southern maine retail forecast - mereda · 7/10/2018 · the bayside 10 • both east & west...
TRANSCRIPT
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1
Southern Maine Retail Forecast
Presented by Peter Harrington
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2.94% 2.62%
5.61%
6.93%
10.80%
8.34%
6.17% 5.92%
4.29% 3.68% 3.60% 3.44%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
Greater Portland Vacancy Rates
Southern Maine Retail Forecast 2
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2.94% 2.62%
5.61%
6.93%
10.80%
8.34%
6.17% 5.92%
4.29% 3.68% 3.60% 3.44%
5.8% 6.0%
7.3%
9.7%
11.9%
13.1% 12.6%
10.9% 10.5%
9.7%
12.6%
11.2%
-1.00%
1.00%
3.00%
5.00%
7.00%
9.00%
11.00%
13.00%
15.00%
Greater Portland National
National Vs. Local Vacancy Rates
Southern Maine Retail Forecast 3
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GP Retail Shopping Centers Vacancy Rates
Southern Maine Retail Forecast 4
9.4%
13.9%
3.0%
1.6% 2.6% 2.3%
3.44%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
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Absorption Rate
Southern Maine Retail Forecast 5
259,559
(138,939)
272,720
166,929
55,230
104,353 39,625
5,069 9,467
(200,000)
(150,000)
(100,000)
(50,000)
-
50,000
100,000
150,000
200,000
250,000
300,000
2008 2009 2010 2011 2012 2013 2014 2015 2016
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GP Historical Lease Rates
Southern Maine Retail Forecast 6
$14.63
$13.87
$14.63
$13.86
$14.48 $14.77
$17.50
$10.00
$12.00
$14.00
$16.00
$18.00
2010 2011 2012 2013 2014 2015 2016
Asking Rate NNN
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Old Port • Changing landscape • Expansion west and east • Almost no vacancy • Restaurant scene • Hotel Impact
7 Southern Maine Retail Forecast
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COMING IN 2017 TO MIDDLE ST
Middle St. Corridor • National retailers entering the market • A mix of local and national tenants has created a
“renaissance” on the Middle Street corridor
8 Southern Maine Retail Forecast
CANAL PLAZA
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India St. & East End
9
• A once vibrant neighborhood comes back to life!
Southern Maine Retail Forecast
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The Bayside
10
• Both East & West Bayside continue to see retail expansion • EAST
Mougalian Rugs at 175 Anderson: Joins Coffee By Design, Youngs Furniture, Cyclemania, Rising
Tide AAA building on Marginal Way proposed conversion to retail Just up the hill – Washington Ave Corridor Continues to develop into a cool restaurant area
• WEST Kennebec St & Marginal Way: Chipotle, T-Mobile, All Speed
Southern Maine Retail Forecast
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Southern Maine Retail Forecast 11
Significant Mall & Retail Building Sales
Property Sales Price SQ/Acres Price PSF City Wendy's $ 505,000.00 3,056 $ 165.25 Brunswick
Tim Horton's $ 525,000.00 2,864 $ 183.31 Auburn
Mr. Bagel $ 600,000.00 3,200 $ 187.50 Scarborough
Margarita's Restaurant $ 610,000.00 4,321 $ 141.17 Portland
Borellas $ 667,500.00 2,720 $ 245.40 Portland
Sala Thai $ 750,000.00 2,136 $ 351.12 Portland
Taylor Brook Mall $ 800,000.00 32,000 $ 25.00 Auburn
Cumberland Farms $ 950,000.00 3,300 $ 287.88 Brunswick
Aubuchon Hardware $ 1,000,000.00 19,000 $ 52.63 Raymond
Clearwater Drive $ 1,170,000.00 7,078 $ 165.30 Falmouth
Wiscasset Marketplace $ 1,230,000.00 34,800 $ 35.34 Wiscasset
Bugaboo Creek Restaurant $ 2,300,000.00 9,060 $ 253.86 South Portland
West Falmouth Crossing $ 2,440,000.00 15,000 $ 162.67 Falmouth
Rite Aid $ 3,000,000.00 11,180 $ 268.34 Augusta
Cumberland Farms $ 4,000,000.00 19,250 $ 207.79 Scarborough
Walmart Plaza $ 12,436,000.00 109,000 $ 114.09 Falmouth
Mt Auburn Plaza, et al $ 20,000,000.00 110,419 $ 181.13 Auburn
Acadia Realty Undisclosed 595,149 $ - Wells, Waterville, Bangor
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Southern Maine Retail Forecast 12
Significant Retail Leases TENANT LOCATION CITY SIZE / SF
Hyperlite Mountain Gear Pepperell Mill Camus Biddeford 11,194
Lamey Wellehan Falmouth Village Center Falmouth 8,609
West End 164 Middle St Portland 16,319
Bunker Brewing 17 Westfield Portland 8,001
Mark's Sports 42-52 Wharf St. Portland 7,200
Bouzu Steakhouse Western Ave South Portland 8,220
Urban Air Clark's Pond South Portland 26,515
Children's Adventure Center 1156 Broadway South Portland 6,500
Willow Pizza & Restaurant 740 Broadway South Portland 8,807
101,365
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New Construction
Southern Maine Retail Forecast 13
CONCEPT ONLY
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Maine Mall & Mall Area Update & Retail Trends
• The Maine Mall and surrounding area continue to be a major draw for shoppers and retailers
• Sales for this holiday season should wind up 4% to 6% higher than last year • The traditional department store is in a transitional period • The Maine Mall is close to full occupancy • The former GAP and Layne Bryant spaces totaling 22,000 SF are being
leased to H&M and H&M’s current space (17,000 SF) will be filled soon • The former Sports Authority space, currently vacant at 43,000 SF, has
several interested parties for all or part of it. • The site that General Growth Properties leased to CarMax
Thanks to Craig Gorris for this information about the Maine Mall.
Southern Maine Retail Forecast 14
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Update & Retail Trends (CONT.)
Southern Maine Retail Forecast 15
TRADITIONAL DEPARTMENT STORES ARE IN TRANSITION
MACY’S - Plans to close 68 stores including its 143,000 SF store in Bangor SEARS – Plans to close 108 Kmarts and 42 Sears stores by Spring 2017 Mall owners are getting creative repositioning vacant department store spaces. Some of these closing might actually be a positive, because alternative uses can actually bring more traffic than the existing department stores. H&M, Forever 22,Dicks Sporting Goods, supermarkets, specialty food stores, gyms, restaurants, cafes and cool food halls, among others are helping to fill the void left by closing department stores.
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Update & Retail Trends (CONT.)
Southern Maine Retail Forecast 16
Eastpoint Christian Church of Clarks Pond Urban Air Trampoline & Adventure Park
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Update & Retail Trends (CONT.)
Southern Maine Retail Forecast 17
Single Tenant Retail Properties are in high demand from high-net-worth individual investors -- fast food chains and drugstores are among the most sought-after tenants.
Why? Zero or no landlord responsibility, limited exposure to operating expenses, capital expenses, vacancy, less, risk.
One Tenant = one check monthly. Noted in ICSC Magazine as well.
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Southern Maine Retail Forecast 18
• Vacancy Rates remaining low – however they don’t have much room to drop
• Lease rates should also remain stable – but after rising over the past few years, they should moderate
• The first new major retail center in the Greater Portland area in years should break ground in Westbrook
• After an active 2016 in shopping center and retail building sales 2017 should be slower
• Increasing interest rates will have an impact on pricing and CAP rates for retail and investment properties
• On-line retail sales will continue to increase but will still be less than 8% to 9% of sales
Looking Ahead to 2017
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Southern Maine Retail Forecast 19
• Demand for retail space on Portland’s peninsula will remain strong
• Demand for single tenant retail properties should remain strong • Other national retailers will continue to be drawn to Portland’s
Old Port and Waterfront • As the US economy heads into 2017, it has the wind in its sails.
There have been gains in employment, consumer spending, incomes, housing starts and consumer confidence.
All in all, it should be another positive year for the retail sector
Looking Ahead to 2017 (CONT.)
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Southern Maine Retail Forecast 20
Thank You!
Peter Harrington Partner & Associate Broker 207.772.0088 direct Malone Commercial Brokers malonecb.com