Koepsel.Retail_ci_08

Report
WCAI Year In Review Symposium
December 2, 2013
Retail Market Overview
Milwaukee, WI
2013
Ross L. Koepsel, CCIM
Partner
Commercial Property Associates, Inc.
1000 N. Water St.
Suite 160
Milwaukee, WI 53202
(414) 271-3298
(414) 271-3789 fax
[email protected]
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Retail-focused brokerage
Founded in 1989
10 brokers plus support staff
Landlord/buyer/developer representation,
Tenant/seller representation, site selection, investment
sales, excess property disposition, distressed assets,
sale/leasebacks, subleases, ground leases, etc.
• Retailers represented include: Men’s Wearhouse,
AutoZone, Dollar Tree, rue 21, Firehouse Subs, Verizon,
Heartland Dental, Caribou Coffee, Fresh Thyme
Farmer’s Market, and many more
Major Factors Currently Affecting
Retail
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Employment
Interest Rates
Consumer confidence/decreased consumer demand
Housing
Inflation
CCIM Quarterly Market Trends Report
• Projected net absorption of approximately 12
million square feet nationwide.
• Third quarter national vacancy rate fell 10
basis points to 10.6%
Retail Research Market Report
• Local economy to add 10,000 jobs in 2013, adding 1.2%
to payrolls year over, while net jobs created remains
relatively even compared to 2012
• Approximately 650,000 sf of new retail space will be
delivered at year end 2013. This is a decrease of
850,000 sf of new product compared to 2012
• Local vacancy rates will fall 70 basis points to 7.8% as
strong national net absorption rates are also witnessed
closer to home
• Area retail asking rents will swing slightly in favor of
Landlords, adjusting up 0.4% from 2012
Recent Retailer Activity in
Southeastern Wisconsin
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Nordstrom, Nordstrom Rack
Sak’s Off Fifth
Wal-Mart Neighborhood Market
Meijer
Hobby Lobby
Ashley Furniture
Ulta
DSW Shoes
Gordman’s
Bed Bath & Beyond
Dick’s Sporting Goods
Big Lots
Planet Fitness
Dollar Tree
TJX Cos
Woodman’s
Retail Development in Southeastern
Wisconsin
Under Construction
• Mayfair Collection
• Drexel Town Square
• Wal-Mart SWC Moorland Rd. and Greenfield Ave.
New Berlin – breaking ground soon 152,000 sf
Proposed
• Ruby Farms/Plaza 173/The Corners in Brookfield
• Grafton – north of Costco
• Oconomowoc Wal-Mart/Sam’s Club
• Phase 3 Shops at Fox River in Waukesha
Largest Lease Deals in 2013
• Hobby Lobby Crossroads SC Menomonee Falls
62,000 sf
• Ashley Furniture 4771 S. 27th St. Greenfield
56,785 sf
• Big Lots 5415 Washington Ave. Racine 39,060 sf
• Value Village Badger Plaza Racine 26,041 sf
• Jo-Ann Fabrics North Northpointe SC
Menomonee Falls 18,157 sf
Largest Deliveries of Space in 2013
• Woodman’s 1600 E. Main St. Waukesha
230,000 sf
• Wal-Mart 4140 W. Greenfield Ave. West
Milwaukee 100,000 sf
• Wal-Mart 5301 S. 76th St. Greendale 92,000 sf
• Wal-Mart 222 N. Chicago Ave. South
Milwaukee 48,978 sf
• TJ Maxx 1160 W. Sunset Dr. Waukesha 24,000
sf
Cap Rates, etc.
• Retail cap rates in the area compressed to
8.04% in 2013 from 8.94% in 2012
• In first 6 months of 2013, 32 sale transactions
over 15,000 sf occurred vs. 25 during the first
6 months of 2012
• Price on a psf basis rose from $81.50/sf to
$93.17/sf
Retail Property Sales
• 3 Wal-Mart anchored properties purchased by
Inland Real Estate JV (Wauwatosa, Menomonee
Falls, and Milwaukee)
• Sale of combined 174,500 sf for $24,200,000
• 9/12/2013
• Nagawaukee Center in Delafield purchased by
Ramco-Gershenson Properties Trust from Told
Development Co. for $22,650,000 on 4/18/2013
• The 105,921 sf acquisition achieved $213.84/sf
• 8% cap
• Washington Square SC Sheboygan sold for
$19,000,000
• $128.18/sf, GLA of center 147,086 sf
• Sold on 12/26/2012 to Piggly Wiggly by Tom
Schafer
• Pick N Save center 1751 N. Mayfair Rd.
Wauwatosa acquired for $16,185,484
• 7.55% cap rate equates to $234.67/sf (68,970
sf)
• Sold 12/21/2012 to Cole Real Estate
Investments by West Development Partners
• East Pointe Marketplace downtown
Milwaukee $15,235,000 or $264.04/sf
• 57,700 sf sold 11/2/2012
• Sold by Mandel Group Inc. to Westwood
Financial Corp
• Originally developed 1994
• Cole Credit Property Trust IV, Inc. purchased the
Pick N Save 2625 S. Business Dr. in Sheboygan
(southside) $14,122,000.
• Sold 9/6/2012 for $201.74/sf (70,000 sf)
• Cap rate of 7.73%
• Built 2012 – developed by Continental Properties
• Shoppes at Wyndham Village 7780 S. Lover’s
Lane in Franklin sold 11/26/13 for $12,800,000
• Sale encompassed the Pick N Save and 3 buildings
totaling 96,269 sf
• Purchaser was Cloverleaf Group from Northfield,
IL
• Sold by Starwood Capital Group
• Ascendant Holdings LLC purchased West Bend
Corporate Center from Ripp Properties on
9/25/2012 for $11,475,000
• Property size 127,992 which equates to $89.65/sf
• 9.66% cap
• Developed in 1998 by Continental Properties
• Meadowbrook Marketplace sold for $10,300,000 on
11/19/2012
• GLA of center 104,526 sf, built in 1999
• $98.54/sf
• 9% cap
• 104,526 sf, 92% leased at time of sale
• Sold by Styza Properties to a property investment group
from Singapore (Meadowbrook Marketplace LLC)
• Pick N Save at 2931 S. Chicago Ave. in South
Milwaukee was sold 11/11/13 for $7,558,000
• Cole Real Estate Investments Inc. purchased
from Alexander & Bishop of Oshkosh, WI
• 58,730 sf big box anchors Grant Park Plaza
2014 Forecast
• Retail leasing and sales activity will continue to
increase
• Net absorption should continue to increase slowly even
with new construction deliveries
• Rents for grade A properties will continue to
strengthen
• Demand and cap rates for single tenant net leased
assets will remain steady due to low inventory
• Cap rates for multi-tenant retail should compress an
additional 25 to 50 basis points due to increased
demand
Have a Happy and Prosperous 2014
Thank you!!

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