Returning to Marketplace… ................................................... 18
Class Acts Rule the Roost… ..................................................................... 18
Looking Ahead … .................................................................................... 19
Regional Outlooks ..................................................................................... 21-22
Statistical Overviews ................................................................................. 23-35
Pacific Summary ..................................................................................... 23
Mountain Summary ................................................................................. 25
Midwest Great Plains Summary ................................................................. 27
Midwest Great Lakes Summary ................................................................. 28
Texas/South Central Summary ................................................................... 29
Southern US Summary ............................................................................. 31
Southeast Summary ................................................................................. 32
Northeast Summary ................................................................................. 34
Methodology.................................................................................................. 36
Key Cassidy Turley Statistics ........................................................................... 37
Kevin ThorpeChief Economist2101 L Street, NW, Ste. 700Washington, DC 20037Kevin.Thorpe@cassidyturley.com202.266.1161
Garrick Brown, EditorResearch Director201 California Street, Ste 800San Francisco, CA 94111Garrick.Brown@cassidyturley.com916.329.1558
CASSIDY TURLEY
Retail Forecast2014
Cassidy Turley 2014 Retail Forecast | 3
Housing vs. Policy, ReduxThe big economic story of 2013 was the return of the housing
market vs. the negative impact of fiscal policy. With strong gains
that began in 2012, the housing market was poised at the beginning
of last year to seriously bolster an anemic economic recovery. The
weakness of the economy since the Great Recession, of course,
was partially due to a housing market that had remained missing
in action. Certainly, the depth of the economic havoc wrought by
the recession and the deleveraging nature of the downturn were
huge factors that we will continue to work through for years to
come. But, the near complete absence of the housing market
dictated that recovery could never accelerate beyond a snail’s
pace at best.
Yet, heading into 2013, all indicators were up for housing. The
only question was whether this rebound would be strong enough
and deep enough to boost GDP from the relatively weak low 2.0%
range where it had been hovering up to the 3% mark more typical
of “normal” performance. The question itself came down to the
issue of whether or not dysfunction in Washington would continue
to rattle the markets, undermine confidence and, at worst, not only
derail the housing rally but send a fragile economy backwards.
This isn’t exactly a new story. Since the first debt ceiling debate
the potential of our policymakers to undermine confidence has
been clear. Over the course of the past two years, politics has
replaced underlying economic weakness as the major threat to
the U.S. economy. We saw this again at the close of 2012 as the
debt ceiling debate wore on. It reared its head again during the
first quarter of 2013 with the sequester squabble and it may have
reached a new peak this autumn with the government shutdown
and debt ceiling II. Unfortunately, each episode has served as a
significant drag on an economy that is desperately trying to shift
into higher gear. There are major long-term issues that need to be
addressed. Entitlements (primarily Social Security and Medicare)
will eventually bankrupt the nation if current numbers hold. The
deficit remains a major issue. No legitimate economist would
ever argue those points, though there are legitimate questions
in regards to the timing of further austerity measures—which will
slow the economy. Of course, the real problem has less to do with
the underlying issues now than the actual handling of those issues.
The complete lack of compromise and the brinksmanship that
has threatened to undermine the United States’ sovereign credit
rating, inflate the deficit and potentially undermine confidence in
the dollar as the dominant world currency is the problem.
Despite Policy-Induced Hiccups, Consumer Confidence RisingBut there is good news. Certainly, the bad news is that consumer
confidence has swooned with each political squabble. The latest dip
in October of this year was nine points (according to the Conference
Board’s Consumer Confidence Index survey). The last time that we saw
confidence fall so sharply in a single month was in August 2011 when
it fell by 14.0 points. Is it a coincidence that this was when the first debt
ceiling debate resulted in the downgrading of the U.S. credit rating? No.
it is not. The largest most recent drop in confidence prior to that was
in October 2008 as the financial meltdown unfolded and confidence
plummeted by a whopping 22.5 points. Policy, not the underlying
economy, is the biggest economic threat that we continue to face.
Consumer Confidence
0.0
20.0
40.0
60.0
80.0
100.0
120.0
Oct2012
Nov2012
Dec2012
Jan2013
Feb2013
Mar2013
Apr2013
May2013
Jun2013
Jul2013
Aug2013
Sep2013
Oct2013
Consumer Confidence Index
Debt Ceiling II Government Shutdown
Sequester Fiscal Cliff
Index Value: 1985 = 100
Policy Issues Continue to Undermine Confidence
Source: Cassidy Turley Research/Conference Board
But here’s the good news. After each of the most recent policy
driven declines in consumer confidence, we saw relatively strong
rebounds within a fairly quick period. Confidence fell by 14.0
points during the first debt ceiling debate in August 2011. Though
it sputtered for two more months, consumer confidence rebounded
by a combined 23.8 points over the course of November and
December 2011. The fiscal cliff fiasco sent it downward by 13.0
points in December 2012/January 2013. But it surged by 9.6
points in February 2013. The sequester squabble immediately
followed—dropping confidence by 6.1 points in March of this
year. It rebounded by 7.1 points in April. Through November
2013 consumer confidence figures were not yet available when
this report went to press, the likelihood is great that these figures
will rebound the full nine points or more that were lost in October.
Recent patterns are clear. Once these political showdowns go away,
confidence rebounds sharply and at an increasingly fast pace.
Economic Outlook 2014
Cassidy Turley 2014 Retail Forecast | 4
This bodes extremely well for a holiday shopping season that drew
lackluster forecasts in September and October, but it also spells
out more of what to expect next year when the issue of government
funding and the debt ceiling will be revisited again in February.
While one could argue (and would probably be right) that the
quickening pace of consumer confidence surges following politically
driven scares may have to do with the fact that these spectacles are
starting to become old hat, the fact is that the underlying economy is
improving and that this is impacting both consumer confidence and
consumer spending.
Consumer Spending Anemic but Income Growth Picking UpThe government shutdown slowed the release of a number of key
economic metrics by agencies like the BEA and Census Bureau this
autumn, but some interesting trends became apparent with data
released in October and early November.
U.S. Consumer Spending
-1.50%
-1.00%
-0.50%
0.00%
0.50%
1.00%
1.50%
2.00%
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
Total USA Consumer Spending (Billions), Seasonally Adjusted Annual Rate% Monthly Change
Tota
l Per
sona
l Con
sum
ptio
n Ex
pend
iture
s,
(Bill
ions
$, S
AA
R) U
SA, E
xclu
ding
Foo
d &
Ene
rgy
Source: Cassidy Turley Research, U.S. Bureau of Economic Analysis
Following the near-financial meltdown of September 2008, real
consumer spending fell in the United States for six of the following
seven months. Those declines over the final quarter of 2008 were
enough to bring annual totals into the red for the first time in over 20
years and this is despite the fact that those metrics had been largely
positive prior to that. Instead, actual consumer spending on an
annualized basis fell by just under one percent that year.
Despite the challenges faced during the initial days of the Great
Recession and the prolonged, but anemic, recovery period since,
consumer spending has generally been on the rise. It grew by 1.4% in
2009, 4.5% in 2010 and 4.9% in 2011. Of course, part of the strong
gains of 2010 and 2011 were because total spending figures for those
years were being compared against weak totals from the prior period.
Consumer spending levels have since moderated. Annualized
growth for 2012 came in at 3.8%. Meanwhile, year-to-date growth
for 2013 (through September of this year) has only increased by
1.9%. The primary reason for this was the suspension of the payroll
tax holiday in January 2013. This took a real bite out of worker
paychecks and the impact was immediate and obvious. Over the
course of 2012, monthly consumer spending totals increased by an
average of 0.46%. This included a very strong fourth quarter (total
three month gains of 1.1%). Yet, numbers immediately fell with
January of this year. Monthly gains have averaged 0.22% since then.
These lukewarm totals have been enough to help trigger some
extremely cautious forecasts for the 2013 holiday shopping season.
Yet, the International Council of Shopping Center’s (ICSC) chain store
sales index actually posted relatively strong gains of 4.0% that month.
Of course, this index is just an aggregate of same store sales for a
select group of retailers and is relatively narrow in focus, but it does
reflect the relatively conflicting indicators present in the marketplace.
While October’s consumer spending figures were not yet available by
the time this report went to press, we anticipate a return to positive
territory—but anemic positive territory. However, we do expect
growth to pick up over the holiday shopping season and for stronger
numbers to begin to emerge next year. We think that consumer
spending (on an annualized basis) will return to something a little bit
closer to the 3.9% annualized rate of last year. Our optimism is not
based on mere wishful thinking, however. It is based on two basic
factors; the return of the housing market and the recent trend of
income growth that has become apparent.
Inflation continues to be a non-factor. Falling fuel prices in recent
months have helped to play a role in this, but ultimately this continues
to be a reflection of the general sluggishness of the economy.
Continued gradual improvement in the economy over the course of
the next year will mean that it will eventually be a factor to watch. In
the meantime, one of the more encouraging recent metrics came
in the form of strong personal income numbers in September (the
latest period available).
U.S. Personal Income
-2.00%
-1.50%
-1.00%
-0.50%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
$10,000
$11,000
$12,000
$13,000
$14,000
$15,000
Total USA Personal Income (Billions), Seasonally Adjusted Annual Rate% Monthly Change
Tota
l Per
sona
l Inc
ome,
(Bill
ions
$, S
AA
R) U
SA
Source: Cassidy Turley Research, U.S. Bureau of Economic Analysis
Cassidy Turley 2014 Retail Forecast | 5
Personal income rose by a strong 0.5% in September, the second
month in a row in which it came in at this level. It is also the fifth
month in a row of gains. Overall growth is now up 3.8% on a
three-month annualized basis. Real disposable income also rose
in September—to the tune of 0.4%. Income growth appears to
be ticking up finally at the national level and in a consistent way.
Consumers remain cautious and so much of these gains have not
yet translated into significant gains in consumer spending. That is
because the saving rate increased to 4.9% in September—the third
straight month in which it has done so. The policy showdown likely
played a role in this and October numbers are likely to be similar.
However, we do anticipate that the trend of income growth will
continue and that, barring any unforeseen shocks to the economy,
consumers will eventually loosen their purse strings as well.
It’s Still All About Housing…The outlook last year was for gradual improvement with gains driven
by housing but tempered by policy headwinds. The outlook for 2014
is the exact same but comes from a vantage point that is further down
that path. The nation’s housing markets made serious gains in 2013,
even if some of that progress was obscured by policy debates.
Nearly every housing market in the Case Shiller 20-City Index has
shown considerable gains in pricing over the past twelve months. The
latest data from the National Association of Realtors reflects pricing
gains in the overwhelming majority of U.S. markets, with a substantial
number of those reflecting increases of 10% or more over the past year.
Home Prices Surging2013Q3 vs. 2012Q3, % Change
*No data available for Charlotte, Salt Lake City or Seattle
Atlanta 42% Sacramento 42% Las Vegas 32%
Jacksonville 29% Riverside 28%
Los Angeles 26% Phoenix 25%
San Francisco 24% Orlando 24%
San Diego 23% San Jose 20%
20% or greater 10% - 20% 5% - 10% 5% or less
Austin 9% Raleigh 8%
Nashville 8% Colorado Springs 8%
DC 8% San Antonio 8%
St. Louis 8% Boston 8% Newark 6%
Cleveland 6% Milwaukee 6%
Portland 15% United States 13% Grand Rapids 12%
Tucson 11% Bismarck 11% Houston 11%
Charlotte 11% Denver 10% Dallas 10%
Providence 10% Tampa 10%
Baltimore 5% Columbus 4%
New York, NY 3% Edison -1%
Little Rock -4% Peoria -14%
Source: Cassidy Turley Research/National Association of Realtors
This is critical because the depth of the Great Recession was due to
the deleveraging nature of this particular downturn. And no other
sector of the economy had more deleveraging to do than housing.
Rebounding pricing means that this is now behind us. The absence of
housing as an economic driver over the past few years was one of the
primary factors behind the length of this downturn. Typically, housing
leads recoveries, but in this instance it has been the missing link.
During the previous three recessions (1980, 1991 and 2001),
residential investment led the way out, growing more than 30% on
average during the first years of recovery. In past cycles, this meant
strong rebounds, thanks to millions of jobs and billions of dollars in
additional economic output. According the National Association of
Home Builders (NAHB), were home construction near its historic
norm, it would create an additional three million jobs. A 2008 study
from the NAHB found that each new home built creates three new
fulltime jobs (from construction to financial services to retail) and
creates $90,000 in tax revenue. Even at half those numbers, the
impact of housing is huge, especially when considering the fact that
housing starts have set new records for lows throughout this downturn.
Most economists agree that the housing sector traditionally has
accounted for between 15% and 20% of the total U.S. economy.
U.S. New Home Completions
Oct-12 Nov-12 Dec-12 1-Jan Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-1330.0
40.0
50.0
60.0
70.0
80.0
New Home Completions
New
Hou
sing
Com
plet
ions
, Tho
usan
ds o
f Uni
ts 2011 Completions: 584.9 2012 Completions: 649.2 2013 Completions (thru August): 616.7
Source: Cassidy Turley Research/U.S. Census Bureau/ Department of Housing & Urban Development
The good news is that sales activity is back, home prices are
rebounding, existing inventories are at near record lows and new
home starts are at their highest level since before the financial
meltdown of 2008. Permits remain high, meaning that this trend will
continue, at least for now. Most of the markets we cover report that
residential developer interest in land remains high with many builders
getting ready for the next wave of new homebuilding. New home
construction should continue to increase and accelerate heading
into 2014 and beyond. Keep in mind that we lost over two million
construction jobs during the recession and that most of those have
not come back yet. We see the potential for as many as one million
new construction jobs through the end of 2014. Likewise, the return
of housing and homebuilding will boost GDP. Our anticipation is that
a return to GDP in the low 3.0% range by the end of 2014 is a real
possibility, if not likely. Meanwhile, consistent GDP growth in the high
2.0% range we think is a given.
Most important to the retail landscape is the impact that rising home
values will have on the marketplace. There is a direct correlation
between housing wealth and consumption. In economic circles, the
common belief has been that for every dollar increase in housing
wealth will increase consumption by roughly $0.05. However,
that theory has been challenged as of late. A 2011 paper by the
economist Matteo Iacoviello found that the most recent numbers
indicate that every dollar increase in housing wealth translates into
Cassidy Turley 2014 Retail Forecast | 6
a boost in consumption of $0.06. Yet, a recently released study by
the economists at Wells Fargo showed that those values in recent
years have been closer to $0.09. Regardless, the potential impact
of an improving housing market for retailers is huge.
U.S. New Home Starts
Oct-12 Nov-12 Dec-12 1-Jan Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-1340.0
50.0
60.0
70.0
80.0
90.0
New Home Starts
New
Hou
sing
Sta
rts, T
hous
ands
of U
nits
2011 Starts: 608.8 2012 Starts: 780.6 2013 Starts (thru August): 819.1
Source: Cassidy Turley Research/U.S. Census Bureau/ Department of Housing & Urban Development
For years we have been dealing with the question of “the new frugality”
and how long would it last. Retail fundamentals have become sharply
bifurcated on all levels, partially due to this issue as pinched middle
class consumers downsized, trading in trips to the Gap for trips to Old
Navy. While retailers and restaurants on the lower end of the pricing
spectrum have thrived throughout the recession, luxury brands and
higher end dining only returned to growth mode a few years ago. But this
still has not happened for the mid-priced retailer, whether we are talking
about apparel, groceries, restaurants or any other retail sector. While we
anticipate that consumers will not immediately revert to old shopping
habits, and that the increasing encroachment of e-commerce will keep
price competition high for many of these retailers, the fact is that the
return of the wealth effect can only translate into increased consumer
sales totals. This will only further strengthen retail fundamentals and
drive greater demand for investment in retail real estate.
Return of the Wealth Effect“A one dollar increase in housing wealth increases consumption 9 cents…” Consumer Wealth and A Changing Wealth Effect, Wells Fargo Economics Group
=Source: Cassidy Turley Research/Wells Fargo Economists
But the Same Challenges Will Remain…If the big economic story of 2013 was policy vs. housing, this year
doesn’t promise much in the way of variety. Policy vs. Housing, Part
II will see the same threats to economic growth as we will continue
to struggle with dysfunction in Washington and, most likely, more
political brinksmanship that may prove to undermine confidence
in the economy. But, while the challenges will be the same, the
underlying fundamentals will be slightly stronger.
Perhaps the biggest difference is that by the middle of next year,
economic growth should be strong enough for inflation to start to be
a possibility once again. This is actually a good thing. The absence
of this threat over the past few years hasn’t been by accident—
it’s been due to how anemic the underlying fundamentals of the
economy were. This will not be the case for much longer, but it
also means that we will almost certainly see the Fed raising interest
rates at some time next year to keep inflationary pressures at bay.
The timetable could vary, but we anticipate this happening near
the end of the second quarter—likely in May or June. So long
as interest rates don’t move too far too fast, the impact on the
overall economy will be minimal. But there will be one. This could
slow the housing recovery and it will certainly have an impact on
commercial real estate pricing as the price of borrowing becomes
more expensive. But that is assuming the underlying economic
fundamentals have heated up to the point of warranting such a
move—which is ultimately a good thing. A stronger economy may
bring higher interest rates, but it will also bring higher earnings,
lower unemployment, greater consumer spending and—for
landlords—better rental rate growth and NOI. In the meantime,
look for the first big political squabble (over the debt ceiling once
again) to start up again in late January.
Cassidy Turley 2014 Retail Forecast | 7
Challenges of Weak Economy Supplanted by Challenge of E-CommerceThere are two basic factors impacting retailer demand today. The
first remains the economy. While high-end consumers are back,
the middle class largely remains in frugality mode. The good news
is that this is slowly lessening and the return of the housing market
will accelerate this trend. However, in terms of retailer performance
it has led to the creation of what is more or less an exaggerated
hourglass in which luxury retailers are doing well at one end of
the spectrum and discounters are doing well at the other. Many
mid-priced players, however, continue to face challenges. These
challenges have been particularly exacerbated for hard goods
chains that fall into this category because of the additional impact
of the other major factor impacting retail today; the growing
encroachment of e-commerce.
In the meantime, from a retailer growth perspective, we continue
to see strong activity at the far ends of the economic spectrum.
Luxury retailers are back and are looking for space in the nation’s
high street shopping districts and trophy shopping malls. We also
continue to see new concepts from abroad in this category looking
for new flagship locations on top shopping streets in markets like
Manhattan, San Francisco, Beverly Hills and Chicago’s Michigan
Avenue among others. Many luxury chains have also been active
with their off-price concepts—particularly with growth in the
nation’s flourishing outlet center marketplace.
Retail Growth 2014Fitness/Health/Spa Concepts Drug Stores Thrift Stores Grocery (Smaller Format Concepts) Discount Ethnic Organic Upscale
Fast Food Fast Casual Automotive Discounters Dollar Stores
Off-Price Apparel Pet Supplies Sporting Goods Wireless Stores Banks
GROWINGSource: Cassidy Turley Research
Meanwhile, discounters, off-price apparel and dollar stores all
remain in aggressive growth mode and have largely been
responsible for backfilling much of the vacant big box space that
had vexed landlords at the height of the recession. Dollar store
growth remains explosive—the top five national chains have
averaged 2,000 new units annually for the past three years and all
have similar growth plans for 2014. Many are also upping their
capital expenditure budgets for remodels on existing stores—in
particular, a number of major dollar store chains are adding more
freezer and refrigerator space as they seek to expand their offerings
of consumables and compete more directly with traditional grocery
players. Discounters are also upping growth totals. Costco alone
has plans for at least 28 new stores over the next six months; 20 of
which will be in the United States (the warehouse store giant is also
expanding into Canada and Australia). Their plans include major
pushes into the Midwest and the New Jersey/New York markets.
And off-price apparel remains white hot as well. Marshall’s, TJ
Maxx, Ross Dress for Less and Nordstrom Rack have all been in
strong growth mode for the last three years and plan to continue
that trend in 2014, though available quality mid-box space (all tend
to use about 30,000 square feet) is becoming harder to find in
most markets.
Retail Contraction 2014
Bookstores Video Stores Do-It-Yourself Home Stores Mid-priced apparel Mid-priced grocery (particularly unionized) Office Supplies Stationary/Gift Shops Shipping/Postal Stores And Casual Dining (Older, Struggling Concepts Shrinking)
DECLINING
Source: Cassidy Turley Research
The other big factor impacting retailer growth is the impact of
e-commerce. This has now supplanted weak underlying economic
fundamentals as the greatest threat to bricks and mortar retailers—
at least those chains which have responded to the challenge.
The continued growth of e-commerce is changing the buying
patterns of consumers and is radically shifting the way that many
retailers look at their real estate portfolios. This shift has been most
profound for traditional hard-goods retailers. With consumers still
largely in frugality mode and online sales growing at a pace of 15%
or more annually (compared to roughly 5% for traditional retail
stores), many traditional mall retailers have shifted their capital
expenditure budgets away from bricks and mortar expansion
towards building their e-commerce platforms and supply chains.
Retailer Outlook 2014
Cassidy Turley 2014 Retail Forecast | 8
Rise of E-CommerceOnline vs. Traditional Retail Sales Growth
1,777
1,877 1,915 2,014 2,105 2,189
143 165 190 221 254 292
-5%
0%
5%
10%
15%
20%
0
500
1,000
1,500
2,000
2,500
2009 2010 2011 2012 2013 2014
Y/Y
Cha
nge
%
Gro
wth
in $
B
U.S. Retail U.S. Online Retail
Retail % Change Online % Change
Source: Cassidy Turley Research
This trend will only accelerate over the next two to three years. This
is partially being driven in response to Amazon’s aggressive expansion
of its supply chain network (the online giant plans to expand it’s
roughly 55 million square feet of distribution centers to 90 million
square feet by 2016) as it seeks to roll out same day delivery
capabilities. Whether or not Amazon will succeed in being the first
major company to roll out a successful same-day delivery model may
not actually be the point. Whether they do, or not, they are creating
an infrastructure that will be able to deliver next day delivery profitably.
In the meantime, responding to this threat has become the focus for
many retailers. For example, Kohl’s—which had been expanding at
a rate of roughly 60 new stores annually—has put new stores on hold
as it builds its e-commerce and supply chain platform. Ultimately,
e-commerce will never replace the shopping experience but it will
create many challenges for retailers that do not master a
comprehensive omni-channel approach (bricks AND clicks) to the
marketplace. Likewise, since shopping is about the experience and
e-commerce is about convenience, retailers who fail to grasp that the
new paradigm demands higher levels of in-store customer service
will also face significant challenges ahead. In the meantime, however,
e-commerce will continue to negatively impact demand for bricks
and mortar shop space.
But that is not the only way in which e-commerce is impacting bricks
and mortar retail demand. While mid-priced hard goods players
are largely either in no growth or contraction mode, we are seeing
surging growth from retail chains that do not compete heavily with
online competition. This largely breaks down to food users (grocery
and restaurants) and service related retail (automotive service, dry
cleaners, financial services/tax preparation, etc.). Restaurants, by
far, are the most active sector.
We track the expansion plans of over 3,000 national retail and
restaurant chains and publish the results each spring in our Annual
Retailer and Restaurant Expansion Guide. As this report went to
press, we were tracking plans from retailers to open as many as
38,000 new storefronts over the next year. This number stood at just
over 36,000 units one year ago. While an increase of just over 5% in
total retailer unit demand comes as good news, this number masks
more than a few challenges for landlords.
Roughly 43% of all the planned growth we are tracking currently is
from restaurant users. This number has been steadily on the rise
thanks to an onslaught of new fast casual concepts ranging from
new, higher-end burger joints to new pan-Asian concepts and
upscale wood-fired pizza chains among others. But it is critical to
note that restaurants are now accounting for a larger percentage of
growth in the marketplace than ever before. One year ago, dining
concepts accounted for 38% of all the growth that we were tracking.
Prior to 2011, this category typically averaged 35% or fewer of the
planned units we tracked.
There is no doubt that retailer demand has shifted and this is
already having major ramifications for landlords as tenant mixes at
local shopping centers become increasingly food-based. This also
includes grocery players, which have increasingly become a staple
at power centers and malls. While concerns remain about grocery
consolidation among mid-priced, unionized chains, some recent
developments in terms mergers and acquisitions may result in less
fallout from these users even as a flood of new, smaller concept
groceries ranging from discounters to high-end organic players
remain in aggressive growth mode.
Population Shifts Still a FactorBeyond the obvious impact of economic conditions and the
growing impact of e-commerce on retailer space demand, there
are a number of other macro trends at work that continue to shape
the marketplace. Everything follows basic consumer trends and
continued demographic shifts in the United States continue to
impact retail site selection at its core.
Population Growth
HOT!
WARM!
COOL!
14.1%
12.0%
10.0%
21.1%
35.1% 23.8%
13.2% 24.6%
20.6%
8.7%
6.1% 16.9%
14.1%
9.7% 4.7%
7.9%
6.7%
7.8%
4.1%
7.0%
9.1%
1.4%
4.3% 7.5%
17.6%
18.3%
15.3%
18.5% 11.5%
6.0%
3.3% 6.6%
7.4%
13.0%
1.6%
2.5%
2.1%
3.4%
4.2% VT 2.8% NH 6.5% MA 3.1% RI 0.4%
NJ 4.5% DE 14.6% MD 9.0% DC 5.2%
-0.6%
Change by % in Population; April 2000 to April 2010
Source: Cassidy Turley Research, US Census Bureau
Cassidy Turley 2014 Retail Forecast | 9
As coastal and select southern markets continue to see population
growth and stronger levels of growth (both organically and through
in-migration), these markets will continue to be the focus of both
retailers and developers. As demonstrated through the most recent
census numbers, population growth continues to be much greater in
the Sun Belt and Western States and this trend was hardly impacted
by the Great Recession. While California’s growth rate may have
cooled slightly from 2000 to 2010, it still remained well above the
national average. Meanwhile, Texas, the Southwest, Mountain States
and the Southeastern U.S. were all on fire in the past decade.
Analysts at Citibank’s Retail Research Group recently published a
thought provoking paper in which they divided the country into six
basic regions and then looked at the number of locations within
those regions for an expanded list of some of the countries’ top retail
chains. They found that the Southeast U.S. now accounts for 25%
of the nation’s total population but 33% of current retail exposure
from the chains in their survey. The Midwest was the second largest
region in their survey in terms of total population—accounting for
21.4% of the nation’s consumers. But the Midwest accounted for
only 17.0% of the retail locations in their survey. The Southwest
was comparatively under-retailed in their findings—accounting
for 18.0% of the nation’s population but just 16.0% of total retail
exposure. The Northeast had relative parity with 17.7% of the
nation’s population and 18.0% of its retail exposure. Meanwhile,
the South Central region (which includes Texas) accounted for
11.6% of the total population and 11.0% of the retail presence of
surveyed companies. Lastly, the Northwest came in at 4.4% of the
total population and just 4.0% of total retailer exposure.
Population / Retailer Exposure
Retailer Exposure by Region, 2013
Northeast 17.7% 18.0%
Southeast 25.0% 33.0% South
Central 11.6% 11.0%
Midwest 21.4% 17.0%
Northwest 4.4% 4.0%
Southwest 18.0% 16.0%
Source: Cassidy Turley Research, US Census Bureau, Citi Research
Interestingly enough, much of what the Citi Retail Group found in
their analysis we see mirrored in the retailer growth requirements
that we track. Demand is picking up across the board, but the
coasts and Texas remain the hottest spots for site selection.
However, the Southwest, Northwest and Mountain states are all
also picking up significantly.
What Are Retailers Looking For?The typical profile now of a Class A shopping center project is one
located on a premium corner, in a densely populated urban location
with higher than average income demographics. With few exceptions,
this is the profile for a shopping center with sub-5% vacancy or better
and strong rental rate growth in nearly every major U.S. market. But,
the fundamentals become weaker for each of those variables that
you take away. That is because, at the street level, most retailers
are still cautious with their growth and are looking for the proverbial
“sure thing.” The best spaces in the best centers with the highest
traffic levels and/or exposure and the densest population and highest
income demographics. Of course, this is why recovery has been so
uneven in the retail world and bifurcated by class. But those spaces
have largely disappeared in most major marketplaces.
The market is still bifurcated on the basis of Class—though to a
lesser degree than it was either 12 or 24 months ago. But while
Class A properties are now generally doing well in all U.S. markets,
Class C properties are still struggling in nearly every national trade
area. Class B properties are the big swing properties here and while
these shopping centers were only doing well in the top 1/3rd of U.S.
metros two years ago (those with the healthiest local economies like
Washington DC, Boston, New York, Baltimore, San Diego, San Jose,
San Francisco, Seattle, etc.), they have since rebounded. Class B
product is now generally back to reasonable vacancy levels and
rental rate growth in at least the top 70% of major U.S. markets.
Trends to Watch in 2014: M&A ActivityThrough October of this year, we tracked roughly $27 billion in
retailer merger and acquisition activity in the United States. This is up
significantly over the $23 billion we tracked over the entirety of last year.
We anticipate that this trend will only accelerate heading into 2014.
There are a number of reasons for this, both in terms of consolidation
and growth driven mergers. Ultimately, we see the growth driven
deals outpacing those of retailers that are looking to merge for
survival’ sake, though there will be a fair amount of that as well.
Retail M&A Activity
0
5
10
15
20
25
30
2006 2007 2008 2009 2010 2011 2012 2013 YTD
Source: Cassidy Turley Research/Conference Board
Cassidy Turley 2014 Retail Forecast | 10
Consolidation plays out further in the grocery world. Likewise, we
expect to see more moves like this year’s merger of Office Depot and
Office Max. The office supplies sector has been hit hard by online
competition. Staples had emerged as the clear leader in the sector,
primarily due to its strong omni-channel approach which saw declining
sales levels from bricks and mortar locations largely supplanted by
robust online sales, Serious questions as to the viability of both Office
Depot and OfficeMax were starting to be asked in a marketplace
where the perception was that there may only be room for two major
national bricks and mortar chains. While it is too soon to say whether
their merger will be a complete success, the two entities are infinitely
stronger together than they were as competitors. But while we expect
to see some M&A activity from concepts that are struggling, we think
there will be even more activity at the other end of the spectrum.
Private equity firms, hedge and pension funds and private investors
all remain on the lookout for new, strong concepts that they can
grow in an improving and expanding economy. Meanwhile, we also
continue to see investors looking to buy concepts on the cheap and
turnaround plays will likely be plenty. We also anticipate that activity
will be driven to some degree by segment leaders looking to pick up
market share by purchasing viable competing concepts. All of which
is likely to lead to more growth than contraction in the long run.
M&A Highlights Fall 2013Advance Auto Parts/Carquest Auto PartsAdvance Auto Parts purchased General Parts International, parent
of Carquest Auto Parts, for about $2 billion in October. The deal
would create one of the largest automotive parts providers in the
nation. Advance Auto Parts currently operates about 4,020 stores
nationally. The merger will boost those totals in the U.S. by about
1,250 company operated units (there are an additional 1,418
franchised U.S. Carquest units and 120 WorldPac locations—mostly
in Canada). After merger, the new company will have roughly 6,100
units and total sales estimated at $9.2 billion. This move will create
some redundancies and we anticipate that as many as 200 to 300
stores may be shuttered over the next few years as leases expire.
Allen EdmondsAllen Edmonds was acquired by private equity firm Brentwood Associates
in November for an undisclosed amount. The upscale men’s shoemaker
will continue to operate independently under the Allen Edmonds banner.
Allen Edmonds wholesales at numerous high end retailers nationally and
operates 45 company-owned retail outlets in the U.S.
Captain D’s Seafood Restaurants/Grandy’s Country Cookin’Private equity firm Centre Partners purchased Captain D’s Seafood
Restaurants from Sun Capital Partners in October for an undisclosed
amount. The deal included the 527-unit Nashville, Tennessee—
based chain as well as the 60-unit (franchise only) chain Grandy’s
Country Cookin’. Sun Capital had acquired the chain in 2010
and since helped to turn around sagging sales—it has posted 27
consecutive months of same store sales growth since. The chain has
about 290 company-owned units. Sun Capital still has an extensive
restaurant portfolio that includes Boston Market, Smokey Bones
Barbeque & Grill, Bar Louie Restaurants, Friendly’s Ice Cream,
Restaurants Unlimited, Garden Fresh, Fazoli’s, and Johnny Rockets.
Carl’s Jr. /Hardee’sRoark Capital announced its plans to a majority stake in CKE, the
parent company to fast food concepts Carl’s Jr. and Hardee’s in
November. The deal would likely not close until December at the very
earliest—more likely in early next year. Roark also owns Arby’s and
their other investments include McAlister’s Deli, Wingstop and the
Corner Bakery Café and Il Fornaio. They also recently acquired the
Miller’s Ale House Chain in July and are responsible for the various
concepts under the Focus Brands banner; Carvel, Cinnabon, Auntie
Anne’s, Schlotzky’s and Moe’s Southwest Grill. Details of the deal
have not been made available, but according to CKE’s most recent
quarterly filings, the chain operated 424 Carl’s Jr. and 468 Hardee’s
restaurants, with domestic and foreign franchisees accounting for an
additional 2,371 units worldwide.
Coffee Bean & Tea LeafThe Los Angeles, California-based Coffee Bean & Tea Leaf chain
was acquired in September by a group of private equity companies,
including Advent International, CDIB Capital, Mirae Asset Private Equity
and the Sassoon family, for an undisclosed amount. The chain operates
more than 900 company-owned and franchised stores across 15 states
and in over 30 countries. We anticipate accelerated growth ahead.
Johnny RocketsOn the restaurant front, one of the largest deals we tracked this
summer was the sale of Johnny Rockets to an affiliate of the private
equity group Sun Capital Partners. Johnny Rockets operates about
220 U.S. locations and a total of 300 restaurants globally with 60
units in the development pipeline and expected to open over the
next year. We anticipate that the new owners will likely boost growth
in the coming years.
Jos A. Banks/Men’s WearhouseJos. A. Banks ended its $2.3 billion bid to purchase Men’s
Wearhouse in mid-November but a potential merger reportedly has
the support of largest Men’s Wearhouse shareholder, Eminence
Capital. In the most recent twist, news broke as this report went
to press that Men’s Wearhouse had turned the tables on Jos. A
Banks, offering $1.5 billion for its rival.
“ Going forward, we expect even more M&A activity in 2014. Private equity firms, hedge and pension funds and private investors all remain on the lookout for new, strong concepts that they can grow in an improving and expanding economy. But the same holds true on the other end of the spectrum.”
Cassidy Turley 2014 Retail Forecast | 11
Juicy CoutureLeonard Green and his Authentic Brands Group bought Juicy Couture
for $195 million in September from Fifth & Pacific Companies. Fifth
& Pacific is reportedly looking to focus on its fast growing Kate Spade
brand, while we anticipate a turnaround in store for Juicy Couture with
new management.
Lion’s ChoiceThe 23-unit Lion’s Choice restaurant chain was sold in September
for an undisclosed amount. The St. Louis, Missouri-based roast beef
concept was purchased by a private equity partnership that consists
of Black Rock Holdings and Millstone Capital Advisors. The new
ownership plans on adding as many as 15 additional restaurants in
the St. Louis area and growing throughout the Midwest.
Nationwide VisionNationwide Vision was purchased by Refac Holdings in September for
an undisclosed amount. Refac operates U.S. Vision, which operates
roughly 770 full service vision care stores throughout North America,
including locations within Belk, BJ’s, Boscov’s, Hudson Bay, JCPenney,
Macy’s, Meijer and Sears stores. Nationwide Vision operates about
65 retail locations, primarily in Arizona, and will continue to operate
under the same banner following the close of the sale. We anticipate
accelerated expansion for this concept in the future.
Neiman MarcusThe Canada Pension Plan Investment Board and Ares Management
(private equity) completed their purchase of Neiman Marcus in
October. The deal, valued at $6.0 billion, will see about half of that
amount repaying debt under the retailer’s existing credit facilities. The
new owners have a track record of aggressive growth with some of the
past retailers that they have invested in (99 Cents Only Stores, Smart
& Final and GNC). The deal included 41 Neiman Marcus stores, two
Bergdorf Goodman’s and 36 Last Call outlet locations. We anticipate
that much of the future growth may in the form of Last Call outlets,
though we would not be surprised to see a couple of new full-line,
high-end department stores as well over the next couple of years.
Office Depot/Office MaxOffice Depot and OfficeMax closed their $1.2 billion merger in early
November. The chain will kill the OfficeMax banner and go by Office
Depot—a change that it will begin to institute immediately. The new
chain now operates about 845 retail stores across the country, but
we anticipate that as many as one third or more of these may be
shuttered in the next few years as the retailer eliminates redundancies
and downsizes to smaller footprints as leases expire.
Pep BoysPep Buys acquired 17 Discount Tire Centers in Southern California in
September from AKH Company for an undisclosed amount. The deal
brings their national store count to more than 750 stores, with over
150 in the state of California alone.
Ritzman Pharmacies/Mast PharmacyThe already shallow pool of drug store players got even thinner
in October. Ritzman Pharmacies acquired the five-unit Mast
Pharmacy chain in northeastern Ohio for an undisclosed amount.
With the deal, Ritzman will now operate 25 pharmacies throughout
the Buckeye state.
SearsSears is reportedly considering spinning off its Land’s End apparel
business, as well as its automotive service centers. The move could
raise the struggling chain as much as $2.5 billion. In August, the
retailer had less than $700 million in cash on hand, with looming debt
maturities in 2014.
Walgreen’s/Kerr DrugWalgreen’s completed its acquisition of regional North Carolina
pharmacy chain Kerr Drug in November. Deal terms were not disclosed,
but the transaction included 76 drug stores, as well as a distribution
center. So far, no decision has been made on the rebranding of the
chain, though we think it likely in the next 24 months.
Wendy’sWendy’s has been active in refranchising locations. In November,
they announced the sale of 54 Salt Lake City area restaurants to NPC
International. The Dublin, Ohio-based chain also announced plans to
refranchise 38 company-operated units in the Phoenix marketplace
to a partnership consisting of their former V.P. of Operations, John
Peters and longtime Wendy’s franchisee Rick Holland. This follows
moves earlier this year to sell 24 company-owned restaurants
in the Seattle market to longtime franchisee Cedar Enterprises,
24 restaurants in the Kansas City area to NPC International, 30
restaurants in St. Louis to a group consisting of current Wendy’s
franchisee and NBA great Junior Bridgeman and current NBA
star Chauncey Billups and a total of 40 other restaurants in various
markets to eight other franchisees. The move is part of the chain’s
goal of refranchising 425 units this year in a move designed to free
cash flow, boost operating margins and provide steadier income
streams from higher royalty and rent payments.
Yankee CandleIn October, consumer products manufacturer Jarden closed on
its acquisition of the 560-store (U.S. and Canada) Yankee Candle
chain. Jarden paid a reported $1.75 billion in cash for the retailer
and reportedly plans for cautious growth ahead.
Trends to Watch in 2014: Grocery-Go-RoundIn terms of M&A activity, the grocery sector has been among
the most active and we don’t see that changing in 2014. Market
consolidation continued to take place here as traditional grocery
chains react to the continued expansion of new, smaller format
grocery players—many of which are non-unionized—into the
marketplace. We see growth from new concepts far outpacing
Cassidy Turley 2014 Retail Forecast | 12
the amount of space that will be given back in the coming year.
Walmart’s plans for their small-format (30,000 square feet)
Neighborhood Market concept alone could potentially result in 4.5
million square feet of occupancy growth in 2014 (assuming they
live up to high-end projections for growth).
Over the past few years, the big three traditional players (Albertson’s,
Kroger and Safeway) have largely been in consolidation mode.
However, as demonstrated by the recent $2.6 billion acquisition
of southeastern grocery banner Harris Teeter by Kroger, these
players are now in acquisition mode. Safeway sold their Canadian
division in June for a reported $5.7 billion and now has a warchest.
Meanwhile, even privately held Albertson’s is now back in the
acquisitions game having recently purchased the 50-unit United
Supermarkets chain in Texas.
So why are the big three traditional grocery players making these
moves now? The reason is simple; all three have made moves to
free up capital and all three know that the key to competing against
all the new players in the marketplace is to build market share
and revenues. And all three know that growing their brands will
lead to better buying power and improve their ability to compete in
terms of pricing. And right now growth via acquisition is currently a
cheaper proposition than organic expansion.
There are plenty of smaller traditional chains that have struggled to
compete against the onslaught of new competition over the past few
years. The grocery business already has thin margins, but the impact
of the Great Recession on consumer behavior (“the new frugality”),
combined with encroachment of non-unionized players has made
for an extremely challenging environment to say the least. Certainly,
the bankruptcies of regional players like A&P and Bashas in recent
years demonstrate this trend. Against this backdrop, acquisition by
one of the larger traditional grocery chains could be a win-win for
many of these players. Kroger plans on keeping the Harris Teeter
brand alive, but the chain will now benefit from better buying power
thanks to improved scale and procurement proficiencies. Because
of this, we anticipate that M&A activity within the grocery sector will
only increase over the next year.
What will the net result be for the commercial real estate market?
Ultimately it will be one of strengthening tenancy. Though we
almost always see an uptick in store closures after such moves
(as new ownership seeks to cut dead weight from their portfolios),
these moves should generally result in the strengthening of those
chains that are acquired and translate into diminished chances of
bankruptcy or larger retail failures. Still, that being said, it is entirely
possible that we may see dozens (if not more) of underperforming
stores closed in the months following deals and some slight uptick
in vacancy levels in individual markets impacted by such moves.
Grocery Go Round Highlights Fall 2013Albertson’s/United SupermarketsAlbertson’s LLC also announced in September that it would be
purchasing Lubbock, Texas-based United Supermarkets. The chain
operates 50 supermarkets under three banners (United Supermarkets,
Market Street and Amigos), as well as seven convenience stores and
26 gas stations under the United Express banner.
Bi-Lo/Piggly WigglyBI-LO Holdings entered into an agreement in September to acquire
22 Piggly Wiggly stores in the southeast (16 in South Carolina and
six in Georgia) from Piggly Wiggly Carolina Company. The stores will
be rebranded under the BI-LO banner.
C&K MarketsIn late November, regional player C&K Markets filed for Chapter
11 bankruptcy protection. The chain, which operates about 60
stores in northern California and southern Oregon under the C&K
Market, Ray’s Food Place, Shop Smart, Price Less Foods and Lo
Buck$ banners was already in the process of selling off its fifteen
pharmacies to focus on its core business. C&K traditionally focused
on rural towns where they were the only grocery presence and
commented that the bankruptcy was a result of expanding outside
of that model, as well as the expansion of discounters into their
traditional strongholds. The chain will close at least 20 locations
but hopes to emerge from bankruptcy next year with at least 40
remaining stores that have “proven profitability.”
Food LionRepositioning is the name of the game with Food Lion, which has made significant investments in the roughly 170 stores that it operates throughout the Carolina’s. Food Lion, a division of Belgian conglomerate Delhaize, is planning on rolling out a new smaller footprint in the coming year with an increased focus on “Easy, Fresh and Affordable” as it seeks to compete more effectively with the flood of new, smaller concepts and organic players in the
marketplace.
Fresh & Easy/Wild Oats?Tesco announced plans in September to sell roughly 150 of the
200 Fresh & Easy stores that it operated in California, Arizona and
Nevada to Ron Burkle’s Yucaipa Companies. Yucaipa has yet to
officially announce its plans, but market speculation is that they
“ Don’t be surprised to see more M&A activity in 2014 between competing chains struggling to compete with increased competition from the Internet. Investors looking to buy concepts on the cheap and turn them around will be plenty. Meanwhile, we will also continue to see segment leaders looking to pick up market share by purchasing viable competing concepts.”
Cassidy Turley 2014 Retail Forecast | 13
will use these properties to reboot the Wild Oats Markets banner.
Fresh & Easy declared bankruptcy shortly thereafter, in a move that
would allow it to get out of the 50 or so remaining leases that it did
not sell to Burkle’s group.
Fresh ThymeIn October, Fresh Thyme Farmers Market announced their plans to
open up to 50 new stores throughout the Midwest over the next six
years. The chain, created by former executives with both the Henry’s
and Sunflower chains, has major financial backing from Meijer. The
chain will operate in the 24,000 to 28,000 square foot range.
Giant EagleIn November, Giant Eagle converted its second store to their new
Market District concept. The location in Green, Ohio marks its
eighth addition to their new upscale concept, which is reportedly
producing impressive numbers. The chain has two other new
Market District locations planned in Northern Ohio, with new
growth for now likely to focus less on their traditional namesake
banner than on the new upscale one.
Harris Teeter/Piggly WigglyHarris Teeter, only a couple of weeks after itself agreeing to be
acquired by Kroger, also announced in September their plans to
purchase seven Piggly Wiggly Carolina stores (this included six
existing locations and one under construction—all in the Charleston,
South Carolina metro). Piggly Wiggly Carolina has stated that these
transactions will strengthen their balance sheet considerably and
that they have no current plans to sell any additional stores, nor is
the company at risk of bankruptcy.
Nash Finch/Spartan StoresMinneapolis-based Nash Finch and Byron Township, Michigan-
based Spartan Stores officially merged in November. The move was
approved with 98% or greater approval from shareholders of both
firms. The new entity will operate under the name SpartanNash
Company starting in May of next year. The new entity will operate
177 supermarkets in 44 states under the banners of Family Fare
Supermarkets, No Frills, Bag’n Save and Econofoods and will be the
largest food distributor serving military commissaries and exchanges
in the United States. The move is expected to result in the chain
achieving cost savings through greater buying power, the elimination
of redundancies and the strengthening of its supply chain. It is still
unknown if any existing stores will be closed following this move,
though some real estate repositioning prior to future growth is likely.
PublixPublix announced in October that it would be off-loading the
14-store PIX gas station/convenience store chain that it has
operated since 2001 to focus on its core grocery business. Circle
K Stores, a division of Alimentation Couche-Tard will buy 13 stores
(eleven in Florida and two in Georgia) while the remaining site in
Tennessee is being sold to the Kentucky-based Max Arnold & Sons.
Meanwhile, the chain is focusing on resuming organic growth of its
traditional grocery concept. Publix has plans to open eleven new
stores (mostly in the 50,000 square foot range) throughout the
Charlotte, North Carolina marketplace through the end of 2015.
SafewaySafeway announced plans in October to exit the Chicago market,
where it operates 72 Dominick’s stores. The chain recently closed
the sale of its Canadian division to Sobey’s for $5.8 billion. That
move should result in about $4 billion (after taxes and expenses)
landing into the Pleasanton, California-based chain’s coffers.
Safeway’s sale of Dominick’s is expected to raise between $400
and $500 million more. The chain plans on using those proceeds to
paying down $2 billion in debt and repurchasing stock. A deal had
not yet been announced as this report went to press, however, four
stores were confirmed as to be sold to New Albertson’s, Inc. (which
will operate them under the Osco-Jewel banner) and Roundy’s
expanding Mariano’s banner in Chicago (they recently opened their
12th Chicagoland location) continues to be rumored as a suitor,
though Kroger is likely a more realistic buyer. Such a move would
give the giant a significant presence overnight in a market where it
currently does not operate. However, Central Grocers and Walmart
have also been rumored to be in play. Safeway owns the real estate
for about twenty of these locations. Safeway has since been rumors
of hostile takeover plans from hedge fund firm Jana Partners, and
has adopted a poison pill defense to fend off any investors seeking
to obtain more than 10% of shares outstanding.
WalmartWalmart announced plans in September to build more than 200
new Walmart Neighborhood Market stores in the U.S. over the
next 18 months to bring their total store base to roughly 500 units.
Growth for the smaller concept grocery only stores, which measure
only 30,000 square feet compared to typical Walmart Supercenter
footprints that start at 125,000 square feet and go up, has yet to
reach the pace that was originally expected when Walmart first
began rolling out the concept in the immediate aftermath of the
recession. That being said, the company has recently refined its
business model to create more operating efficiencies and to bring
returns from the smaller format stores closer to those being realized
by the Supercenters. As Walmart continues to improve the logistics
model serving this new footprint, look for growth to explode. This
will be a game changer in the grocery world, however, had Walmart
been able to aggressively roll out this concept a couple of years
ago when the balance sheets of more traditional grocers were in
more perilous shape, they likely would have succeeded in knocking
out a number of smaller, regional chains. Walmart would like to
eventually reach as many as 700 units for this concept in the US.
In 2014, they will likely open between 120 and 150 Neighborhood
Markets and Walmart Express stores (this is their smallest concept
at just 15,000 square feet), compared to about 115 Supercenters.
Cassidy Turley 2014 Retail Forecast | 14
Holiday Shopping Outlook 2013 As this report went to press there were a number of indicators that
were not yet available that will have a telling impact on what to
expect from this year’s holiday sales season.
Unfortunately, heading into the holiday season there were as many
reasons to be pessimistic as optimistic. The biggest problem is the
calendar; this year has six fewer shopping days than last year and
loses an entire weekend. That alone could make the difference
between a 3% and 4% seasonal gain in most seasons. Throw into
the mix the fact that consumer spending has been down slightly all
year and that consumer confidence had been rattled in September/
October by the government shutdown and you have plenty of
reasons for retailers to be nervous about receiving the proverbial
lump of coal in their stockings this Christmas.
Holiday Sales Performance 2002-2012
-5%
-3%
-1%
1%
3%
5%
7%
9%
21
22
23
24
25
26
27
28
29
30
31
Shopping Days % Holiday Sales Growth
Holiday Shopping Days vs. NRF Holiday Sales Growth
10-Year Average: 3.3%
Source: Cassidy Turley Research, National Retail Federation, Citi Research
In terms of the predictions from the major forecasting groups, most
anticipate sales growth this year to be below the averages of the
past few years but still at respectable levels. The National Retail
Federation forecast solid growth of 3.9% this year. The International
Council of Shopping Centers was not far behind at 3.7%. Wells
Fargo’s economists agreed with the ICSC at 3.7%, but we also saw
a number of much weaker predictions as well. Consumer tracking
gurus Shopper Trak predicted 2.4% sales growth while Customer
Growth Partners were slightly more optimistic at 3.9%. Morgan
Stanley forecast a bleak 1.6% total. Our forecast is for 3.0% to 3.5%
sales growth, though we hope we are erring on the side of caution.
We believe that a strong rebound in November’s consumer
confidence tallies and a solid Black Friday weekend will be the key
to determining whether sales growth ends up falling into the low or
high 3% range, though we also think totals outside of that range (on
either side) are unlikely.
Some positives we anticipate this year are lower gas prices, the
impact of the Holiday Creep (the start of the holiday sales period
continues to come sooner with Black Thursday now the true
beginning of the season) the likelihood of better weather and the
impact of the Sony/Playstation console wars on potentially driving
up sales. But we also expect those positives will be countered by the
impact of showrooming and online shopping, fewer shopping days,
the absence of any “must have” gifts in the children’s sector, the
likelihood of less self-gifting this year (numerous consumer studies
have pointed towards this phenomenon), lower retailer inventory
levels and continued declines in mall foot traffic erasing most of those
positives. The biggest issue, however, remains consumer sentiment
and continued caution at the macro level—shopper spending power
has been feeling the pinch all year and this will likely play out this
holiday sales season as lukewarm annual sales growth totals. Still, it is
important to keep in mind that the ten-year average for sales growth
according to the National Retail Federation has been 3.3%. Certainly
everyone in the industry would like to see totals in the 4.0% range or
better. And there is no doubt that should actual performance come
in at 3.3% this year that many in the media will run with the storyline
of this year’s disappointing holiday sales season. But, a 3.3% gain—
while not as strong as what was hoped for—would, in fact, represent
totals in line with the historical average.
Cassidy Turley 2014 Retail Forecast | 15
National OverviewAs of the close of Q3 2013, shopping center vacancy across the 60
major markets that we track in the United States stood at 8.7%. This
compares to a vacancy rate of 8.8% at the midyear point of 2013 and
a vacancy rate of 9.6% one year ago. This is the lowest level of vacancy
that the market has recorded since the Great Recession—retail
shopping center vacancy in the United States peaked at 10.8% in Q2
2009. But while we are entering into the fourth year of consecutive
occupancy gains, recovery in the overall retail sector has lagged
behind that of most other commercial real estate property types.
The centers that we track accounted for over 42.2 million square feet
of occupancy growth over the past twelve months. Deliveries are also at
their highest level since the Great Recession. We have tracked nearly
18 million square feet of new shopping center product that has come
online over the past year. For the most part, these numbers have directly
translated into growth. As little new construction is taking place on a
speculative basis (and virtually no anchor or box space is being built
at all without commitments in place before construction), we estimate
that roughly 85% of that total—or about 15.3 million square feet--
consisted of space that was accounted for immediately upon delivery.
Meanwhile, second generation space saw its occupancy levels increase
by approximately 26.9 million square feet during the same period.
U.S. Shopping Center Statistics
Pacific 935,617,213 65,870,018 7.0%
7,171,157 2,735,839
3,430,094
Mountain 481,232,546 48,245,654 10.0%
7,226,206 2,225,325
1,923,450
Great Plains
293,561,866
27,815,954 9.5%
1,845,339
893,342
509,967
Great Lakes 726,221,168 79,558,885 11.0% 5,603,014 2,125,878 377,120
Texas South Central
671,216,332
60,016,840
8.9%
6,992,374
2,925,033
931,877
Southern US 193,742,090 22,882,282 11.8% 1,232,022 274,663 7,700
Southeast 1,186,563,516 104,272,110 8.8%
7,787,178 4,728,968
4,664,727
Northeast 777,640,354 49,782,019 6.4%
4,422,923 2,057,594
2,540,313
National 5,265,795,085
458,443,762
8.7%
42,280,213
17,966,642
14,385,248
Region Total Gross Leasable
Area
Total Vacant SF
Vacancy %
Last 12 Months Under Const. Net
Absorption Deliveries
Source: Cassidy Turley Research/Costar
Neighborhoods On the ReboundOf course, not all shopping center types have performed the same.
The biggest gains over the past year have come from community,
neighborhood and strip centers. Vacancy for this product type now
stands at 10.1%. This product type was hardest hit during the recession.
Many markets entered the downturn with a glut of unanchored strip
product to begin with and this particular subtype of shopping center
is most dependent upon mom-and-pop retailers—who largely went
missing in action during the recession and who are only now slowly
starting to drive modest levels of demand in the nation’s strongest
trade areas. Yet, the community/neighborhood/strip sector has seen
occupancy levels increase by over 27.8 million square feet in the past
year. Deliveries accounted for nearly 10.4 million square feet of new
product over the last twelve months and about 8.8 million square
feet of this space was occupied upon delivery. Meanwhile, second-
generation space accounted for the remaining 19 million square feet
of occupancy gains that we tracked over the past four quarters.
Community / Neighborhood / Strip Center Statistics
Pacific 637,576,599 52,082,014 8.2% 4,069,478 1,764,279 2,238,167
Mountain 323,619,598 37,813,038 11.7% 4,629,078 769,723 158,006
Great Plains 189,778,773 19,340,926 10.2% 1,512,079 234,180 58,528
Great Lakes 474,378,875 60,279,406 12.7% 3,993,432 1,517,181 318,825
Texas South Central 468,709,951
49,167,976
10.5%
4,998,628
2,143,312
393,746
Southern US 134,853,488 15,591,382 11.6% 1,093,908 138,663 2,400
Southeast 812,083,857 84,787,610 10.4% 4,479,826 2,400,019 2,573,235
Northeast 484,516,124 38,151,698 7.9% 3,058,895 1,398,701 1,067,813
National 3,525,517,265 357,214,050 10.1% 27,835,324 10,366,058 6,810,720
Region Total Gross Leasable
Area
Total Vacant SF
Vacancy %
Last 12 Months Under Const. Net
Absorption Deliveries
Source: Cassidy Turley Research/Costar
Part of the resurgence of this property type has been the fact that food
and service related retailers are driving demand currently. While there is
some consolidation occurring in the grocery world, new smaller format
concepts are more than making up for those losses and neighborhood
centers are overwhelmingly where they land. The traditional tenant
mix of the neighborhood and community centers have always been
grocery or drug anchors, with a mix of restaurants and local services
and generally fewer hard goods or big box retailers—which is where
much of the contraction in the industry is still taking place. This will
only strengthen in the coming year as demand trends will continue to
shift towards retailers that don’t compete with the Internet. Meanwhile,
the return of new home development in the United States will mean
more development—most of it in the form of new neighborhood or
strip centers—as retailers return to following rooftops.
Top Malls Continue to StrengthenDespite the fact that many traditional mall tenants are not currently
in growth mode, malls continue to enjoy the lowest vacancy levels
of any shopping center product type. We are currently tracking a
national vacancy rate of just 4.8%. This is down from Q2’s reading
of 4.9% and reflects a reduction from 5.8% one year ago. Malls
have accounted for just under 1.8 million square feet of net
absorption over the past year, while deliveries have added just under
900,000 square feet of new space to the marketplace.
Shopping Center Outlook 2014
Cassidy Turley 2014 Retail Forecast | 16
Mall properties still account for the lion’s share of the nation’s retail
trophy assets and continue to benefit from a marketplace in which
Class A space is seeing the highest levels of tenant interest and
activity. However, these numbers don’t tell the whole story. Most of
the major markets that we track have reported the same trend across
the board; Class A space availability is extremely tight and Class B
malls are faring well in all but the weakest economies. However, Class
B space still faces some challenges in some marketplaces and Class
C mall properties in virtually every trade area (including those with
the strongest local economies) are where the overwhelming majority
of vacancy resides today. Our estimate is that vacancy for Class C
malls throughout the United States is closer to the 8% range, while
Class A vacancy is now just below the 2% mark.
Returns by Property Type
Multifamily Hotel Industrial Office Retail0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
1-Year Returns 10-Year Returns
Source: Cassidy Turley Research, NCREIF
Perhaps a more telling statistic on mall performance comes not from
the leasing side of the equation, but from the investment world. The
National Council of Real Estate Investment Fiduciaries (NCREIF)
recently released a report that showed that retail properties have
performed better than any other commercial real estate property
type in terms of return on investment. They reported at the close of
Q3 that (on an unleveraged basis) retail properties had averaged a
13.2% rate of return over the previous year and had yielded an
average of 10.5% over the past decade.
U.S. Mall Statistics
Pacific 113,370,244 2,905,056 2.6%
724,221 345,838
154,408
Mountain 57,015,445 2,883,647 5.1%
321,096 38,331
1,514,000
Great Plains 41,593,229 2,575,383 6.2%
134,006 56,410
29,789
Great Lakes 95,688,878 7,583,729 7.9%
(77,801) 6,500
-
Texas South Central
75,423,970
3,565,354
4.7%
324,805
6,200
-
Southern US 18,957,974 2,886,430 15.2%
(226,842) -
-
Southeast 148,052,408 6,097,252 4.1%
343,397 194,987
-
Northeast 117,021,531 3,312,614 2.8%
242,214 227,260
747,500
667,123,679
31,809,465
4.8%
1,785,096
875,526
2,445,697
Region Total Gross Leasable
Area
Total Vacant SF
Vacancy %
Last 12 Months Under Const. Net
Absorption Deliveries
National
Source: Cassidy Turley Research/Costar
However, it is critical to note that NCREIF only tracks institutional
grade properties—in other words, the cream of the crop. So these
numbers are almost entirely driven by core trophy assets—mostly
malls. Unfortunately, once you step outside the realm of Class A
and Class B+ assets in most markets is where you begin to see the
challenges facing the retail landscape. Retailer demand remains all
about Class A and, in some markets, Class B space. Beyond that is
where most of the nation’s retail shopping center vacancy remains.
It is where rental rate growth has largely remained flat or is still
actually posting modest declines in some of the countries’ weakest
marketplaces. It is where nearly all of the weaknesses for the entire
sector are concentrated.
Specialty Centers; All About the OutletsNational specialty center vacancy as of the end of Q3 2013 stood
at 7.6%. This product classification also includes lifestyle centers,
outlet centers and theme retail projects. Vacancy has remained in
essentially the same place for the past six months. One year ago, it
stood at 8.0%. Over the past year, we have tracked just under 4.8
million square feet of occupancy growth for this property type as
roughly 4.5 million square feet of new product (nearly all of it in the
form of outlet centers) was delivered to the marketplace.
Specialty Center Statistics
Pacific 33,988,970 2,578,496 7.6% 558,964 567,795 922,422
Mountain 13,404,050 1,094,960 8.2% 1,050,051 1,083,867 245,585
Great Plains 10,170,540 1,302,454 12.8% 405,028 588,183 421,650
Great Lakes 22,144,834 1,189,997 5.4% 131,379 4,500 3,895
Texas South Central
20,783,225
1,409,055
6.8%
682,444
397,345
-
Southern US 6,360,546 1,170,785 18.4% (160,986) - -
Southeast 41,593,928 2,918,281 7.0%
1,472,487 1,456,387
1,243,081
Northeast 19,802,872 1,098,340 5.5%
632,264 409,000
330,000
National 168,248,965
12,762,368
7.6%
4,771,631
4,507,077
3,166,633
Region Total Gross Leasable
Area
Total Vacant SF
Vacancy %
Last 12 Months Under Const. Net
Absorption Deliveries
Source: Cassidy Turley Research/Costar
Higher end lifestyle centers continue to do well and hold their
own competing against Class A mall projects. However, there is
no question that this product type was overbuilt in some trade
areas. For years there has been a running joke in development
circles that if you aren’t sure how to position your new project, just
throw in a fountain and you can call it a lifestyle center. And this
may illustrate one of the challenges that this product type faces.
The highest end product accounts for some of the nation’s best
performing trophy centers, but this sector of the marketplace was
overbuilt heading into the downturn. As a result, some weaker
projects have taken a lot longer to rebound. Thanks to the growing
impact of e-commerce, many of the apparel and hard goods
retailers who traditionally make up the tenant mix for lifestyle
centers have slowed or reversed growth. Most absorption for this
product type now is coming from dining or food related concepts
Cassidy Turley 2014 Retail Forecast | 17
(higher end grocers like Whole Foods are increasingly part of the
standard tenant mixes at these centers). But if performance for
lifestyle centers has been a mixed bag, demand remains white-hot
for outlet center space. This is one of the few product types where
we have seen developers build speculatively. In general, most of
these projects lease-up before construction is done. Discount and
outlet concepts are one of the few areas where we are seeing a lot
of apparel players who are otherwise in no or slow growth mode
looking to grow. For example, while Nordstrom will likely build no
more than one full service department store over the next year, they
are looking to expand their off-price Nordstrom Rack concept by
as many as 60 stores over the next two years. Likewise, the recent
acquisition of Nieman Marcus will probably result in increased
expansion—not necessarily for the chain’s namesake concept but
for its off-price Last Call stores.
Adaptation Keeping the Power in Power CentersIf you look at it from a demand perspective, it would appear that
power centers would be the product type in greatest peril. Power
centers are all about big box retail, but nearly every single category
big box user type is shrinking. This includes categories that are
in sharp consolidation mode due to competition with the Internet
(bookstores, consumer electronics, office supplies, etc.). Most of
these chains are not only closing stores but also slashing footprints.
But it also includes some strong categories like pet supplies—where
most chains are generally in modest growth mode—but more are
experimenting with smaller concepts of 10,000 square feet or less.
The fact is that retailers are shrinking their box presence overall,
whether we are talking about grocery stores, home improvement or
just about any other category. This is the twilight of the big box age.
Power Center Statistics
Source:
Pacific
150,681,400
8,304,452 5.5%
1,818,494 115,097
Mountain
87,193,453
6,454,009 7.4%
1,225,981
333,404
5,859
Great Plains
52,019,324
4,597,191 8.8%
(205,774)
14,569 -
Great Lakes
134,008,581
10,505,753 7.8%
1,556,004
597,697
54,400
Texas South
Central
106,299,186
5,874,455 5.5%
986,497
378,176
538,131
Southern US
33,570,082
3,233,685 9.6%
525,942
136,000
5,300
Southeast
184,833,323
10,468,967 5.7%
1,491,468
677,575
848,411
Northeast
156,299,827
7,219,367 4.6%
489,550
22,633
395,000
National
904,905,176
56,657,879 6.3%
7,888,162 2,217,981
1,962,198
Region Total Gross Leasable
Area
Total Vacant SF
Vacancy %
Last 12 Months Under Const. Net
Absorption Deliveries
Source: Cassidy Turley Research/Costar
The only exception to the rule would be sporting goods—which
remains robustly in growth mode both in terms of units and
footprints—due largely to a mix of successful experiential retail and
limited competition from online sales (particularly when it comes to
firearms). One could also argue that health clubs fit in here as well.
Larger concepts have backfilled a substantial amount of vacant
mid-size boxes (and larger), though due to the cost of converting
space for this use, there is an equally strong argument that this is
more about adaptive re-use.
Regardless, against this backdrop, one would assume that power
centers were taking it on the chin. But they are holding up well.
And this isn’t just because the best operators have taken creative
approaches to leasing and have been willing to invest in expensive
demising and upgrades of their space (which they have). But it is
also because the very nature of power center space has changed.
Call them power neighborhood centers or regional neighborhood
centers or whatever you like. The fact is that the old paradigm of
just throwing up some boxes, leasing to a few regional players and
hoping for a strong 10-mile trade area is dead. The new paradigm
for power centers is about straddling both the power and community/
neighborhood center worlds.
Despite this, the power centers that we track are reporting vacancy
(as of Q3 2013) of just 6.3%. This is down from a reading of 6.4% in
Q2 and 7.0% a year ago. We’ve tracked just under 7.9 million square
feet of occupancy growth for this product type over the past twelve
months. During that same time, developers added nearly 900,000
square feet of new product to the marketplace.
The question, of course, is with big box demand shrinking (both in
terms of retailer demand for locations and actual footprint), why are
power centers continuing to perform so well? Adaptation is the answer.
While there remain disparities in performance within this sector that
are nearly all based on class, there are a few common threads that
we have seen with the best performing power centers. The first is that
these landlords were not afraid to spend money to demise larger, vacant
boxes a few years back when big box vacancy became a major issue.
Those who made the investment were able to chop up larger space
and land new, more nimble junior box users. The second major trend
has to do with embracing food users, particularly grocery tenants. The
addition of grocery components makes perfect sense—small format
grocery players have proven to be excellent tenants for power centers
looking to backfill vacant Circuit City locations. But this play isn’t just
about getting empty space filled—it is about repositioning. The idea
is simple; power centers used to be all about big box retailers with
regional draws. Add some grocery components and now you have
hedged your bets with both regional and local draws.
The new power center is really a hybrid neighborhood center.
Nearly all of the new development that we are tracking for this
product type includes significant commitments in place from food
anchors, as opposed to the old host of big box users. Target and
Walmart Superstores, in particular, have proven to be extremely
attractive tenants to land. Both offer strong neighborhood and
regional draws in terms of shoppers, but they both also prove to be
attractive anchors for inline tenants to follow.
Cassidy Turley 2014 Retail Forecast | 18
Construction Returning to MarketplaceFrom 2002 to 2008 developers added nearly 140 million square feet
of new shopping center space to the marketplace. Those numbers
dropped precipitously during the Great Recession. From 2009 to
2012 we tracked just 23.2 million square feet of new product that
was delivered. Mostly this was in the form of additional pad buildings
at existing shopping centers, though outlet centers saw strong growth
and there were a couple of regional malls—long in the works from
before the downturn—that were delivered as well. Yet, in the past year,
we have tracked nearly 18 million square feet of new shopping space
that was delivered to the marketplace. The development pipeline, so
far, has overwhelmingly been about infill urban projects (whether new
or redevelopment). But with the return of the nation’s housing market
and new home construction expected to pick up significantly in 2014,
we anticipate that new construction levels will pick up further next year.
Of the roughly 18 million square feet of new product delivered over
the past year, nearly 60% of that has been at existing centers where
expansions or redevelopment took place. In terms of product types,
community/neighborhood/strip centers accounted for the lion’s share
of activity. We tracked just under 10.4 million square feet of product
that has been delivered over the past year, accounting for just under
30% of all new construction. Specialty centers accounted for just over
4.5 million square feet of new product—nearly all of which was in the
form of outlet centers—which remain white hot. Malls accounted for
just under 2.5 million square feet of new space, while the nation’s
power center inventory grew by just under two million square feet.
U.S. Shopping Center Development
24.1
19.5
17.7
14.2
20.7
25.5
20.9
18.4 19.3
8.6
3.2 5.1
3.4
14.0
0
5
10
15
20
25
30
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013YTD
Mill
ions
, SF
Shopping Center Deliveries MSF 2002 – 2008
MSF 2009 – 2012
M SF Last 12 Months
Source: Cassidy Turley Research/Costar
We are now tracking 14.4 million square feet of new shopping space
under construction in the United States. This is the largest amount of
new space in the development pipeline that we have tracked since
early 2009 when the pipeline was still emptying following the onset
of the recession in September 2008. Once again, the community/
neighborhood/strip category leads the pack with over 6.8 million
square feet of space under development. Specialty centers follow
with nearly 3.2 million square feet of product under construction,
while malls account for just over 2.4 million square feet of planned
deliveries. Lastly, we are tracking just under two million square feet of
new power center development. These projects have varying delivery
timelines over the next six quarters. The Southeast U.S. leads the way
with just under 4.7 million square feet of space under development.
The Pacific region follows with 3.4 million square feet. There is just over
2.5 million square feet of new development underway throughout the
Northeast, while the Mountain region has roughly 1.9 million square
feet of new projects in the works. The Great Lakes, Great Plains, Texas
and South U.S. regions all have less than one million square feet of
active construction projects in their respective pipelines.
Proposed projects are up as well. The Directory of Major Malls is now
tracking 36 major projects in the planning stages throughout the U.S.
that are one million square feet in size or greater. The majority of
these are mall or lifestyle center projects and a substantial number
of them are mixed-use in nature. But despite, the uptick in new
development activity, we have yet to see many developers willing to
build speculatively and we don’t expect that to change anytime soon.
This certainly won’t be the case in terms of anchor tenancy anytime
within the next few years—if not throughout the entire foreseeable
future. The building pattern for the next decade is likely to be based
upon secure commitments in place to anchors, minimal speculative
building on inline space and delivery in phases. Retail fundamentals
may be improving, and the construction pipeline growing, but don’t
expect much in the way of risk taking any time soon.
Class Acts Rule the RoostOverall retail vacancy has been on a downward trajectory going on
four years now, but declines in vacancy have been relatively slow
with changes measured more in basis than percentage points. Of
course, recovery has been uneven both geographically and across
product types. But across every market that we track and across
every shopping center type we have also seen sharp divisions in
performance on the basis of class.
In virtually every market that we track, we found that retailer demand
for Class A space was extremely robust and this held true in even
the most challenged local economies. Of course, this is nothing
new. Recovery started with Class A—even with a diminished pool of
actively growing tenants this is where retailers look first for growth.
Retailer demand has been on the upswing for four years now and
though this demand has only increased incrementally each year,
in a marketplace where there has been little in the way of new
construction Class A options are now few and far between in most
markets. Demand for quality space has now spilled over to Class B
product in most major U.S. markets with vacancy for these shopping
centers falling and rents finally starting to show some signs of growth
(rents have been on the upswing for Class A product in most trade
areas for well over two years now). But this trend has yet to spread to
many secondary and tertiary markets—particularly in portions of the
Midwest and South. It also hasn’t, and likely won’t, spread to Class C
product—which will continue to remain challenged even in some of
the nation’s tightest vacancy marketplaces.
Cassidy Turley 2014 Retail Forecast | 19
The overwhelming majority of shopping center vacancy that exists
today throughout the United States is in Class B or C product. Even in
the most economically challenged markets where the overall metrics
indicate flat overall asking rents, Class A rents are climbing by as
much as 5% or more annually. In mid-performing markets we have
seen Class A rents climb by as much as 10% and we have seen
increases of more than that in some of the hottest trade areas. Until
enough new product is delivered to the marketplace to sate demand,
expect this trend to continue.
The shortage of Class A space is now starting to discourage growth in
some trade areas. For example, we know of a number of retailers who
have slowed or postponed planned expansion in the San Francisco
Bay Area as they patiently wait for quality space to become available.
We have heard similar anecdotal information from multiple markets
on both coasts (demand remains white hot in Texas, however,
because developers never fully stopped building here during the
recession space options remains plentiful). This has proven beneficial
to many trade areas that came late to the recovery but that are
blossoming now—particularly for a number of cities in the Mountain
region. Phoenix and Las Vegas were hammered by the recession but
have seen retail demand and activity radically improve in the past 18
months. Denver is white-hot in terms of demand while Salt Lake City
is also seeing strong activity.
In recent years, our review of top producing trade areas (in terms of
retailer demand and occupancy growth) have consistently included
metros like Washington DC, New York, San Francisco, San Jose,
Boston, Houston, Dallas and San Diego. But thanks to economic
recovery picking up in a number of major secondary markets and the
fact that retailers are now finding little room to grow in many of these
markets, we have seen a number of upstart trade areas surpassing
these cities in terms of actual occupancy growth.
Looking AheadRetailer demand next year will still be primarily about the economy or
the Internet. Discounters and luxury players will be active but just as
the middle class consumer will still largely be in frugality mode, mid-
priced hard goods players will largely be inactive in terms of bricks
and mortar growth. Meanwhile, food related users (restaurants and
grocery) and service users will remain extremely active.
“ The overwhelming majority of shopping center vacancy that exists today throughout the United States is in Class B or C product. Even in the most economically challenged markets where the overall metrics indicate flat overall asking rents, Class A rents are climbing by as much as 5% or more annually. In mid-performing markets we have seen Class A rents climb by as much as 10% and we have seen increases of more than that in some of the hottest trade areas. Until enough new product is delivered to the marketplace to sate demand, expect this trend to continue.”
Directory of Major Malls – Top U.S. 20 Proposed Shopping Centers
Project Location Shopping Center Type Mixed Use? Gross Leasable Area Anchors Developer
Mall at Luxury Point Sayreville, NJ Lifestyle Specialty Yes 2,600,000 Bass Pro Shops O'Neill Properties Group
Copper Ridge at Northgate Colorado Springs, CO Lifestyle Specialty Yes 2,000,000 Bass Pro Shops Northgate Properties
Berry Farms Franklin, TN Lifestyle Specialty No 1,800,000 Boyle Investment Company
Okatie Crossing Bluffton, SC Lifestyle Specialty No 1,600,000 Horne Properties
The Shops at East Prairie Ames, IA Lifestyle Specialty No 1,500,000 Wolford Development
Konterra Town Center East Laurel, MD Lifestyle Specialty Yes 1,500,000 Konterra Realty
Parkside Town Commons Raleigh-Cary, NC Lifestyle Specialty Yes 1,500,000 Target, O2 Fitness, Frank Theatres
Kite Realty Group
The Falls Bristol, VA Lifestyle Specialty No 1,500,000 Cabela’s Interstate Realty Advisors
Columbia Crossing Columbia, IL Lifestyle Specialty Yes 1,500,000 G.J. Grewe
Seaport Square Boston, MA Lifestyle Specialty No 1,500,000 WS Development
The Shops at Summerlin Centre
Las Vegas, NV Super Regional Center Yes 1,500,000 Dillard’s, Macy’s Howard Hughes
Waller Town Center Waller, TX Lifestyle Specialty No 1,400,000 Cullinan Properties
Ka Makana Ali'i Kapolei, HI Lifestyle Specialty No 1,400,000 DeBartolo Development
The Commons at 7th Standard
Bakersfield, CA Super Regional Center Yes 1,385,000 Bidart Bros.
The Railyards Sacramento, CA Lifestyle Specialty No 1,300,000 Inland American Retail Mgmt.
Estrella Falls Mall Goodyear, AZ Super Regional Center Yes 1,300,000 Macerich
The Triangle Murrieta, CA Lifestyle Specialty No 1,300,000 Domenigoni Barton Properties
The Pinnacle Bristol, TN Super Regional Center Yes 1,300,000 Bass Pro Shops, Belk, Regal Cinemas
Johnson Commercial Development
Delta Shores Sacramento, CA Lifestyle Specialty No 1,300,000 Merlone Geier
The Bridges at Mint Hill Mint Hill, NC Lifestyle Specialty No 1,500,000 Belk Howard Hughes
Cassidy Turley 2014 Retail Forecast | 20
Though there will be closures and consolidations among a number of
major chains, large scale bankruptcies will be fewer overall than what
we saw this year or last. Space givebacks will be down slightly while
demand will be up slightly. Neighborhood centers will see the greatest
level of improvement; malls the least—but a rising tide will lift all boats.
“ …the most important economic trend impacting mom-and-pop demand is the return of housing appreciation. Home equity lines of credit are the initial line of funding for most (an estimated 75%) of these start-ups. Though the numbers will be tepid to begin with, we will see small business creation gradually accelerating over the next 24 months.”
The return of the housing market will remain the single greatest
overriding economic story and the one with the most significance for
retail. Rising home values will continue, though not at the whiplash pace
of the past 18 months. Instead, we will begin to see housing values in
most markets falling into more sustainable levels of growth. New home
construction will ramp up; this will help to drive lower unemployment,
greater wage growth and improved consumer spending. The real
impact might not be clearly felt until 2015, but it will be felt.
Shopping Centers (All Types)
Vacancy Rate 3Q 2013
Vacancy Rate 2Q 2013
Vacancy Rate 3Q 2012
1. San Francisco, CA (Includes SF Peninsula)
3.0% 3.0% 3.0%
2. Hawaii 3.4% 3.5% 3.6%
3. Pittsburgh, PA 4.8% 4.7% 5.5%
4. New York Metro (NYC, Long Island, Southern CT)
4.9% 4.9% 5.1%
5. San Jose, CA 5.3% 5.4% 5.7%
6. Boston, MA 5.5% 5.2% 5.3%
7. Salt Lake City, UT 5.5% 5.3% 5.9%
8. San Diego, CA 5.6% 5.2% 5.8%
9. Oakland/East Bay, CA 5.6% 5.8% 5.8%
10. Orange County, CA 5.6% 5.8% 5.8%
11. Washington DC 5.7% 5.7% 5.6%
12. Los Angeles, CA 5.9% 5.7% 6.0%
13. Santa Barbara, CA 6.2% 6.1% 6.2%
14. Des Moines, IA 6.6% 6.5% 7.1%
15. Baltimore, MD 6.7% 6.5% 7.2%
16. Austin, TX 6.7% 6.6% 7.0%
17. Northern New Jersey 6.8% 6.7% 7.2%
18. Minneapolis/St. Paul, MN 7.0% 7.0% 7.6%
19. Miami, FL 7.0% 6.9% 7.1%
20. Seattle, WA 7.2% 7.0% 7.6%
21. Raleigh/Durham, NC 7.3% 7.2% 7.0%
22. Charleston, SC 7.3% 6.9% 6.9%
23. Denver, CO 7.7% 7.6% 8.3%
24. New Orleans, LA 7.8% 7.6% 8.8%
25. Portland, OR 7.9% 7.7% 8.1%
Source: Cassidy Turley Research/Costar
Most importantly, the return of increasing home values will translate
into stronger consumer spending, less frugality among middle-class
shopper and a resurgence of small business creation. In terms of
retailer demand, mom-and-pop retail has been the missing link.
These are the bread-and-butter tenant type for neighborhood
and strip retail centers, but they also certainly help to increase
the pool of demand for all retail space. While we have only just
begun to see some signs of life from this sector (after nearly six
years), the action has largely been limited so far to the nation’s
strongest local economies. That is because that is where we see the
greatest strength in home values. This is why the most important
economic trend impacting mom-and-pop demand is the return of
housing appreciation. Home equity lines of credit are the initial line
of funding for most (an estimated 75%) of these start-ups. Though
the numbers will be tepid to begin with, we will see small business
creation gradually accelerating over the next 24 months.
San Francisco
3.0%Hawaii
3.4%Pittsburgh
4.8%
Lowest Vacancy Markets
Look for continued incremental declines in overall shopping center
vacancy heading into 2014. We anticipate that overall vacancy will
fall to near the 7.9% mark by the close of next year, despite the fact that
new construction will pick up considerably and 2014 will see many of the
issues surrounding the shortage of Class A space alleviated.
Cassidy Turley 2014 Retail Forecast | 21
While there have been a few dynamics that have changed since
our last report, there have been a number of trends that haven’t.
Bifurcation by class is one of them. Slow growth is another. The good
news here is that of 60 total markets that we track, only 17 posted
increased vacancy levels over the past year. Of those, five still have
vacancy rates of 8.0% or less and some of these trade areas are
markets where some of the most robust growth in recent years has
taken place. Vacancy in Boston now stands at 5.5% (up from last
year’s reading of 5.3%), but despite this uptick this remains one
of the hottest retail markets in the nation. The same holds true of
Washington DC where vacancy has climbed from 5.6% to 5.7% over
the past year. Philadelphia vacancy has ticked up from 7.7% to 8.0%.
In each of these three cases, retailer demand and leasing activity has
remained strong but have been outpaced by the resurgence in new
development that is taking place in these trade areas.
Highest Vacancy Markets
Reno
14.9%Memphis
13.9%Birmingham
13.7%In terms of overall vacancy, the San Francisco shopping center
market led the way with just 3.0% vacancy—though it is important to
remember that the majority of this city’s inventory is in the form of
freestanding retail or street-level retail in mixed-use buildings—
segments of the marketplace that these numbers do not cover. Other
major markets in the top ten include; Hawaii (3.4%), Pittsburgh
(4.8%), New York City Metro (4.9%), San Jose (5.3%), Boston
(5.5%), Salt Lake City (5.5%), San Diego (5.6%), Oakland/East Bay
(5.6%) and Orange County CA (5.6%).
Keep in mind, that these are the top U.S. markets in terms of vacancy
levels—not necessarily occupancy growth, though nearly all of these
have posted strong positive net absorption trends in the past year. Nor
do these numbers measure demand. For example, demand levels
remain white hot in Houston, Dallas and are very strong in a number
of other Texas markets, yet no Lone Star State metros made our top
ten. This is because throughout the recession, the Texas economy
was the best performing in the United States and was one of the few
places where retail development has continued to take place. While
Texas markets have continued to post among the best occupancy
growth numbers and highest levels of demand of any in the United
States, many have also experienced considerable levels of new
development. And so while activity and demand are both strong in
most major metros there, vacancy levels are also generally elevated.
Shopping Centers (All Types)
Vacancy Rate 3Q 2013
Vacancy Rate 2Q 2013
Vacancy Rate 3Q 2012
26. Philadelphia, PA 8.0% 7.7% 7.7%
27. Little Rock, AK 8.1% 7.2% 6.7%
28. San Antonio, TX 8.1% 7.7% 9.0%
29. Richmond, VA 8.4% 8.4% 8.9%
30. Houston, TX 8.5% 8.4% 8.8%
31. Tulsa, OK 8.6% 8.3% 8.6%
32. Hampton Roads, VA 8.7% 8.4% 7.9%
33. Tucson, AZ 9.3% 9.1% 10.1%
34. Louisville, KY 9.6% 9.3% 9.1%
35. Chicago, IL 9.6% 9.5% 9.8%
36. Orlando, FL 9.6% 9.7% 9.8%
37. Tampa, FL 9.7% 9.4% 9.2%
38. Indianapolis, IN 10.0% 9.7% 10.1%
39. Albuquerque, NM 10.0% 9.7% 10.1%
40. Dallas, TX 10.2% 10.0% 10.6%
41. Milwaukee/Madison, WI 10.3% 9.9% 10.7%
42. Mobile, AL 10.3% 8.6% 7.9%
43. Kansas City, MO 10.5% 10.1% 10.4%
44. Charlotte, NC 10.5% 10.1% 10.2%
45. Oklahoma City, OK 10.6% 10.3% 11.0%
46. Inland Empire, CA 10.6% 10.3% 10.5%
47. Nashville, TN 10.6% 10.7% 11.6%
48. Jacksonville, FL 10.8% 10.3% 11.1%
49. St. Louis, MO 10.9% 10.9% 11.1%
50. Sacramento, CA 10.9% 10.9% 11.5%
51. Omaha, NE 11.7% 10.6% 9.5%
52. Las Vegas, NV 11.8% 11.1% 12.2%
53. Cincinnati/Dayton, OH 11.9% 11.8% 12.3%
54. Phoenix, AZ 12.2% 12.1% 13.6%
55. Detroit, MI 12.2% 11.6% 12.0%
56. Atlanta, GA 12.2% 12.1% 12.6%
57. Cleveland, OH 12.6% 12.1% 12.2%
58. Birmingham, AL 13.7% 13.4% 13.6%
59. Memphis, TN 13.9% 13.8% 14.4%
60. Reno, NV 14.9% 13.8% 14.5%
Source: Cassidy Turley Research/Costar
Rounding out our top twenty markets in terms of vacancy, in
rankings eleven through 20 are; Washington DC (5.7%), Los
Angeles (5.9%), Santa Barbara (6.2%), Des Moines (6.6%),
Baltimore (6.7%), Austin (6.7%), Northern New Jersey (6.8%),
Miami (7.0%) and Seattle (7.2%).
Regional Outlooks
Cassidy Turley 2014 Retail Forecast | 22
Mid-performing markets in terms of vacancy (rankings 21 through 40
in our survey) include a number of Southern markets where activity
is on the upswing (Houston and New Orleans are both extremely hot
markets), as well as a few Western trade areas where improvement
has been steadily accelerating over the past few months (Denver
and Seattle). This portion of our national vacancy survey includes;
Raleigh/Durham (7.3%), Charleston SC (7.3%), Denver (7.7%),
New Orleans (7.8%), Portland (7.9%), Philadelphia (8.0%), Little
Rock (8.1%), San Antonio (8.1%), Richmond (8.4%), Houston
(8.5%), Tulsa (8.6%), Hampton Roads (8.7%), Tucson (9.3%),
Louisville (9.6%), Chicago (9.6%), Orlando (9.6%), Tampa (9.7%),
Indianapolis (10.0%), Albuquerque (10.0%) and Dallas (10.2%).
Omaha
11.7%Mobile
10.3%Little Rock
8.1%
Largest Decrease in Vacancy (3Q 2013 vs 3Q 2012)
There are starkly different storylines present in the numbers of the
bottom 20 markets in our survey. Eight of them have seen vacancy
creep up over the past year—half of these trade areas had been
posting declining levels of vacancy until recently. In nearly every
case, sluggish occupancy growth combined with minimal levels of
new development conspired to drive vacancy levels higher. Yet, a
number of the markets in our bottom 20 have not only posted
declining levels of vacancy in the past year, but strong levels of
occupancy growth as well. The common thread here is that these
trade areas remain fragile with Class B and C product continuing to
face significant challenges for the most part. Rounding out our
national vacancy survey at rankings 41 through 60 were; Milwaukee
(10.3%), Mobile (10.3%), Kansas City (10.5%), Charlotte (10.5%),
Oklahoma City (10.6%), Inland Empire (10.6%), Nashville (10.6%),
Jacksonville (10.8%), St. Louis (10.9%), Sacramento (10.9%),
Omaha (11.7%), Las Vegas (11.8%), Cincinnati (11.9%), Phoenix
(12.2%), Detroit (12.2%), Atlanta (12.2%), Cleveland (12.6%),
Birmingham (13.7%), Memphis (13.9%) and Reno (14.9%).
Largest Increase in Vacancy (3Q 2013 vs 3Q 2012)
Phoenix
12.1%New Orleans
7.8%Nashville
10.6%The markets at the bottom of our survey are a mix of markets
geographically; Midwestern, southern and a few of the western
markets hardest hit by the housing market collapse. While most of
these markets are already showing signs of improvement
statistically, we anticipate improvement even in those trade areas
where vacancy levels increased over the past year. In our recent
surveying of brokers in the marketplace, even markets like Detroit
and Cleveland reported increasing retailer demand and tight
conditions for premium space. Most of these markets are only now
starting to see improving conditions for Class B product, but the
process has begun. Of course, the real challenge for many of these
trade areas is the overhang of Class C space in the market—which,
in most cases, will not be going away and will continue to negatively
impact overall numbers. Still, barring any unforeseen shocks to the
system, the current pace of occupancy growth should continue to
improve heading into 2014.
Cassidy Turley 2014 Retail Forecast | 23
Statistical Overview
HAWAII Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 15,134,224 546,590 3.6% 3.8% 3.7% 40,429 228,565 179,388 50,747 $32.20
Power/Regional Centers 6,700,281 184,302 2.8% 2.8% 3.5% 5,183 47,115 - - $36.35
Specialty Centers 790,201 121,279 15.3% 15.4% 17.3% 145 15,199 - - $39.35
Strip 1,564,849 111,501 7.1% 6.9% 5.8% (4,153) (20,959) - - $23.84
Malls 3,750,236 - 0.0% 0.7% 0.7% 25,223 26,288 - 15,558 $47.63
All Shopping Centers 27,939,791 963,672 3.4% 3.5% 3.6% 66,827 296,208 179,388 66,305
Pacific Summary
INLAND EMPIRE, CA* Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 73,509,676 8,440,298 11.5% 11.5% 11.4% 55,527 68,842 196,172 400,574 $15.61
Power/Regional Centers 20,581,685 1,795,608 8.7% 9.3% 10.3% 124,070 321,967 4,500 - $18.16
Specialty Centers 6,179,444 728,738 11.8% 12.6% 11.4% 51,792 (17,889) 4,990 - $20.21
Strip 14,112,273 1,704,086 12.1% 11.9% 12.1% (968) 81,046 90,445 - $15.84
Malls 12,463,786 764,798 6.1% 6.2% 6.8% 15,762 234,593 165,750 - $39.86
All Shopping Centers 126,846,864 13,433,528 10.6% 10.3% 10.5% 246,183 688,559 461,857 400,574
LOS ANGELES, CA Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 118,082,427 7,934,037 6.7% 6.7% 7.0% 29,127 395,760 67,962 167,218 $21.82
Power/Regional Centers 35,277,462 1,548,530 4.4% 4.7% 5.2% 116,898 284,235 13,472 - $23.69
Specialty Centers 7,412,940 411,163 5.5% 4.0% 4.2% 16,724 33,097 135,000 200,000 $40.02
Strip 38,372,329 2,908,626 7.6% 7.8% 8.0% 96,627 292,168 124,042 91,614 $22.93
Malls 29,587,724 597,252 2.0% 2.3% 2.6% 96,442 177,696 4,088 - $20.84
All Shopping Centers 228,732,882 13,399,608 5.9% 5.7% 6.0% 355,818 1,182,956 344,564 458,832
OAKLAND/EAST BAY, CA Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 36,301,791 2,036,257 5.6% 6.2% 6.1% 222,609 399,599 244,192 80,000 $20.83
Power/Regional Centers 10,332,576 509,467 4.9% 6.2% 7.2% 134,132 235,219 - - $16.89
Specialty Centers 1,934,567 56,652 2.9% 2.9% 3.4% - 398,327 402,589 147,214 $30.00
Strip 6,071,429 518,428 8.5% 8.4% 8.2% (3,251) 14,953 23,802 16,588 $19.77
Malls 7,889,741 393,549 5.0% 5.0% 4.4% 9 (45,446) - - $25.39
All Shopping Centers 62,530,104 3,514,353 5.6% 5.8% 5.8% 353,499 1,002,652 670,583 243,802
ORANGE COUNTY, CA Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 54,867,423 3,641,676 6.6% 6.9% 6.7% 161,852 61,166 13,501 - $22.59
Power/Regional Centers 11,744,315 666,307 5.7% 5.7% 6.3% (122) 68,694 - - $28.33
Specialty Centers 4,814,056 559,357 11.6% 11.8% 11.3% 10,564 (16,095) - 460,208 $24.42
Strip 11,639,376 754,103 6.5% 6.6% 8.2% 20,204 205,578 11,774 - $21.64
Malls 14,046,168 359,708 2.6% 2.7% 2.9% 15,069 70,019 16,000 14,600 $37.09
All Shopping Centers 97,111,338 5,981,151 6.2% 5.9% 6.2% 207,567 389,362 41,275 474,808
*Riverside & San Bernardino Counties, CA
Cassidy Turley 2014 Retail Forecast | 24
Statistical Overview
PORTLAND, OR Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 43,284,699 3,534,696 8.2% 8.3% 8.7% 84,607 297,347 54,485 - $15.32
Power/Regional Centers 14,075,507 934,242 6.6% 6.0% 6.5% (25,732) 171,915 203,633 6,969 $17.68
Specialty Centers 2,101,207 32,964 1.6% 1.3% 3.1% (4,803) 31,563 - - $32.39
Strip 8,835,479 1,113,824 12.6% 12.7% 12.7% 16,365 19,844 9,039 - $15.93
Malls 6,768,604 326,971 4.8% 5.1% 4.7% 17,599 (6,922) - - $15.17
All Shopping Centers 75,065,496 5,942,697 7.9% 7.7% 8.1% 88,036 513,747 267,157 6,969
Pacific Summary
SACRAMENTO, CA Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 43,758,623 5,048,153 11.5% 11.9% 12.8% 148,198 564,344 20,300 409,827 $16.40
Power/Regional Centers 15,096,979 1,211,406 8.0% 10.1% 10.9% 328,816 465,427 33,955 109,497 $19.47
Specialty Centers 3,389,584 385,161 11.4% 11.2% 11.4% (5,728) 22,219 25,216 - $21.25
Strip 10,663,945 1,715,890 16.1% 16.0% 15.7% (7,432) (37,267) 5,000 - $14.67
Malls 4,587,805 99,301 2.2% 2.2% 2.2% - - - 21,000
All Shopping Centers 77,496,936 8,459,911 10.9% 10.9% 11.5% 463,854 1,014,723 84,471 540,324
SAN DIEGO, CA Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 44,809,009 3,276,516 7.3% 7.0% 7.6% 44,482 542,771 439,630 14,932 $21.51
Power/Regional Centers 12,397,567 444,550 3.6% 3.6% 3.8% 5,007 37,557 6,000 5,600 $26.47
Specialty Centers 2,189,818 99,254 4.5% 4.3% 5.6% (5,910) 22,509 - 115,000 $22.53
Strip 10,828,690 792,569 7.3% 7.6% 8.1% 33,888 93,891 4,881 3,900 $19.34
Malls 12,513,425 27,685 0.2% 0.2% 1.0% - 251,313 160,000 - $36.00
All Shopping Centers 82,738,509 4,640,574 5.6% 5.2% 5.8% 77,467 948,041 610,511 139,432
SAN FRANCISCO, CA* Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 7,644,197 328,781 4.3% 4.4% 3.7% 9,826 (47,182) - 270,000 $27.68
Power/Regional Centers 3,670,796 53,299 1.5% 1.8% 3.0% 11,534 57,251 - - $29.68
Specialty Centers 1,484,246 34,965 2.4% 2.5% 3.3% 2,579 13,845 - - $60.00
Strip 1,909,880 63,387 3.3% 3.4% 5.1% 1,319 34,183 - - $28.27
Malls 3,871,160 69,991 1.8% 2.0% 1.9% 5,671 2,670 - 96,000 $30.00
All Shopping Centers 18,580,279 550,423 3.0% 3.0% 3.0% 30,929 60,767 - 366,000
SAN JOSE, CA Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 25,437,908 1,632,261 6.4% 6.8% 6.9% 103,095 245,760 142,941 356,560 $27.38
Power/Regional Centers 6,581,029 368,801 5.6% 6.8% 7.4% 80,664 120,303 - - $33.03
Specialty Centers 715,372 - 0.0% 0.0% 2.3% - 16,600 - -
Strip 5,613,855 319,948 5.7% 5.7% 6.9% (2,424) 97,543 33,276 - $25.51
Malls 7,587,949 111,465 1.5% 1.4% 1.5% (5,262) 5,436 - - $33.00
All Shopping Centers 45,936,113 2,432,475 5.3% 5.4% 5.7% 176,073 485,642 176,217 356,560
*Includes San Francisco and San Mateo Counties
Cassidy Turley 2014 Retail Forecast | 25
Statistical Overview
SANTA BARBARA, CA Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 5,917,025 507,625 8.6% 8.4% 8.9% (12,113) 21,761 - - $18.11
Power/Regional Centers 2,533,490 30,563 1.2% 1.5% 1.8% 6,280 15,622 - - $36.80
Specialty Centers - - 0.0% 0.0% 0.0% - - - - $-
Strip 960,025 45,952 4.8% 5.1% 4.4% 3,437 (3,697) - - $20.22
Malls - - 0.0% 0.0% 0.0% - - - - $-
All Shopping Centers 9,410,540 584,140 6.2% 6.1% 6.2% (2,396) 33,686 - -
Pacific Summary
SEATTLE, WA Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 45,889,354 3,932,359 8.6% 8.7% 9.2% 108,158 391,923 95,049 376,207 $17.58
Power/Regional Centers 11,689,713 557,377 4.8% 4.9% 6.2% 11,965 165,081 - - $23.25
Specialty Centers 2,977,535 148,963 5.0% 5.0% 6.3% - 39,589 - - $24.63
Strip 12,368,113 1,174,451 9.5% 9.1% 10.4% (51,543) 121,539 8,400 - $18.17
Malls 10,303,646 154,336 1.5% 1.5% 1.6% (18) 8,574 - 7,250 $29.53
All Shopping Centers 83,228,361 5,967,486 7.2% 7.0% 7.6% 68,562 726,706 103,449 383,457
ALBUQUERQUE, NM Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 14,958,420 1,580,455 10.6% 10.5% 11.0% 856 73,141 - - $12.36
Power/Regional Centers 1,722,711 84,956 4.9% 3.1% 1.8% (31,753) (51,393) 3,000 - $16.13
Specialty Centers 252,283 9,000 3.6% 3.6% 3.6% - - - -
Strip 3,576,399 378,352 10.6% 10.5% 12.2% 7,218 66,393 11,544 - $13.93
Malls 3,182,681 321,608 10.1% 10.1% 10.1% - - - - $9.00
All Shopping Centers 23,692,494 2,374,371 10.0% 9.7% 10.1% (23,679) 88,141 14,544 -
Mountain Summary
DENVER, CO Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 63,610,412 5,627,593 8.8% 9.0% 9.7% 110,485 754,469 261,836 5,000 $14.14
Power/Regional Centers 24,909,067 1,663,260 6.7% 6.4% 7.5% (70,804) 240,177 39,256 - $18.66
Specialty Centers 1,929,458 80,345 4.2% 5.7% 4.5% 30,034 35,249 30,960 - $21.57
Strip 9,986,637 884,709 8.9% 9.7% 10.3% 82,332 176,416 38,742 7,500 $14.86
Malls 13,761,334 573,994 4.2% 4.2% 4.4% (962) 34,695 - 14,000 $22.81
All Shopping Centers 114,196,908 8,829,901 7.7% 7.6% 8.3% 151,085 1,241,006 370,794 26,500
Cassidy Turley 2014 Retail Forecast | 26
Statistical Overview
LAS VEGAS, NV Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 41,655,980 6,055,058 14.5% 14.6% 15.5% 23,166 419,781 - 8,400 $14.97
Power/Regional Centers 16,161,650 1,085,947 6.7% 6.6% 7.8% (24,673) 185,080 12,404 - $18.25
Specialty Centers 2,921,963 198,805 6.8% 6.9% 9.4% 3,500 76,170 - 192,432 $22.64
Strip 9,419,903 1,381,683 14.7% 14.7% 15.8% 14,497 117,583 8,838 - $14.78
Malls 6,460,295 317,707 4.9% 6.6% 4.8% 109,890 (4,703) - 1,500,000 $22.70
All Shopping Centers 76,619,791 9,039,200 11.8% 11.1% 12.2% 126,380 793,911 21,242 1,700,832
Mountain Summary
PHOENIX, AZ Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 89,976,969 12,885,843 14.3% 14.6% 16.3% 263,804 1,910,701 175,771 9,500 $13.62
Power/Regional Centers 26,223,171 2,062,087 7.9% 8.8% 9.8% 254,331 515,759 9,085 5,859 $18.28
Specialty Centers 4,319,234 379,518 8.8% 8.5% 10.6% (13,957) 701,388 698,931 - $22.24
Strip 13,226,389 2,297,208 17.4% 17.2% 18.9% (28,762) 223,434 20,022 - $13.44
Malls 20,339,279 1,125,903 5.5% 6.1% 6.5% 113,003 190,172 - - $25.15
All Shopping Centers 154,085,042 18,750,559 12.2% 12.1% 13.6% 588,419 3,541,454 903,809 15,359
RENO, NV Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 11,427,939 1,525,294 13.3% 12.9% 13.8% (50,247) 53,094 - - $14.10
Power/Regional Centers 3,062,713 712,469 23.3% 23.0% 23.2% (7,671) 2,984 - - $12.99
Specialty Centers 690,674 68,622 9.9% 9.9% 4.8% - (35,423) - - $21.00
Strip 2,823,926 502,048 17.8% 17.2% 19.0% (6,725) 44,193 11,968 - $15.41
Malls 1,926,419 151,651 7.9% 7.9% 8.2% - 29,837 24,837 - $18.94
All Shopping Centers 19,931,671 2,960,084 14.9% 13.8% 14.5% (64,643) 94,685 36,805 -
SALT LAKE CITY, UT Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 33,563,962 1,695,438 5.1% 4.9% 5.8% (64,309) 452,325 220,000 - $12.67
Power/Regional Centers 9,811,783 602,187 6.1% 5.9% 5.8% (19,073) (28,553) - - $14.89
Specialty Centers 2,374,197 294,012 12.4% 11.3% 10.3% 17,599 267,546 353,976 53,153 $22.49
Strip 7,065,440 465,789 6.6% 6.9% 7.7% 23,831 76,825 - - $13.96
Malls 8,960,949 361,172 4.0% 4.0% 4.7% (5,908) 69,048 13,494 - $19.74
All Shopping Centers 61,776,331 3,418,598 5.5% 5.3% 5.9% (47,860) 837,191 587,470 53,153
TUCSON, AZ Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 18,477,105 2,009,974 10.9% 10.8% 12.1% (18,777) 249,218 21,002 127,606 $14.72
Power/Regional Centers 5,302,358 243,103 4.6% 4.6% 6.0% 104,415 333,374 269,659 - $18.94
Specialty Centers 916,241 64,658 7.1% 7.1% 7.6% 465 5,121 - - $23.54
Strip 3,850,117 523,594 13.6% 14.1% 13.9% 19,877 11,505 - - $12.87
Malls 2,384,488 31,612 1.3% 1.3% 1.4% - 2,047 - - $26.77
All Shopping Centers 30,930,309 2,872,941 9.3% 9.1% 10.1% 105,980 601,265 290,661 127,606
Cassidy Turley 2014 Retail Forecast | 27
Statistical Overview
DES MOINES, IA Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 8,661,881 514,396 5.9% 6.1% 6.7% 9,698 69,267 - - $10.02
Power/Regional Centers 1,494,664 158,869 10.6% 8.0% 8.3% (39,525) (34,767) - - $14.08
Specialty Centers 503,259 12,888 2.6% 5.5% 6.0% 14,725 17,467 - 17,500 $21.51
Strip 2,389,441 279,222 11.7% 12.2% 14.1% 12,946 86,528 34,244 - $11.06
Malls 5,022,149 222,407 4.4% 4.4% 4.6% - 6,515 - - $16.37
All Shopping Centers 18,071,394 1,187,782 6.6% 6.5% 7.1% (2,156) 145,010 34,244 17,500
Midwest/Great Plains Summary
KANSAS CITY, MO Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 43,694,810 4,864,215 11.1% 10.9% 11.6% (33,149) 247,472 65,100 6,000 $10.98
Power/Regional Centers 15,801,792 1,587,973 10.0% 10.2% 10.2% 17,774 33,635 10,000 - $16.03
Specialty Centers 3,098,312 490,795 15.8% 16.0% 13.9% 5,723 170,565 268,383 4,150 $15.89
Strip 7,053,345 997,874 14.1% 14.4% 15.0% 19,384 67,146 7,004 - $11.98
Malls 8,047,849 197,556 2.5% 2.9% 2.9% 39,334 33,809 - - $24.68
All Shopping Centers 77,696,108 8,138,413 10.5% 10.1% 10.4% 49,066 552,627 350,487 10,150
MINNEAPOLIS/ST. PAUL, MN Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 41,360,169 3,243,084 7.8% 8.1% 8.9% 115,528 467,473 34,051 7,928 $13.38
Power/Regional Centers 14,963,231 744,273 5.0% 5.1% 5.3% 15,626 53,616 - - $15.29
Specialty Centers 2,997,032 112,577 3.8% 4.8% 5.1% 31,751 41,739 - 400,000 $19.21
Strip 11,581,408 1,262,590 10.9% 11.1% 12.2% 24,263 176,681 36,470 - $12.76
Malls 12,433,098 446,919 3.6% 3.6% 3.6% 50,278 51,493 56,410 29,789 $17.43
All Shopping Centers 83,334,938 5,809,443 7.0% 7.0% 7.6% 237,446 791,002 126,931 437,717
OMAHA, NE Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 13,563,536 1,645,584 12.1% 11.6% 11.9% (66,340) (35,610) - - $11.28
Power/Regional Centers 7,297,312 980,004 13.4% 13.5% 8.9% 3,826 (323,307) 4,569 - $9.70
Specialty Centers 256,566 - 0.0% 0.0% 2.0% - 5,071 - - $18.00
Strip 3,978,606 484,780 12.2% 13.1% 13.3% 36,610 53,687 9,000 - $11.57
Malls 2,323,394 84,557 3.6% 5.6% 5.6% 46,584 46,584 - - $10.07
All Shopping Centers 27,419,414 3,194,925 11.7% 10.6% 9.5% 20,680 (253,575) 13,569 -
ST. LOUIS, MO Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 48,050,135 4,837,794 10.1% 10.1% 10.6% 53,297 273,780 25,000 - $11.74
Power/Regional Centers 12,462,325 1,126,072 9.0% 9.2% 9.6% 20,675 65,049 - - $14.19
Specialty Centers 3,315,371 686,194 20.7% 20.7% 17.9% 254,561 170,186 319,800 - $12.99
Strip 9,445,442 1,211,387 12.8% 13.0% 13.7% 14,671 105,655 23,311 44,600 $13.10
Malls 13,766,739 1,623,944 11.8% 11.9% 11.8% 9,666 (4,395) - - $15.57
All Shopping Centers 87,040,012 9,485,391 10.9% 10.9% 11.1% 352,870 610,275 368,111 44,600
Cassidy Turley 2014 Retail Forecast | 28
Statistical Overview
CHICAGO, IL Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 134,471,129 15,386,540 11.4% 11.8% 12.4% 519,566 1,694,902 442,772 207,483 $14.48
Power/Regional Centers 44,338,817 2,757,913 6.2% 6.6% 7.1% 662,567 884,500 538,000 - $17.08
Specialty Centers 8,207,805 315,594 3.8% 4.3% 4.5% 36,326 54,556 4,500 3,895 $23.52
Strip 34,760,267 4,615,506 13.3% 12.8% 12.8% (78,551) (83,473) 89,083 37,000 $16.01
Malls 29,920,842 1,073,862 3.6% 3.1% 2.8% (153,191) (248,356) - - $21.96
All Shopping Centers 251,698,860 24,149,415 9.6% 9.5% 9.8% 986,717 2,302,129 1,074,355 248,378
Midwest/Great Lakes Summary
CINCINNATI/DAYTON, OH Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 49,723,844 7,027,645 14.1% 14.3% 14.9% 104,809 396,433 8,524 - $9.48
Power/Regional Centers 15,378,908 1,337,074 8.7% 8.8% 10.1% 19,404 211,332 - - $15.23
Specialty Centers 5,105,176 217,890 4.3% 4.6% 4.3% 19,387 482 - - $11.30
Strip 9,429,834 1,280,794 13.6% 13.6% 13.3% 39,012 13,611 45,488 - $12.75
Malls 10,878,335 905,521 8.3% 8.4% 9.2% 7,340 104,417 6,500 - $9.37
All Shopping Centers 90,516,097 10,768,924 11.9% 11.8% 12.3% 189,952 726,275 60,512 -
CLEVELAND, OH Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 57,902,966 7,476,508 12.9% 13.1% 13.3% 206,841 403,693 196,083 - $9.65
Power/Regional Centers 24,468,040 2,379,068 9.7% 9.6% 10.3% (4,315) 176,847 49,697 16,900 $12.22
Specialty Centers 2,146,016 274,591 12.8% 12.8% 13.0% - 4,598 - - $19.17
Strip 10,723,735 1,211,861 11.3% 11.5% 11.5% 26,525 39,194 22,397 - $11.17
Malls 16,914,339 2,752,433 16.3% 16.2% 16.3% (5,500) 12,633 - - $14.17
All Shopping Centers 112,155,096 14,094,461 12.6% 12.1% 12.2% 223,551 636,965 268,177 16,900
DETROIT, MI Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 72,018,452 10,690,552 14.8% 14.9% 15.2% 363,202 646,411 441,083 3,630 $11.89
Power/Regional Centers 26,278,667 1,996,299 7.6% 8.0% 8.7% 111,933 303,025 10,000 2,500 $13.72
Specialty Centers 3,453,164 306,302 8.9% 8.4% 9.2% (15,364) 10,769 - - $18.13
Strip 19,581,837 3,054,587 15.6% 15.5% 15.7% (3,479) 49,068 39,356 11,612 $13.23
Malls 21,394,688 1,383,426 6.5% 6.5% 6.6% 2,676 34,491 - - $7.05
All Shopping Centers 142,726,808 17,431,166 12.2% 11.6% 12.0% 458,968 1,043,764 490,439 17,742
INDIANAPOLIS, IN Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 33,536,562 3,736,058 11.1% 11.3% 12.0% 48,361 336,171 36,183 59,100 $11.34
Power/Regional Centers 14,857,129 1,433,434 9.6% 9.5% 9.5% (26,690) (19,700) - 35,000 $16.82
Specialty Centers 902,823 20,976 2.3% 3.2% 7.0% 8,000 42,024 - -
Strip 7,272,470 870,131 12.0% 11.6% 11.2% (27,618) (45,204) 13,373 - $13.52
Malls 8,885,346 475,855 5.4% 5.3% 5.4% (4,439) (200) - - $14.23
All Shopping Centers 65,454,330 6,536,454 10.0% 9.7% 10.1% (2,386) 313,091 49,556 94,100
Cassidy Turley 2014 Retail Forecast | 29
Statistical Overview
MILWAUKEE/MADISON, WI Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 37,055,892 4,082,778 11.0% 11.1% 11.8% 60,141 429,922 147,505 - $10.45
Power/Regional Centers 8,687,020 601,965 6.9% 7.0% 8.3% 5,561 157,866 47,000 270,330 $14.76
Specialty Centers 2,329,850 54,644 2.3% 2.5% 3.2% 3,639 18,950 - - $20.40
Strip 7,901,887 846,446 10.7% 10.9% 11.7% 15,115 112,704 35,334 - $13.44
Malls 7,695,328 992,632 12.9% 12.9% 13.1% - 19,214 - - $8.12
All Shopping Centers 63,669,977 6,578,465 10.3% 9.9% 10.7% 84,456 738,656 229,839 270,330
Midwest Great Lakes Summary
AUSTIN, TX Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 25,670,754 2,415,277 9.4% 9.8% 10.1% 176,135 279,116 125,945 - $16.20
Power/Regional Centers 17,363,487 647,034 3.7% 4.1% 4.6% 58,198 163,927 12,026 - $18.91
Specialty Centers 2,202,148 19,149 0.9% 1.3% 1.6% 20,533 26,338 10,845 - $18.00
Strip 6,674,898 737,529 11.0% 10.6% 11.7% (32,236) 82,932 43,246 3,550 $17.97
Malls 5,233,547 10,754 0.2% 0.1% 0.2% 434 3,934 6,200 -
All Shopping Centers 57,144,834 3,829,743 6.7% 6.6% 7.0% 223,064 556,247 198,262 3,550
DALLAS, TX Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 120,993,162 14,777,073 12.2% 12.4% 13.0% 311,835 1,216,317 295,361 166,076 $12.77
Power/Regional Centers 32,156,099 1,841,742 5.7% 5.5% 6.0% (84,877) 134,096 56,356 370,838 $19.82
Specialty Centers 6,493,915 351,153 5.4% 5.3% 6.6% (7,796) 88,362 8,500 - $17.61
Strip 31,081,505 3,761,716 12.1% 11.9% 13.4% 28,711 622,542 236,624 26,525 $14.62
Malls 26,522,259 1,404,564 5.3% 5.0% 5.2% (67,193) (14,100) - - $21.27
All Shopping Centers 217,246,940 22,136,248 10.2% 10.0% 10.6% 180,680 2,047,217 596,841 563,439
HOUSTON, TX Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 118,585,274 10,989,000 9.3% 9.3% 10.0% 97,243 1,204,407 342,728 83,560 $13.56
Power/Regional Centers 28,294,032 1,631,576 5.8% 6.1% 6.2% 111,165 342,247 223,148 44,908 $22.40
Specialty Centers 5,813,750 585,053 10.1% 10.0% 10.7% (5,665) 347,471 350,000 - $12.77
Strip 34,492,164 3,667,900 10.6% 10.3% 10.5% (56,392) 118,975 149,680 57,250 $15.81
Malls 23,676,443 1,114,209 4.7% 4.6% 4.8% (29,939) 14,870 - - $15.98
All Shopping Centers 210,861,663 17,987,738 8.5% 8.4% 8.8% 116,412 2,027,970 1,065,556 185,718
Texas/Panhandle/Lower Mississippi Delta Summary
Cassidy Turley 2014 Retail Forecast | 30
Statistical Overview
LITTLE ROCK, AR Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 11,220,024 1,182,122 10.5% 9.2% 8.3% (152,781) (252,387) - - $9.98
Power/Regional Centers 4,976,430 183,793 3.7% 3.5% 3.4% 2,109 (3,291) 10,000 - $16.42
Specialty Centers 977,856 57,726 5.9% 5.3% 7.0% (6,060) 11,203 - - $19.80
Strip 3,656,909 253,986 6.9% 6.7% 6.7% (10,664) (2,658) 7,600 - $14.33
Malls - - 0.0% 0.0% 0.0% - - - - $-
All Shopping Centers 20,831,219 1,677,627 8.1% 7.2% 6.7% (167,396) (247,133) 17,600 -
Texas/Panhandle/Lower Mississippi Delta Summary
NEW ORLEANS, LA Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 17,053,019 1,660,411 9.7% 10.4% 11.4% 296,065 476,607 212,000 - $13.06
Power/Regional Centers 2,712,407 106,506 3.9% 4.3% 5.1% 9,675 30,741 - - $34.00
Specialty Centers 1,564,808 44,385 2.8% 2.8% 3.6% - 12,066 - -
Strip 3,235,349 387,618 12.0% 11.9% 12.7% (1,700) 23,469 - - $13.50
Malls 5,275,326 128,769 2.4% 2.1% 4.1% (18,192) 86,999 - - $19.36
All Shopping Centers 29,840,909 2,327,689 7.8% 7.6% 8.8% 285,848 629,882 212,000 -
OKLAHOMA CITY, OK Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 21,213,885 2,269,262 10.7% 10.1% 10.7% (119,307) 4,017 9,200 - $9.66
Power/Regional Centers 6,903,629 509,651 7.4% 7.7% 8.5% 23,028 78,513 - - $14.00
Specialty Centers 707,996 72,703 10.3% 10.2% 17.5% (574) 74,228 28,000 - $15.86
Strip 6,981,680 516,016 7.4% 8.3% 8.6% 60,241 90,083 4,080 - $11.42
Malls 3,002,340 732,234 24.4% 24.4% 31.1% - 202,029 - - $6.00
All Shopping Centers 38,809,530 4,099,866 10.6% 10.3% 11.0% (36,612) 448,870 41,280 -
SAN ANTONIO, TX Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 34,191,360 3,258,920 9.5% 9.2% 11.0% (106,668) 853,695 397,926 - $13.06
Power/Regional Centers 9,955,919 753,972 7.6% 7.9% 9.0% 32,829 204,893 67,146 117,510 $21.30
Specialty Centers 1,908,325 152,010 8.0% 7.2% 15.8% (14,700) 150,178 - - $13.53
Strip 9,344,270 907,921 9.7% 9.2% 9.5% (36,207) 27,578 51,686 7,542 $14.40
Malls 8,706,759 109,514 1.3% 1.3% 1.8% 7,013 51,378 - - $25.78
All Shopping Centers 64,106,633 5,182,337 8.1% 7.7% 9.0% (117,733) 1,287,722 516,758 125,052
TULSA, OK Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 18,329,218 1,934,596 10.6% 10.5% 10.9% 78,336 279,142 228,451 49,243 $9.16
Power/Regional Centers 3,937,183 200,181 5.1% 5.9% 7.8% 32,212 113,884 9,500 4,875 $8.81
Specialty Centers 1,114,427 126,876 11.4% 11.5% 8.9% 814 (27,402) - - $13.56
Strip 5,986,480 448,629 7.5% 7.6% 6.5% 6,998 (25,207) 38,785 - $11.07
Malls 3,007,296 65,310 2.2% 1.9% 1.5% (7,000) (20,305) - - $28.29
All Shopping Centers 32,374,604 2,775,592 8.6% 8.3% 8.6% 111,360 320,112 276,736 54,118
Cassidy Turley 2014 Retail Forecast | 31
Statistical Overview
BIRMINGHAM, AL Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 22,365,185 3,091,397 13.8% 13.9% 14.9% 10,060 238,440 - - $8.13
Power/Regional Centers 10,067,171 1,156,247 11.5% 11.2% 15.2% (24,367) 488,423 136,000 - $21.55
Specialty Centers 1,178,000 182,375 15.5% 16.1% 16.3% 7,538 9,438 - - $13.89
Strip 5,209,886 475,604 9.1% 9.3% 9.3% 11,086 9,528 2,415 - $11.58
Malls 2,469,936 763,147 30.9% 28.6% 15.4% (56,058) (382,801) - - $42.00
All Shopping Centers 41,290,178 5,668,770 13.7% 13.4% 13.9% (51,741) 363,028 138,415 -
Southern US Summary
LOUISVILLE, KY Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 24,876,666 2,249,293 9.0% 9.1% 9.2% 26,606 61,070 34,107 - $10.30
Power/Regional Centers 4,763,801 245,309 5.1% 5.0% 5.1% (7,210) (3,279) - - $23.53
Specialty Centers 364,956 89,707 24.6% 29.7% 34.2% 18,687 35,187 - - $16.82
Strip 3,564,171 576,107 16.2% 15.0% 14.6% (19,620) (21,936) 40,765 - $13.42
Malls 3,668,576 395,899 10.8% 10.6% 9.8% (8,764) (36,486) - - $8.63
All Shopping Centers 37,238,170 3,556,315 9.6% 9.3% 9.1% 9,699 34,556 74,872 -
MEMPHIS, TN Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 24,088,748 3,385,998 14.1% 14.3% 15.5% 63,734 351,073 14,080 - $10.42
Power/Regional Centers 8,360,337 749,223 9.0% 9.0% 8.7% 3,478 (20,879) - 5,300 $9.36
Specialty Centers 1,588,394 338,948 21.3% 21.3% 21.3% - (726) - - $21.64
Strip 7,352,896 894,439 12.2% 12.3% 12.8% 9,145 56,113 9,759 2,400 $12.68
Malls 3,194,627 849,040 26.6% 26.6% 26.9% - 11,638 - - $1.19
All Shopping Centers 44,585,002 6,217,648 13.9% 13.8% 14.4% 76,357 397,219 23,839 7,700
MOBILE, AL Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 9,157,477 984,563 10.8% 10.2% 9.6% (53,919) (101,377) - - $10.39
Power/Regional Centers 1,775,117 119,802 6.7% 6.7% 6.7% - (1,356) - - $18.00
Specialty Centers 1,777,656 393,418 22.1% 15.5% 10.4% (118,648) (208,394) - - $14.31
Strip 2,463,135 228,682 9.3% 9.3% 9.8% (651) 12,897 - - $11.12
Malls 2,470,766 98,704 4.0% 4.0% 4.0% - - - -
All Shopping Centers 17,644,151 1,825,169 10.3% 8.6% 7.9% (173,218) (298,230) - -
NASHVILLE, TN Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 29,961,144 3,101,545 10.4% 10.5% 11.8% 31,072 421,735 - - $12.25
Power/Regional Centers 8,603,656 963,104 11.2% 11.3% 11.9% 7,613 63,033 - - $18.45
Specialty Centers 1,451,540 166,337 11.5% 11.7% 11.7% 4,216 3,509 - - $11.76
Strip 5,814,180 603,754 10.4% 10.7% 11.0% 34,019 66,365 37,537 - $14.39
Malls 7,154,069 779,640 10.9% 13.4% 13.4% 176,364 180,807 - - $24.00
All Shopping Centers 52,984,589 5,614,380 10.6% 10.7% 11.6% 253,284 735,449 37,537 -
Cassidy Turley 2014 Retail Forecast | 32
Statistical Overview
ATLANTA, GA Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 114,582,545 16,583,360 14.5% 14.6% 14.8% 171,076 370,438 16,399 64,977 $12.23
Power/Regional Centers 34,753,423 2,725,677 7.8% 8.0% 8.7% 46,381 319,330 13,000 - $12.30
Specialty Centers 7,286,610 775,461 10.6% 10.8% 11.6% 374,661 424,985 403,786 4,571 $13.11
Strip 35,039,082 5,138,984 14.7% 15.1% 15.3% 166,540 237,465 32,872 - $13.32
Malls 24,152,446 1,181,989 4.9% 5.0% 7.3% 31,418 587,299 - - $25.03
All Shopping Centers 215,814,106 26,405,471 12.2% 12.1% 12.6% 790,076 1,939,517 466,057 69,548
Southeast Summary
CHARLESTON, SC Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 13,550,932 1,154,767 8.5% 8.6% 8.9% 8,549 53,610 7,208 139,246 $14.40
Power/Regional Centers 2,232,392 94,113 4.2% 4.7% 5.8% 10,047 36,030 - - $14.49
Specialty Centers 581,969 - 0.0% 0.0% 0.0% - - - - $24.99
Strip 2,954,868 309,790 10.5% 11.0% 8.6% 15,439 (55,226) - - $13.45
Malls 2,101,239 6,560 0.3% 0.3% 0.7% - 8,150 - - $20.00
All Shopping Centers 21,421,400 1,565,230 7.3% 6.9% 6.9% 34,035 42,564 7,208 139,246
CHARLOTTE, NC Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 46,810,360 5,651,445 12.1% 11.9% 12.1% 335,627 481,480 518,241 372,400 $11.74
Power/Regional Centers 17,908,223 990,681 5.5% 6.3% 6.4% 133,078 245,617 99,874 - $16.28
Specialty Centers 3,664,847 428,300 11.7% 11.8% 10.5% 4,807 (41,808) - - $9.72
Strip 9,107,862 1,112,535 12.2% 12.2% 13.0% 3,290 100,933 34,812 - $13.24
Malls 8,062,653 803,564 10.0% 10.0% 9.3% (9) (53,084) - - $15.37
All Shopping Centers 85,553,945 8,986,525 10.5% 10.1% 10.2% 476,793 733,138 652,927 372,400
HAMPTON ROADS, VA Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 33,868,055 3,506,546 10.4% 10.5% 9.8% 109,396 83,235 284,201 61,642 $11.93
Power/Regional Centers 9,611,687 339,915 3.5% 3.5% 3.4% (1,975) (8,784) 3,750 - $19.86
Specialty Centers 1,895,326 148,897 7.9% 6.8% 7.0% (20,919) (16,171) - - $23.09
Strip 6,893,034 702,141 10.2% 10.5% 10.0% 38,795 45,987 65,824 9,930 $13.97
Malls 5,873,965 388,182 6.6% 6.4% 6.1% (9,698) (31,458) - - $16.26
All Shopping Centers 58,142,067 5,085,681 8.7% 8.4% 7.9% 115,599 72,809 353,775 71,572
JACKSONVILLE, FL Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 31,706,634 3,636,220 11.5% 11.3% 12.6% (35,955) 462,310 111,120 - $12.58
Power/Regional Centers 4,130,606 574,851 13.9% 13.9% 14.9% - 39,515 - - $10.19
Specialty Centers 1,158,502 62,400 5.4% 5.4% 5.4% - - - -
Strip 7,493,149 957,755 12.8% 12.7% 12.8% (7,825) 21,642 12,736 17,000 $13.72
Malls 5,843,080 185,299 3.2% 3.2% 3.5% 7,309 32,995 11,987 - $17.08
All Shopping Centers 50,331,971 5,416,525 10.8% 10.3% 11.1% (36,471) 556,462 135,843 17,000
Cassidy Turley 2014 Retail Forecast | 33
Statistical Overview
Southeast SummaryMIAMI, FL Current Qtr
Total SF VacVac %
Historical Vacancy Qrtly Net Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 105,951,306 8,663,261 8.2% 8.2% 8.4% 38,470 367,899 195,773 - $18.52
Power/Regional Centers 17,082,433 1,197,491 7.0% 7.1% 7.5% 15,499 84,573 - 500,000 $21.83
Specialty Centers 6,420,687 542,333 8.4% 8.8% 8.6% 19,954 251,211 262,290 500,000 $21.15
Strip 25,170,487 1,711,703 6.8% 6.4% 6.7% (110,742) 22,805 40,163 - $19.45
Malls 23,695,482 414,110 1.7% 1.9% 2.2% 27,139 150,139 35,000 - $34.15
All Shopping Centers 178,320,395 12,528,898 7.0% 6.9% 7.1% (9,680) 876,627 533,226 1,000,000
ORLANDO, FL Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 55,358,870 6,167,466 11.1% 11.5% 12.0% 194,540 755,435 305,407 - $13.81
Power/Regional Centers 13,221,204 810,405 6.1% 6.1% 6.0% (5,984) (12,343) - - $16.43
Specialty Centers 6,149,466 372,030 6.0% 5.9% 7.0% (11,396) 252,535 210,616 - $18.86
Strip 10,744,699 1,427,824 13.3% 13.3% 12.8% 1,673 (18,627) 30,622 - $15.00
Malls 13,205,195 712,788 5.4% 5.4% 3.7% (1) (222,029) - - $15.16
All Shopping Centers 98,679,434 9,490,513 9.6% 9.7% 9.8% 178,832 754,971 546,645 -
RALEIGH/DURHAM, NC Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 34,734,920 3,105,778 8.9% 9.0% 8.7% 75,686 79,135 140,686 - $14.85
Power/Regional Centers 11,422,281 526,405 4.6% 4.7% 5.1% 18,543 449,275 418,901 325,000 $16.58
Specialty Centers 2,803,241 76,995 2.7% 2.9% 2.5% 5,000 (7,757) - 90,102 $14.84
Strip 3,770,134 509,365 13.5% 13.1% 11.9% (15,978) (57,141) 6,000 4,706 $15.54
Malls 7,073,104 130,849 1.8% 1.8% 1.8% (1,181) (99) - - $30.00
All Shopping Centers 59,803,680 4,349,392 7.3% 7.2% 7.0% 82,070 463,413 565,587 419,808
RICHMOND, VA Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 26,146,678 2,725,369 10.4% 10.9% 11.1% 128,090 360,545 207,714 185,244 $13.19
Power/Regional Centers 7,686,441 370,872 4.8% 4.6% 4.9% (18,208) 6,281 - 20,011 $19.08
Specialty Centers 54,528 - 0.0% 0.0% 0.0% - - - -
Strip 4,140,121 384,405 9.3% 9.6% 11.8% 13,017 103,574 - - $14.45
Malls 4,282,901 84,562 2.0% 2.0% 2.0% 2,443 2,943 - - $17.00
All Shopping Centers 42,310,669 3,565,208 8.4% 8.4% 8.9% 125,342 473,343 207,714 205,255
TAMPA, FL Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 74,212,473 8,048,500 10.8% 11.0% 10.8% 133,128 (52,695) 26,970 904,232 $12.73
Power/Regional Centers 14,124,987 856,856 6.1% 5.9% 5.9% (25,803) (29,844) - - $18.09
Specialty Centers 1,900,385 146,974 7.7% 7.9% 8.6% 3,847 15,962 - - $23.76
Strip 18,489,224 2,164,544 11.7% 11.5% 11.4% (21,227) (21,726) 32,150 - $14.07
Malls 11,675,582 410,247 3.5% 3.5% 3.6% 3,594 15,502 - - $25.52
All Shopping Centers 120,402,651 11,627,121 9.7% 9.4% 9.2% 93,539 (72,801) 59,120 904,232
Cassidy Turley 2014 Retail Forecast | 34
Statistical Overview
Northeast Summary
BOSTON, MA Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 73,956,385 4,565,083 6.2% 6.1% 6.3% (27,098) 334,033 257,586 - $15.87
Power/Regional Centers 25,447,408 960,799 3.8% 3.5% 3.6% (74,836) (48,372) 2,260 395,000 $12.80
Specialty Centers 3,893,302 174,374 4.5% 4.2% 6.0% (10,000) 443,251 409,000 177,000 $18.88
Strip 14,400,242 1,199,109 8.3% 8.3% 8.4% (5,970) 47,384 40,359 3,900 $14.82
Malls 17,686,301 514,702 2.9% 2.9% 2.7% - (30,000) - -
All Shopping Centers 135,383,638 7,414,067 5.5% 5.2% 5.3% (117,904) 746,296 709,205 575,900
NEW YORK CITY METRO* Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 86,818,750 4,483,705 5.2% 5.5% 5.7% 305,102 854,820 387,741 630,849 $20.57
Power/Regional Centers 22,793,391 980,057 4.3% 4.3% 4.8% 2,609 104,321 - - $22.20
Specialty Centers 3,721,694 515,655 13.9% 13.8% 13.5% (3,025) (14,785) - - $22.94
Strip 18,050,366 1,492,468 8.3% 8.2% 7.8% (8,671) (57,437) 23,686 - $21.04
Malls 27,610,959 339,801 1.2% 1.3% 1.4% 6,080 36,053 - - $30.97
All Shopping Centers 158,995,160 7,811,686 4.9% 4.9% 5.1% 302,095 922,972 411,427 630,849
* includes New York City, Long Island and Southern CT
BALTIMORE, MD Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 41,540,091 3,017,930 7.3% 7.4% 8.1% 55,252 450,675 110,638 325,000 $19.69
Power/Regional Centers 15,473,475 700,734 4.5% 4.7% 5.8% 30,803 191,646 - - $28.07
Specialty Centers 2,278,621 185,708 8.2% 8.7% 9.6% 11,950 209,511 195,823 - $18.77
Strip 6,157,690 493,072 8.0% 7.6% 7.6% 2,475 24,380 55,532 - $18.01
Malls 12,402,564 795,582 6.4% 6.4% 6.5% 3,478 16,099 - - $26.72
All Shopping Centers 77,852,441 5,193,026 6.7% 6.5% 7.2% 103,958 892,311 361,993 325,000
NORTHERN NEW JERSEY Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 81,225,496 7,207,213 8.9% 8.9% 9.8% 73,888 815,243 38,200 234,654 $19.09
Power/Regional Centers 31,238,106 1,404,399 4.5% 5.1% 5.5% 203,639 330,385 5,251 - $25.08
Specialty Centers 3,167,504 84,367 2.7% 3.0% 4.5% 9,702 134,397 - 153,000 $26.70
Strip 15,623,191 1,571,707 10.1% 10.2% 10.4% 29,247 83,744 41,700 14,000 $19.55
Malls 30,739,417 678,738 2.2% 2.1% 2.2% (18,164) (12,595) - 747,500 $51.37
All Shopping Centers 161,993,714 10,946,424 6.8% 6.7% 7.2% 298,312 1,351,174 85,151 1,149,154
PHILADELPHIA Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 140,278,909 13,803,995 9.8% 9.9% 9.9% 292,394 564,556 462,812 124,410 $14.04
Power/Regional Centers 59,297,303 3,158,644 5.3% 5.2% 5.3% (57,983) 27,314 15,122 - $13.44
Specialty Centers 6,660,880 222,529 3.3% 3.8% 4.2% 33,095 60,489 - - $18.23
Strip 20,071,416 1,909,978 9.5% 9.3% 9.4% (51,991) (6,562) 15,687 - $14.23
Malls 29,139,081 1,347,782 4.6% 4.7% 3.8% 8,288 (250,297) - - $18.67
All Shopping Centers 255,447,589 20,442,928 8.0% 7.7% 7.7% 223,803 395,500 493,621 124,410
Cassidy Turley 2014 Retail Forecast | 35
Statistical Overview
Northeast SummaryPITTSBURGH, PA Current Qtr
Total SF VacVac %
Historical Vacancy Qrtly Net Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 29,378,433 1,586,823 5.4% 5.7% 6.2% 80,059 286,669 41,400 60,000 $11.20
Power/Regional Centers 17,523,619 715,468 4.1% 4.4% 4.5% 53,834 75,902 - - $17.34
Specialty Centers 2,359,492 101,415 4.3% 4.4% 4.7% 2,585 8,912 - -
Strip 4,712,936 331,617 7.0% 6.7% 7.5% (15,027) 136,445 89,530 - $15.71
Malls 11,845,773 431,591 3.6% 3.1% 6.1% (65,481) 499,053 225,000 - $12.36
All Shopping Centers 65,820,253 3,166,914 4.8% 4.7% 5.5% 55,970 1,006,981 355,930 60,000
WASHINGTON, DC Current Qtr Total SF Vac
Vac %Historical Vacancy Qrtly Net
Absorption
Last 12 Months Under Construction
Average Quoted RateShopping Centers Total GLA Prior Qtr Prior Yr Net Absorption Deliveries
Community/Neighborhood 90,746,261 6,577,184 7.2% 7.9% 7.7% 567,925 480,713 119,235 483,083 $19.53
Power/Regional Centers 37,186,171 1,280,967 3.4% 3.4% 3.6% 73,703 209,668 142,050 3,400 $22.14
Specialty Centers 7,399,746 179,183 2.4% 3.0% 2.6% 267,089 384,019 383,872 648,408 $48.38
Strip 12,914,382 1,037,666 8.0% 8.0% 8.9% 41,936 182,980 72,686 5,775 $20.53
Malls 29,684,197 983,520 3.3% 3.3% 2.3% 4,279 (163,060) 148,000 - $17.04
All Shopping Centers 177,930,757 10,058,520 5.7% 5.7% 5.6% 954,932 1,094,320 865,843 1,140,666
Cassidy Turley 2014 Retail Forecast | 36
MethodologyCassidy Turley’s quarterly estimates are derived from a variety of data sources, including its
own proprietary sample of market activity, historical inventory data from Bureau of Labor
Statistics Employment data, CoStar and other third party data sources. The market statistics
are calculated from a base building inventory made up of shopping center properties
deemed to be competitive in the local retail markets. The inventory is subject to revisions
due to resampling. Vacant space is defined as space that is available immediately or three
months (90 days) after the end of the quarter. Sublet space still occupied by the tenant is
not counted as available space.
The figures provided for the current quarter are preliminary, and all information contained in
the report is subject to correction of errors and revisions based on additional data received.
Explanation of TermsTotal Inventory: The total amount of retail space within a shopping center.
Total Space Available: The sums of new, relet and sublet space that is unoccupied and
being actively marketed.
Vacancy Rate: The amount of unoccupied space (new, relet and sublet) expressed as a
percentage of total inventory.
Absorption: The net change in occupied space between two points in time. (Total
occupied space in the present quarter minus total occupied space from the previous
quarter, quoted on a net, not gross, basis.)
Asking Rents: Triple net average asking rents.
Disclaimer
This report and other research materials
may be found on our website at
www.cassidyturley.com. This is a research
document of Cassidy Turley in Washington,
DC. Questions related to information
herein should be directed to the Research
Department at 202-463-2100. Information
contained herein has been obtained
from sources deemed reliable and no
representation is made as to the accuracy
thereof. Cassidy Turley is a leading
commercial real estate services provider,
with 400 million square feet managed on
behalf of institutional, private and corporate
clients and $22 billion in completed
transactions for 2012.
Regional Map
WestMidwestSouthNortheast
Methodology
Cassidy Turley 2014 Retail Forecast | 37
Key Statistics
• More than 60 U.S. offices
• 65 international offices*
• More than 3,800 professionals
• More than 970 brokers
• 2012 transactions
– Gross transaction volume
$22 billion
– Gross capital markets
volume $9.2 billion
• 400 million sf managed
portfolio on behalf of
institutional, corporate and
private clients
• More than 23,000 client
locations served
*Through GVA Partnership
A Leader in Commercial Real Estate ServicesAt Cassidy Turley, we are market leaders, industry leaders and community leaders. Nationwide, clients recognize us for the creative
sophistication of our real estate advice as well as for the discipline and accuracy of our service delivery. We are a trusted partner and
advocate, supporting our clients’ overall business performance. In markets across the country, we are respected as a leading provider of
commercial real estate services as well as for our community engagement. Our thorough understanding of local business practices and
market dynamics, combined with our customer focus and service commitment, give our clients a distinct edge in commercial real estate
across the globe.
Local Market Leaders, Nationwide• Our professionals have deep ties to our communities and our industry, and a thorough
understanding of local business leaders and practices, giving Cassidy Turley and our
clients an edge.
• Our in-depth, local market knowledge provides a comprehensive understanding of
market dynamics and enables us to effectively forecast market trends – providing
insight to clients and helping them make informed real estate decisions.
• Our leadership position is recognized in the communities we serve. We are often rated
in local business journals as a “Best Place to Work,” and are honored for our many
local philanthropic efforts.
Industry Leadership• Named to Leaders List of 2013 Global Outsourcing 100
• Over 80% of real estate executives familiar with our brand ranked it Very Good or
Excellent – Wall Street Journal survey
• Ranked a Top 5 Brand – Lipsey’s 2013 Commercial Real Estate Brandy Survey
• Ranked in the Top 5 in Best Practices Index – Commercial Property Executive
• 2012 Greenest Company Index – Commercial Property Executive
• Named by the EPA a 2013 ENERGY STAR® Partner of the Year
World-Class Expertise• Many of our associates have honed their skills in their respective markets for years –
even decades – gaining an understanding of industry best practices and serving as
thought leaders.
• Cassidy Turley has served clients’ needs outside of the United States since 1985. In
order to better serve our clients in Europe and Asia-Pacific, Cassidy Turley is proud
to partner with GVA, the founder and majority shareholder of GVA Worldwide, which
serves key markets in over 25 countries.
Key Cassidy Turley Statistics
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