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Second Quarter 2017 | Retail

Greenville

The second quarter of 2017 boasted three key retail trends: the rapid rise in rent rates on Downtown Greenville’s Main Street, an all-time high in restaurant competition within Downtown Greenville, and continued growth of suburban retail development.

Downtown Greenville’s Main Street is in the spotlight, thus furthering the rise in rental rates. The competition between restaurants and retail shops for prime retail space will continue to increase throughout 2017. This is attributed to the recent national accolades Downtown Greenville has received combined with the delivery of several new hotels, multifamily housing facilities, office buildings and retail developments.

Restaurant competition in Downtown is especially high due to skyrocketing rental rates combined with high food prices. At the end of the second quarter, two prominent West End restaurants announced that they will be closing their doors permanently. New restaurants willing to pay higher rental rates are already lined up to take their places. Further, Greenville will be receiving several new-to-market concepts including an IV bar, a bar-cade and several bowling alleys.

Downtown Spartanburg is also in the Upstate spotlight with a wide variety of new restaurant concepts coming to market combined with mill revitalization. Rick Erwin announced plans for a “Level 10”

restaurant concept to open at the new AC Hotel. A first-to-market Hawaiian cuisine restaurant, Pokenori plans to open Downtown along with additional breweries and restaurant concepts. Mill revitalization, a trend that started in Greenville, has now carried over to the Spartanburg market. The Arcadia Mill is set to receive rehabilitation with the addition of 80 loft apartments and a portion of the building for an art school.

Suburban retail development is on the rise with the addition of several new-to-market grocers. Lidl and Aldi grocers continue to open new stores throughout Greenville and Spartanburg. Sprouts also announced its plans for a new development on the Woodruff Road corridor. In addition to grocery chain growth, other national retailers including Tropical Smoothie have announced plans for new Upstate locations. Area restaurant Staple, Saskatoon, announced that it will be vacating its Haywood Road location after 23 years after purchasing 9 acres for an expansion. Another area restaurant/bar staple, Local Cue, applied for expansion plans to include an event venue.

These retail trends can be expected to continue throughout the remainder of 2017 and trickling into 2018 as both Downtown Greenville and Downtown Spartanburg receive national attention from both media publications and developers alike.

Downtown Greenville in the Spotlight Creating High Competition


Greenville Second Quarter 2017 | Retail

Anderson CountyInventory

Vacancy Rate

Available Rate

Asking Rent

Laurens CountyInventory

Vacancy Rate

Available Rate

Asking Rent

Greenville CountyInventory

Vacancy Rate

Available Rate

Asking Rent

Cherokee CountyInventory

Vacancy Rate

Available Rate

Asking Rent

Pickens CountyInventory

Vacancy Rate

Available Rate

Asking Rent

Spartanburg CountyInventory

Vacancy Rate

Available Rate

Asking Rent

4Q165,131,548

6.6%

12.3%

$6.11

4Q16797,549

6.2%

8.0%

$5.62

4Q1613,615,218

6.7%

8.1%

$11.68

4Q161,063,506

3.6%

5.4%

$7.54

4Q162,828,283

8.0%

8.4%

$10.05

4Q166,902,310

8.4%

10.5%

$6.92

3Q165,131,548

6.4%

9.2%

$6.45

3Q16797,549

6.9%

9.8%

$5.62

3Q1613,595,218

6.9%

8.7%

$11.48

3Q161,063,506

4.4%

5.7%

$7.54

3Q162,828,283

7.1%

7.5%

$9.95

3Q166,902,310

10.0%

11.9%

$7.05

2Q165,131,548

6.5%

8.9%

$6.28

2Q16797,549

9.1%

10.7%

$5.28

2Q1613,590,218

8.3%

9.0%

$11.64

2Q161,063,506

4.1%

5.4%

$5.94

2Q162,828,283

8.8%

9.8%

$9.71

2Q166,902,310

9.1%

12.3%

$7.23

Submarket Indicators

Market Facts

7.2%Vacancy Rate

9.6%Available Rate

$8.64 psfAsking Rent

30,346,614 sfInventory

1Q175,131,548

9.5%

11.7%

$6.84

1Q17797,549

5.8%

8.0%

$5.62

1Q1713,623,418

6.6%

8.7%

$11.76

1Q171,063,506

3.6%

5.7%

$7.54

1Q172,828,283

5.3%

5.6%

$9.61

1Q176,902,310

8.3%

9.9%

$6.99

2Q175,131,548

10.0%

13.6%

$6.64

2Q17797,549

5.6%

7.4%

$5.62

2Q1713,623,418

6.6%

8.6%

$11.64

2Q171,063,506

2.9%

3.5%

$6.58

2Q172,828,283

5.8%

6.5%

$9.53

2Q176,902,310

7.8%

10.8%

$6.92



All SubmarketsInventory

Vacancy Rate

Available Rate

Asking Rent

Net Absorption

4Q1630,338,414

7.1%

9.3%

$8.62

133,970

3Q1630,318,414

7.4%

9.3%

$8.79

193,951

2Q1630,313,414

8.1%

9.7%

$8.73

709,867

Market Overview

Submarket Map

1Q1730,346,614

7.2%

9.1%

$8.84

(37,465)

2Q1730,346,614

7.2%

9.6%

$8.64

79



Trends to Watch

RentsRents continue to rise on Main Street in Downtown Greenville

CompetitionRestaurant competition at all-time high in downtown areas

DevelopmentSuburban retail development continues to grow

Vacancy Rates Asking Rent Net Absorption

Notable Lease Transactions

American Freight

JC Hair Land Beauty Supply

Absolute Fitness

Liquor & Wine World

Bee Healthy

Tenant

Original

Original

Original

Original

Original

Type

Hidden Hill Center, 473-477 E Blackstock Rd

Westowne Shopping Center, 5-9 Farrs Bridge Rd

Wade Hampton Gallery, 5115 Wade Hampton Blvd

Peachtree Shopping Ctr, 1301 W Wade Hampton Blvd

Anderson Central, 629-651 Hwy 28 Bypass

Address

Spartanburg County

Greenville County

Anderson County

Greenville County

Anderson County

Market

29,781

6,950

4,000

3,471

3,200

SF

Notable Sales Transactions

B.M. Smith & Associates, Inc.

Lakeside Vista, LLC

Greer Rite Air, LLC

15 Garlington, LLC

Prep Fast Food-piedmont, LLC

Buyer

$5,530,000

$3,250,000

$3,050,000

$2,295,483

$2,200,000

Sale Price

Camelot Center, 1600 John B White Sr Blvd

Carolina Ale House, 1115 Woodruff Rd

1100 W Wade Hampton Blvd

15 Garlington Road

Bojangles', 2 Kalyns Way

Address

Spartanburg County

Greenville County

Greenvile County

Greenville County

Anderson County

Market

64,519

6,478

14,481

5,565

3,400

SF

7.2%

6%

7%

8%

9%

10%

YE12 YE13 YE14 YE15 YE16 YTD17

$8.64

$7.50

$8.00

$8.50

$9.00

$9.50

YE12 YE13 YE14 YE15 YE16 YTD17

79

-200,000

-100,000

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17

avisonyoung.com

© 2017 Avison Young - South Carolina, Inc. All rights reserved.

E. & O.E.: The information contained herein was obtained from sources which we deem reliable and, while thought to be correct, is not guaranteed by Avison Young.


Charlene Aydelotte MasseyBusiness Operations Manager, Researcher [email protected]

GreenvilleContact Information

For more information on this report, please contact:

511 Rhett StreetSuite Two-BGreenville, South Carolina 29601United States

Researcher CommentsMarket research data and transaction information provided by CoStar.

John OdomSenior Associate [email protected]

Rakan DrazAssociate [email protected]

Total Square FootageRetail inventory includes all multi-tenant and single tenant centers and properties at least 20,000 square feet.

Retail Buildings ClassificationsSuper Regional Centers are properties with greater than two million square feet of space, drawing from a trade area encompassing multiple smaller submarkets. Sub Regional centers include centers of 500,000 square feet or greater that service one main submarket exclusively. Single Tenant retail includes power center tenants in free-standing centers as well as stand-alone retailers. Large Strip Centers are car oriented strip retail centers of 150,000 square feet or greater. Small Strip Centers are centers of 50,000 to 150,000 square feet, and include many local and grocery anchored centers.

Vacancy and AvailabilityThe vacancy rate is the amount of physically vacant space divided by the inventory and includes direct and sublease vacant. The availability rate is the amount of space available for lease divided by the inventory.

Net AbsorptionThe net change in physically occupied space over a period of time.

Asking RentThe dollar amount asked by landlords for available space expressed in dollars per square foot per year in most parts of the country. Retail rents are reported on a triple net basis where all costs including, but not limited to, real estate taxes, insurance and common area maintenance are borne by the tenant on a pro rata basis. The asking rent for each building in the market is weighted by the amount of available space in the building. This has the effect of causing rental rates on larger spaces to affect the average more than that of smaller spaces. The weighted average asking rental rate is calculated by taking the ratio of the square footage associated with the rental rate on each individual available space to the square footage associated with rental rates on all available spaces, multiplying the rental rate by that ratio, and then adding together all the resulting numbers. Asking rental rate averages only includes Direct Space that is being offered for lease directly from the landlord or owner of a building and does not include Sublet Space that is being offered by another tenant trying to sublet a space that has already been leased.

Retail Terms and Definitions

SubmarketsSubmarkets are non-overlapping, contiguous geographic designations having a cumulative sum that matches the boundaries of the Market they are located within.

Meghan McDuffAdministrative Coordiantor [email protected]

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