7.0 EDSR 03-12-2007 - Laserfiche WebLink

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Page 1 of 2 !a e .~.. m`!~ _ _ _. _ . Vacancy Remains arecording-setting low Absorption Doubled from 12 months ago Rental Rates Fairly flat Highlights Print this Page Close Window • Absorption continues to be the big story for Twin Cities community centers. These big-box-anchored centers experienced 1,901,280 sq. ft. of positive absorption in the second half of 2006 alone. That is nearly three times the absorption at mid- yearand double the absorption from 12 months ago. Community centers finished the year with 2,556,844 sq. ft. of positive absorption. No other retail product type even came close. There are 110 community centers totaling 27.4 million square feet in this market. • This record-setting activity is reflected in community centers' vacancy, which is 2.9% (3.2% with sublease space), the lowest historical vacancy in at least the past decade and possibly the lowest ever. • Much of the activity in community centers is continuing to be fueled by big-box anchor tenants, including Target, Wal- Mart, Lowe's Home Improvement Center, Cub Foods and Home Depot, which are seeking to gain strategic positions in the marketplace. These anchors are driving community center construction. • New construction is accounting for the majority of the new absorption, with 730,000 sq. ft. reported at the new Fountains at Arbor Lakes in Maple Grove, anchored by Costco, Lowe's, Dick's Sporting Goods and Marshall's. Developed by Opus Northwest, the 800,000-sq.-ft. center celebrated its grand opening in September. It is the final stage of a 2.2-million- square-foot development. Also, the 200,000-sq.-ft. Clydesdale Marketplace, anchored by Target, opened in Medina, accounting for 180,000 sq. ft. of absorption. • Target remains a very strong anchor and continues to expand and seek market share. The Target near Knollwood Mall in St. Louis Park was recently expanded, and that store is doing well. In addition to the new Target at Clydesdale Marketplace, a new Target opened at Oakdale Marketplace in Oakdale and three SuperTargets are under construction at The Grove in Maple Grove, Union Crossing in Monticello and Cedar Point Commons in Richfield. More SuperTarget stores are planned, including one in Apple Valley proposed by Ryan Companies at the west end of Cobblestone Lake on Pilot Knob Road. SuperTargets are approximately 180,000 sq. ft. and include a full grocery. • Target also has been undertaking "scrapes," where it demolishes smaller Target stores and develops its larger SuperTarget format. A scrape is underway in St. Paul's Midway where Target will raze its existing Target store at University and Hamline avenues after the new store is built on the former Four Points Sheraton site. It will be the discount retailer's first urban SuperTarget, and it's expected to open in 2008. Both Target and Wal-Mart continue to seek attractive inner-ring sites, which typically require this type of redevelopment. Also, Target received city approval to go "super" in Edina, where it will re-develop a 196,000-sq.-ft. SuperTarget at its existing site at 7000 York Ave. S. In Burnsville, Target will undergo a similar redevelopment of the existing store at Burnhaven Mall and re-open as a SuperTarget in October. • Wal-Mart is also looking to do its expanded "super" format, which offers a full grocery, and is going "super" where it has land available. Although no new Wal-Marts opened in the past six months, the retailer is planning to expand stores in Vadnais Heights and Oak Park Heights and convert them to Wal-Mart SuperCenters. . Also adding to the absorption in community centers was the opening of new locations for Lowe's, a retailer that is aggressively expanding in the metro. In addition to the new Lowe's at Fountains at Arbor Lakes, locations opened at Oak Park Commons in Oak Park Heights and freestanding locations in Rogers, Blaine, West St. Paul and Shakopee. http://outlook.uproperties.com/PagePrinter. aspx?InstanceID=e8b69470-Oe4e-4c39-8061-90... 3/7/2007