7.0. EDSR 02-11-2008 - Laserfiche WebLink

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United Properties Outlook: Retail -Community Centers JFc ~ : h'ip QUICK Page 1 of 1 Community_Centers j Mmnea.polis CBD j Neighborhood Centers j Regionf ~ i ` ; ~IL~~ ~zn~ers j ~~ rdul_la~D. ~ J k~ „,_,~ ~ ~l . j . NW ~ A ~. ~~~~~il~~i 1~~~~L1'lJ HistorCai Vacancy His'.crcal Abscrp~io-7 H~4torical Construdlon '= Fi;:'~pr'' ~I Rentai Rates `~ Building, Data ~~; Additional Data Grapl Vacancy Up nearly 2% Absorption Up significantly from first half Rental Rates Dropped slightly Highlights Community centers have enjoyed a period of expansion largely fueled by the healthy growth of big-box stores and "junior box" retailers such as Best Buy, OfficeMax, Slumberland and Dick's Sporting Goods. In addition, several million square feet of single-user freestanding retail space also came on line in the second half, but this space is not reflected in the multi-tenant universe. The strong growth of community center retail was reflected in the second-half absorption of 581,230 sq. ft., up from just 104,502 sq. ft. in the first six months of 2007. Retailers have become more selective in opening new locations. Lack of leasing activity in small shop space is reflected in the year end community center vacancy rate of 5.5% (6.9% with sublease space), up from 3.6% in the first half. The average rental rate dropped slightly, to $18.73 per square foot. Some of the increase in vacancy rates was due to store closings by CompUSA (Bloomington, Minnetonka, Roseville and Woodbury) and Wickes Furniture (Edina, Burnsville, Roseville, Brooklyn Center, Maple Grove and Coon Rapids). Staples is working on a deal for the former CompUSA Minnetonka space; PetSmart is taking the Roseville CompUSA location; the other locations are being marketed. Minneapolis-based Target has been the most active big-box retailer, adding new SuperTargets in Richfield, Monticello and Maple Grove and redeveloping its existing stores in Edina, St. Paul-Midway and Burnsville to convert them to SuperTargets. Two new Targets will open in third-quarter 2008 in Waconia and Otsego; Waconia will be a new prototype without groceries and Otsego will be a SuperTarget. Lowe's stores opened in Maple Grove, West St. Paul, Blaine and Richfield. Slumberland has continued to grow, opening in Maple Grove and preparing for a spring opening in Shakopee. Crossroads and Har Mar Mall in Roseville have both been repositioning tenants and adding new, more attractive facades and signage. In early 2008, Best Buy will be relocating to 53,206 sq. ft. of end-cap space at Crossroads of Roseville at County Road 62 and Snelling Avenue. Dick's Sporting Goods will take the space vacated by Best Buy. Several national, family entertainment center brands have been evaluating locations for possible entry into the Twin Cities market, including Dave & Buster's, Amazing Jokes and Brunswick Fun Zone. Brunswick has opened its second metro location in Blaine and is working on another location in Oakdale. The Outlook Retailers will continue to closely watch the fallout from the residential mortgage crisis and its impact on consumer spending. Developers are already being more cautious with plans for new projects, and that trend is likely to continue until consumer confidence begins emerging. Vacancy is expected to increase slightly as more small shop space becomes available. Absorption will likely remain flat as fewer developments are under construction and expected to come on line in 2008. Copyright 2002-2008. United Properties. All Rights Reserved. 3500 American Boulevard West, Minneapolis, MN 55431 Privacy Policy j Contt~ct tJE7 j gcr~~n oaci_Fiard ~9~y j Request bard Copy Back.T.o_Top http://outlook.uproperties.com/Screens/Retail/CommunityCenters.aspx 2/4/2008