MARKET REPORTNASHVILLE

4Q 2011 | RETAIL

www.ColliersNashville.com Accelerating Success.

4Q

2011

2012

Forecast

VACANCY

NET ABSORPTION

CONSTRUCTION

RENTAL RATE

2011 Ends Well, Future Looks Bright The retail market ended the year on a positive note. As a whole, the market has slowed over the past few years but several indicators show that the market is recovering and the new year will continue this growth and recovery. The quarter posted a positive absorption of 45,471 square feet and the year of 2011 posted a gain of 336,517 square feet. As absorption increases, vacancy rates are decreasing, especially as several big leases have been inked this year. The two submarkets that saw the most significant drops in vacancy rates were Donelson/Hermitage and Green Hills/Belle Meade. The Donelson/Hermitage submarket’s vacancy rate dropped from 5.0% to 3.2% and Green Hills/Belle Meade submarket’s vacancy dropped from 4.3% to 2.4% by the end of 2011. In addition to positive absorption and decreasing vacancy rates, asking rates are showing signs of increasing and are expected to continue increasing over the course of 2012. As total vacant space declines, meaning less space is available for lease, landlords begin to have the upper hand in transactions and therefore, asking rates will begin to rise.

MARKET INDICATORS

Quarterly Comparisons and Totals

QUARTER BUILDINGSTOTAL INVENTORY

SFDIRECT VACANT

DIRECT VACANCY RATE

SUBLEASE VACANCY RATE

NET ABSORPTION CURRENT QTR

AVG ASKING RATE

Q4.11 698 48,712,738 3,012,656 6.2% 0.2% 45,471 $16.14

Q3.11 698 48,676,951 3,165,932 6.5% 0.3% 163,943 $16.12

Q2.11 698 48,716,038 3,434,756 7.1% 0.2% (60,266) $16.58

Q1.11 698 48,687,848 3,332,504 6.8% 0.3% (14,809) $16.74

Q4.10 699 48,719,737 3,370,385 6.9% 0.3% 140,620 $16.93

By Property Type

BUILDING TYPE BUILDINGSTOTAL INVENTORY

SFDIRECT VACANT

DIRECT VACANCY RATE

SUBLEASE VACANCY RATE

NET ABSORPTION CURRENT QTR

NET ABSORPTION YTD SF

Community Ctr 39 8,904,447 646,216 7.3% 0.0% 40,507 117,050

Conv/Strip Ctr 286 5,098,770 559,504 11.0% 0.1% (8,459) 98,826

Neighborhood Ctr 244 16,147,075 1,412,384 8.7% 0.1% 27,681 34,864

Power Ctr 120 12,139,562 312,587 2.6% 0.6% (32,000) (11,537)

Regional Ctr 9 6,422,884 81,965 1.3% 0.0% 17,742 97,314

- -

Updated 7-2011

P. 2 | COLLIERS INTERNATIONAL

MARKET REPORT | Q4 2011 | RETAIL | NASHVILLE

The biggest deal this quarter was the 50,000 square foot space for Publix at the Crossing in the Donelson/Hermitage submarket. In addition to this lease and numerous others this quarter, there have been several announcements of speculative developments that will include retail spaces. Specifically, there are two developments on the horizon in the Downtown/Gulch area: the 1201

Demonbreun project and the Gulch Crossing project. Both developments will be mixed-use buildings with the ground floor being reserved for retail space. As projects like these come to fruition, the retail market will only continue to improve.

Power Ctr

Neighborhood Ctr

Regional Ctr

Community Ctr

Conv/Strip Ctr

4Q 2011 | Vacancy Space By Type

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10000

15000

20000

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4Q 2011 | Net Absorption By Submarket

RECENT SALES TRANSACTIONSSALES ACTIVITY

PROPERTY SELLER/BUYER SALE PRICE SIZE SF SUBMARKET

5520 Nolensville Pike IPM Partnership/H&G Properties LLC $22,367,445 142,915 Southeast Corridor

2500 Gallatin Road Queen C Living Trust $5,105,000 14,476 North

Shoppes of Movie Row IPM Partnership/H&G Properties LLC $3,325,000 16,275 Rutherford County

912 Rivergate Pkwy O’Charley’s Inc/Store Master Funding $2,105,960 7,403 North

2001 Wall Street Undisclosed $800,000 6,358 Cool Springs/Franklin

921 Gallatin Avenue Undisclosed $470,000 5,452 North

RECENT LEASING TRANSACTIONS

LEASING ACTIVITY

PROPERTY ADDRESS TENANT SIZE SF TYPE SUBMARKET

The Crossings Publix 50,000 New Donelson/Hermitage

Madison Square Shopping Center CSL Plasma 15,400 New North

Donelson Plaza Deal$ 14,400 New Donelson/Hermitage

Cool Springs Pointe Kirkland’s 10,707 New Cool Springs/Franklin

Stones River Mall Verizon 8,842 New Rutherford County

Stones River Mall Sam’s All American Sports Grill 6,000 New Rutherford County

Moores Crossing II The Monkey Treehouse 4,500 New Cool Springs/Franklin

DEFINITIONS

Absorption - The net change in occupied space between the current quarter and the previous quarter, calculated by summing all the positive changes in occupancy and subtracting all the negative changes in occupancy.

Available SF - Space currently being marketed for lease or sublease.

Inventory - The total square footage of all single and multi tenant retail properties above 10,000 SF.

Total Building SF - All single & multi tenant office buildings above 20,000 SF excluding medical, government and owner occupied.

Vacancy Rate - Percentage rate of the total amount of physically vacant space divided by the total amount of existing inventory.

*Bold text denotes Colliers International transactions.

MARKET REPORT | Q4 2011 | RETAIL | NASHVILLE

COLLIERS INTERNATIONAL | P. 3

UPDATE Market Comparisons

RETAIL MARKET

SUBMARKET BLDGSTOTAL

INVENTORY SF

DIRECT VACANT

SF

DIRECT VACANCY

RATE

DIRECT VACANCY

RATE PRIOR QTR

SUBLEASE VACANCY

RATE

NETABSORPTION

CURRENT QTR ST

NET ABSORPTION

YTD SF

AVG ASKING RATE

BELLVUE/WEST NASHVILLE 36 2,987,939 70,248 2.4% 2.5% 0.0% 1,484 2,410 $15.17

BRENTWOOD 32 1,601,523 53,561 3.3% 3.7% 0.0% (6,527) 12,755 $19.35

COOL SPRINGS/FRANKLIN 96 7,575,496 295,692 3.9% 4.1% 0.01% 5,783 71,007 $20.51

DONELSON/HERMITAGE 35 2,866,529 93,879 3.3% 4.9% 0.3% 37,449 45,859 $12.14

DOWNTOWN/WEST END 42 1,293,477 116,302 9.0% 9.7% 0.4% 4,147 20,929 $22.22

GREEN HILLS/BELLE MEADE 43 2,717,742 67,346 2.5% 2.9% 0.5% 0 55,764 $21.93

HENDERSONVILLE/GALLATIN 58 4,274,117 283,155 6.6% 6.2% 0.0% 720 (26,236) $12.96

MT. JULIET/LEBANON 42 4,213,932 315,195 7.5% 7.8% 0.0% 0 12,088 $12.86

NORTH 76 6,276,023 388,499 6.2% 6.1% 0.0% (13,525) 45,854 $12.42

RUTHERFORD COUNTY 126 7,973,895 637,285 8.0% 9.0% 0.0% 10,602 105,074 $16.39

SOUTHEAST CORRIDOR 112 6,932,065 691,494 10.0% 10.0% 1.1% 5,338 (8,987) $12.30

GRAND TOTAL 698 48,712,738 3,012,656 6.2% 6.5% 0.2% 45,471 336,517 $16.14

MARKET REPORT | Q4 2011 | RETAIL | NASHVILLE

DOWNTOWN

Gallatin Rd.

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Harding Pl.

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Murfreesboro Rd.

Nolensville Rd.

Briley

Pkwy.

Bell Rd

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Woodmont Blvd.

MURFREESBORO

BELLVUE

COOL SPRINGS/FRANKLIN

BRENTWOOD

GREEN HILLS/BELLE MEADE

CHARLOTTE PIKE/CLARKSVILLE HWY.

MADISON/GOODLETTSVILLE

HENDERSONVILLE/GALLATIN

MT. JULIET/LEBANON

LAVERGNE/SMYRNA

NOLENSVILLE PIKE

RIVER

GATE

WEST END AIRPORT/MURFREESBORO RD.

DONELSON/HERMITAGE

ANTIOCH/HICKORY HOLLOW

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MARKETING DIRECTOR:

NashvilleAllison Schepman300 BroadwayNashville, TN, 37201TEL +1 615 850 2748FAX +1 615 244 2957

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The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it.

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Nashville Retail Submarkets include Bellevue/West Nashville, Brentwood, Cool Springs/Franklin, Donelson/Hermitage, Downtown/West End, Green Hills/Belle Meade, Hendersonville/Gallatin, Mt. Juliet/Lebanon, North Nashville, Rutherford County, Southeast Corridor and Southwest.

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