CHARLOTTESVILLE VACANCIES JULY 2010 Downtown Mall: Throughout the United States, vacancies at neighborhood shopping centers have not experienced notable improvement over the past year. According to Reis, a commercial real estate performance research firm, the national vacancy rate has increased from 10.8% in the first quarter of 2010 to a 29 year high of 10.9% in the second quarter. However, the City of Charlottesville s Downtown Mall (as well as the City s other shopping centers) has fared better than average with a downtown vacancy rate of 7.8% (15 vacancies). This rate is a decrease from the January 2010 downtown rate of 9.0% (18 vacancies). Additionally, Charlottesville has successfully decreased its rate to a level that is closer to vacancy rates of other pedestrian malls in peer cities such as Boulder, Colorado and Burlington, Vermont. Please note that the current rate (7.8%) is not considerably lower than the January 2010 rate (9.0%) due to the fact that approximately five of the empty buildings that have been occupied in recent months were not counted as vacant when the last study was conducted because they had not been empty for more than two months (see vacancy criteria on Page 3). In addition to this, there has been an increase in the number of vacant storefronts on the south side of Market Street, and this has in turn impacted the Mall s overall rate. The Main Street vacancy rate however has decreased over 3% from 9.0% in January to 5.9% in July. Table 1.1 below provides a count of the vacant storefronts on the Mall, as well as vacancy rates in January 2010 and July 2010. TABLE 1.1 DOWNTOWN MALL VACANCIES & VACANCY RATE ESTIMATES JANUARY 2010 & JULY 2010 Vacancies Vacancy Rate Area Total # of Stores Jan 10 Jul 10 Jan 10 Jul 10 Main Street & Side Streets 152 13 9 9.0% 5.9% South Side of Market Street 21 1 3 5.0% 14.3% North Side of Water Street 19 4 3 21.0% 15.8% Total 192 18 15 9.0% 7.8% * Does not include storefronts that have been vacant for less than 2 months, storefronts that are vacant due to renovations or storefronts with pending leases. +Number of storefronts used to calculate the vacancy rate was 192. Based on the vacancy criteria used (see Page 3), 15 storefronts on the Downtown Mall were deemed vacant as compared to 18 when the study was done six months ago. Since the survey in January, there have been four new vacancies on the Mall, and their vacancy lengths range from two months to three months (just long enough to be considered vacant). These include: 115 4 th Street NE, 113 5 th Street SE, 105 1 st Street SE, and 204 East Market Street. Due to the recent decrease in downtown storefront vacancies however, these locations will probably become occupied in the near future. The remaining 11 vacancies have been empty for significantly longer. Two have been vacant from six months to a year, including 101 East Main Street and 206 East Market Street. Seven have been vacant for approximately a year to a year and a half, including 507 East Water Street, 509 East Water Street, 215 West Water Street, 300 East Market Street, 106 5 th Street SE, 400 East Main Street, and 107 East Main Street. The last two, 111 and 422 East Main Street have been vacant for approximately three and six years, respectively. The former A&N building located at 422 East Main Street did serve temporarily as Obama Campaign Headquarters (July 08 to November 08) but for the most part has been vacant over the past six years. 1
For comparison purposes, Charts 1.1 and 1.2 depict both the Mall vacancy rates by streett (i.e., Main Street and side streets, the south side of Market Street, and the north side of Water Street) and the overall downtown vacancy rates for July 2008, January 2009, July 2009, January 2010, and July 2010. 1.1 Mall Vacancy Rate by Street 07/2008 07/2010 1.2 Overall Mall Vacancy Rate 07/ /2008 07/2010 Under Renovation/Construction There are four ground level storefrontss on the Downtown Mall that are presently vacant but were not counted for the purposes of this survey (see Page 5). These buildings are currently under renovation or construction with plans of occupancy in the near future. More specifically, the Downtown Mall looks forward to the renovations of 420 East Main Street (planned for Bend), 219 West Main Streett (planned for Sweet Frog Yogurt), and 407 East Water Street. It is evident that many of these storefronts will be welcoming new businesses by the end of this summer. The Landmark Hotel project (110 East Main Street) is stalled in the construction process and final completion/occupancy are not known at this time. Newly Vacant Two buildings on the Mall have been unoccupied for less than two months, and thereforee were not counted as vacant by this survey (see Page 5). These include 114 East Main Street (formerly The Needle Lady, which moved across the street) and 110 5 th Street SE (formerly Salad Creations). Since the past report, the Downtown Mall also welcomed the renovation and opening of 225 East Main Street (Rock, Paper, Scissors), 112 West Main Street, Suite 4 (The Downtown Hotdog Company), 418 East Main Streett (Chroma), 106 East Main Street ( Bittersweet), 425 East Main Street (Great Scott s Popcorn), 508 East Main Street (Utopia Gifts), 425 East Main Street (Contemporary Arts Company), and 313 East Main Street (The Blue Ridge Eco Shop). Other Charlottesvillee Shopping Centers: The July 2009 survey broadened its scope in order to better understand Charlottesville s storefront vacancy rates. Therefore, in addition to the Downtown Mall, vacancy rates were calculated for The Corner, Seminole Square, Barrack s Road, and Preston Plaza. The most recent study suggests that rates did not remain consistent for all areas of Charlottesville, as some experienced a decrease in vacancies, while others faced a rise in these rates. In comparison to January 2010, the vacancy rates have remained constant for Preston Plaza. However, Barrack s Road vacancy rose from zero to one empty storefront, and Seminole Square has seen increased vacancy from five to six storefronts. Stores that are under renovation or expected to be opening soon were not included when calculating the vacancy rate. Nonetheless, both The Corner and the Downtown Mall have experienced a decrease in their vacancy rates. Table 1.2 below provides a count of the vacant storefronts and vacancy rates in various shopping centers and compares numbers from these shopping centers to the Downtown Mall. 2
TABLE 1.2 CHARLOTTESVILLE SHOPPING CENTER VACANCIES AND VACANCY RATE ESTIMATES JANUARY 2010 & JULY 2010 Area Total # of Stores Vacancies Vacancy Rate Jan 10 Jul 10 Jan 10 Jul 10 Downtown Mall 192 18 15 9.4% 7.8% Barrack's Road 88 0 1 0.0% 1.1% The Corner 59 3 1 5.1% 1.7% Preston Plaza 9 0 0 0.0% 0.0% Seminole Square 53 5 6 9.4% 11.3% Total 401 26 23 6.5% 5.7% * Does not include storefronts that have been vacant for less than 2 months, storefronts that are vacant due to renovations, or storefronts with pending leases. +Number of storefronts used to calculate the vacancy rate was 401. Vacancy rates vary across Charlottesville. For example, Preston Plaza had no ground level vacancies except for the space that The Eco Shop recently left for its new shop Downtown. Since this vacancy is new and has only formed within the past month, it was not counted in this vacancy report. Moreover, one store is currently vacant at the Barrack s Road Shopping Center and another (previously Boston Market) is in the process of being renovated into Brixx: Wood Fired Pizza. Seminole Square had a small increase in its vacancy rate due to an additional storefront that is not in use. On the other hand, The Corner has greatly improved since the survey was last done in January. Even though Catwalk Clothing closed, an Irish Pub called Trinity, an Asian fusion restaurant called L7, and an outdoor inspired restaurant called The Backyard have opened since the last vacancy report. Furthermore, renovations are still being done on Dunkin Doughnuts and Semolina, which are expected to open within a few months. Overall, the City of Charlottesville has decreased its vacancy rate over the past quarter by 0.74%, which is an improvement to City and the local economy. As long as future vacancy studies prove to be just as successful, Charlottesville is sure to continuously thrive as a dynamic and prosperous city. The following criteria were used to determine the vacancy rate in Charlottesville shopping centers: Only ground level storefronts were counted. Definitions: For the purposes of this survey, the Downtown Mall was defined as the eight block pedestrian mall, including storefronts on Main Street, the side streets, the south side of East Market Street and the north side of Water Street. The Corner was defined as all commercial establishments on the seven blocks between Madison Lane (starting at Bank of America) and 12 ½ Street Southwest (Red Roof Inn), including side streets such as Elliewood Avenue. Seminole Square, Barracks Road, and Preston Plaza were each defined as the group of commercial buildings that self identified as a member of the shopping center. Storefronts that have been unoccupied for 2 or more months were considered vacant. Storefronts that are unoccupied due to renovations were not considered vacant if there are plans for occupancy once the renovations are complete. Storefronts that have been unoccupied for less than 2 months were not considered vacant to allow for normal property use transitions. Storefronts that are vacant but have a lease pending/approved were not considered vacant. For a visual depiction of the vacant buildings on the Downtown Mall, please refer to the attachment, Vacant Downtown Mall Storefronts & Planned Occupancy July 2010. 3
Downtown Mall Vacant Storefronts July 2010* 115 4 th Street NE Est Vac: 3 mo; Sq Ft: ** 111 E Main St Est Vac: 3+ yrs; Sq Ft: 2700 101 E Main St Est Vac: 9 mo; Sq Ft: 2000 422 E Main St Est Vac: 6+ yrs; Sq Ft: 2400 107 E Main St Est Vac: 1+ yr; Sq Ft: 2000 105 1st St SE Est Vac: 3 mo; Sq Ft: 400 E Main St Est Vac: 1+ yr; Sq Ft: 2500 106 5 th St SE Est Vac: 1.5 yrs; Sq Ft: 1100 113 5 th St SE Est Vac: 3 mo; Sq Ft: 1000 300 E Market St Est Vac: 1.5 yrs; Sq Ft:1400 509 E Water St Est Vac:1.5 yr; Sq Ft: 958 507 E Water St Est Vac: 1 yr; Sq Ft: 1075 215 W Water St Est Vac: 1.5 yrs; Sq Ft: 4911 204 E Market St Est Vac: 3 mo; Sq Ft: 1100 206 E Market St Est Vac: 9 mo; Sq Ft: 1100 * Includes all ground level storefronts on the eight-block pedestrian mall (Main Street, side streets, south side of Market Street and north side of Water Street). ** Est Vac is defined as Estimated Time of Vacancy, and Sq Ft is defined as Square Feet. 4
Downtown Mall: Planned Occupancy July 2010* Under Renovation 110 E Main St Landmark Hotel 407 E Water 420 E Main St Bend (August 2010) 219 W Main St Sweet Frog Yogurt (August 2010) 114 E Main St 110 5 th Street SE New Since Last Vacancy Study New Vacancies 225 E Main St Rock, Paper, Scissors 425 E Main St Great Scott s Popcorn 112 W Main St Suite 4 The Downtown Hotdog Company 508 E Main St Utopia Gifts 418 E Main St Chroma 425 E Main St Contemporary Arts Co. 106 E Main St Bittersweet 313 E Main St The Blue Ridge Eco Shop * Buildings under renovation, under lease, or that have been vacant for less than 2 months were not counted as vacant by this survey. 5