Ccim Presentation: Market Overview
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a Colliers CMN Company
CCIM Presentation February 4, 2009
Market Overview Presented By: W. Grant Norling Jeff Grose, MAI Steven L. Waugh
PGP Valuation, Inc www.pgpinc.com
Commitment to Values
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
The Housing Market Steve Waugh
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Industrial & Office Markets Jeff Grose, MAI
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Industrial Market Overview • Slowing economy has and will continue to shape the market • Hangover – sales volume off 60-80% • Market participants “frozen” in light of economic turmoil • 2009 will see softening in rents and increase in cap rates
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Industrial Market Overview Portland Market & Colum bia Corridor East Subm arket (Industrial) SUPPLY
VACANCY
Period
Market
Submarket
Market
Submarket
2003 2004 2005 2006 2007
206,479,984 207,813,591 208,936,088 211,459,670 215,011,836
13,943,125 14,367,305 14,837,005 15,538,355 16,510,776
11.0% 9.1% 7.8% 6.3% 5.0%
11.1% 9.4% 8.5% 5.3% 5.0%
216,041,306 216,925,883 216,912,451 217,071,293
16,836,510 17,567,392 17,567,392 17,567,392
5.6% 6.1% 6.2% 6.3%
9.0% 12.5% 11.8% 12.0%
217,071,293
17,567,392
6.0%
11.3%
Q1 Q2 Q3 Q4
2008 2008 2008 2008
2008 YTD
AVERAGE ASKING RENT PSF/MO. (NNN)
NET ABSORPTION
Period
Market
Submarket
Market
Submarket
2003 2004 2005 2006 2007
$0.38 $0.38 $0.39 $0.38 $0.42
$0.37 $0.38 $0.40 $0.41 $0.40
3,942,713 4,988,711 4,016,319 4,596,790 4,797,566
865,367 459,598 639,813 1,236,093 394,386
$0.45 $0.45 $0.46 $0.46
$0.42 $0.42 $0.44 $0.45
65,229 -226,048 -238,621 9,118
-7,743 57,192 122,280 -29,627
$0.46
$0.43
-390,322
142,102
Q1 Q2 Q3 Q4
2008 2008 2008 2008
2008 YTD
Source: CoStar Property®
NNN = Triple Net
Y-T-D = Year-to-Date
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Industrial Construction – Portland Market Completed Construction 1st Qtr. 2008: 1,136,378 SF Completed Construction 2nd Qtr. 2008: 1,134,520 SF Completed Construction 3rd Qtr. 2008:
0 SF
Completed Construction 4th Qtr. 2008: 478,184 SF Under Construction 1st Qtr. 2009:
916,345 SF
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Industrial Construction
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
What does it mean? Rents
Sales
• Softening
• Difficulty obtaining financing
• Concessions? • Pressure on landlords to retain roll-over tenants
• Buyers and sellers will not see eye to eye in the first half 2009 • Transaction volume will continue to be low
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Cap Rates
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Acquisition Financing Source: Real Capital Analytics
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Industrial Market Trends / Forecast • Leasing – Economic conditions will continue to limit new tenants entering the market and existing tenants expanding. • Cap Rates – Rising. Risk factors will be considered to a much greater degree than in the past. • Overall – The market needs credibility. Once faith is restored in financial markets, stock market, and economy, transactions (sales and leases) can resume. The lack of new supply coming on line should ease the effects of the current slow down and provide for a quick rebound when the economy improves. The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Office Market Like the industrial sector, the office market is feeling the effects of the recession • New construction has been moderate in 07/08 which is softening the negative impacts for 2009 • Market participants “frozen” in light of economic turmoil • 2009 will see softening in rents and increase in cap rates The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Office Market – All
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Portland Office Vacancy, Q4-2008 Central Business District: 7.8% – – –
Class A: 5.1% Class B: 11.4% Class C: 11.3%
• Net absorption for the CBD at +371,701 for 2008. Overall market also saw positive net absorption. This is due to limited new construction. • Overall Portland market has 1,383,398 SF under construction with deliveries in 2009. • With slow economy and large amount of new product, vacancies will rise and there will be pressure on landlords to retain tenants. The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Overall Cap Rates Source: Korpacz Real Estate Investors Survey, Q4 2008
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Regional Retail Market 2008 Overview & Forecast Grant Norling, Retail Manager
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Retail Demand Vacancy Rates & Absorption Trends: Portland Metro Retail Demand Year
Absorption (SF)
Vacancy
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
506,141 979,766 342,886 375,920 242,709 2,461,489 808,981 46,584 1,100,000 339,774
5.0% 6.0% 6.7% 5.4% 4.3% 4.3% 4.7% 4.8% 4.9% 5.8%
Total
9,476,332
Source: Norris Beggs & Simpson Retail Market Report The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Retail Demand
2008 – 90 basis point increase in vacancy Largest change since 2000
2009 – Likely first (-) negative absorption in over a decade More national tenants go dark Local and regional tenants struggle in harsh economy
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Portland Metro: Where is the Vacancy?
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Portland Metro: Where is the Vacant Box Spaces Vacancy? Former Tenant City Sq. Ft. Mervyns Linens N' Things Linens N' Things Linens N' Things Linens N' Things Levitz Levitz Wickes Shoe Pavilion Shoe Pavilion Shoe Pavilion Total
Vancouver Portland Portland Beaverton Tanasbourne Clackamas Tigard J antzen Beach Portland J antzen Beach Beaverton
82,225 40,160 35,000 45,000 38,410 34,103 40,041 51,350 17,505 19,909 16,500 420,203
Source: New & Neville Real Estate Services
Represents 1% of +/- 42 Million SF metro wide The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Portland Metro: Soon to be Vacant Vacant Box Spaces Former Tenant Circuit City Circuit City Circuit City Circuit City Circuit City Total
Location Gateway J antzen Beach Washington Square Clackamas Salem
Sq. Ft. 37,857 37,360 ±37,000 ±37,000 ±37,000 186,217
Source: CoStar®
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
2008 US Store Closings Retailer
Status
Ann Taylor Banana Republic Circuit City Disney Stores Foot Locker Linens 'N Things Mac y's Mervyn's Pac ific Sunware Phillips-Van Heusen Sharper Image Starbucks Wilson's Leather Zales J ewelers
Re-Structuring Re-Structuring C hapter 11 C hapter 11 Re-Structuring C hapter 11 Re-Structuring Chapter 7 Re-Structuring Re-Structuring C hapter 11 Re-Structuring C hapter 11 Re-Structuring
Stores Closed 117 25 721 98 60 371 11 149 154 175 96 600 103 105
• Many spaces go dark in 2008 • ICSC estimates 6,100 retail chain stores exited in 2008 nation wide The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Investment Grade Sales Retail CAP Rates - OR Year
Type of Center
CAP Rate Range
Average CAPRate
2002
Strip Anchored All Centers
8.3 - 10.8% 7.9 - 9.5% 7.9 - 10.8%
9.6% 8.9% 9.2%
2003
Strip Anchored All Centers Strip Anchored All Centers Strip Anchored All Centers Strip Anchored All Centers Strip Anchored All Centers
8.0 - 9.6% 7.0 - 9.5% 7.9 - 9.6% 6.5 - 8.9% 7.0 - 9.4% 6.5 - 9.4% 6.4 - 7.8% 5.9 - 8.6% 5.9 - 8.6% 5.5 - 10.1% 5.7 - 7.7% 5.5 - 10.1% 5.8 - 8.1% 6.2 - 7.3% 5.8 - 8.1%
8.8% 8.7% 8.7% 7.6% 7.6% 7.6% 7.1% 7.2% 7.1% 6.9% 6.7% 6.8% 6.8% 6.7% 6.8%
Strip Anchored All Centers
6.5 - 7.0% 6.5 - 7.6% 6.5 - 7.6%
6.7% 7.0% 6.9%
2004
2005
2006
2007
2008
Notes End 07 Market Turns
08 Caps
↑ 10 bps
08 Sales Volume ↓ 75% compared to 07
Source: PGP Valuation, Inc. Database The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
National OAR Averages - Strip Centers 7.55% 7.49%
7.50% 7.45% 7.40%
Notes 3Q07 Market Turns
7.20%
7.20% 7.15% 7.10%
7.33%
7.32%
7.28%
7.25%
7.24%
7.30%
7. 34%
7.35%
4Q08 Caps
46 bps ↑ projected through 2Q09
7.05% 2Q-07 Source: Korpacz
3Q-07
4Q-07
1Q-08
↑ 16 bps
2Q-08
3Q-08
4Q-08
Strip Shopping Center
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
National OAR Averages - Power Centers 7.70% 7.57%
7.60% 7.50% 7.40%
Notes 3Q07 Market Turns
7.30% 7.20%
1Q-08
7.17%
4Q-07
7.17%
6.80%
7.13%
6.90%
7.00%
7.00%
7. 06%
7.10%
7.13%
4Q08 Caps
2Q-08
3Q-08
58 bps ↑ projected through 2Q09
6.70% 2Q-07 Source: Korpacz
3Q-07
↑ 40 bps
4Q-08
Power Center
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Investment Sales 2008 Retail Sales Category Size Low High Average Sale Price Low High Average Sale Price/SF Low High Average Cap Rates Low High Average
Anchored
Strip
Other*
40,800 78,292 53,306
12,000 27,710 16,465
1,690 14,820 5,264
$6,925,000 $16,762,867 $12,165,717
$1,575,000 $6,200,000 $4,018,250
$625,000 $7,300,000 $2,607,479
$170 $322 $226
$131 $347 $248
$191 $835 $528
6.5% 7.6% 7.0%
6.5% 7.0% 6.7%
6.0% 8.5% 7.2%
Source: PGP Valuation, Inc. Database *Fast food, freestanding & NNN
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Selected Sales Berryhill Retail Center Oregon City, OR Price: Price/SF: NRA: Date: Cap Rate: Anchors: Comments: center
$8,600,000 $204 42,129 SF 2/28/2008 7.39% Kmart and Albertson’s Shadow Anchored This is the sale of the strip-center component of an approximate 200,000 SF community shopping The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Selected Sales Lowrie’s Marketplace Wilsonville, OR Price: Price/SF: NRA: Date: Cap Rate: Anchors: Comments: private
$16,762,867 $322 52,001 SF 10/10/2008 6.75% Albertsons Property was never on market and was sold after a party made an offer The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Selected Sales Valley River North Eugene, OR Price: Price/SF: NRA: Date: Cap Rate: Anchors: Comments: River Mall. upward
$16,375,000 $209 78,292 SF 8/28/2008 7.57% Petco, Barnes & Noble and Ross Sale of the center across the street from the Valley Perceived risk of anchor tenant rents applied pressure to cap rate. The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Portland Metro
Power Center-$16.38 Shopping Center$19.61
Specialty Center$32.00 Mall-$25.75
General Retail$17.14 Total Market-$18.49
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
2008 YTD Summary • Vacancy rates increasing • Cap rates increasing • New construction stagnant • Retail rents softening
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
2009 Projections • 2009 lowest amount of new space delivered in a decade – New construction will grind to a halt
• The 1st & 2nd quarters will give perspective as to the depth and length of the problems retail landlords will face as postholiday store closures are fully realized – Power and regional centers likely to take the biggest hit – Healthy retailers in 2009 will be able to take advantage of the market; more so than perhaps at any time since the recession of the early 1990s
• Slightly greater investment sales volume compared to 08 – Savvy investors will capitalize on overleveraged owners misfortunes – Cap rates from 7-8+%; more cap rates >8% than <7%
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Download The Presentation http://www.retailnewsblog.com/ccim/
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
CCIM Presentation February 4, 2009
Market Overview Presented By: W. Grant Norling Jeff Grose, MAI Steven L. Waugh
PGP Valuation, Inc www.pgpinc.com
Commitment to Values
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
The Housing Market Steve Waugh
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Industrial & Office Markets Jeff Grose, MAI
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Industrial Market Overview • Slowing economy has and will continue to shape the market • Hangover – sales volume off 60-80% • Market participants “frozen” in light of economic turmoil • 2009 will see softening in rents and increase in cap rates
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Industrial Market Overview Portland Market & Colum bia Corridor East Subm arket (Industrial) SUPPLY
VACANCY
Period
Market
Submarket
Market
Submarket
2003 2004 2005 2006 2007
206,479,984 207,813,591 208,936,088 211,459,670 215,011,836
13,943,125 14,367,305 14,837,005 15,538,355 16,510,776
11.0% 9.1% 7.8% 6.3% 5.0%
11.1% 9.4% 8.5% 5.3% 5.0%
216,041,306 216,925,883 216,912,451 217,071,293
16,836,510 17,567,392 17,567,392 17,567,392
5.6% 6.1% 6.2% 6.3%
9.0% 12.5% 11.8% 12.0%
217,071,293
17,567,392
6.0%
11.3%
Q1 Q2 Q3 Q4
2008 2008 2008 2008
2008 YTD
AVERAGE ASKING RENT PSF/MO. (NNN)
NET ABSORPTION
Period
Market
Submarket
Market
Submarket
2003 2004 2005 2006 2007
$0.38 $0.38 $0.39 $0.38 $0.42
$0.37 $0.38 $0.40 $0.41 $0.40
3,942,713 4,988,711 4,016,319 4,596,790 4,797,566
865,367 459,598 639,813 1,236,093 394,386
$0.45 $0.45 $0.46 $0.46
$0.42 $0.42 $0.44 $0.45
65,229 -226,048 -238,621 9,118
-7,743 57,192 122,280 -29,627
$0.46
$0.43
-390,322
142,102
Q1 Q2 Q3 Q4
2008 2008 2008 2008
2008 YTD
Source: CoStar Property®
NNN = Triple Net
Y-T-D = Year-to-Date
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Industrial Construction – Portland Market Completed Construction 1st Qtr. 2008: 1,136,378 SF Completed Construction 2nd Qtr. 2008: 1,134,520 SF Completed Construction 3rd Qtr. 2008:
0 SF
Completed Construction 4th Qtr. 2008: 478,184 SF Under Construction 1st Qtr. 2009:
916,345 SF
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Industrial Construction
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
What does it mean? Rents
Sales
• Softening
• Difficulty obtaining financing
• Concessions? • Pressure on landlords to retain roll-over tenants
• Buyers and sellers will not see eye to eye in the first half 2009 • Transaction volume will continue to be low
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Cap Rates
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Acquisition Financing Source: Real Capital Analytics
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Industrial Market Trends / Forecast • Leasing – Economic conditions will continue to limit new tenants entering the market and existing tenants expanding. • Cap Rates – Rising. Risk factors will be considered to a much greater degree than in the past. • Overall – The market needs credibility. Once faith is restored in financial markets, stock market, and economy, transactions (sales and leases) can resume. The lack of new supply coming on line should ease the effects of the current slow down and provide for a quick rebound when the economy improves. The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Office Market Like the industrial sector, the office market is feeling the effects of the recession • New construction has been moderate in 07/08 which is softening the negative impacts for 2009 • Market participants “frozen” in light of economic turmoil • 2009 will see softening in rents and increase in cap rates The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Office Market – All
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Portland Office Vacancy, Q4-2008 Central Business District: 7.8% – – –
Class A: 5.1% Class B: 11.4% Class C: 11.3%
• Net absorption for the CBD at +371,701 for 2008. Overall market also saw positive net absorption. This is due to limited new construction. • Overall Portland market has 1,383,398 SF under construction with deliveries in 2009. • With slow economy and large amount of new product, vacancies will rise and there will be pressure on landlords to retain tenants. The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Overall Cap Rates Source: Korpacz Real Estate Investors Survey, Q4 2008
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Regional Retail Market 2008 Overview & Forecast Grant Norling, Retail Manager
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Retail Demand Vacancy Rates & Absorption Trends: Portland Metro Retail Demand Year
Absorption (SF)
Vacancy
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
506,141 979,766 342,886 375,920 242,709 2,461,489 808,981 46,584 1,100,000 339,774
5.0% 6.0% 6.7% 5.4% 4.3% 4.3% 4.7% 4.8% 4.9% 5.8%
Total
9,476,332
Source: Norris Beggs & Simpson Retail Market Report The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Retail Demand
2008 – 90 basis point increase in vacancy Largest change since 2000
2009 – Likely first (-) negative absorption in over a decade More national tenants go dark Local and regional tenants struggle in harsh economy
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Portland Metro: Where is the Vacancy?
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Portland Metro: Where is the Vacant Box Spaces Vacancy? Former Tenant City Sq. Ft. Mervyns Linens N' Things Linens N' Things Linens N' Things Linens N' Things Levitz Levitz Wickes Shoe Pavilion Shoe Pavilion Shoe Pavilion Total
Vancouver Portland Portland Beaverton Tanasbourne Clackamas Tigard J antzen Beach Portland J antzen Beach Beaverton
82,225 40,160 35,000 45,000 38,410 34,103 40,041 51,350 17,505 19,909 16,500 420,203
Source: New & Neville Real Estate Services
Represents 1% of +/- 42 Million SF metro wide The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Portland Metro: Soon to be Vacant Vacant Box Spaces Former Tenant Circuit City Circuit City Circuit City Circuit City Circuit City Total
Location Gateway J antzen Beach Washington Square Clackamas Salem
Sq. Ft. 37,857 37,360 ±37,000 ±37,000 ±37,000 186,217
Source: CoStar®
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
2008 US Store Closings Retailer
Status
Ann Taylor Banana Republic Circuit City Disney Stores Foot Locker Linens 'N Things Mac y's Mervyn's Pac ific Sunware Phillips-Van Heusen Sharper Image Starbucks Wilson's Leather Zales J ewelers
Re-Structuring Re-Structuring C hapter 11 C hapter 11 Re-Structuring C hapter 11 Re-Structuring Chapter 7 Re-Structuring Re-Structuring C hapter 11 Re-Structuring C hapter 11 Re-Structuring
Stores Closed 117 25 721 98 60 371 11 149 154 175 96 600 103 105
• Many spaces go dark in 2008 • ICSC estimates 6,100 retail chain stores exited in 2008 nation wide The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Investment Grade Sales Retail CAP Rates - OR Year
Type of Center
CAP Rate Range
Average CAPRate
2002
Strip Anchored All Centers
8.3 - 10.8% 7.9 - 9.5% 7.9 - 10.8%
9.6% 8.9% 9.2%
2003
Strip Anchored All Centers Strip Anchored All Centers Strip Anchored All Centers Strip Anchored All Centers Strip Anchored All Centers
8.0 - 9.6% 7.0 - 9.5% 7.9 - 9.6% 6.5 - 8.9% 7.0 - 9.4% 6.5 - 9.4% 6.4 - 7.8% 5.9 - 8.6% 5.9 - 8.6% 5.5 - 10.1% 5.7 - 7.7% 5.5 - 10.1% 5.8 - 8.1% 6.2 - 7.3% 5.8 - 8.1%
8.8% 8.7% 8.7% 7.6% 7.6% 7.6% 7.1% 7.2% 7.1% 6.9% 6.7% 6.8% 6.8% 6.7% 6.8%
Strip Anchored All Centers
6.5 - 7.0% 6.5 - 7.6% 6.5 - 7.6%
6.7% 7.0% 6.9%
2004
2005
2006
2007
2008
Notes End 07 Market Turns
08 Caps
↑ 10 bps
08 Sales Volume ↓ 75% compared to 07
Source: PGP Valuation, Inc. Database The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
National OAR Averages - Strip Centers 7.55% 7.49%
7.50% 7.45% 7.40%
Notes 3Q07 Market Turns
7.20%
7.20% 7.15% 7.10%
7.33%
7.32%
7.28%
7.25%
7.24%
7.30%
7. 34%
7.35%
4Q08 Caps
46 bps ↑ projected through 2Q09
7.05% 2Q-07 Source: Korpacz
3Q-07
4Q-07
1Q-08
↑ 16 bps
2Q-08
3Q-08
4Q-08
Strip Shopping Center
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
National OAR Averages - Power Centers 7.70% 7.57%
7.60% 7.50% 7.40%
Notes 3Q07 Market Turns
7.30% 7.20%
1Q-08
7.17%
4Q-07
7.17%
6.80%
7.13%
6.90%
7.00%
7.00%
7. 06%
7.10%
7.13%
4Q08 Caps
2Q-08
3Q-08
58 bps ↑ projected through 2Q09
6.70% 2Q-07 Source: Korpacz
3Q-07
↑ 40 bps
4Q-08
Power Center
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Investment Sales 2008 Retail Sales Category Size Low High Average Sale Price Low High Average Sale Price/SF Low High Average Cap Rates Low High Average
Anchored
Strip
Other*
40,800 78,292 53,306
12,000 27,710 16,465
1,690 14,820 5,264
$6,925,000 $16,762,867 $12,165,717
$1,575,000 $6,200,000 $4,018,250
$625,000 $7,300,000 $2,607,479
$170 $322 $226
$131 $347 $248
$191 $835 $528
6.5% 7.6% 7.0%
6.5% 7.0% 6.7%
6.0% 8.5% 7.2%
Source: PGP Valuation, Inc. Database *Fast food, freestanding & NNN
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Selected Sales Berryhill Retail Center Oregon City, OR Price: Price/SF: NRA: Date: Cap Rate: Anchors: Comments: center
$8,600,000 $204 42,129 SF 2/28/2008 7.39% Kmart and Albertson’s Shadow Anchored This is the sale of the strip-center component of an approximate 200,000 SF community shopping The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Selected Sales Lowrie’s Marketplace Wilsonville, OR Price: Price/SF: NRA: Date: Cap Rate: Anchors: Comments: private
$16,762,867 $322 52,001 SF 10/10/2008 6.75% Albertsons Property was never on market and was sold after a party made an offer The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Selected Sales Valley River North Eugene, OR Price: Price/SF: NRA: Date: Cap Rate: Anchors: Comments: River Mall. upward
$16,375,000 $209 78,292 SF 8/28/2008 7.57% Petco, Barnes & Noble and Ross Sale of the center across the street from the Valley Perceived risk of anchor tenant rents applied pressure to cap rate. The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Portland Metro
Power Center-$16.38 Shopping Center$19.61
Specialty Center$32.00 Mall-$25.75
General Retail$17.14 Total Market-$18.49
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
2008 YTD Summary • Vacancy rates increasing • Cap rates increasing • New construction stagnant • Retail rents softening
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
2009 Projections • 2009 lowest amount of new space delivered in a decade – New construction will grind to a halt
• The 1st & 2nd quarters will give perspective as to the depth and length of the problems retail landlords will face as postholiday store closures are fully realized – Power and regional centers likely to take the biggest hit – Healthy retailers in 2009 will be able to take advantage of the market; more so than perhaps at any time since the recession of the early 1990s
• Slightly greater investment sales volume compared to 08 – Savvy investors will capitalize on overleveraged owners misfortunes – Cap rates from 7-8+%; more cap rates >8% than <7%
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
a Colliers CMN Company
Download The Presentation http://www.retailnewsblog.com/ccim/
The information contained herein has been obtained from sources we deem reliable. Although we have no reason to doubt its contents, we do not guarantee them.
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