Greenville defies the nationwide trend of retail closures

Transcription

1 Research & Forecast Report GREENVILLE SPARTANBURG ANDERSON, SC RETAIL Q Greenville defies the nationwide trend of retail closures Crystal Baker Research Coordinator South Carolina Key Takeaways > > Shop space rental rates are up 1.6% over last quarter. > > Core shop space will see more experience-oriented and personal service retailers, rather than the traditional shop space users. Market Conditions Overall vacancy has risen a bit from last quarter from 10.51% up to 10.97%. On a positive note, the average triple net shop space rents have risen 1.6% from last quarter up to $13.45 per square foot. The core shopping center triple net rental rate for this quarter also rose to $23.17 per square foot, and in non-core shopping center space the triple net rental rate was $10.81 per square foot. In addition, the overall market absorption, relative to the second quarter of 2017, was positive at 713,189 square feet. The vacancy rate within core shop space is 6.66% this quarter, which is a little more than half of the 12.84% vacancy rate of non-core space. Shopping Center Market Woodruff Road The Woodruff Road corridor is comprised all all core shop space, and has an average triple net shop space rent of $30.48 per square foot this quarter; the highest of all other submarkets. The vacancy rate of 5.85% is slightly higher than last quarter s rate of 4.06%; however, the Woodruff submarket has absorbed 85,861 square feet since last quarter. Clemson Boulevard Clemson Boulevard is the main retail corridor in the City of Anderson and the vacancy rate of 10.27% was down slightly from the second quarter when it spiked to 10.6%; likewise, the core vacancy rate dropped to 4.92%. The average asking triple net rental rate for core shop space increased to $23.17 per square foot, and the non-core triple net rental rate also increased from last quarter to $10.81 per square foot. Market Indicators Relative to prior period VACANCY NET ABSORPTION CONSTRUCTION AL RATE Note: Construction is the change in Under Construction. Q Q4 2017* Summary Statistics Q Greenville Retail Market Core Non-Core Vacancy Rate 6.66% 12.84% Change From Q (basis points) Absorption: Relative to prior period New Construction Under Construction Asking Rents Per Square Foot Per Year Shopping Center (Small Shop Space) Core Non-Core $23.17 $10.81 Change From Q % 3.64% Urban Retail $26.00 Greer

2 the price of core shop space Overall vacancy in the Greer shopping center market dropped from 14.11% last quarter to 10.65% this quarter. In this submarket, the non-core centers have a lower vacancy rate of 6.59%, while the core vacancy is 13.86%. Non-core triple net average shop space rents in Greer are $8.15 per square feet, while core shop space is $15.41 per square feet. Haywood Pleasantburg Road The Haywood-Pleasantburg Road overall market vacancy rose slightly to 8.03%, a 4.29% increase over last quarter. This market has a non-core vacancy rate of 7.29% which is lower than the core vacancy rate of 10.23%. The average non-core shop space is almost $5.00 per square foot lower than core shop space, which is an attractive feature for many shop owners. The average triple net non-core shop space rental rate is $12.63 per square foot while the average triple net core shop space rental rate is $17.28 per square foot. West Spartanburg The West Spartanburg region overall market vacancy rate dropped to 8.42% compared to the higher vacancy rate of 8.9% during second quarter of this year. Also dipping a bit lower is the core vacancy rate to 6.61% from 7.14% last quarter. The triple net average core shop space rental rate was $18.20 per square foot and the non-core triple net average shopping center rent was $12.09 per square foot; both of these rent averages are higher than last quarter. Pelham Road Overall market vacancy in the Pelham Road corridor was 17.65% this quarter with the core vacancy rate dropping to 6.92%, which is a little over half of the vacancy rate from last quarter. The Pelham Road market core properties also absorbed 23,692 square feet of space since last quarter, which is 12.5% of the total Pelham Road core market square feet. Urban Retail The average triple net shop space rental rates in the Main Street area, the largest of all of the subareas, remained unchanged at $31.50 per square foot from the second to the third quarter. West End average triple net shop space rental rates are also still $25.00 per square foot. Augusta Road average triple net shop space rental rates are $30.00 per square foot, while North Main and Stone Avenue average triple net shop space rental rates are $28.50 per square foot. The urban shop space rental rates are some of the highest in the entire market, which demonstrates how desirable these subareas are to tenants. Recent Transactions Sales > > In Spartanburg, Dorman Center, Dorman Center I and Dorman Center II comprised of 370,776 square feet of retail space sold in Definitions This report includes two distinct types of data. Shopping Center Retail is defined as all retail shopping centers except for regional shopping centers that are 20,000 square feet or larger, designed to accommodate at least one anchor or junior anchor tenant. This is further divided into core and non-core retail nodes. A core retail center is in an amalgamation that draws shoppers from across the region. It will have a mix of anchor, junior anchor and shop space tenants and will include a variety of food service and soft goods retailers that exist only in core retail markets. A non-core retail center will be one that is located at the edge of a submarket. It is generally designed with a single retail anchor and attracts shoppers from the surrounding neighborhoods only. Anchor space is typically 25,000 square feet or greater and is designed to accommodate a single tenant. Junior anchor space is typically 10,000 to 25,000 square feet and is designed for a single tenant. It can anchor a shopping center but is generally paired with an anchor and shop space. Shop space is typically less than 10,000 square feet and is generally attached to a center with an anchor, junior anchor or both. Urban Retail is defined as a street-oriented retail district where the primary way the tenant approaches the property is as a pedestrian. It typically has a mix of luxury retailers not found in traditional shopping centers and is found in urban locations. It is usually the street level or first level of a multistory building in a highly urbanized area. September for $43.9 million. > > Woodruff Gallery, a 27,012-square-foot retail strip center located at 1178 Woodruff Road in Greenville, traded for $3.7 million. Leases > > Hobby Lobby leased 55,000 square feet in Seneca within the Applewood Shopping Center. > > Lidl signed a lease for 36,173 square feet in Greenwood and their move-in date is expected to be during the fall of > > Staples renewed their 33,556-square-foot lease within the McBee Station shopping center located in Greenville. Market Forecast While core shop space will continue to be quickly leased in most submarkets, the Greer and Haywood-Pleasantburg Road local retailers will continue to lease the economical non-core shops. Retailers are slowly changing as personal service and uniqueexperience shops lease more spaces and create a memorable ambiance for clients. National retailers will be interested in leasing and redeveloping in core areas across the market in order to maximize their profits and reach as many consumers as possible soon after they enter the Greenville-Spartanburg-Anderson market. 2 South Carolina Research & Forecast Report Q Greenville-Spartanburg-Anderson Retail Colliers International

3 Q Retail Market Summary Statistics Greenville - Spartanburg - Anderson, SC ANCHOR SPACE (GREATER THAN 25,000 SF) JR. ANCHOR SPACE (10,000-25,000 SF) SHOP SPACE (LESS THAN 10,000 SF) SHOPPING CENTERS INVENTORY VACANCY RATE (%) BELTON - HONEA PATH Non Core 260, % 35, ,600 $5.23 Belton - Honea Path Total 260, % 35, ,600 $5.23 BOILING SPRINGS Non Core 610, % 171,826 $ ,500 $ ,500 $6.11 Boiling Springs Total 610, % 171,826 $ ,500 $ ,500 $6.11 CHERRYDALE - TR Non Core 500, % ,067 $15.58 Cherrydale - TR Total 500, % ,067 $15.58 CLEMSON BLVD Core 790, % 34,000 $ ,850 $18.00 Non Core 189, % 48, ,800 $11.02 Clemson Blvd Total 979, % 82,912 $ ,650 $12.94 CLEMSON PENDLETON Non Core 380, % 34, ,000 $18.00 Clemson Pendleton Total 380, % 34, ,000 $18.00 DOWNTOWN Non Core 169, % ,000 $ ,300 $12.50 Downtown Total 169, % ,000 $ ,300 $12.50 DUNCAN - LYMAN Non Core 219, % ,310 $12.09 Duncan - Lyman Total 219, % ,310 $12.09 EASLEY Non Core 1,151, % 90,216-17,000-29,741 $16.60 Easley Total 1,151, % 90,216-17,000-29,741 $16.60 EAST SIDE Non Core 1,171, % 32,960-47,404 $ ,511 $12.08 East Side Total 1,171, % 32,960-47,404 $ ,511 $12.08 EAST SPARTANBURG Non Core 1,061, % 60,682 $ ,655 $ ,291 $7.71 East Spartanburg Total 1,061, % 60,682 $ ,655 $ ,291 $7.71 GREER Core 407, % ,980 $ ,488 $15.41 Non Core 322, % ,240 $8.15 Greer Total 729, % ,980 $ ,728 $12.04 HAYWOOD - PLEASANTBURG Core 354, % ,800-22,524 $17.28 Non Core 1,065, % ,926 $ ,749 $12.63 Haywood - Pleasantburg Total 1,420, % ,726 $ ,273 $14.28 HIGHWAY 81 Non Core 175, % ,525 $10.00 Highway 81 Total 175, % ,525 $10.00 INMAN - LYMAN Non Core 222, % ,572 $4.95 3,918 $12.12 Inman - Lyman Total 222, % ,572 $4.95 3,918 $ South Carolina Research & Forecast Report Q Greenville-Spartanburg-Anderson Retail Colliers International

4 Q Retail Market Summary Statistics Greenville - Spartanburg - Anderson, SC SHOPPING CENTERS MAULDIN INVENTORY VACANCY RATE (%) ANCHOR SPACE (GREATER THAN 25,000 SF) JR. ANCHOR SPACE (10,000-25,000 SF) SHOP SPACE (LESS THAN 10,000 SF) Non Core 410, % ,609 $19.75 Mauldin Total 410, % ,609 $19.75 OCONEE Non Core 741, % ,000 $ ,595 $9.61 Oconee Total 741, % ,000 $ ,595 $9.61 PELHAM ROAD Core 189, % ,120 $27.00 Non Core 123, % 38, ,092 $14.00 Pelham Road Total 312, % 38, ,212 $23.55 PICKENS - LIBERTY Non Core 204, % ,080 $5.00 Pickens - Liberty Total 204, % ,080 $5.00 POWDERSVILLE Non Core 141, % Powdersville Total 141, % SIMPSONVILLE Core 405, % ,200 $ ,606 $20.00 Non Core 292, % ,275 $12.52 Simpsonville Total 697, % ,200 $ ,881 $14.04 SOUTH SIDE Non Core 159, % ,500 $10.00 South Side Total 159, % ,500 $10.00 WEST ANDERSON Non Core 854, % ,801 $ ,485 $8.59 West Anderson Total 854, % ,801 $ ,485 $8.59 WEST SPARTANBURG Core 939, % ,233-28,883 $18.20 Non Core 582, % 28,695 $ ,280 $12.09 West Spartanburg Total 1,521, % 28,695 $ ,233-66,163 $14.19 WHITE HORSE RD - BEREA Non Core 777, % 44,050-22,500-38,273 $11.18 White Horse Rd - Berea Total 777, % 44,050-22,500-38,273 $11.18 WOODRUFF MOORE Non Core 145, % ,120 - Woodruff Moore Total 145, % ,120 - WOODRUFF RD Core 2,112, % 39,702-19,913-63,980 $30.48 Woodruff Rd Total 2,112, % 39,702-19,913-63,980 $30.48 Core 5,199, % 34,000 $ ,866 $ ,831 $22.10 Non Core 11,932, % 509,996 $ ,334 $ ,154 $10.47 Total Shopping Center Market 17,132, % 543,996 $ ,200 $ ,985 $13.24 URBAN RETAIL Main Street $31.50 West End $25.00 Augusta Road $30.00 North Main and Stone Ave. $ South Carolina Research & Forecast Report Q Greenville-Spartanburg-Anderson Retail Colliers International

5 554 offices in 66 countries on 6 continents United States: 153 Canada: 34 Latin America: 24 Asia Pacific: 231 EMEA: 112 FOR MORE INFORMATION: David Feild, CCIM Market President Greenville David.Feild@colliers.com Liz H. McCary Vice President, Marketing South Carolina Liz.McCary@colliers.com Crystal Baker Research Coordinator South Carolina Crystal.Baker@colliers.com GREENVILLE RETAIL PROFESSIONALS: $2.5 billion in annual revenue 2 billion square feet under management Frank Hammond, CCIM, CPM Senior Principal Frank.Hammond@colliers.com Lyn Tyner Principal & Brokerage Associate Lyn.Tyner@colliers.com Scott Burgess Brokerage Associate Scott.Burgess@colliers.com Lance Byars Brokerage Associate Lance.Byars@colliers.com 16,000 professionals and staff Colliers International Greenville 55 E. Camperdown Way, Suite 200 Greenville, South Carolina USA About Colliers International Colliers International Group Inc. (NASDAQ: CIGI; TSX: CIG) is a global leader in commercial real estate services with more than 16,000 professionals operating from 554 offices in 66 countries. With an enterprising culture and significant insider ownership, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include brokerage, global corporate solutions, investment sales and capital markets, project management and workplace solutions, property and asset management, consulting, valuation and appraisal services, and customized research and thought leadership. Colliers International has been ranked among the top 100 outsourcing firms by the International Association of Outsourcing Professionals Global Outsourcing for 10 consecutive years, more than any other real estate services firm. For the latest news from Colliers International, visit Colliers.com or follow us on Twitter (@ColliersIntl) and LinkedIn. colliers.com Copyright 2016 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.