Retail Market Report. West Michigan Q4 - Year End Wisinski of West Michigan. Office Industrial Retail Multi-Family

Transcription

1 Retail Market Report West Michigan Q4 - Year End 2017 Wisinski of West Michigan 100 Grandville Ave SW Suite 100 Grand Rapids, MI *Also serving the Kalamazoo & Southwest Michigan areas from our Kalamazoo office* Office Industrial Retail Multi-Family

2 GRAND RAPIDS The Market Total Businesses Median Age 1,058,079 Total Population 36,247 $71,795 Average Household Income % Unemployment Rate Class A Retail Trending in the West Retail Michigan Market Market Trends 2017 was another fantastic year for retail stores. While the year started with media hype surrounding some by-gone era stores like Sears and Kmart, the trend for West Michigan retail from Grand Rapids to Kalamazoo to the Lakeshore has been positive steady growth and the addition of new stores. Our West Michigan economy is so strong, the vacant stores left by MC Sporting Goods and Family Christian stores were repurposed very quickly. MC s flagship store on 28th SE will now be our area s first Ashley Furniture Store. Woodland Mall continues to solidify its strength as the area s premier mall by eliminating the Sears location and making way for the area s first Von Maur Department Store and other in-mall and outlot users. Finding class A retail space in the primary corridors is very difficult. Several new retail centers are being built along the East Beltline north of Knapp St. While the face of retail is changing, this new construction combined with other hot neighborhood areas like the lower west side, Wealthy Street and the Michigan Street corridor, continue to demonstrate that in West Michigan there are far more retailers opening stores or expanding their footprint size than closing locations. Around our area, we continue to pursue additional locations for Petco, Tim Hortons, and Arby s. The Fast Casual dining classification continues to show strong growth with no signs of slowing down. Hudsonville will see the opening of a new Meijer store in Investment sale activity also remained strong in the West Michigan area, with several notable retail centers in West Michigan transacting. However, as with retailers and consumers, investors appetite for retail is changing. Grocery anchored centers, smaller neighborhood centers, and centers with strong tenant rosters are trading, as these tend to be more insulated from online competition. Said Cameron Timmer, Investment Sales Specialist 2017 was an amazing year for our Retail Group here at NAI, and we begin 2018 with strong optimism that this will be another strong year for retail real estate sales and leasing. Please let any member of our team know how we can help you. - Rod Alderink Partner, Associate Broker Grand Rapids-Wyoming, MI Metropolitan Statistical Data. Source: U.S. Census Bureau Cover Feature: 2627 E. Betline Ave. SE

3 Wisinski of West Michigan Commercial Real Estate Services, Worldwide. SOLD SOLD SOLD Retail Sales & Leases Q Byron Center Ave. SW 23,931 SF Investment Sale LEASED West River Valley Dr. 8,027 SF Investment Sale LEASED Breton Rd. SE 31,002 SF Investment Sale LEASED 2627 Rochester Rd. 14,356 SF Tenant: Petco 2365 East Betline Ave. NE 1,300 SF Tenant: Sara s Sweets Bakery th St. SW, Suite 4 1,265 SF Tenant: Boost Mobile Market Activity On December 4th, MVP Sports Clubs opened a new venture in Jenison. 4G Athletic is a new concept, unlike the facilities and activities typically associated with MVP Sports Clubs. Housed in an 11,000 square-foot building on Port Sheldon St., 4G Athletic will be a boutique studio-based facility. The building was ideal because of its openness, which allowed MVP Sports Clubs to incorporate four studios into one. Sara s Sweets Bakery, a family-owned business, just signed a 10-year lease for a 1,300 squarefoot space in a new development at 2365 E. Beltline Ave. NE. The move was needed to accomodate the business s growth. Bill Tyson, of NAI Wisinski of West Michigan assisted Sara s Sweets with the lease deal, while Doug Taatjes and Hillary Taatjes Woznick, also of NAI Wisinski of West Michigan, are handling the leasing for the remaining spaces in the new retail center. Canopy by Hilton announced plans to build a new, 164 room hotel in downtown Grand Rapids. They will partner with Lodgco Hospitality and Olsen Loeks Development. Canopy by Hilton is scheduled to open in late The project will occupy city parking lots 4 and 5, south of Van Andel Arena.

4 West Michigan Retail Submarket Statistics 2017 Q4 Retail Snapshot Lakeshore Submarket Total RBA Retail Statistical Changes Year-over-Year and Quarter-over-Quarter 4Q16 vs. 4Q17 Vacant Available SF Vacancy Rate Total Average NNN Rate ($/SF/Yr) Total Net Absorption (SF) Community 1,508,212 42, % $8.08 1,383 Neighborhood 1,508,212 42, % $8.08 1,383 Strip 1,036,125 77, % $ ,736 Total 4,052, , % $8.97 5,502 Northeast Community 445, , % $ Neighborhood 1,115,603 96, % $8.26-3,693 Strip 682,609 24, % $ ,327 Total 2,243, , % $8.15 2,634 Northwest Community 473,200 12, % $ ,975 Neighborhood 723,807 29, % $ Strip 564,919 37, % $ ,913 Total 1,761,926 80, % $ ,062 Southeast Community 760,897 4, % $ Neighborhood 2,681, , % $ ,216 Strip 1,744, , % $ ,229 Total 5,186, , % $ ,445 Southwest Community 1,658, , % $ ,149 Neighborhood 960,605 39, % $9.48 1,640 Strip 981,896 66, % $ ,678 Total 3,600, , % $ ,187 Overall Total 16,845,574 1,268, % $ ,668 NET ABSORPTION 3Q17 vs. 4Q17 VACANCY RATE CONSTRUCTION ASKING RATES NET ABSORPTION VACANCY RATE CONSTRUCTION ASKING RATES *Disclaimer: Historical data figures are subject to change based upon the timing of when CoStar receives market information. NAIWWM uses the numbers available at the time each quarterly report is published.

5 Retail Total Market Report Interpretation Vacancy rates for Neighborhood and Strip have both decreased from Q We see the largest increase in vacancy rates in the Community category from 10.3% in Q to 12.8% this quarter. 2 2 Interpretation The rental rates for Neighborhood and Strip have decreased from Q We see the greatest change in rental rates for the Strip category, from $11.14 in Q to $11.96 this quarter. 2

6 Methodology: The retail market report includes community, neighborhood, and strip retail buildings within each of the defined submarkets. For definition of product type, please see below. Methodology Definitions Submarket Map Northwest Northeast Lakeshore Southwest Southeast 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 retail, a triple net rate is requested. RBA The total square footage of a building that can be occupied by, or assigned to a tenant for the purpose of determining a tenant s rental obligation. Deliveries Buildings that have their certificate of occupancy and are allowed to be moved into by the tenant/ purchaser. Vacancy Rate All physically unoccupied lease space, either direct or sublease. SF/PSF Square foot/per square foot, used as a unit of measurement. Community Center A shopping center development that has a total square footage between 10, ,000 SF. Generally will have 2-3 large anchored tenants, but not department store anchors. Community Center typically offers a wider range of apparel and other soft goods than the Neighborhood Center. Among the more common anchors are supermarkets and super drugstores. Strip Center A strip center is an attached row of stores or service outlets managed as a coherent retail entity, with on-site parking usually located in front of the stores. Open canopies may connect the storefronts, but a strip center does not have enclosed walkways linking the stores. Neighborhood Center Provides for the sale of convenience goods (food, drugs, etc) and personal services (laundry, dry cleaning, etc.)

7 NAI Wisinski of West Michigan At a Glance Meet Our Team Local Knowledge. Global Reach. Achieve More. NAI Wisinski of West Michigan was formed in the spring of 2011 when NAI West Michigan merged with The Wisinski Group. This merger brought together two successful, reputable companies to form what is now the largest independently owned commercial real estate firm in West Michigan. Our focus is simple: building client relationships for life. We do this by utilizing the rich diversity of skills and specialties of our agents and staff, actively listening to our clients, offering market appropriate advice, providing access to the industry s most current and proven technologies, and delivering the best possible service to each and every client. NAI Wisinski of West Michigan is headquartered in Grand Rapids, MI and maintains a second location in Kalamazoo, MI. Our company provides all facets of commercial real estate services, including brokerage and property management, throughout the entire West Michigan region. Through our relationship with NAI Global, we have access to over 400 NAI affiliate offices throughout the world. NAI Wisinski of West Michigan: Local Knowledge, Global Reach, Achieve More. Retail Specialists Rod Alderink roda@naiwwm.com Dane Davis daned@naiwwm.com Dick Jasinski dickj@naiwwm.com Scott Nurski scottn@naiwwm.com Joshua Jacobs joshuaj@naiwwm.com Doug Taatjes, CCIM, SIOR dougt@naiwwm.com Hillary Taatjes-Woznick hillaryt@naiwwm.com Tim Platt timp@naiwwm.com Gary Steere garys@naiwwm.com Russ Bono russb@naiwwm.com Jeremy Veenstra jeremyv@naiwwm.com Marc Tourangeau, MBA marct@naiwwm.com Stanley Wisinski III, SIOR, CCIM sjw@naiwwm.com Bill Tyson billt@naiwwm.com Todd Leinberger toddl@naiwwm.com Cameron Timmer cameront@naiwwm.com

8 nai-wisinski-of-west-michigan Wisinski of West Michigan 100 Grandville Ave SW Suite 100 Grand Rapids, MI Office Industrial Retail Multi-Family