By: Jimmy Wright, Retail Division Broker & Principal

Transcription

1 NAIEarle MEMBER NAI Furman,NAME LLC OfficeReport Report Fourth First Quarter 27 Retail Quarter 211

2 Upstate Market TRENDS: Vacancy Rate Net Absorption UPSTATE STATISTICS: Number of Buildings...9,38 Market Size (SF)...8,65,12 Overall Vacancy Space (SF)...5,48,21 Overall Vacancy (%)...6.3% Direct Vacancy (SF)...4,957,671 Sublease Vacancy (SF)...9,35 Net Absorption...233,144 Average Asking Rental Rate ($/SF/YR)...$ % 8.% 7.5% 7.% 6.5% 6.% $11. $1.5 Overall Vacancy (%) 3Q1 4Q1 1Q11 2Q11 3Q11 4Q11 Average Asking Rental Rate Construction Asking Rents SECOND Quarter MARKET OVERVIEW By: Jimmy Wright, Retail Division & Principal $1. $9.5 $9. 3Q1 4Q1 1Q11 2Q11 3Q11 4Q11 New retail development seems to be picking up as evidenced by two new Wal-Mart stores under discussion (Church Street, Greenville and Hwy 153, Powdersville). Also, an additional Kohl s location has been announced on Wade Hampton Boulevard (Greer) in the former KMart building. New development is still tenant driven versus speculative. Retail land is moving slow, but is showing signs of life for the 1-2 acre user like QuikTrip and Wendy s. Leasing activity is improving with decreasing vacancy rates, while rental rates have increased but are still relatively in line with previous quarters. Retail investment sales are very active and cap rates are going down because of the pent up demand for quality investment products. We anticipate 212 to be a year of growth in the retail sector as retailers appear to have improving sales and growth plans are being discussed and implemented. The Upstate should see its fair share of growth with continued re-positioning and new tenants coming to the market such as REI, QuikTrip and Petco. Click here to contact Jimmy Wright Top Lease Transactions *NAI Earle Furman transaction Tenant: Size (SF): Address: Country at Heart 5, SF WestGate Mall, Spartanburg Yellow Mana Music 1, SF 2 Greenville Highway, Spartanburg Factory Mattress 9,743 SF 1425 Woodruff Road, Greenville Top Sale Transactions Buyer: Size (SF): Address: Sale Price: Cole Real Estate Investments 173,226 SF Anderson Midtowne Park, Anderson $25,6, *LFR Holdings 11, SF 3 Benton Road, Travelers Rest $1,64, *Investor 7,2 SF 149 WO Ezell Boulevard, Spartanburg $2,46,2 Some of the data in this report has been gathered from third party sources including CoStar Group, Inc. and has not been independently verified by NAI Earle Furman, LLC. NAI Earle Furman, LLC makes no warranties or representations as to the completeness or accuracy thereof. All rents are per SF/per YR unless otherwise noted. Construction is defined as total RBA under construction. The Upstate Market is defined by: Greenville, Anderson, Spartanburg, Cherokee and Pickens counties. NAI Earle Furman, LLC 11 East Washington Street, Suite 4 Greenville SC 2961

3 NAI Earle Furman, LLC Retail Report Fourth Quarter 211 SUBMARKET/ # BLDGS. TOTAL RBA TOTAL AVAIL. TOTAL VACANT TOTAL NET TOTAL AVERAGE UNDER CLASS (SF) (SF) AVAIL (%) Absorption (SF) RATE ($/SF/YR) CONSTRUCTION (SF) Anderson/Pickens 1,84 17,544,775 1,8, % 94,375 $8.6 *51,561 Greenville 3,784 34,935,343 2,931,47 5.9% 16,685 $1.48 4, Travelers Rest/ 39 3,226,22 254, % (1,864) $8.11 **14,36 Cherrydale Wade Hampton 576 4,774,35 556, % (2,463) $8.32 West Greenville 631 4,213, ,88 6.3% 5,632 $5.41 Pelham Rd ,495,46 124,26 7.1% (5,882) $13.28 I-385/Woodruff Rd. 29 3,683, , % 32,498 $13.95 ***14, Mauldin 196 1,838,512 83, % 2,62 $8.96 Fairview Rd ,631,31 228, % 4,324 $1.18 South Greenville 253 1,426,862 17, % 5,5 $6.64 Stone Ave/ 143 7,768 71, % 13,173 $7.97 E. North St. Greenville CBD ,31 43, % 9,113 $15.35 ***4, Pleasantburg Dr. 15 1,184, , % (5,317) $1.9 Augusta Rd ,697,61 145, % 13,27 $11.41 Haywood/Congaree 415 7,393, , % 9,342 $13.97 & Woodruff Corridor Spartanburg 2,912 23,45,18 2,32,28 6.5% 39,99 $1.14 Upper Spartanburg 761 4,365,16 334,587 7.% 7,514 $6.4 East Side 1,123 9,19, , % 11,172 $11.47 West Side 622 7,39,386 66,565 6.% 19,119 $11.26 Lower Spartanburg 46 2,53, , % 2,14 $7.6 *Easley Town Center (Easley) **Auto Zone and O Reily Automotive (Travelers Rest) ***Petco (Woodruff Road) ****ONE development (Greenville CBD) NAI Earle Furman, LLC 11 E. Washington Street, Suite 4 Greenville SC 2961

4 NAI Earle Furman, LLC Methodology / Definitions / Submarket Map Absorption (Net) The change in occupied space in a given time period. Available Square Footage Net rentable area considered available for lease; excludes sublease space. Average Asking Rental Rate Rental rate as quoted from each building s owner/ management company, For office space, a full service rate was requested; for retail, a triple net rate requested; for industrial, a triple net basis. Building Class Class A product is office space of steel and concrete construction, built after 198, quality tenants, excellent amenities & premium rates. Class B product is office space built after 198, fair to good finishes & wide range of tenants. Direct Vacancy Space currently available for lease directly with the landlord or building owner. Market Size Includes all existing and under construction office buildings (office, office condo, office loft, office medical, all classes and all sizes, both multi-tenant and singletenant, including owner-occupied buildings) within each market. Overall Vacancy All unoccupied lease space, either direct or sublease. SF/PSF Square foot/per square foot, used as a unit of measurement. West Greenville Travelers Rest/Cherrydale Midtown Uptown 15.3 million SF vacant 4.13% vacancy East rate Side & Hwy 9 $54.14 SF/YR avg. rental Wade Hampton Pelham Rd 4.88 million SF vacant Mauldin 4.7% vacancy rate Fairview Road $37.53 SF/YR avg. rental S. Greenville I-385/ Woodruff Rd Anderson Downtown 11.3 million SF vacant 4.o% vacancy rate $42.3 SF/YR avg. rental Upper Spartanburg West Side Greenville CBD Augusta Road Lower Spartanburg Stone Ave/E. North St. S. Pleasantburg Road N. Pleasantburg Road Haywood/ Congaree & Woodruff Rd. Corridor Sublease Arrangement in which a tenant leases rental property to another, and the tenant becomes the landlord to the subtenant. Sublease Space Total square footage being marketed for lease by the tenant. Sublease space is not considered in the overall occupancy or absorption numbers - only direct leases are included. Sublease Vacancy Space currently available in the market for sublease with an existing tenant within a building acting as the landlord. NAI Earle Furman, LLC 11 E. Washington Street, Suite 4 Greenville SC 2961

5 Upstate in the News Bi-Lo to acquire Winn-Dixie for $56 Million By Scott Miller, GSA Business Published Dec. 19, 211 Bi-Lo Inc. CEO Michael Byars said today the grocery store chain could relocate its corporate headquarters from Mauldin following its acquisition of Winn-Dixie for $56 million. The company will maintain some presence in both Mauldin and Winn-Dixie s headquarters in Jacksonville, Fla., he said, but the extent of that remains undetermined. There are a number of details that are being worked on right now, Byars said. The merger agreement was announced today. Both the Bi-Lo and Winn-Dixie brands will survive the merger, but Bi-Lo will be the parent company. Winn-Dixie shareholders must approve the acquisition. If approved, Winn-Dixie shareholders would receive $9.5 in cash per share of Winn-Dixie common stock, representing a premium of approximately 75% over the closing price on Friday. Combined, the grocery chains will operate approximately 69 grocery stores and employ 63, people in eight states. Bi- Lo employs approximately 17, people and operates 27 supermarkets in North Carolina, South Carolina, Georgia and Tennessee. Winn-Dixie operates approximately 48 retail grocery locations in Florida, Alabama, Louisiana, Georgia and Mississippi. The company employs approximately 46, people. No stores are expected to close, the companies said. With no overlap in our markets, the combined company will have a perfect geographic fit that will create a stronger platform from which to provide our customers great products at a great value, while continuing to offer exceptional service, said Bi-Lo Chairman Randall Onstead. Bi-Lo and Winn-Dixie are both strong regional brands with similar heritages, compelling customer connections and outstanding employees. Both have been an important part of the communities and families they serve, and we look forward to building upon these two iconic brands and serving loyal customers for years to come. Bi-Lo emerged from bankruptcy protection in May 21, and reports surfaced months later saying that the grocery chain was marketing some stores for sale. Byars noted that Bi-Lo filed for bankruptcy to restructure pending debt; it remained well financed and didn t have any cash liquidity issues. He declined to discuss figures but said Bi-Lo sales have been strong. We ve had a good run the past couple of years, he said. The acquisition of Winn-Dixie is expected to close in 6 to 12 days. Following the completion of the merger, Winn-Dixie will become a privately-held, wholly-owned subsidiary of Bi-Lo and Winn-Dixie s common stock will cease trading on Nasdaq. This transaction with Bi-Lo provides Winn-Dixie shareholders with a significant cash premium for their shares. We believe this transaction is in the best interests of our shareholders, said Peter Lynch, chairman, CEO and president of Winn-Dixie. By combining Bi-Lo and Winn-Dixie, we anticipate building a company that is stronger than our individual businesses and creating opportunities for continued advancement through the cross-pollination of our people and the sharing of ideas across our organizations, all to the benefit of our guests, suppliers, team members and the neighborhoods that Winn-Dixie serves. NAI Earle Furman, LLC 11 E. Washington Street, Suite 4 Greenville SC 2961

6 Upstate in the News Augusta Road residents, businesses look to the future Area just outside downtown aims for balance By: Cindy Landrum The Greenville Journal - Published December 21, 211 If Greenville s commercial corridors were family members, Augusta Street would be a family s well-to-do, quirky aunt. Augusta Street is unique to the city, said Tracy Ramseur, the city s development coordinator for the city s economic development department who grew up in the area just outside of downtown and the West End. There s really no other area quite like it. Augusta has been called the city s boutique with locally owned businesses that have been there for generations, such as Pickwick Pharmacy and The Grey Goose, and businesses that have opened recently, such as Zoe s Kitchen. Many of the owners are from Greenville and they know their customer base well, said Cheryl Hoskins, owner of The Grey Goose, a children s store that started on Cleveland Street across from Sirrine Stadium before moving to the Augusta area about a dozen years ago. They know their retail niche. But parts have lost some of their luster in recent years. Some of the street s shopping areas are looking old and tired and others have seen retailers come and go. Retail sales have decreased from $141.4 million in 28 to $99.8 million in 21, the years hardest hit by the recession. Businesses have come and gone over the years, but you ll find that in older areas anywhere, Hoskins said. It looks a little more prominent than if you look at some of the strip centers in other areas, but there are holes there as well. Kelly Odom, owner of Pickwick and president of the Augusta Road Business Association, said Augusta is vital because it is often the first thing visitors see. But, he said, some areas of Augusta that need sprucing up are outside the city limits. Mayor Knox White said a lot of older buildings exist in the corridor. It s looking a little blighted on Augusta Road, he said. But the area is still strong, he said. Its secret of economic success is the hospital, he said. Augusta leans on the neighborhood on weeknights and weekends, but depends on hospital employees during the week. Augusta is one of the commercial areas the city officials plan to concentrate on when it comes to façade improvements, streetscaping and pedestrian access. An example is Augusta Village, Ramseur said. The space occupied by the Rite-Aid Pharmacy was divided into space occupied by three businesses: Wisteria Spa, Bella s Bridesmaid and Vestidi. That s a great example of an older shopping center with not a lot of interest putting some money into their property and generating interest, Ramseur said. It will be used as a model for other parts of Augusta. Ramseur said Augusta needs a balance of locally owned higher-end boutique-type shops with national and regional chain retailers and restaurants. The chains interested in Augusta Road fit in with the character of the neighborhood, Ramseur said. Retailers that would fit on Augusta Road are different from those who want to locate on Woodruff Road or Haywood Road. The national retailers know which ones are successful in places like Augusta Road. They want to be there, Ramseur said. That s their niche. Ramseur said retailers such as Talbots and Chico s coincide with Augusta s boutique feel. I think you need both on Augusta. You need the local stores as well as the Panera Bread and Starbucks, she said. Hoskins said while chains locating in the area concern her, it s inevitable. Any profitable popular shopping area will end up with them at some point, she said. Sometimes it makes a nice mix as long as it fits in with the flavor of the shopping area. Odom agrees, saying it depends on how it s developed. article continued on next page NAI Earle Furman, LLC 11 E. Washington Street, Suite 4 Greenville SC 2961

7 Upstate in the News Augusta Road residents, businesses look to the future Area just outside downtown aims for balance Big box chains have come in, and I don t want to say bullied their way in, but what they did is not cohesive with the rest of the neighborhood, he said. There s room for chains on Augusta Road, but it really all depends on how it s developed. Odom said national chains are building smaller buildings in other cities such as Charlotte. But we re not seeing it in Greenville yet, he said. Zoe s Kitchen, which opened recently, is a regional chain that looked for a location on Augusta or in downtown for two years before locating in the shopping center that houses Starbucks and 32 Degrees, a regional frozen yogurt restaurant. Ramseur said she expects redevelopment of the Augusta@Faris shopping center to occur in the next year to 18 months. The shopping center is about half empty, and faded canopies tell passers-by of the businesses that used to be there. White said the shopping center could be demolished and new retail space built. It s a challenging site with topography issues and parking, Ramseur said. City officials want to continue streetscaping like the work done near Starbucks in other areas of Augusta, White said. It also plans on relocating power poles from beside the street to the back of properties from Capers to Lupo Street. Streetscaping and infrastructure improvements send the signal to private investors that this is a good place to do business, White said. Our biggest challenge on Augusta is what to do with the old buildings and out-of-control signage. The city will have to have one-on-one discussions with landowners and businesses to improve and upfit their properties, he said. Ramseur said one of the challenges on Augusta is it is not as walkable in some areas as it needs to be. Odom said he s seeing more pedestrians on Augusta, but said the area needs crosswalks. Residents and businesses are predominantly multi-generational who live, work, play, go to school, go to church in the Augusta Road area as did their fathers and grandfathers, said Odom, who said Pickwick has been in the Augusta Road area since 1933 and at its current site since You don t see that anywhere else in Greenville. NAI Earle Furman, LLC 11 E. Washington Street, Suite 4 Greenville SC 2961

8 Contact Us For more information on the Upstate Retail market please contact one of our specialists: Jimmy Wright Principal and Harry Croxton Renee Dunlap Tommy Diangikes Ted Lyerly, CCIM Tim Roller (Anderson Area) Bill Sims Jake Van Gieson NAI Earle Furman, LLC 11 E. Washington Street, Suite 4 Greenville SC 2961

9 Additional Resources Complete listings of NAI Earle Furman s available properties The Greenville Area Development Corporation (GADC) is dedicated to the growth and prosperity of Greenville County, SC. Since its founding in 21, GADC efforts have resulted in the creation of nearly 1, new jobs and more than $2 billion in capital investment in Greenville County. The organization s continued successes are demonstrated by the innovative, dynamic, and inviting nature of our community. Formed in 2, the Upstate South Carolina Alliance is a public/private regional economic development organization designed to market the dynamic 1-county Upstate region to the world. The 1 counties of the Alliance represent the commerce-rich northwestern corner of South Carolina - The Greater Greenville Chamber at its core is dedicated to promoting quality development of Upstate South Carolina through managed growth, service to members and the public, and a community-wide approach to issues shaping the region's future. - Provides information on trade, grants, rural development, and recycling. Includes databases of community profiles, labor market information, etc South Carolina's Information Highway is the largest directory of South Carolina information on the Internet. - The South Carolina Power Team promotes industrial sites & industrial buildings in South Carolina and the state's unique advantages for industry. - Official website of the City of Greenville Official website of Spartanburg County government Official website of Greenville County government - Official website of Anderson county government - Official website of Cherokee county government NAI Earle Furman, LLC 11 E. Washington Street, Suite 4 Greenville SC 2961