Q4 2012 Cincinna

THE KNOWLEDGE REPORTCINCINNATI, OH

www.colliers.com/cincinnati

RETAIL MARKET CLOSES OUT THE YEAR ON A RESPECTABLE NOTEEXECUTIVE SUMMARY

In the first quarter of 2012, the vacancy rate stood at 12.5%. At the close of the year, deal momentum

accelerated and the vacancy rate for the fourth quarter improved to 10.41%. With this activity, the

market saw 525,355 square feet of positive absorption in the last three quarters of 2012, and 57,667

square feet occurring in the fourth quarter. The biggest lease transactions during this period included:

91,723 square feet by Pease Warehouse and Kitchen Showroom at Hamilton Crossing Shopping

Center; 54,956 square feet by Hobby Lobby at Governor’s Pointe Shopping Center; and 31,260 square

feet by Ollie’s Bargain Outlet at Glenway Crossing.

Major purchases had a role in the overall market during fourth quarter as well. The City of Cincinnati

took the lead and purchased the distressed 70,000-square-foot Tower Place Mall in the

Central Business District. The proposed plan is to demolish the existing parking structure, Pogue’s

Garage, and build a 30-story mixed use high rise at the site. The development will contain 300 luxury

apartments, 1,000 parking spaces, and a 15,000 square-foot grocery store. The project also includes

the renovation of Tower Place Mall into 500 additional parking spaces and street level retail. This

major purchase, and several others, are all great signs for retail going into 2013.

DEVELOPMENT

Construction projects are moving forward as scheduled throughout the city. Excitement surrounding

the Horseshoe Casino development increased with the announcement of several premiere restaurants

joining the mix. Restaurants joining the development include: Margaritaville State of Mind, First Jack

Binion’s Steakhouse, and celebrity Chef Bobby Flay’s Bobby’s Burger Palace.

In May, it was announced that the Yard House Bar and Grill would join The Banks development at the

corner of Walnut Street and Freedom Way. This is one of the first steps in next major phase of

construction at the $600 million project. An additional 300 apartment units and 60,000 square feet

of retail space are planned and will be delivered throughout the year in 2013.

With the opening date set for March 5, 2013 for the casino, and construction at The Banks moving

ahead smoothly, 2013 is setting up as a strong year.

MARKET INDICATORS

*Projected Change to the following Quarter.

Q4 12 Q1 13*

VACANCY

NET ABSORPTION

CONSTRUCTION

RENTAL RATE

Q4 2012 | RETAIL

OVERALL VACANCY RATE

10.0%

10.5%

11.0%

11.5%

12.0%

12.5%

13.0%

13.5%

1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12

Overall Vacancy Rate

UPDATE Recent Transactions

FIRST QUARTER ACTIVITY

PROPERTY TRADE AREA TENANT SIZE TYPE

Stone Creek Towne Center Northwest Oakbrook III 143,000 Sale

Hamilton Crossing Shopping Center Northwest Pease Warehouse and Kitchen Showroom 91,723 Lease

Shoppes of Mason Northeast Optimus Investment 80,800 Sale

Tower Place Mall CBD City of Cincinnati 70,000 Sale

Governor’s Pointe Shopping Center Northeast Hobby Lobby 54,956 Lease

7755 Montgomery Road Northeast U.S. Bank 40,500 Sale

Glenway Crossing West Ollies Bargain Outlet 31,260 Lease

10400 Reading Road Central Cincinnati Asian Market 31,000 Lease

Cincinnati Mall Northwest Place 2 B Night Club 29,000 Lease

Governor’s Pointe Shopping Center Northeast Marshall’s 28,600 Lease

Newport Plaza NKY Planet Fitness 28,000 Lease

Northgate Mall Northwest Marshall’s 27,000 Lease

3960 Red Bank Road Central Pet Medical & Cancer Care 25,000 Sale

7720 Voice of America Centre Drive Northwest Fresh Market 23,600 Lease

Cincinnati Mall Northwest Bee Active Adventure Zone 22,917 Lease

Shoppes of Deerfield Northeast Square Hill Properties LLC 20,156 Sale

Latonia Plaza Shopping Center NKY ACB American 18,150 Lease

8255 Colerain Avenue Northwest Victory Lady Fitness 15,000 Lease

3061 Madison Road Central David Millet Interiors 13,500 Lease

Newport Shopping Center NKY Ace Hardware 12,500 Lease

Harrison Center West Dollar Tree 12,000 Lease

Delhi Plaza West Dollar General 11,737 Lease

Tri-County Towne Center Northwest Casual Male DXL 11,240 Lease

Latonia Plaza Shopping Center NKY Aarons Rents 10,500 Lease

NATIONAL RETAIL SPOTLIGHT

With the urgency of the deficit

situation taking center stage at the

close of 2012, many national retailers

underestimated the magnitude of

consumer pullback that occurred in

December. This has been a high

profile issue for more than a year, but

it appears that it wasn’t until

December that many people realized

the potential negative impact to their

2013 tax liability. While we believed

that Congress would eventually

reach a deal to push off the “cliff”

ahead of the January 1st deadline,

discussions surrounding the last-

minute agreement kept consumers

and retailers on edge throughout the

holiday season. After Christmas,

heavy shopper turnout helped to

salvage the season for many stores.

FORECAST2013 will be an interesting one to

watch. As employees’ first 2013

paychecks reflected the revision of

the Social Security payroll tax rate

from 4.2% to 6.2%, retailers worry

soft sales may occur at the beginning

the year. This lull in buying activity

may persist for a couple of months as

households recalibrate their budgets.

Transactions are believed to be accurate but not guaranteed.

UNEMPLOYMENT

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

9.5%

10.0%

10.5%

11.0%

Jan-

09

Mar

-09

May

-09

Jul-0

9

Sep-

09

Nov-

09

Jan-

10

Mar

-10

May

-10

Jul-1

0

Sep-

10

Nov-

10

Jan-

11

Mar

-11

May

-11

Jul-1

1

Sep-

11

Nov-

11

Jan-

12

Mar

-12

May

-12

July

-12

Sep-

12

Nov

-12

US Unemployment Rate

Ohio Unemployment Rate

Cincinnati Unemployment Rate

Columbus Unemployment Rate

Cleveland Unemployment Rate

J M M J S N J M M J S N J M M S N J M M J S No

THE KNOWLEDGE REPORT | Q4 2012 | RETAIL | CINCINNATI

P. 2 | COLLIERS INTERNATIONAL

SUBMARKET Total Inventory Total Vacant SF Vacancy Rate Quarterly

AbsorptionYTD

Absorption Avg. Rate

Central 4,856,891 390,990 8.05% 59,385 115,875 $11.50

East 7,108,541 646,176 9.09% 28,584 206,341 $13.70

Monroe/Middletown 3,254,481 299,869 9.21% (29,621) (32,251) $10.26

Northern Kentucky 10,864,972 566,991 5.22% 5,946 30,483 $13.63

Northeast 9,081,505 867,086 9.55% 107,689 247,433 $12.72

Northwest 17,379,700 2,424,210 13.95% (9,529) 189,644 $8.10

West 6,292,265 930,118 14.78% (104,787) (7,692) $12.29

Market Totals 46,872,923 6,125,440 10.41% 57,667 749,833 $10.77

SUBMARKET DATA

QUARTERLY NET ABSORPTION

Squa

re F

eet

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12

Quarterly Net Absorption The Retail Market saw 57,667 square feet of positive absorption this quarter.


COLLIERS INTERNATIONAL | P. 3

CEO | PRINCIPAL: Shenan P. Murphy, CCIM+1 513 721 4200

Colliers International statistics are audited annually and may result in revisions to previously reported quarterly and final year-end figures

Colliers International | Greater Cincinnati 425 Walnut Street, Suite 1200Cincinnati, OH 45202

Retail & Investment Services | Greater Cincinnati

Michael P. Ziegler, SCLSBrokerage Senior Vice President

[email protected] +1 513 562 2224

Ken Arbino Brokerage Vice President


Justin T. Rex, MICP™ Brokerage Associate


NORTHWEST

NORTHEAST

MIDDLETOWN/MONROE

EASTWEST

NORTHERNKENTUCKY

CENTRAL

RETAIL SUBMARKETS

Accelerating success.

522 offices in 62 countries on 6 continentsUnited States: 147Canada: 37Latin America: 19Asia: 36ANZ: 165EMEA: 118

• $1.8 billion in annual revenue

• 1.25 billion square feet under management

• Over 12,300 professionals

Steven L. Timmel, CCIMBrokerage Senior Vice President


Jeffrey E. Johnston, CPABrokerage Senior Vice President


Christopher B. Prosser, CCIMBrokerage Senior Vice President

