old dominion university hampton roads real estate old

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Old Dominion University Hampton Roads Real Estate

Market Review and Forecast2005

Presented by: The Center for Real Estate

and Economic Development


Market Review and Forecast

Retail MarketPresented by

Blount HunterH. Blount Hunter

Retail & Real Estate Research Co.

RETAIL SALES GROWTH

• Southside: Expect to surpass $10.0 Billion• Peninsula: Approaching $4.5 Billion• Steady increases during military

deployment—very different from Gulf War experience in early 1990s

• 2004: “Market caught its breath”• 2005-2006: significant new development

RETAIL SALES GROWTH

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

1996 1997 1998 1999 2000 2001 2002 2003 2004

SouthsidePeninsula

RETAIL OVERVIEW

• 46 million SF GLA (shopping centers)• 30 million SF Southside (65 percent)• 16 million SF Peninsula (35 percent)

Square footage and population are “balanced” within regionRegion has 29 SF per capita compared to national average of 22 SF

MARKET DYNAMICS

CONSTRUCTION: DOWNNEW TENANTS: DOWNABSORPTION: DOWNBIG BOX VACANCY: DOWNOCCUPANCY: UPRENT: UP

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AVERAGE RENT

$13.46 $13.88$13.18 $13.36

$0.00$2.00$4.00$6.00$8.00

$10.00$12.00$14.00$16.00$18.00$20.00

Southside Peninsula

20032004

NEW CONSTRUCTION

419500

271600 330000

185000

749000

456600

0

100000

200000

300000

400000

500000

600000

700000

800000

Southside Peninsula Total

20032004

SPACE ABSORPTION

419100 341700 412000

84300

831000

426000

0100000

200000300000

400000500000600000

700000800000

900000


20032004

VACANCY RATE

0.105

0.089

0.126

0.104

0.119

0.094

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%


20032004

VACANCY BY PRODUCT TYPE

0.098

0.127

0.066

0.135

0.049

0.037

0 00.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

Neighborhood

Community

Regional

Power

Freestanding

Specialty

Festival

Outlet

“BIG BOX” VACANCY

2.6 million SF “Big Box” vacancy– 61 percent of total retail vacancy– Disproportionate problem on Peninsula

• 43 percent of “big box” vacancy is on Peninsula• 69 percent of Peninsula’s vacancy is in “big boxes”

– Reflects 30 percent drop in vacancy from 2003

– Absorption: re-leasing and re-use

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“BIG BOX” VACANCY

Big Box Vacancy per Square Foot

0500,000

1,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,000

1997

19

98

1999

20

00

2001

20

02

2003

20

04

Vaca

nt S

quar

e Fe

et

SouthsidePeninsulaTOTAL

NOTABLE SALES IN 2004

Greenbrier Mall sold (again) for $102 million or the equivalent of $115 PSFSmaller centers throughout the market generally sold for $70 - $95 PSF

“SWEET SPOTS”

“Sweet Spots” exist throughout the region:WilliamsburgNorthern Newport NewsColiseum CentralNorthern Suffolk/Isle of Wight/Route 17Pembroke/Town CenterVictory Crossing/Midtown in PortsmouthDowntown Norfolk/GhentGreenbrier

“EYE ON THE MARKET”

• Nationally and locally, department stores will be under pressure to perform

• More regional shopping centers will add non-traditional uses and anchors to increase their appeal

• “Lifestyle centers” continue to be the project du jour; strong co-tenancy of retailers, restaurants, and entertainment is critical for success


→Suffolk doesn’t have an emerging “central place” for shopping center development

→Williamsburg is getting broader retail offering—just not in mall format

→“Workhorse” retail areas such as Janaf and Coliseum are being overlooked despite strong sales and new investments

→Town Center’s challenge is to become more than a restaurant park


• Lord & Taylor’s departure provides good merchandising opportunity for Lynnhaven

• MacArthur Center’s sales continue to rise—opportunities exist for enhanced tenant quality and “third anchor”

• Northern Newport News will soon surpass Greenbrier as region’s highest density retail node

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THANK YOU!


Market Review and Forecast

Presented by: The Center for Real Estate

and Economic Development

old dominion university hampton roads real estate old

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