jump to navigation

Market Review – Retail 4th Qtr 2012 January 17, 2013

Posted by Erik Swanson in Development, Research/Data, Retail News.
add a comment

The retail market improved in 2012 with positive absorption, some limited new construction, and a very strong investment climate for core assets. There has even been more interest in B and C quality retail investments.

In a nutshell the forecast is:

  • Vacancy Down
  • Construction – Up (slightly)
  • Rents – Flat (argh!)
  • Absorption – Up

Loopnet: Regional Retail Property Asking Price Index – Sale Trends January 11, 2013

Posted by Erik Swanson in Research/Data, Retail News, Retail Sales Comps, Uncategorized.
add a comment

Sept. 12 vs. 3 mo. prior Y-O-Y
State $126.25 -6.8% -15.4%
Metro $166.79 -10.4% -18.0%
County $194.97 -10.9% -16.7%
City $182.17 -13.6% -24.9%

The average asking price for retail properties in the metro area was $166.79 per square foot for the month. This is down 18% from the previous year, and down 11.8% from the end of the second quarter of 2012. Asking prices for retail properties have fallen to a new three-year low this month. The previous three-year low was $181.69, set last month

Seattle Area Retail Vacancy and Rental Rates December 1, 2011

Posted by Erik Swanson in Research/Data, Retail News.
add a comment

Officespace.com put together an interesting chart showing the vacancy and rental rates for nearly 2400 retail buildings in the Seattle MSA.  There’s lots of space still available…almost 6.2 million square feet.  Tacoma’s vacancy is at a whopping 14% and the Northend (Shoreline, Lynnwood, Everett) is over 10%. Not surprisingly the urban downtown areas have fared much better with vacancy rate of around 7% on average.  

The chart shows an average rental rate of $22.48 per square foot per year. I have to believe those are asking rates based on listings and not executed lease rates. Although there has been some increase in leasing activity there are still relatively few tenants in the market. With so much available space to choose from, tenants still have significant leverage in negotiations with landlords.

Kidder Mathews Bolsters Retail Team September 29, 2011

Posted by Erik Swanson in Research/Data, Retail News, Uncategorized.
add a comment

Kidder Mathews has strengthened its retail group in recent weeks with the addition of veteran retail specialists Rune Harkestad, Tom Dillon, Eric and Brad Bissell, and Brian Engleking.

Eric Bissell spent the majority of his 28-year career at CB Commercial and First Western Properties, but was most recently at Cascade Commercial/Wallace Properties.  Brad was also at Cascade and Wallace and will partner with Eric. They will specialized in tenant rep, land acquisition, and investment sales.

Tom Dillion is a 40 year veteran of the industry working on both the client and broker sides of the business. Tom was most recently with First Western Properties. Over the years Tom has represented national tenants such as Car Quest, Cold Stone, Godfathers, Jack-in-the-Box and Radio Shack.

Rune Harkestad is 15 year real estate veteran. He  began working as a commercial retail specialist with JSH Properties in 1998. Later he worked with First Western Properties, where his focus was locating, analyzing and acquiring development sites in Washington State for companies like Walgreens drugstores, KeyBank, and SONIC restaurants.

Brian Engelking has over 14 years experience in retail leasing and tenant representation. Prior to brokering real estate, Brian successfully owned and operated a chain of 15 video rental stores from 1987-1995.

All told, the Kidder Mathews retail team now totals over 20 experienced agents in Washington alone. Welcome gentlemen.

Puget Sound Investment Review – September 2011 September 19, 2011

Posted by Erik Swanson in Articles, Puget Sound Investment Review, Research/Data, Retail News, Sale, Uncategorized.
add a comment

Anchored Retail Draws Buyers August 9, 2011

Posted by Erik Swanson in Articles, Retail News, Retail Sales Comps, Sale, Uncategorized.
add a comment

The appetite for grocery anchored retail investments remains strong. Two area centers traded hands over the last couple of weeks. 

Gerrity Holdings purchased the QFC anchored North Lynnwood Shopping center for $10.2 million which is roughly a 7.25% cap rate. The property was originally listed for sale last year at $10,600,000  a 7% cap rate. 

Another recent sale was the 120,860 square foot Canyon Park Shopping Center. The Albertson, Rite Aid anchored center sold for $18,400,000 which equates to $152 per square foot in an all cash transaction. The purchase included the inline space and the ground leases for the Albertson’s and Shell. Retail Opportunity Investment Corporation beat out numerous buyers with a 7.06 Cap rate, all-cash offer with a quick 3 week close.  

It’s been an interesting few weeks with all that’s gone on in the world. The political fight over raising the debt ceiling and the S&P down grade have certainly been a distraction and investors seem uncertain as to the lasting effects on CRE (check out this nreionline.com article). It seems clear that for the foreseeable future well located properties with strong anchors will continue to draw serious buyer interest.

Kidder Mathews 2nd Quarter Retail Report August 2, 2011

Posted by Erik Swanson in Articles, Research/Data, Retail News, Retail Sales Comps.
Tags: , , , , , , ,
add a comment

Below is the Kidder Mathews 2Q retail market report compiled by Andy Robinson in our appraisal department. The report details construction activity, retail sales, rent forecasts and highlights sales comparables for the first half of 2011.

The investment activity chart shows continued improvement in both deal volume and cap rate compression.

The full report is available by clicking here: Retail-Market-Research-Seattle-2011-2q.

More vacant space…in Lebam, WA July 26, 2011

Posted by Erik Swanson in Articles, Research/Data, Retail News.
add a comment

Most of us by now have heard that the Borders Group, the second largest bookstore chain after Barnes & Noble, announced last week that they were abandoning bankruptcy protection plans after failing  to find an investor. This means the closure of nearly 400 stores (after already closing 200 earlier this year) and subsequent loss of roughly 11,000 jobs. While the writing has been on the wall for some time, the announcement is yet another blow for battered landlords who just beginning to enjoy renewed tenant interest. And large, two store retail boxes might be tough to re-lease.

Now, in blow to small  town landlords, the U.S. Postal Service has announced the closure of 3700 locations, including 39 in Washington State alone.  Two locations in downtown Seattle will be closed but most of the remaining locations appear to be in rural towns…by the way, where are Marlin, Wishram and Lebam? Anyway, in these smaller towns where there is no post office branch, the USPS may pursue a “village post office” concept whereby they will locate limited services within grocery stores or gas stations. The Puget Sound Business Journal lists the local closures here and there’s more from the Wall St. Journal article here.

Landlord concessions diminish while sales increase July 15, 2011

Posted by Erik Swanson in Articles, Research/Data, Retail News.
add a comment

Although it seems rents will remain soft for some time, vacancy rates are stabilizing and landlords for the most part have stopped having to give rent concessions.  The caveat is that this will vary widely by location and even down to the asset level. Grocery anchored centers and core assets are more likely to maintain and potentially even grow rents (barring another blow to the shaky economy). Older centers without a strong anchor in tertiary markets have more of an uphill battle.

According to Costar,the nationwide vacancy rate for all retail stood at 7.1%. Malls fared better with vacancy at 5.8% (see chart above).

As a result of improving market conditions, average cap rates on retail acquisitions fell to 7.5% in April, according to RCA, 20 basis points below the 7.7% recorded in January. – NREI Online

With the capital markets showing more interest in the secondary markets, investors are now beginning to acquire assets in non-core areas. April sales of retail properties valued over $2.5 million increased by 39% over last year. As we indicated before, competition for good retail has continued to push cap rates down.  According to Real Capital Analytics, caps have dropped nationally as much as 20 basis points from the start of the year.

Data shows CRE recovery continues July 6, 2011

Posted by Erik Swanson in Articles, Research/Data, Retail News.
add a comment

Separately released data from the Mortgage Bankers Association and Costar shows that despite continued weakness in the general economy and in job creation, commercial real estate fundamentals continue to improve in all sectors.

The MBA’s Q1 Databook showed 1st quarter commercial mortgage origination for all property types were up over 1st quarter last year and the index reached its highest mark since 2008. For retail in particular, the data is much the same and reflected the cyclical nature of the CRE market. Although down from 184 in 4th quarter 2010, the 1st quarter index score of 96 was the highest 1st quarter since 2008 (a score of 100 on the origination index equates to an average quarter in 2001). This equates to a 13% increase in loans for retail properties. Full report here.

“The retail real estate market has now experienced eight quarters of positive net absorption” -Costar

Real estate strategists at Costar predict that a second half improvement in the economy will accelerate CRE recovery. Retail sales are expected to increase and retailers should again begin expansion after scaling back new store openings at the end of last year.  Furthermore, with almost no new construction, positive net absorption should continue as retailers move into second and third generation space. See complete Costar article here.