4Q14 Retail Snapshot.indd

INDIANAPOLIS
Retail Market Snapshot
Fourth Quarter • 2014
Economy
INDIANAPOLIS RETAIL
The economy is showing signs of sustained growth, with
Economic Indicators
4Q 13
4Q 14
12-Month
Forecast
Indianapolis Employment
944K
966K
Indianapolis Unemployment
6.4%
5.3%
U.S. Unemployment
6.7%
5.6%



4Q 13
4Q 14
12-Month
Forecast
Overall Vacancy
7.1%
6.7%
Net Absorption
170,743
82,795
Under Construction
317,663
308,182
Average Asking Rent
$13.76
$13.85




300,000
250,000
200,000
there is little to suggest that leasing fundamentals will not
100,000
50,000
Net Absorption
recover, but job growth and a brightened consumer outlook is
now translating into increased consumer spending. This in turn
is supporting retail sales and leasing fundamentals. Indiana has
experienced private-sector job growth in 17 of the past 23
months, with gains averaging 4,500 per month during that
Indianapolis has followed the same recovery trajectory.
$13.80
Middle- and higher-wage sectors are seeing some of the
$13.60
2012
The retail sector was one of the slowest real estate sectors to
$14.00
150,000
2013
throughout the entire post-recession recovery/expansion
period and one that bodes well for continued improvement in
$13.20
retail fundamentals.
$13.00
2014
strongest growth, a factor that had largely been missing
$13.40
Asking Rent, $ PSF
Market Overview
The Indianapolis retail market registered 82,795 SF of positive
absorption in the final quarter, raising net occupancy gains for
Overall Vacancy
the year to 886,083 SF. Examination of trade area metrics
8.0%
confirms that eleven of the fifteen trade areas witnessed
7.8%
occupancy gains in the quarter, as did neighborhood centers,
7.6%
7.4%
Historical Average = 7.3%
7.2%
7.0%
community centers, and malls. Overall vacancy for all retail
types ended the year at 6.7 percent, a decline of 40 basis
points from a year previous.
6.8%
6.6%
Deal velocity on a square-foot basis has rebounded with over
6.4%
1.3 MSF of leasing in 2014. Some of the most notable leasing
6.2%
6.0%
2010
interest rates and rising business and consumer confidence,
state, Indiana has added 264,800 private-sector jobs.
4Q TRAILING AVERAGE
2011
percent, job creation at a 15-year high, lower gas prices, low
period. Since July 2009, the low point of employment in the
NetFour
Absorption/Asking
Rent
Quarter Trailing Average
2010
performance since at least 2005. With Real GDP touching 5
continue to tighten in many Indianapolis trade areas in 2015.
Market Indicators
0
consensus forecasts among economists predicting its best
2011
2012
2013
2014
of the past year was in the grocery segment, where new
entrants and existing grocers continue to battle for market
INDIANAPOLIS
Retail Market Snapshot
Fourth Quarter • 2014
share. Likewise, fitness concepts, restaurants, small shops of
all types and a growing craft beer segment are helping to drive
leasing demand.
Vacant Space by Retail Type
PERCENTAGE
OF TOTAL
4Q14 SPACE 4Q14
PERCENTAGE
OFVACANT
TOTALSPACE
VACANT
The diversity of concepts that are actively pursuing
opportunities now is much more reflective of a healthy retail
market, one in which multiple concepts within a broad size
Neighborhood Centers
23%
24%
Community Centers
range are actively engaged in leasing. As a result, the median
Power Centers
Strip Centers
11%
The diversity of concepts that are actively
pursuing opportunities now is much more
reflective of a health retail market, one in
which multiple concepts within a broad size
range are actively engaged in leasing.
Malls
21%
Other Types
10%
12%
Source: DTZ Research
Confidence vs. Retail Sales
CONSUMER’S CONFIDENCE IS BOLSTERING SALES REVENUE
CONSUMER’S CONFIDENCE IS BOLSTERING SALES REVENUE
time to lease available space continues to decline, having fallen
120
$360,000
by 35 percent since its peak of 29 months in the third quarter
100
$340,000
of 2012. Nonetheless, there remains a great disparity by class
80
and location, with Class A retail product generally leasing
60
faster than before the recession, Class B product generally on
40
par with the pre-recessionary leasing timeline, and Class C
20
product continuing to remain on the market for a greater
period of time.
$320,000
$300,000
$280,000
$260,000
0
05
06
07
08
CCI (1985=100, SA)
09
10
11
12
13
14
Total Retail Sales excl. Autos (Mil. USD, SA)
Source: The Conference Board; U.S. Census Bureau
Outlook
• I mproved economic fundamentals will translate into
increased spending among middle-class shoppers and
support improved mid-priced retail sales, although the
pace of improvement will remain slow.
• S
mall-shop leasing will continue to accelerate, with deal
velocity among this segment reaching pre-recession levels.
• I ncreased demand and limited new supply will result in
year-over-year vacancy declines of 80–90 bps in 2015.
• A
verage asking rents for centers across the metro should
see an annual advance of 1.5%, with the highest rental
rate appreciation occurring in the prime trade areas.
Net Absorption and Vacancy Change
ECOMMERCEand
AND
RESTAURANTS
CONTINUE
TO LEAD
Ecommerce
Restaurants
Continue
to Lead
GainsGAINS
Restaurants/Bars
Internet/Nonstore Retailers
Grocery Stores
Health/Personal
Building Materials
General Merchandise
Apparel
Furniture/Electronics
Miscellaneous
Sporting Goods
0%
5%
10%
15%
20%
25%
Source: U.S. Census Bureau
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INDIANAPOLIS
Retail Market Snapshot
Fourth Quarter • 2014
TOTAL
BUILDINGS
INVENTORY
SUBLET
VACANT
DIRECT
VACANT
VACANCY
RATE
CURRENT NET
ABSORPTION
YTD NET
ABSORPTION
TOTAL
OCCUPIED
AVERAGE
ASKING RENT
(ALL TYPES)
TOTAL
AVAILABLE
Trade Area
Avon
183
3,731,281
65,040
285,888
7.7%
8,313
(3,945)
3,445,393
414,463
$14.96
Broad Ripple/Glendale
244
2,440,786
0
80,613
3.3%
9,999
31,459
2,360,173
121,784
$19.94
Brownsburg
130
1,624,157
0
70,440
4.3%
Carmel/Westfield
334
5,288,510
24,314
364,980
6.9%
6,080
1,553,717
105,626
$17.34
(46,352)
4,140
12,549
4,923,530
450,037
$20.16
Castleton/Keystone
269
7,909,914
5,480
478,832
Downtown Indianapolis
158
2,576,705
0
471,016
6.1%
44,288
16,844
7,431,082
660,085
$18.96
18.3%
(15,055)
8,535
2,105,689
536,840
$16.10
Fishers/Noblesville
451
8,738,087
0
298,061
3.4%
(4,101)
(3,287)
8,440,026
447,214
$13.80
Greenwood/Southport
707
11,567,475
7,300
486,749
4.2%
(8,536)
(4,285)
11,080,726
722,328
$14.19
Lafayette Square/Speedway
372
7,814,451
0
1,034,632
13.2%
4,000
159,561
6,779,819
1,216,461
$9.06
Michigan Road/Zionsville
348
5,644,817
0
199,674
3.5%
11,624
281,138
5,445,143
329,813
$13.92
Mooresville
117
1,558,937
0
55,162
3.5%
1,600
21,613
1,503,775
93,425
$14.42
Nora
54
916,723
0
8,289
0.9%
1,221
8,219
908,434
14,554
$18.26
Pendleton Pike
346
3,692,530
3,520
436,841
11.8%
(6,339)
(16,567)
3,255,689
643,282
$9.84
Plainfield
138
3,444,453
2,000
253,426
7.4%
(24,400)
142,418
3,191,027
311,558
$13.01
Washington Square
199
4,773,155
5,000
541,776
11.4%
108,572
139,406
4,231,379
647,291
$12.71
611
14,976,285
18,619
1,540,107
10.3%
63,802
87,591
13,436,178
1,983,089
$13.02
Product Types
Neighborhood Centers
Community Centers
310
11,591,865
83,555
1,378,602
11.9%
27,155
69,914
10,213,263
1,752,544
$13.66
Power Centers
268
11,004,514
0
773,149
7.0%
(22,374)
14,711
10,231,365
841,602
$17.20
Strip Centers
526
6,236,106
0
660,568
10.6%
(11,203)
9,687
5,575,538
898,155
$14.16
85
9,978,378
0
703,273
7.0%
75,567
64,709
9,275,105
900,655
$24.61
7,774
98,790,896
147,689
6,626,295
6.7%
82,795
886,083
92,164,601
8,987,534
$13.85
Malls
ALL RETAIL TYPES
All Retail Types classification encompasses all retail properties located both within and outside of the 15 prime trade areas
Retail asking rents converted to NNN
Select Lease Transactions 4Q 14
ADDRESS/PROPERTY
CITY
TENANT
TRADE AREA
TYPE
3400 E. 146th Street
Carmel
Fresh Thyme Farmers Market
Carmel
Lease
11481 E. 116th Street
Fishers
Fresh Thyme Farmers Market
Fishers
Lease
5802 W. U.S. Hwy 52
New Palestine
Marsh Supermarkets
Outlying
Lease
812 E. Main Street (Brownsburg Shopping Center)
Brownsburg
Planet Fitness
Brownsburg
Lease
3739 E. Washington Street
Indianapolis
Save-A-Lot Food Stores
Outlying
Lease
9962 E. Washington Street (Washington Corner)
Indianapolis
Fuji Japanese Steakhouse
Washington Square
Lease
9737 Fall Creek Road (Geist Crossing Shoppes)
Fishers
Taking Strides Daycare
Fishers
Lease
714 N. Capitol Avenue
Indianapolis
TwoDEEP Brewing Co.
Downtown
Lease
13316 Tegler Drive
Noblesville
Perkins
Noblesville
Lease
2650 Lake Circle Drive (Willow Lake East)
Indianapolis
Disc Relay
Michigan Road
Lease
2438 E. 146th Street (Cool Creek Commons)
Carmel
Orange Theory Fitness
Carmel
Lease
1048 N. Shadeland Avenue, Indianapolis (George Thomas Plaza)
Indianapolis
Select Physical Therapy
Outlying
Lease
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128
Frankton
Atlanta
37
INDIANAPOLIS
19
Retail Market Snapshot
421
65
Fourth Quarter • 2014
Sheridan
orntown
Pike
47
213
Walnut
Grove
38
Mechanicsburg
Florida
Perkinsville
Bakers
Corner
Elizaville
Linwood
Aroma
Arcadia
Boxley
Terhune
Omega
Millersburg
31
Cicero
Strawtown
Woodlawn Heigh
Deming
38
Edgewood
39
Hazelrigg
Retail Submarkets
Lamong
Waugh
Indianapolis
Bloomer
Hortonville
421
Stringtown
Big
Springs
Ulen
Fishersburg
38
31
Gadsen
Rosston
Jolletville
32
32
Lebanon
Eagletown
Max
65
Hamilton
Town Center
Carmel
Carmel
Eagle
Village
Zionsville
52
Fayette
865
Royalton
267
65
Lizton
Michigan Road
New Augusta
74
Raintown
W
Br
236
Brownsburg
Tilden
74
65
Eagle Creek
Airport
Clermont
267
Maxwell
Mowhawk
Mt. Comfort
Wynnedale
Lafayette
Square
52
136
Sunnyside
36
Highwoods
Spring Hill
Maplewood
67
Lawrence
31
Rocky
Ripple
39
Indianapolis
70
36
Speedway
9
70
IMS
465
Danville
36
Tremont
36
36
Lynhurst
40
Plainfield
Cartersburg
Clayton
Amo
Mars
Hill
Indianapolis
International
Airport
40
Plainfield
67
52
Valley
Mills
Southern Plaza
36
Glens
Valley
Crown
Center
Acton
Fairland
135
Five Points
Stones
Crossing
Monrovia
About DTZ
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Plano
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74
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42
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Greenwood
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Mooresville
9
Greenwood Park Mall
Center Valley
42
52
Wanamaker
Southport
Southport
31
37
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Gasburg
74
Morristown
West
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Mooresville
New
Palestine
Five
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Emerson & Thompson
Edgewood
Antrim
Camby
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40
Carrollton
Homecroft
Friendswood
52
67
31
465
Belleville
40
Beech Grove
Maywood
74
70
267
Greenfield
40
Spring Philadelphia
Lake
Gem
Washington Square
421
40
Six
Points
39
Cumberland
Westland
Ben Davis
Bridgeport
465
65
70
267
Springtown
Warren
Park
Circle Centre
74
Avon
Hadley
70
Speedway
Avon
234
Oaklandon
Crows Nest
Montclair
Eden
234
37
Glendale
Brownsburg
Milner
Corne
Woodbury
McCordville
Broad
136
9
Geist
31
Shore
Acres
Pittsboro
36
Fortville
37
465
Keystone at
Meridian the Crossing
Hills
Augusta
69
Castleton Square
Nora
465
Traders
Point
421
465
Traders Point
Ingalls
67
Fishers
52
136
Huntsville
13
Fishers
31
1 06th & Michigan
New
Brunswick
9
Pendleton
69
Milledgeville
Herr
38
Westfield
421
39
Clarksville
Noblesville
Northfield
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9
38
Noblesville
Westfield
Anderson
Lapel
32
Durbin
32
over
32
Clare
19
52
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The information contained within this report is 9
gathered from multiple sources considered to
be reliable. The information may contain errors
or omissions and is presented without any
warranty or representations as to its accuracy.
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