Greater Hartford, Connecticut

Transcription

1 Retail Real Estate Trends & Analysis Greater Hartford, Connecticut New This Year: -Year Historical Data The KeyPoint Report KEYPOINT PARTNERS, LLC, BURLINGTON, MA KeyPoint Partners, LLC One Burlington Woods Drive, Burlington, MA Tel.. Fax.. KeyPointPartners.com Blog.KeyPointPartners.com unlocking value

2 About this Report: Highlights: This KeyPoint Report examines changes in supply, vacancy and absorption, retailer activity, and market composition by store size and retail categories during the year ending July. The Greater Hartford market includes cities and towns, and represents more than square miles and approximately, people (.% of the state population). Supply:.M SF :.M Absorption:, SF :, SF Vacancy Rate:.% :.% KeyPoint Partners GRIID database maintains detailed information on virtually all retail properties in three key regions: Eastern Massachusetts, Southern New Hampshire and Greater Hartford, Connecticut. These markets encompass nearly half of all retail space in New England. GRIID has information on more than million square feet of retail space and approximately, retail establishments. City/Town Ranks: # Space SF: Manchester # High Occupancy: Wethersfield # Low Occupancy: East Hartford Category Expansion by Square Feet: # Food/Grocery (+,) Category Expansion by Number of Stores: # Food/Grocery (+) The KeyPoint Reports contain detailed summaries and analyses of market trends and activity for each region. Copyright KeyPoint Partners, LLC, Retailer Expansion by Square Feet: # Walmart Neighborhood (+,) # Subway/Sleepy s (+) Study Area: Cities & Towns in the Study Area: Northeast: East Windsor, Ellington, Enfield, South Windsor Northwest: Avon, Bloomfield, Canton, East Granby, Farmington, Plainville, Simsbury, Suffield, West Hartford, Windsor, Windsor Locks City of Hartford: Hartford Southeast: Bolton, East Hartford, Glastonbury, Manchester, Vernon Southwest: Berlin, New Britain, Newington, Rocky Hill, Wethersfield

3 KeyPoint Partners, LLC Custom Retail Market Research The KeyPoint Report Greater Hartford, CT Figure : Summary At the end of July, the total retail inventory was comprised of. million square feet, a modest decline of.% from a year ago, equating to a drop of just over, square feet. The net decline resulted mainly from conversions from retail to non-retail use. Category Total Market Size (Square Feet) Total Number of Retail Properties Total Number of Retail Establishments Total Market Vacancy (Square Feet) Vacancy Rate Total Retail Space Per Capita,,,,,,.%.,,,,,,.%. % change -.% -.% -.% -.% -.% Vacancy & Absorption: Vacant retail space within Greater Hartford stood at. million square feet, refl ecting a vacancy rate of.%. This refl ects a signifi cant decrease in vacancy compared to the prior year level of. million square feet and a vacancy rate of.%. However, the increase in vacancy rates in some size classifi cations refl ects the jagged retail recovery that Greater Hartford is experiencing, although the notable decline in vacant square footage and modest change in inventory resulted in a net absorption of, square feet. Figure : Submarkets The City of Hartford continues to have the highest vacancy rate in the region at.% but the fi gure is down considerably from the.% level reported last year. The Northwest and Southeast submarkets lead the region with. million and. million square feet, respectively. The Northwest also has the lowest vacancy rate at.%, the only submarket in single digits. Submarket City of Hartford Northeast Northwest Southeast Southwest Greater Hartford SF,,,,,,,,,,,, SF,,,,,,,,,,,, Vacancy.%.%.%.%.%.%.% Vacancy.%.%.%.%.%.% Observations: Special Feature: This year s Report, in addition to our usual detailed summary of market activity for the last year, includes a special feature: an historical perspective which presents a profi le of the market from the relatively good times beginning in, through the Great Recession, to the present. Supply, Occupancy, & Absorption (Figure, Page ): Greater Hartford is still taking baby steps in its attempt to recover from the Great Recession. Total retail space in Greater Hartford included. million square feet at the end of the study, a small decrease from the. million square feet reported last year. Some spaces were converted to non-retail uses or demolished, contributing to the negligible decline in inventory this year. The most salient point regarding total inventory in the region is that there was virtually no net change. New retail construction continued to move at a snail s pace as most developers remained on the sidelines. The better news is that following a few up-and-down years, the vacancy rate in Greater Hartford this year fell to.%, its lowest level since, denoting a signifi cant drop from the.% vacancy rate in. This equates to a reduction in the level of vacant space of, square feet. Still, occupancy levels need to improve substantially before we declare a healthy retail climate in the region. Regional Submarkets (Figure, Page ): Among the Greater Hartford submarkets, not surprisingly, the City of Hartford continues to have the highest vacancy rate in the region at.%. However, that rate is down considerably from the.% level reported last year. At the same time, it is the smallest retail sector, consisting of. million square feet, and has the least vacancy with, square feet, lessening the concern associated with the overall health of the region. The Northwest and Southeast submarkets lead the region with. million and. million square feet, respectively. The Northwest also has the lowest vacancy rate at.%, the only submarket in single digits, which is a bit disconcerting. It raises the possibility that Greater Hartford could be an overstored market, based on its current retail space per capita of. square feet. The data suggests so relative to our Eastern Massachusetts region, with its comparable ratio of.. The current space per capita level in Southern New Hampshire of. is not a valid comparison since the ratio is substantially elevated by its tax-free attraction of neighboring Massachusetts shoppers. Manchester retains number rank in retail supply Individual Town Rankings (Figure, Page ): The top ten rankings among Greater Hartford retail markets remain the same in with only one change: West Hartford jumped over Enfi eld to take second place this year - although a distant second behind Manchester, which continues to dominate all communities with. million square feet of retail space. West Hartford ended the year at. million square feet. Among towns with at least, square feet of retail space, the highest vacancy rates are found in East Hartford and Berlin, ranked again in fi rst and second place at.% and.% respectively. Both rates are disconcertingly higher than last year. In East Hartford, two Rite Aid locations, a Family Dollar, and a, square foot independent pet store were added to the list of vacant units, and Berlin lost an independent pharmacy as well as a number of less signifi cant retailers. New Britain and East Windsor also ended the year above %. Hartford ranked fi fth at.%, declining basis points. Among towns with the lowest vacancy rate, Wethersfi eld leaped from third to fi rst, coming in at.% in ; occupancy in Wethersfi eld improved largely because of a new Panera unit, in addition to other small store openings. The abutting town of Rocky Hill fi nished second at.%, inching ahead of Enfi eld, which ended at.%. No warranty or representation, expressed or implied, is made as to the accuracy of the information contained herein, and same is submitted subject to errors, omissions, change in price, rental or other conditions, or withdrawal without notice. Copyright KeyPoint Partners, LLC Continued on page

4 KeyPoint Partners, LLC Custom Retail Market Research The KeyPoint Report Greater Hartford, CT Figure : City & Town Rankings Manchester continues to dominate all communities with. million square feet of retail space. West Hartford ended the year ranked second with. million square feet. Among towns with at least, square feet of retail space, the highest vacancy rates are found in East Hartford and Berlin, ranked again in fi rst and second place at.% and.%, respectively. Among towns with the lowest vacancy rate, Wethersfi eld was fi rst at.% in and the abutting town of Rocky Hill fi nished second at.%. Most Space SF Lowest Vacancy* Prior Rank Highest Vacancy* Prior Rank Manchester West Hartford Enfi eld Hartford Newington Farmington East Hartford New Britain Vernon Bloomfi eld,,,,,,,,,,,,,,,,,,,, *For cities and towns with, square feet or more of retail space. Municipalities not meeting this threshold in prior year are denoted by N. Figure : Market Composition & Vacancy by Tenant Size Vacancy rates within all tenant size classifi cations less than, square feet, which comprise.% of the retail space in the region, remain at double-digit levels. Vacancy in stores up to, square feet inched up from.% to.% during the year. Greater Hartford showed marked improvement in the store size ranges from, to, square feet but trended higher in the,-, square foot range. Tenant Size Market Share Vacancy Rate Vacancy Rate Less Than, SF, to, SF, to, SF, to, SF, to, SF, to, SF, to, SF, SF and above Wethersfi eld Rocky Hill Enfi eld Glastonbury West Hartford Canton Farmington Newington Plainville Windsor.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.% East Hartford Berlin New Britain East Windsor Hartford Avon Vernon South Windsor Bloomfi eld Manchester.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.% Observations Continued Vacancy by Tenant Size (Figure, Page ): While vacancy showed improvement in, it was not all good news. Vacancy rates within all tenant size classifi cations less than, square feet remain at double-digit levels. Most troubling is the category of stores up to, square feet, in which vacancy inched up from.% to.% during the year. Greater Hartford did show marked improvement in the store size ranges from, to, square feet, but trended higher in the,-, square foot range. Walmart Neighborhood Market led expansion Among the more prominent names closing,-, square foot stores were Rite Aid (), Planet Fitness, Petco, Restoration Hardware, and Nike. In some cases, tenants relocated to smaller units. Retailer Activity (Figure, Page ): Walmart Neighborhood Market, with its fi rst entry into the Greater Hartford market, a, square foot store in West Hartford, took the top spot for incremental space in the region. Kohl s took second place with the addition of its new, square foot store in Berlin, its fi rst smaller prototype in the region. LA Fitness opened a, square foot health club in Farmington, good enough to rank third. Sleepy s and Subway tied for the lead in the number of new stores in Greater Hartford with six apiece. Boost Mobile and Chipotle each added four stores. Gold s Gym closed two Enfi eld locations, reducing its retail space by, square feet, the highest level of contraction by square footage in the region. TJ Maxx and Sears Hardware were the only other retailers to decline by more than, square feet. No warranty or representation, expressed or implied, is made as to the accuracy of the information contained herein, and same is submitted subject to errors, omissions, change in price, rental or other conditions, or withdrawal without notice. Copyright KeyPoint Partners, LLC Continued on page

5 KeyPoint Partners, LLC Custom Retail Market Research The KeyPoint Report Greater Hartford, CT Figure : Retailer Activity The region encompasses more than, retail establishments, representing approximately, unique retailers. The following summarizes these by the degree of expansion and contraction. Expansion by SF Retailer New Total Walmart Neighborhood Market Kohl s LA Fitness Sleepy s Mattresses Club Fitness DSW Shoe Warehouse HomeGoods Spotlight Theatre Tractor Supply Panera Bread Expansion by # Stores Sleepy s Mattresses Subway Sandwiches & Salads Boost Mobile Chipotle Mexican Grill Panera Bread Starbucks Coffee First Niagara Bank Dunkin Donuts Verizon Wireless,,,,,,,,,, Retailer New Total NOTE: All fig gures shown above are NET,,,,,,,,,, Contraction by SF Retailer Contracted Total Gold s Gym T J Maxx Sears Hardware Stores Better Bedding Offi ce Depot Hometown Buffet Planet Fitness Court House Plus Fashion Bug Rite Aid Pharmacy Contraction by # Stores,,,,,,,,,,,,,,,, Retailer Contracted Total Better Bedding Midas Muffler Liberty Tax Service Gold s Gym Metro PCS GameStop Ganache Sun City Hometown Buffet Figure : Retail Category Activity Tenants in GRIID TM represent nearly unique business classifi cations; we have aggregated similar business types into larger retail categories, and summarized these by the degree of expansion and contraction. Expansion by SF Category New Total Food Stores - Grocery Eating Places Beer, Wine & Liquor Stores Optical Goods Stores Beauty Salons and Services Beauty Supplies and Cosmetics Tobacco Stores and Stands Medical & Dental Services Musical Instrument Stores Food Stores - Dairy Products Expansion by # Stores Category New Total Food Stores - Grocery Health & Fitness Services Beauty Salons and Services Food Stores - Dairy Products Eating Places Tobacco Stores and Stands Beauty Supplies and Cosmetics Telephone Equipment Sporting Goods,,,,,,,,,, Contraction by SF Contraction by # Stores Observations Continued Better Bedding exited the region by vacating four stores which were acquired by Sleepy s. Midas Muffl er and Liberty Tax Service each closed three stores, while several retailers closed two units. Retail Categories (Figure, Page ): The top three retail categories in incremental square footage were all food and beverage related. Grocery Stores led the way with, square feet of net new space. Walmart Neighborhood Market contributed the bulk of that space. Eating Places was next as restaurants continued to ride the recovery tide, followed by Beer, Wine, and Liquor stores. Food-Grocery also led in net new stores, increasing by locations. Health & Fitness Services and Beauty Salons and Services tied for second, netting seven stores. Furniture stores lost the most space, declining, square feet, followed by Offi ce & Stationery Supplies. Building Materials ended in third place but led all categories in store contraction, losing nine stores. Jewelry Stores also decreased by nine units, followed by Variety Stores with a reduction of seven locations. Conclusions: As noted, Greater Hartford is taking small steps toward recovery. Occupancy is up, with the vacancy rate at its lowest level in years. As they have in other regions, food and beverage related categories - Grocery Stores and Eating Places - led the way in expansion, perhaps an indication that, particularly regarding restaurants, consumers are spending at least a little more freely. Although developers remain quiet, with virtually no new construction, it s not impossible that if an upward trend continues we ll see movement in that area. Overall, then, we can say with some caution that in Greater Hartford, a return to stability may be in sight. Bob Sheehan Vice President of Research BSheehan@KeyPointPartners.com No warranty or representation, expressed or implied, is made as to the accuracy of the information contained herein, and same is submitted subject to errors, omissions, change in price, rental or other conditions, or withdrawal without notice. Copyright KeyPoint Partners, LLC,,,,,,,,,,,,,, Category Contracted Total Furniture Stores Offi ce & Stationery Supplies Building Materials Department Stores Hardware Jewelry Lawn & Garden Supply Gift, Novelty, Souvenir Shops Banks and Savings Institutions Apparel - Family Building Materials Jewelry Variety Stores Computer & Software Stores Shoe Stores Furniture Stores Gift, Novelty and Souvenir Shops Lawn & Garden Supply Offi ce & Stationery Supplies Paint, Glass & Wallpaper,,,,,,,,,,,,,,,,,,,,,,,, Category Contracted Total

6 Special Section: A Ten-Year Market History Total Market Size SF Vacancy Rate Decade of Change: Recovery, Recession, Recovery,,,,,,.%.%.% In our KeyPoint Reports, we seek to create an annual snapshot of where we are right now as a region and as an industry. Given the turbulent times we ve been through since the beginning of the decade, we thought it would be instructive this year to look at where we ve been.,,,,,,,,,,.%.%.%.%.% We examined activity in several key areas by reviewing KeyPoint Reports for Southern New Hampshire from, when retail activity and the general economy were relatively robust, through the diffi cult times that started in and culminated in the recession, to the glimmerings of recovery we noted in this year s study. The tables in this section were compiled from GRIID data in KeyPoint Reports from through. During the past ten years, Greater Hartford has netted an additional. mil- lion square feet of retail space, a relatively modest increase over a relatively long term. In fact, beginning in, there has been a general fl attening in market growth, clearly refl ecting the hiatus that retail developers have been enduring in recent years as the region recovers from the Great Recession. Compared to other regions we study, Greater Hartford has exhibited the high- est vacancy rates. The City of Hartford had been a disproportionate contributor with respect to unoccupied space in the region but now we see some of the suburban retail hubs experiencing double-digit vacancy as well. It must be noted, however, that beginning in, vacancy rates have trended down. Total Retail Establishments Total Retail Properties Net Absorption,,,,,,,,,,,, -, -,, -,, Although there has been an increase in total retail inventory of.% during the past ten years, there has been a gradual decrease in both the number of retail properties and the number of retail establishments. This largely resulted from a decrease in retail space of units under, square feet from % to % and an increase in retail space of stores larger than, square feet from % to %. The -year change in the square footage of stores in the,-, square foot range was negligible. The trend in net absorption in Greater Hartford since has been erratic amid vast fl uctuations in occupancy and development activity. However, negative absorption occurred only in. Total Retail Square Footage Per Capita :. Total Retail Square Footage Per Capita :. Copyright KeyPoint Partners, LLC No warranty or representation, expressed or implied, is made as to the accuracy of the information contained herein, and same is submitted subject to errors, omissions, change in price, rental or other conditions, or withdrawal without notice.

7 The KeyPoint Report KEYPOINT PARTNERS, LLC, BURLINGTON, MA On the cover: Downtown Hartford, CT Methodology: The data for this study includes all public retail space in the study area except for a few exclusions discussed below. The information in our database has been compiled from a variety of sources. A member of KeyPoint Partners research staff has visited each store/shopping center in order to verify and/ or acquire the necessary information. The area for each space is obtained from sources deemed reliable, such as the owner or leasing agent, is paced off by our researchers or otherwise measured. Retail categories and SIC Codes are obtained from a leading business database, InfoUSA, when available. Each entry is fi eld verifi ed or determined by our research staff. In general, public retail space is characterized as all space currently, or most recently, utilized in selling or renting retail goods and/or services to the public. There are no size restrictions for stores or shopping centers. Certain retail classifi cations are excluded, including automobile dealerships, gasoline service stations, automobile repair shops and quasi-retail services, such as stock brokers, real estate agents, insurance agents, etc., unless such establishments are located in shopping centers containing typical retail tenants. In some cases wholesale or quasi-retail establishments have been included in the database if information from InfoUSA or our fi eld research indicates that goods and/or services are being offered to the public from the location. Some establishments available to the public but typically serving primarily the needs of other users of a facility, such as a cafeteria in an offi ce building or a beauty salon located inside a hotel, may also be excluded. Demographic information used in this study was provided by Scan/US. Custom Retail Market Research KeyPoint Partners provides retail research consulting services ranging from preliminary desktop assessments to comprehensive evaluations which integrate fi eld investigation and quantitative analysis for a variety of retail location and store types. The heart of our research superiority is our powerful, proprietary GRIID. Is there a custom retail market research project we can do for you? Call Bob Sheehan, Vice President of Research at.., or him at BSheehan@KeyPointPartners.com. Read our daily news blog, the KeyPoint Retail RoundUp; our monthly KeyPoints retail newsletter; and our annual KeyPoint Reports at KeyPointPartners.com Property Management Retail Leasing & Tenant Representation Investment Sales Construction Research & Consulting KeyPoint Partners, LLC One Burlington Woods Drive, Burlington, MA Tel.. Fax.. KeyPointPartners.com Blog.KeyPointPartners.com