southern maine retail review & outlook 2015

2014 State of the Market

RETAIL

National Retail Trends

Local Market Conditions

Notable Leases & Sales

Forecast 2015

Recovery

Expansion

Hyper-Supply

Recession

NATIONAL

TRENDS

NATIONAL TRENDS

INTERNET SALES

16.9%

Internet

4.4%

In-store

INTERNET SALES

Internet In-store

16.9%

4.4%

$263B

$4.27 T

$75B SALES

$274M NET

$2B NET

INTERNET SALES

$274M NET

$687M NET

INTERNET SALES

HOW BRICKS & MORTAR

STAYS HEALTHY

“To know your Enemy, you must become your Enemy.”

― Sun Tzu, The Art of War

INTERNET SCHOOL

Omnichannel Definition: Seamless approach to the consumer

experience through all available

shopping channels: mobile, computers,

bricks and mortar, TV, radio, direct mail

etc.

CLICK AND COLLECT

WEB INFLUENCED SALES

LOCATION, LOCATION , LOCATION

CHANGE IS GOOD?

STATISTICS

GREATER PORTLAND

VACANCY RATES 10.80%

8.34%

6.17% 5.92%

4.29% 3.68%

0%

2%

4%

6%

8%

10%

12%

2009 2010 2011 2012 2013 2014

GREATER PORTLAND VS

NATIONAL RATES

0%

2%

4%

6%

8%

10%

12%

14%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Greater Portland National

9.7%

3.68%

GREATER PORTLAND AREA

VACANCY RATES

0.0%

12.7%

5.2%

3.1%

1.9% 1.3%

3.68%

0%

2%

4%

6%

8%

10%

12%

14%

Cape Eliz Falmouth Portland Scarb So Portland Westbrook All

VACANCY RATE

PRIMARY & SECONDARY

0%

1%

2%

3%

4%

5%

6%

7%

8%

2013 2014

Primary Secondary

GREATER PORTLAND NET

ABSORPTION RATE 2014 BOY inventory total 6,460,738 BOY vacant 277,283 BOY occupied 6,183,455

EOY inventory total 6,460,738 Adjustments* - EOY vacant 239,658 EOY occupied 6,221,080

Net Absorption 37,625

2013 6,449,542

382,136 6,067,406

6,460,738 -

277,283 6,183,455

116,049

GREATER PORTLAND NEW

CONSTRUCTION BY DECADE 144,903 SF

110,632 SF

94,232 SF

114,754 SF

144,106 SF

26,020 SF

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

1960's 1970's 1980's 1990's 2000's 2010's

Note: Average annual rate of construction.

2013 2014

LARGE VACANCIES

2013 2014

132,698 SF 133,667 SF

2013 2014

Pine Tree Shopping Center Center 30,548 SF 30,262 SF

2013 2014

Clark Pond 17,500 SF 25,435 SF

2013 2014

Cabela's 16,000 SF 15,000 SF

2013 2014 Falmouth Shopping Center 68,650 SF 62,970 SF

HISTORICAL LEASE RATES

$14.08

$14.86

$18.71

$20.50

$18.00

$16.25

$15.03

$14.63

$13.87

$14.63

$14.42

$15.00

$10.00

$12.00

$14.00

$16.00

$18.00

$20.00

$22.00

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

OTHER MAINE VACANCY

RATES

6.3%

4.0%

16.4%

10.5%

5.9% 5.3%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Augusta Biddeford Brunswick Freeport Saco Topsham

HAPPENINGS &

TRANSACTIONS

15,000 SF

LARGER DEALS

11,000 SF

LARGER DEALS

11,000 SF 15,000 SF 9,300 SF

LARGER DEALS

11,000 SF 15,000 SF 9,300 SF 8,400 SF

LARGER DEALS

PORTLAND- OLD PORT

BAYSIDE

INDIA ST

PORTLAND- OLD PORT

BAYSIDE

INDIA ST

WEST END

PORTLAND- OLD PORT

BAYSIDE

INDIA ST

7,500 SF

PORTLAND- OLD PORT

TIQA 7,000 SF

PORTLAND- OLD PORT

PORTLAND- OLD PORT

PORTLAND- DOWNTOWN

SMALL DEALS

2014

Total# 85

Average SF 1,817

Total SF 154,409

2013 2012

95 75

2,065 2,050

196,190 153,732

SMALL DEALS

Food

25%

Service

32%

Merch

33%

Other

10%

SMALL DEALS

Retail Outside Portland

83% SERVICE, FOOD,

OTHER

27% MERCHANDISE

SMALL DEALS

83% SERVICE, FOOD,

OTHER

56% SERVICE,

FOOD, OTHER

Retail in Portland

44% MERCHANDISE

DISCOUNTERS

1.25- 1.5 Acres 4,500 SF

GAS/CONVENIENCE

GAS/CONVENIENCE

COFFEE

AUBURN

55,000 SF

TOPSHAM

BRUNSWICK

• Merrymeeting Plaza- 50K vacant • Cooks Corner- 35K vacant

WINDHAM

BIDDEFORD

STORE CLOSINGS

• EMS- 18,000 SF • Young’s Furniture Market- 20,000 SF • J.L. Coombs- 5 stores • Clark’s Pond- 113,000 SF

(Projected EOY inventory for 2015)

PROPERTY SALES

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

2010 2011 2012 2013 2014

Avg Annual PSF $69 $74 $121 $118 $88

Total # of sales 15 8 9 10 21

TD Bank

$1.75M

$235.75 PSF 6.7 CAP

PROPERTY SALES

TD Bank

$1.75M

$235.75 PSF 6.7 CAP

STARBUCKS/MATTRESS FIRM

$4.78M

$704.14 PSF 6.75 CAP

PROPERTY SALES

TD Bank

$1.75M

$235.75 PSF 6.7 CAP


$4.78M

$704.14 PSF 6.75 CAP

NORTHERN PLAZA

$700,000

$8.33 PSF 15 CAP

PROPERTY SALES

TD Bank

$1.75M

$235.75 PSF 6.7 CAP


$4.78M

$704.14 PSF 6.75 CAP

NORTHERN PLAZA

$700,000

$8.33 PSF 15 CAP

POLAND CROSSING

$2.98M

$147.74 PSF 9 CAP

PROPERTY SALES

TD Bank

$1.75M

$235.75 PSF 6.7 CAP


$4.78M

$704.14 PSF 6.75 CAP

NORTHERN PLAZA

$700,000

$8.33 PSF 15 CAP

POLAND CROSSING

$2.98M

$147.74 PSF 9 CAP

MILL STORE

$2.2M

$88.53 PSF

PROPERTY SALES

TD Bank

$1.75M

$235.75 PSF 6.7 CAP


$4.78M

$704.14 PSF 6.75 CAP

NORTHERN PLAZA

$700,000

$8.33 PSF 15 CAP

POLAND CROSSING

$2.98M

$147.74 PSF 9 CAP

MILL STORE

$2.2M

$88.53 PSF

DUNSTAN SCHOOL

1.48M

$110.45 PSF

PROPERTY SALES

2015

FORECAST

2015 FORECAST

Vacancy Rates

• Primary Markets

• Secondary Markets

Lease Rates

• Primary Markets

• Secondary Markets

Small spaces- rise sharply Large spaces- rise slightly

Small spaces- flat Large spaces- decline

2015 FORECAST

Investment Sales

Will Increase.

However we are challenged by lack of supply and potential

rising interest rates.

2015 FORECAST

SCARBOROUGH

GALLERY

115,000 SF

2015 FORECAST

WIDGERY WHARF

15,000 SF

2015 FORECAST

New Construction

• Dirigo Plaza- 550,000 SF • Century Plaza- Bayside- 13,000 SF • Bayside Housing- 100,000 SF

2015 FORECAST

Recovery

Expansion

Hyper-Supply

Recession

PRIME

RETAIL

MID-

MARKET

RETAIL

CENTERS

DISCOUNTERS

& DOLLAR

STORES

“It’s a wise man who rules the stars,

it’s a fool who’s ruled by them”

…Darrell Martini, The ‘Great’ Cosmic Muffin

Presented by

Mark Malone, CCIM

15th Annual Retail Report

southern maine retail review & outlook 2015

Real Estate