Retail
MARKET REPORT 2011 Summary Prepared by: Dan Dutton Associate Vice President
780 North 114th Street • Omaha, NE 68154 • 402.697.8899 • worldgroupllc.com Information furnished is from sources deemed reliable but not guaranteed by us and is subject to change in price, corrections, errors and omissions, prior sales or withdrawal without notice.
City Wide Highlights
By: Dan Dutton, World Group Commercial Real Estate
A Few Notes this Coming Year...
Net Absorption by Type (SF)
The biggest stories of 2012 will include Walmart’s Neighborhood Markets, which should close on several sites and may even begin construction this year. We should see some big-box leasing with the potential for new big-box retailers to enter the market. We will also see several smaller concepts and restaurants enter the market. Dunkin’ Donuts will look for sites throughout Omaha but may wait until 2013 to open any stores. As long as the economy continues to improve, we should see vacancy rates continue to fall.
Net Absorption (SF)
50,000
45,240 41,002
40,000 30,000 20,000
5,500
0 (7,718)
(10,000) (20,000)
Conv/Strip Center
Community Center
Regional Center
Neighborhood Center
Vacancy Rate by Type (Q4 2011) Vacancy Rate (%)
Retail both nationally and locally saw improvement in 2011 after a few tough years. Retail sales nationally increased 3.5%. Nebraska retail sales increased 5.2% and Iowa saw an increase of 5.4% according to the International Council of Shopping Centers. Retail real estate market also saw improvement during 2011. Total absorption for 2011 was 140,701 square feet in the metro, dropping the vacancy rate to 11.2%. The majority of the absorption happened in the fourth quarter. Small deals accounted for most of the absorption with few deals over 5,000 square feet. Big-box leasing is one area of the market that continues to struggle with a net negative absorption of 25,740 square feet. Council Bluffs, East Omaha and Sarpy County West continue to have the highest vacancy rates.
20.0% 15.0% 10.0% 5.0% 0.0%
Conv/Strip Big Box Community Regional NeighborCenter Center Center hood Center
Asking Lease Rate Range by Class (FSG) $30.00
Asking Lease Rate (NNN)
$25.00
$25.00
$25.00
$20.00
$15.00
$14.59 $12.66
$12.00
$15.00
$16.00 $12.98 $11.25
$10.50
$10.00 $7.92 $5.00
Source: Xceligent Market Research
$25.00
$6.50
$6.00 $4.88
$4.00
$2.50
$10.50 $8.83 $8.00
$2.00
$0.00 Conv/Strip Center
Big Box
Community Center
Regional Center
Neighborhood Center
Power Center
Freestanding
780 North 114th Street • Omaha, NE 68154 • 402.697.8899 • worldgroupllc.com Information furnished is from sources deemed reliable but not guaranteed by us and is subject to change in price, corrections, errors and omissions, prior sales or withdrawal without notice.
West Dodge Corridor In 2011, the West Dodge Corridor saw positive absorption of 12,095 square feet and kept its vacancy rate low at 4.8%. This corridor had seen an increase in vacancy until the fourth quarter when over 13,000 square feet of space was leased. We look for this corridor to stay
strong throughout 2012. Village Pointe saw a few changes including the closing and releasing of the former Melting Pot space. Kobe Steakhouse opened in their new building at 168th and Burke. We also saw Hy-Vee open at 180th and Pacific Street.
Vacancy Rate by Type (Q4 2011)
10,000
10.0%
8,000
8.0%
7,022
6,000 4,000 2,000 0
3,202 1,871 Regional Center
Conv/Strip Center
Vacancy Rate (%)
Net Absorption (SF)
YTD Net Absorption by Type (SF)
Source: Xceligent Market Research
By: Dan Dutton, World Group Commercial Real Estate
South Central
8.2%
Conv/Strip Center
Neighborhood Center
6.0% 4.0%
2.4%
2.0% 0.0%
Neighborhood Center
8.0%
Regional Center
By: Dan Dutton, World Group Commercial Real Estate
The 72nd and Dodge/midtown area of Omaha continues to be in a transition period with plans ongoing for the eventual renovation or redevelopment of Crossroads Mall. We saw the closing of Border’s on the southwest corner of 72nd and Dodge Street. The area did see positive absorption of 34,075 square feet with a vacancy rate at 9.7%. We expect that 2012 will bring new names to the area and possibly an announcement soon on who will fill the former Old Country Buffet location at 78th and Dodge.
YTD Net Absorption by Type (SF)
Source: Xceligent Market Research
20,000
20,757
30.0%
23,685
25.0% Vacancy Rate (%)
Net Absorption (SF)
30,000
Vacancy Rate by Type (Q4 2011)
10,000 0
(7,619)
10,000 20,000
(17,986)
30,000 Community Conv/Strip Center Center
Neighbor- Freestanding hood Center
24.8%
20.0% 15.2%
15.0% 10.0%
12.4% 8.1%
7.4%
5.0% 0.0%
Regional Community Conv/ Center Center Strip Center
NeighborFreehood standing Center
780 North 114th Street • Omaha, NE 68154 • 402.697.8899 • worldgroupllc.com Information furnished is from sources deemed reliable but not guaranteed by us and is subject to change in price, corrections, errors and omissions, prior sales or withdrawal without notice.
Southwest
By: Dan Dutton, World Group Commercial Real Estate
With 84,372 square feet of positive absorption, the vacancy rate lowered to 9.6%. West Center Corridor from 120th to 144th Streets (including L Street) saw the most action in 2011. • Montclair On Center, located on the southeast corner of 132nd & West Center Road, added the 20,000 square foot Tile Shop.
YTD Net Absorption by Type (SF) 60,000
54,781
50,000
Net Absorption (SF) Source: Xceligent Market Research
• Thomasville located in West Center Oaks closed and was quickly replaced by Bridal Traditions which relocated from their store at 108th and West Center Road. • L Street Marketplace saw a few new restaurants including Noodles & Co., Qdoba and Cheddars. The Center also added Charming Charlie’s to their lineup. • The West Center Corridor from 168th to 186th Streets saw the closings of Blockbuster and Fuddruckers, which was quickly replaced by Omaha’s first Brazilian Steakhouse.
40,000 30,000
• The Rec Room, on the ring road around Oak View Mall, closed and Hibachi Grill is taking almost all the vacated space.
26,117
20,000 10,000
9,473
6,001
0 10,000 (12,000) 20,000 Community Center
Conv/ Strip Center
Neighborhood Center
Power Center
Freestanding
Vacancy Rate by Type (Q4 2011) 40.0%
Vacancy Rate (%)
30.0%
Source: Xceligent Market Research
23.0%
20.0% 15.1%
12.6%
11.4%
10.0%
5.0%
4.0%
3.7%
3.6%
0.0% Regional Center
Community Center
Big Box
Conv/Strip Center
Neighborhood Center
Power Center
Freestanding
780 North 114th Street • Omaha, NE 68154 • 402.697.8899 • worldgroupllc.com Information furnished is from sources deemed reliable but not guaranteed by us and is subject to change in price, corrections, errors and omissions, prior sales or withdrawal without notice.
Sarpy West
By: Dan Dutton, World Group Commercial Real Estate
The South 72nd Street corridor continues to be in a growth pattern and we expect a few new announcements in the coming year, including the possibility of a new shopping center. Some of this growth comes at the expense of the South 84th Street corridor which continues to struggle. Shadow Lake saw the closing of Border’s along with the addition of Charming Charlie’s in 2011. Vacancy continues to stay high at 14.1% and the area did see negative absorption of 5,792 square feet in 2011.
YTD Net Absorption by Type (SF) 15,000 10,584
10,000
Net Absorption (SF)
5,000 0 5,000 2,947
3,739 1,635
10,000 15,000 20,000 25,000
Source: Xceligent Market Research
30,000
24,692 Regional Community Conv/ Center Center Strip Center
Neighborhood Center
Power Center
Vacancy Rate by Type (Q4 2011) 59.0%
60.0%
Vacancy Rate (%)
50.0% 40.0% 30.0%
10.0% Source: Xceligent Market Research
18.2%
20.0%
0.0%
10.4%
6.0% Regional Community Conv/ Center Center Strip Center
9.4%
NeighborFreehood standing Center
780 North 114th Street • Omaha, NE 68154 • 402.697.8899 • worldgroupllc.com Information furnished is from sources deemed reliable but not guaranteed by us and is subject to change in price, corrections, errors and omissions, prior sales or withdrawal without notice.
Sarpy East/Bellevue This area saw little change in 2011 with 13,911 square feet of positive absorption and a good vacancy rate of 5.3%. It was one of the only areas of the metro that
By: Dan Dutton, World Group Commercial Real Estate
didn’t have a good fourth quarter bringing 3,758 square feet of formerly leased space into the market.
Vacancy Rate by Type (Q4 2011)
YTD Net Absorption by Type (SF)
Source: Xceligent Market Research
15,000
12.0%
12,000
10,000 5,000
2,874
0
287 (1,250)
10.0%
6.0% 4.0%
10,000
2.0%
Neighbor- Freestanding hood Center
0.0%
East
7.7%
8.0%
5,000
Community Conv/Strip Center Center
2.4%
Community Center
Conv/Strip Center
Neighborhood Center
By: Dan Dutton, World Group Commercial Real Estate
East Omaha is an area of the metro that continues to struggle with negative absorption of 14,812 square feet and a vacancy rate at 17%. With little new development in this area we don’t believe that this will
change much during 2012. For those tenants looking for space in this area, they can find low rents and large Landlord concessions.
Vacancy Rate by Type (Q4 2011)
YTD Net Absorption by Type (SF) 20,000
60.0% 16,676 50.0% Vacancy Rate (%)
15,000 10,000 Net Absorption (SF)
13.8%
14.0%
Vacancy Rate (%)
Net Absorption (SF)
20,000
5,989
5,000 0 (1,043)
40.0%
33.6%
30.0% 20.0%
5,000
10.0%
10,000
0.0%
20,000
50.0%
16.0% 7.7%
Community Center
Big Box
Conv/Strip Center
Neighborhood Center
30,000 Source: Xceligent Market Research
(36,434)
40,000 Community Conv/Strip Center Center
Neighbor- Freestanding hood Center
780 North 114th Street • Omaha, NE 68154 • 402.697.8899 • worldgroupllc.com Information furnished is from sources deemed reliable but not guaranteed by us and is subject to change in price, corrections, errors and omissions, prior sales or withdrawal without notice.
North Central
By: Dan Dutton, World Group Commercial Real Estate
North Central Omaha stayed strong with a low vacancy rate and 6,269 square feet of space taken off the market in 2011. Although the area did see a positive absorption rate, it really saw very few deals. This area
will continue stay about the same during 2012. Tenant’s looking for space should find very competitive deals.
YTD Net Absorption by Type (SF) Net Absorption (SF)
12,000 10,080
10,000 8,000 6,000 4,000
Vacancy Rate by Type (Q4 2011)
0 2,000 Source: Xceligent Market Research
4,000
(1,795)
Community Center
(2,016) Conv/Strip Center
Vacancy Rate (%)
2,000
Neighborhood Center
Northwest
30.0% 20.0% 10.0% 0.0%
12.9% 6.5% Regional Center
5.1%
3.6% Community Center
Conv/Strip Center
Neighborhood Center
By: Dan Dutton, World Group Commercial Real Estate
Northwest Omaha struggled in 2011 with negative absorption of 30,344 square feet pushing the vacancy rate up to 9.3%. This area did see Borders close at 132nd and Maple but with that closing also brings word that the site is under contract for a Wal-Mart Neighborhood Market store.
YTD Net Absorption by Type (SF)
60.0%
23,802
50.0%
20,000 Vacancy Rate (%)
Net Absorption (SF)
30,000
10,000 0,000 (2,497) 10,000
30,000
40.0% 30.0%
(25,740) Community Center
Big Box
Conv/Strip Center
(25,909) Neighborhood Center
18.8%
20.0% 10.0%
20,000 Source: Xceligent Market Research
Vacancy Rate by Type (Q4 2011)
0.0%
2.5%
4.1%
Community Center
Big Box
Conv/Strip Center
15.3%
Neighborhood Center
780 North 114th Street • Omaha, NE 68154 • 402.697.8899 • worldgroupllc.com Information furnished is from sources deemed reliable but not guaranteed by us and is subject to change in price, corrections, errors and omissions, prior sales or withdrawal without notice.
Council Bluffs Council Bluffs is another area of the metro that continues to struggle, but did see positive growth in 2011 with 40,927 square feet of space being taken off the market. The vacancy rate stayed high at 17.3%. The issue with Council Bluffs has to do with existing retailers in the market moving to new developments but leav-
ing their former locations vacant. With rumors swirling about what might happen at Mall of the Bluffs, we can expect to see brighter days in the future. For the time being, especially with big-box retail, it will be a tenant’s market.
YTD Net Absorption by Type (SF)
Vacancy Rate by Type (Q4 2011)
30,000
60.0%
27,613
20,000 15,000 10,323
10,000 5,000
Source: Xceligent Market Research
50.0% Vacancy Rate (%)
Net Absorption (SF)
25,000
57.8%
1,983
0,000 Community Conv/Strip Center Center
40.0% 30.0% 20.0% 10.0%
1,008 Neighbor- Freestanding hood Center
0.0%
14.9% 8.4% 2.5%
1.7%
Regional Community Conv/ Neighbor- FreeCenter Center Strip hood standing Center Center
780 North 114th Street • Omaha, NE 68154 • 402.697.8899 • worldgroupllc.com Information furnished is from sources deemed reliable but not guaranteed by us and is subject to change in price, corrections, errors and omissions, prior sales or withdrawal without notice.
Omaha - Market Area Map
Source: Xceligent Market Research
Terminology Inventory - The total square feet of all single and multi tenant retail properties greater than 5,000 square feet. Total Available Square Feet - All of the available leasable space within a building, whether it is occupied or vacant, for direct lease or sublease space. Space can be available but not vacant, for example, if the landlord, or his agent, is marketing space that will be coming available at a future date because a tenant is planning to move. Total Vacant Square Feet - The total of all of the vacant square footage within a building, including both direct and sublease space. Direct Vacant Square Feet - The total of the vacant square footage in a building that is being marketed by an agent representing the landlord.
Sublease Square Feet - Space that is offered for lease by a current tenant, or his agent, within a property. Whether the tenant is paying rent or not, the space is considered vacant only if it is unoccupied. Net Absorption - The net change in occupancy from quarter to quarter, expressed in square feet.
Report Prepared by Dan Dutton World Group Commercial Real Estate Associate Vice President 780 North 114th Street Omaha, NE 68154 ddutton@worldgroupllc.com
780 North 114th Street • Omaha, NE 68154 • 402.697.8899 • worldgroupllc.com Information furnished is from sources deemed reliable but not guaranteed by us and is subject to change in price, corrections, errors and omissions, prior sales or withdrawal without notice.