Avison Young Atlanta Retail Overview Q Review

Transcription

1 Avison Young Atlanta Retail Overview Q Review Partnership. Performance.

2 Table of Contents Atlanta Overview Significant Retail Transactions by Market Atlanta Retail Market Overview Avison Young Overview Avison Young Capital Markets Group Pg. 3 Pg. 6 Pg. 7 Pg. 19 Pg. 21 2

3 Atlanta Retail Market Overview Summary The Atlanta retail market did not experience much change in market conditions in the third quarter The vacancy rate went from 6.6% in the previous quarter to 6.5% in the current quarter. Net absorption was positive 798,683 square feet, and vacant sublease space decreased by (181,187) square feet. Quoted rental rates increased from second quarter 2016 levels, ending at $12.95 per square foot per year. A total of 44 retail buildings with 411,407 square feet of retail space were delivered to the market in the quarter, with 2,877,043 square feet still under construction at the end of the quarter. Vacancy Atlanta s retail vacancy rate decreased in the third quarter 2016, ending the quarter at 6.5%. Over the past four quarters, the market has seen an overall decrease in the vacancy rate, with the rate going from 6.8% in the fourth quarter 2015, to 6.8% at the end of the first quarter 2016, 6.6% at the end of the second quarter 2016, to 6.5% in the current quarter. Source: 3

4 Atlanta Retail Market Overview Absorption Retail net absorption was moderate in Atlanta third quarter 2016, with positive 798,683 square feet absorbed in the quarter. In second quarter 2016, net absorption was positive 778,873 square feet, while in first quarter 2016; absorption came in at positive 392,652 square feet. In fourth quarter 2015, positive 1,601,396 square feet was absorbed in the market. Tenants moving out of large blocks of space in 2016 include: Kmart moving out of (69,756) square feet at 620 Bankhead Hwy, Farmers Market moving out of (50,060) square-feet at Merchants Square and Best Buy moving out of (45,775) square-feet at Turner Hill Marketplace. Tenants moving into large blocks of space in 2016 include: Von Maur moving into 172,000 square-feet at Mall of Georgia; Kroger moving into 114,356 square-feet at Glenwood Place - Kroger; and at home moving into 84,146 square-feet at 2420 Wisteria Blvd. Rental Rates Average quoted asking rental rates in the Atlanta retail market are up over previous quarter levels, and up from their levels four quarters ago. Quoted rents ended the third quarter 2016 at $12.95 per square foot per year. That compares to $12.72 per square foot in the second quarter 2016, and $12.57 per square foot at the end of the fourth quarter This represents a 1.8% increase in rental rates in the current quarter, and a 2.93% increase from four quarters ago. Source: Deliveries and Construction During the third quarter 2016, 44 buildings totaling 411,407 square feet were completed in the Atlanta retail market. Over the past four quarters, a total of 1,783,648 square feet of retail space has been built in Atlanta. In addition to the current quarter, 36 buildings with 386,407 square feet were completed in second quarter 2016, 25 buildings totaling 321,723 square feet completed in first quarter 2016, and 664,111 square feet in 24 buildings completed in fourth quarter There were 2,877,043 square feet of retail space under construction at the end of the third quarter Some of the notable 2016 deliveries include: Glenwood Place - Kroger, a 114,356-square-foot facility that delivered in second quarter 2016 and is now 100% occupied, and The Overlook, a 93,211-square-foot building that delivered in third quarter 2016 and is now 90% occupied. Total retail inventory in the Atlanta market area amounted to 355,233,093 square feet in 26,483 buildings and 3,419 centers as of the end of the third quarter Source: 4

5 Retail Market Statistics Q Existing Inventory Vacancy YTD Net YTD Under Quoted Period # Bldgs. Total GLA Direct SF Total SF Vacancy % Absorption Deliveries Const. SF Rates q 26, ,233,093 22,597,407 23,009, % 798, ,407 2,877,043 $ q 26, ,960,094 22,941,904 23,535, % 778, ,407 3,245,020 $ q 26, ,614,726 23,380,087 23,968, % 392, ,723 3,066,424 $ q 26, ,392,401 23,530,858 24,138, % 1,601, ,111 1,507,706 $ q 26, ,919,215 24,617,255 25,267, % 708, ,097 1,525,762 $ q 26, ,839,112 25,277,177 25,895, % 966, ,725 1,381,599 $ q 26, ,704,232 25,989,148 26,727, % 560, ,946 1,159,220 $ , ,235,446 27,105,572 27,818, % 5,244,700 2,420, ,794 $ , ,386,149 30,290,881 31,214, % 4,151,696 1,497,054 2,031,767 $ , ,355,057 33,509,148 34,334, % 2,530,827 1,038,530 1,978,431 $ , ,520,773 35,003,377 36,031, % 1,010,769 1,174,107 1,354,584 $ , ,446,184 34,819,855 35,967, % 1,241,745 1,537, ,415 $ , ,916,613 33,949,196 35,679, % (1,712,050) 3,481,841 1,219,489 $ , ,465,898 28,818,338 30,516, % 4,267,590 9,309,942 3,212,705 $ , ,187,938 24,355,227 25,506, % 7,005,620 9,613,756 7,994,708 $ , ,666,435 21,758,596 22,990, % 9,330,955 12,138,021 8,123,663 $

6 Significant Sale Transactions Atlanta MSA Property Name Address City S.F. Year Built Sold Date Price in $ $ / S.F. Cap Rate Buyer Seller Occ. % Anchor Tenants Lakeland Plaza 501 Buford Hwy Cumming 301, Jul-16 45,250, New Market Properties LLC State Teachers Retirement System of Ohio 94% Belk, LA Fitness, Sprouts Farmers Market Windward Commons GA-9 Alpharetta 117, Aug-16 27,650, % InvenTrust Investco Financial Corp 99% Kroger Douglasville Marketplace 6875 Douglas Blvd Douglasville 129, Jul-16 19,900, Tabani Partners DDR 100% Babies "R" Us, Best Buy Village Place Brookhaven (1F) 1418 Dresden Dr NE Atlanta 34, Jul-16 18,000, Westwood Financial Coro Realty Advisors 100% Kaleidescope, Verde Gwinnett Prado & Gwinnett Station 2300 Pleasant Hill Dr Duluth 358, Jul-16 17,000, Insignia Phillips Investments 100% Great Wall Supermarket Pleasant Hill Plaza 1630 Pleasant Hill Rd Duluth 99, Sep-16 10,000, Pleasant Hill Road Plaza LLC Fairway Capital Partners 85% Assi Supermarket (Shadow/Not Owned), Dollar Tree Spalding Woods Village 4015 Holcomb Bridge Rd Norcross 83, Sep-16 6,800, Spalding Wood Retail Center LLC Rialto Capital Mgmt 66% Dollar Tree Towne Centre Village Jonesboro Rd McDonough 33, Sep-16 6,400, % Rivercrest Realty Associates Southeast Properties Inc 100% TMobile, American Deli 2441 Cheshire Bridge Rd 2441 Cheshire Bridge Rd Atlanta 40, Aug-16 6,305, Ana Associates-VIII LLC Collision Works Properties LLC 100% Enterprise Car Rental Village Shopping Center 1207 W Spring St Monroe 89, Aug-16 5,800, Don J Harris Harold Breedlove 97% Big Lots, Goodys 6

7 Atlanta Retail Market Source: Source: Source: Source: 7

8 Unemployment Rate 12 Historical Unemployment 10 8 Percent YTD US Atlanta 8

9 Monthly Job Change, Metro Atlanta 40.0 Historical Monthly Job Change In Thousands, Not Seasonally Adjusted

10 New Single Family Home Sales 140 Historical U.S. New Single Family Home Sales In Thousands YTD 10

11 Single Family Building Permits 70 Historical Atlanta Single Family Building Permits In Thousands YTD 11

12 Employment Job Change Historical Atlanta Employment In Thousands YTD 12

13 Rental Rate Growth $33.00 Historical Atlanta Average Asking Retail Rental Rates $28.00 Full Service $23.00 $18.00 $13.00 $ YTD Overall General Retail Malls Power Center Shopping Center Specialty Center 13

14 Consumer Price Index 6.0 U.S. Consumer Price Index Percent Annual Change All Core YTD 14

15 Gross Domestic Product 6.0 Gross Domestic Product Percent Annual Change YTD US Georgia 15

16 Employment Job Change Mining Construction Manufacturing Wholesale Trade Retail Trade Transportation/Utilities Information Financial Professional/Business Services Education/Health Leisure/Hospitality Other Services Government Atlanta Job Change by Sector (in thousands) YTD 16

17 Metro Atlanta Retail Market 14,000,000 Historical Deliveries and Absorption 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000, ,000,000 4,000, YTD Net Absorption Deliveries 17

18 Leading Indicator of Demand - Employment Atlanta averages 155 SF of office absorption per premium job added. Historically, premium jobs have accounted for appx. 35% of job growth Atlanta Employment Using this data, combined with Moody s prediction of 2.3% annual job growth in Atlanta through 2020, absorption would progress as follows: 2016: 3,320, : 3,397, : 3,475, : 3,555,396 In Thousands

19 About Avison Young At-a-Glance: Key Statistics: Founded in 1978 as Graeme Young & Associates of Edmonton; merged with Avison & Associates in 1996 to form Avison Young. In 2009, began international expansion and has since opened 53 offices in the U.S., five in Canada, nine in Europe and one in Mexico. Recognized for the last five years as one of Canada s Best Managed Companies. Named #1 among Fastest- Growing Companies in commercial real estate by Real Estate Forum in Real Estate Professionals Avison Young professionals include licensed brokers, property managers, financial analysts, research professionals and marketing specialists Number of Offices Overseas expansion began 2014 Property Under Management (million square feet) We service tenants, lease space, manage capital and operations, report financials and manage cash flow msf msf 19

20 Representative Retail Transactions The Mall at Waycross Waycross, Georgia Crosstown Plaza West Palm Beach, Florida High Springs Winn-Dixie High Springs, Florida Defuniak Square Defuniak Springs, Florida Perimeter Square Atlanta, Georgia $6.775 million 380,982 sf Retail Mall $24.3 million 143,134 sf Retail Plaza $4.7 million 57,000 sf Retail $5.9 million 91,631 sf Retail $42.2 million 186,000 sf Retail Plaza Sebring Square Sebring, Florida CVS Portfolio AL, CA, CT, MA, MI, TX Rozzelle Crossing Charlotte, North Carolina Wal-Mart Portfolio Various Locations, Ontario University Shoppes Miami, Florida $7.75 million 175,000 sf Retail $22.0 million Varied sf Retail $8.5million 63,650 sf Retail $104.8 million 691,141 sf Retail / Structured Finance $38 million 120,000 sf Retail Plaza / Debt Financing Retail Portfolio Northern Virginia Fraser Heights Village Surrey, British Columbia Taunton Gardens Whitby, Ontario Namao South Edmonton, Alberta Hazelton Lanes Toronto, Ontario $28.5 million 775,000 sf Retail / Secured Credit $23.65 million 62,000 sf Retail $85 million 460,784 sf Retail Plaza $51 million 108,205 sf Retail Plaza $82 million 210,000 sf Retail Mall 20

21 Avison Young Retail Capital Markets THERESA JOHNSON SVP Retail Investment Sales, Atlanta, GA Direct: Cell: PROFESSIONAL EXPERIENCE (770) (770) Avison Young 30 Ivan Allen Jr. Blvd Suite 900 Atlanta, GA YEARS Real Estate Experience Theresa Johnson is Senior Vice President of Retail Investment Sales for Avison Young and is based out of the Atlanta office. Prior to joining AY, Theresa served as Senior Vice President in the Retail Capital Markets Group of Bull Realty, a commercial real estate firm in Atlanta, since Theresa has over 15 years of experience in commercial real estate and has been recognized as a top producer in her field. Her primary focus as a professional real estate advisor is representing buyers and sellers in the disposition and acquisition of larger anchored retail properties throughout the Southeast US. In addition, Theresa has operated as a principal and managing partner in her own firm gaining transactional experience in all facets of the retail real estate space. Her professional relationships extend nationwide to include REITs, funds, and investment companies within the retail sector. Theresa is an active member of the International Council of Shopping Centers (ICSC) and a Certified Commercial Investment Member (CCIM). She continually enhances her knowledge by attending national 4 conferences and seminars. Theresa graduated from Georgia State University with a B.A. in Marketing. She enjoys volunteering in the community and has served on several non-profit boards and on the Executive Board of The Oglethorpe Museum in Atlanta. 21