Market Data
Regional Outlook
South
Miami’s Big Deal
Lincoln Road Mall was one of the top
acquisitions in 1H 2012, as Vornado Realty Trust JV paid $1,039 psf, or $132
million total, according to Real Capital Analytics, purchasing the 13-year-old
center from a company controlled by New York real estate investor Aby Rosen.
The high price surprised some market followers, given that the property was
appraised at only $41 million last year. The center is 96 percent leased and
garners rents around $220 psf, more than triple Miami Beach’s retail average of
$74.48 psf, according to local sources.
Midwest
Office
Depot Shrinking
Look for Office Depot to drastically
reduce its square footage in the next round of lease renewals. For example, in
September, the Office Depot in Frankfort, Ky., closed its 20,000-sf store, cut
six employees, and reopened in a 6,000-sf former Blockbuster space, according
to the State Journal
in Frankfort. It’s emblematic of the office supply store’s strategy to remain
viable, which was suggested by its largest shareholder, Starboard Value LP. In
a letter to the company’s CEO and board of directors, Starboard determined that
Office Depot could cut store space by 75 percent, or about 7 million sf,
according to CoStar, but still retain 90 percent of its sales. By downsizing
the 250 to 375 stores up for lease renewal in the next three years from the
current 24,000-sf format to 5,000 sf, Starboard said, the retailer could
increase operating income by $50 million to $75 million.
East
Crowdsource
Leasing
The
Parkville Shopping Center in Baltimore is soliciting tenant suggestions through
Popularise, an online crowdsourcing platform. While the 161,734-sf
grocery-anchored center is undergoing renovations, its owner, Regency Centers,
has set up the site Popularise.com/parkville and is encouraging local customers
to log on with their ideas for improvements and tenant choices. As of Oct. 1,
almost 3,000 people had visited the Parkville site, offering more than 200
tenant suggestions and comments. Leasing specialists take note: Social media’s
wide appeal may help you build customer loyalty and target tenants who have a
built-in local fan base.
Midwest
Suds
Growth
Home to
Indiana University, Bloomington, Ind., is also home to
Upland Brewery Co., which recently opened a new 37,000-sf brewing facility to
increase production of its growing list of craft beers. Upland, which
distributes its beers in Indiana, Wisconsin, and Kentucky, is keeping its
original facility as a brewpub and banquet space. Craft brewing is becoming a
strong local business in Indiana: This year the state has about 30 breweries in
operation; in 1990 there was one. Nationwide, the craft brewing industry is
also growing. More than 2,000 craft breweries operate in the U.S., the largest
number since the 1880s, according to the Brewers Association. In addition, more
than 1,200 are in the planning stages, making microbreweries and brewpubs some
of the fastest-growing local small businesses.