Upload
lucas-ward
View
214
Download
0
Tags:
Embed Size (px)
Citation preview
Andrew H. Kessenich, Andrew H. Kessenich, CRECRE
MADISON RETAIL MARKET MADISON RETAIL MARKET REPORT 2010REPORT 2010
RetailRetail Market OverviewMarket Overview
Generally Soft Market ConditionsGenerally Soft Market Conditions Vacancies UpVacancies Up Rents Mostly Stagnant or DecreasingRents Mostly Stagnant or Decreasing Financing DifficultFinancing Difficult Fewer Sale TransactionsFewer Sale Transactions Alternative Uses of Retail SitesAlternative Uses of Retail Sites
Market Conditions Have Market Conditions Have Changed Changed 2008 – Transition Year2008 – Transition Year
Market Conditions – Market Conditions – LeasingLeasing
Average Vacancy Rates UpAverage Vacancy Rates Up
Class B & C SpaceClass B & C Space Old Rates:Old Rates: 6% - 10%6% - 10% New Rates:New Rates: 10% - 15%10% - 15%
Class A SpaceClass A Space Unchanged at 5% - 10%Unchanged at 5% - 10%
Average Rental RatesAverage Rental Rates
Class AClass A Steady at Steady at $15 - $25/SF 3N$15 - $25/SF 3N
Class B Class B Old RatesOld Rates $14 – 16/SF 3N$14 – 16/SF 3N New RatesNew Rates $12 - $14/SF 3N$12 - $14/SF 3N
Class CClass C Old RatesOld Rates $10 - $12/SF 3N$10 - $12/SF 3N New RatesNew Rates $ 8 - $10/SF 3N$ 8 - $10/SF 3N
FinancingFinancing
New Construction RequirementsNew Construction Requirements 70% minimum pre-leased70% minimum pre-leased
Loan to Value RatiosLoan to Value Ratios OldOld 75% - 80% LTV75% - 80% LTV NewNew 60% - 70% LTV60% - 70% LTV
Tenant Credit ReviewsTenant Credit Reviews
Market Conditions - Market Conditions - SalesSales
Cap RatesCap Rates Pre – 2009 ConditionsPre – 2009 Conditions Post – 2009 ConditionsPost – 2009 Conditions
Average Rate Increases 50 – 100 BPsAverage Rate Increases 50 – 100 BPs Class A Properties Class A Properties
Low 7%’s to Low 8%’sLow 7%’s to Low 8%’s Class B PropertiesClass B Properties
Low 8%’s to Low 9%’sLow 8%’s to Low 9%’s Class C PropertiesClass C Properties
Low 9%’s to High 9%’sLow 9%’s to High 9%’s
Sales ActivitySales Activity 20072007 54 Sales54 Sales 20082008 36 Sales36 Sales 20092009 30 Sales30 Sales 20102010 22 Sales22 Sales
Average & Median Sale PricesAverage & Median Sale Prices DecreasingDecreasing
East, West & Suburban East, West & Suburban MarketsMarkets
Historical designs losing favorHistorical designs losing favor Mixed-use & New UrbanismMixed-use & New Urbanism Spike in condo constructionSpike in condo construction
Alternative Uses of Retail Alternative Uses of Retail SitesSites
Mixed UseMixed Use
MedicalMedical
DentalDental
New Projects – Retail New Projects – Retail Target at HilldaleTarget at Hilldale
The DepotThe DepotMixed Use ProjectMixed Use Project