© 2013, Reichle | Klein Group

www.rkgcommercial.com Endyear 2012

MarketViewToledoRetail

Infill redevelopment continues as the domi-nant theme in the Toledo, Ohio, retail real estate market at year-end 2012. Space under construction reached more than 250,000 square feet, by far the highest level since the end of 2007. Virtually all of this new con-struction is in the form of infill redevelopment rather than greenfield development.

Among the more noteworthy of these re-development projects are the previously announced Art Van Furniture store on the former cinema site at Spring Meadows and CarMax on the site of the former Kmart at Holland Sylvania Road and W. Central Avenue. In addition, Kroger started demolition of a former auto dealership at Dussel Drive and Conant Street in Maumee where it will build a 90,000-square-foot store. These projects join a number of, primarily, dollar-store projects scattered across the South End, West Toledo and Oregon. Most recently, CVS closed on the sale of a site at Monroe Street and Douglas Road, marking its reentry to the market, and a new hotel with retail development also has been announced for the site of the former National Amusements Cinema on Secor Road at I-475.

Overall activity continues to be strong in the main retail corridors. Fitness, restaurant and auto-parts retailers continue to be the most active segments. One example is Planet

Fitness, which just added its second location in the market at Southland Plaza. Family Dollar and Dollar General have both been very aggressively pursuing sites. In the fashion seg-ment, ULTA and Forever 21 also added stores.

As a result, market vacancy declined to 14.2% from 14.5%, where it stood at midyear. A 1% decline in inline vacancy offset a slight increase in anchor vacancy. The market also absorbed 124,760 square feet of space. Most of the positive absorption was comprised of inline rather than anchor space and attribut-able to new construction projects being delivered occupied. The most prominent such project was UT’s Gateway development where Gradkowski’s and Barnes & Noble have opened.

One lagging metric is the average asking rental rate which fell from $8.43 per square foot at midyear to $8.19 in December. This drop largely reflects the increase in anchor vacancy, which dragged the average down. The average asking rate for inline space actually increased to $10.48 from $10.41 at midyear.

In summary, if the Toledo retail segment can-not truly be described as hot, it is a whole lot more enjoyable for its participants today than it was in the dark days following the economic meltdown in 2008 and is moving in the right direction.

Quick Stats

Change from

Current End 11

Mid 12

Vacancy 14.2%

Lease Rates $8.19

Net Absorption* 124,760

Construction 263,125

* The arrows are trend indicators over the specified time period and do not represent a positive or nega-tive value. (e.g., absorption could be negative, but still represent a positive trend over a specified period.)

Hot Topics

•Infill redevelopment

dominates market

•Space under

construction at

highest level since

2007

•Overall activity strong

in main corridors

•Fitness, restaurants

and auto-parts

retailers remain most

active segments

•Dollar-type stores

aggressively pursuing

sites

Vacancy Rate vs. Lease Rate Vac. Rate 14.2%Lease Rate $8.19

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Toledo Retail

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Market Statistics

Market SubmarketRentable

AreaVacancy Rate %

Net Absorption

SF

Under Construction

SF

Average Asking Lease Rate

SF/YRAvailability

Rate %

CBD Anchor 60.6% $ 4.22 70.0%

Strip Inline 3.6% $12.00 7.7%

Total 665,466 33.4% — 9,000 $4.61 40.3%

E. Toledo/Oregon Anchor 8.0% $5.43 8.0%

Strip Inline 7.2% $10.13 9.1%

Total 1,553,965 7.7% 7,890 35,695 $7.12 8.4%

North Toledo Anchor 18.7% $6.13 18.7%

Strip Inline 23.0% $6.53 23.7%

Total 2,811,076 20.0% 4,450 — $6.27 20.2%Perrysburg/ Northwood Anchor 10.9% $3.96 15.8%

Strip Inline 23.0% $11.69 25.8%

Total 2,866,290 14.9% — — $7.87 19.1%South/ Southwest Anchor 10.9% $5.81 10.9%

Strip Inline 15.4% $10.19 17.3%

Total 6,218,234 12.9% 31,980 94,500 $8.12 13.7%West Toledo/ Sylvania Anchor 9.8% $9.31 9.8%

Strip Inline 14.9% $ 11.74 16.7%

Total 7,002,216 12.3% 80,440 123,930 $10.74 13.1%

Market Total Anchor 13.0% $6.19 14.0%

Strip Inline 15.8% $10.48 17.7%

Total 21,117,247 14.2% 124,760 263,125 $8.19 15.5%

As of December 2012, the most recent information states the unemployment rate for the Toledo MSA is 7.2%, lower than last May’s recorded rate of 7.6%. Ohio’s December 2012 unemployment rate of 6.8% is half percent lower than last quarter’s rate of 7.3%. The U.S. unemployment rate of 7.8% is a full percent less than last May at 8.9%

The average sale price for a home in the Toledo MSA, as of November 2012, is $105,878, a decrease of 4.7% from the previous month’s price of $111,105. The current average home sale price increased by 8.9% from last year’s price of $97,200.

Manufacturing employment for the Toledo MSA, as of November 2012, is 38,300 which is lower than last year’s manufacturing employment number of 40,000 by 4.2%.

2012 Annual Unemployment Rate

Toledo MSA 7.2%Ohio 6.8%

US 7.8%

For these estimates: Toledo MSA consists of Lucas, Fulton, Ottawa and Wood counties.Source: Regional Growth Partnership

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Toledo Retail

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Vacancy/Availability/ Net Absorption

The North Toledo submarket is the only submarket which recorded an increase in vacancy at year end. Overall vacancy declined to 14.2% from 14.5% at midyear and from 14.7% at year-end 2011. Anchor vacancy increased from 12.2% to 13% while inline vacancy declined to 15.8% from 16.8% at midyear. Most of the positive absorption occurred in the West Toledo/Sylvania and South/Southwest submarkets.

New Construction New Construction 263,125 SF

This market metric best illustrates the improved environment for retail real estate in Toledo. More than 250,000 square feet of space is currently under construction and little, if any, of it is being built on a speculative basis. Rather, it is largely comprised of build-to-suit space which will be delivered fully occupied. Kroger, CarMax and Art Van Furniture are the feature projects under construction.

Asking Rental Rates Rental Rate $8.19

The average asking rental rate declined to $8.19 per square foot from $8.43 at midyear. The big decline actually occurred within the anchor-space segment where the average asking rate fell from $6.72 per square foot at midyear to $6.19 at year end. Given the weighting of the average based on the amount of vacant square feet, this decline swamped an increase in the average asking rate for inline space.

Vacancy 14.2%Availability 15.5%Absorption 124,760 SF

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© Copyright 2013 Reichle | Klein Group Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by Reichle | Klein Group clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission.

For more information regarding the MarketView, please contact: Harlan Reichle, CCIM, SIOR President and CEOReichle | Klein Group One SeaGate, Toledo, OH 43402 419.794.1122 t 419.794.6060 f hreichle@rkgcommercial.com

Toledo Retail Average Asking Lease RateRate determined by multiplying the ask-ing net lease rate for each building by its available space, summing the products, then dividing by the sum of the available space with net leases for all buildings in the summary.

Net LeasesIncludes all lease types whereby the ten-ant pays an agreed rent plus most, or all, of the operating expenses and taxes for the property, including utilities, insurance and/or maintenance expenses.

Market CoverageIncludes all competitive retail buildings 5,000 square feet and greater in size.

Net AbsorptionThe change in occupied square feet from one period to the next.

Net Rentable AreaThe gross building square footage minus the elevator core, flues, pipe shafts, verti-cal ducts, balconies, and stairwell areas.

Occupied Area (Square Feet)Building area not considered vacant.

Under ConstructionBuildings which have begun construction as evidenced by site excavation or founda-tion work.

Available Area (Square Feet)Available Building Area which is either physically vacant or occupied.

Availability RateAvailable Square Feet divided by the Net Rentable Area.

Vacant Area (Square Feet)Existing Building Area which is physically vacant or immediately available.

Vacancy RateVacant Building Feet divided by the Net Rentable Area.

NormalizationDue to a reclassification of the market, the base, number and square footage of buildings of previous quarters have been adjusted to match the current base. Availability and Vacancy figures for those buildings have been adjusted in previous quarters.

Lat: 41.61603 Long: -83.60710 Zoom: 35.02 m

iLogos are for identification purposes only and m

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©2013, SITES USA Inc., Chandler, AZ (480) 491-1112. All Rights Reserved.

This map was produced using data from private and government sources deemed to be reliable. The information herein is provided without representation or warranty

January 2013

PERRYSBURG/NORTHWOOD

SOUTH/SOUTHWEST

WEST TOLEDOCBD

SOUTHEAST MICHIGAN

NORTH TOLEDO

EAST TOLEDO/OREGON

Top Transactions

Size (Sq. Ft.) Buyer/Tenant Submarket

90,000 Kroger South/Southwest

90,000 Art Van Furniture South/Southwest

51,200 Shoppers World North Toledo

22,000 Forever 21 West Toledo/Sylvania

15,930 CarMax West Toledo/Sylvania

11,000 Ulta Salon South/Southwest

9,000 Dollar General West Toledo/Sylvania

9,000 Family Dollar West Toledo/Sylvania

Submarket Map