North American Business Activity Statistics Third Quarter 2012

Transcription

1 North American Business Activity Statistics Third Quarter 2012 First Leica corporate store in USA Washington, DC Leica represented by X Team Partner Streetsense

2 WE ARE over 400 professionals in 30 offices throughout North America. We are a powerful network of partner offices that exclusively focus on first class, best in class, world class retail real estate. X Team International s unique platform assembles the strongest and most experienced retail-only specialists in the most important metropolitan markets in North America. There are no substitutes for resume or reputation, and each X Team partner office is a recognized leader in its regional trade area. Our team has an enormous track record in the representation of Fortune 500 and emerging retailers alike. We represent North America s premier Power Center and Specialty Center developers as well as regional and local clientele who own the high street retail and neighborhood centers where North America shops. In 2012, X Team is on track to consummate retail lease and sale transactions in North America representing some $3 Billion in value and approximately 30 Million square feet of the best retail space in every market. Together with our International Partner DTZ, we provide brokerage and consulting services to firms that make the global economy hum in North America, Europe, Asia and the Middle East. Extensive Experience. Exclusively Retail. X Team. Tiffany & Co., Walnut Creek, CA. Leased by X Team Partner, John Cumbelich & Associates Q Summary The North American retail real estate market displayed ongoing vibrancy at the conclusion of the third quarter of 2012, based on figures compiled by X Team International s 30 US and Canadian offices. X Team partners consummated lease and sales transactions valued at $670,000,000 during the third quarter, consisting of some 7.9 million square feet of retail space. Leasing far outpaced sales in the quarter, accounting for slightly over 6.0 million square feet, or 76% of the total inventory. While the total transaction volume of leases in the quarter increased by 6% over the prior period, the total square footage of space leased actually dropped by some 18% during the same period. These contrary tend lines clearly demonstrate rising national rents for quality retail space, as less space is commanding a higher total value than the preceding quarters. On the sales side, the network tallied over $110,000,000 in retail property sales during the third quarter. While this figure is a drop from the prior period, and telling statistic was the sharp spike in raw land sales. Some 105 acres of retail land was sold during the period a 30% increase over the prior period. This land sale activity is a reliable indicator of new development projects making their way into the pipeline a further indicator of supply trying to catch up to demand in several markets. Key Findings from the retail sector included: Leasing transaction volume increased from the prior period by 6% Square footage of space leased dropped by 18% from the prior period The increase in transaction volume while total space leased declined indicates strongly firming rental rates Sales transaction volume slipped from in the prior period $213 M to $112 M Square footage of space sold hit a high point for the year, at over 1.85 M SF in Q3 The large volume of space sold despite steeply lower values suggests that value oriented buyers were active Over 100 acres in retail land sales occurred during the period, a clear indicator of new projects entering the development pipeline Network-wide activity through three quarters total $2.2 B in retail-only transactions 21.7 M SF of space leased or sold, year to date

3 Network Locations & Rental Survey North American Business Activity Statistics Third Quarter 2012 North American Partner Offices XTeam United States Regions Regions Vancouver, BC Western Region Central North Region Seattle Northeast Region Central South Region Southeast Region Portland Montreal, QC Minneapolis Detriot Boston Chicago New Jersey/New York Philadelphia DTZ Global Footprint San Francisco Las Vegas Los Angeles Denver Kansas City St. Louis Indianapolis Cincinnati Nashville Washington, DC Norfolk Charlotte Newport Beach Phoenix Birmingham Atlanta Dallas/Fort Worth Houston New Orleans Jacksonville Tampa Ft Lauderdale/Miami Rental Rates in Top 10 Markets The survey below tracks rental rates in ten key national markets, both in the Power Center and premium High Street retail segments. The Power Center survey captures rental rates for junior boxes in in the 20,000 SF range for best in class Power Centers. The adjacent survey of High Street retail captures rates for the top premium retail locations in the 2,500 SF range (excluding enclosed malls). While the New York market is the pace setter in both surveys, the disparity with other national markets is far narrower in the Power Center segment than in premium retail. On the High Streets, New York s Madison Avenue is achieving rents of $1,000 per SF in 3Q 2012, nearly doubling the $540 per SF rate on Los Angele s Rodeo Drive. This significant premium above all other North American markets validates New York City retail as an international target for retail. However in the Power Center arena, New York s $40 per SF rate for outer Boroughs narrowly outpaces Seattle s mid $30 rent levels. In addition to New York, Los Angeles and Seattle, San Francisco and Chicago are the strongest landlord markets in the current survey, commanding rents 25% to 50% higher than Dallas, Denver, Atlanta and Boston. Power Center Retail Rental Rates in Top 10 Markets ($/SF/Yr) New York, NY Seattle San Francisco Los Angeles Chicago Boston Atlanta Denver Dallas $0 $10 $20 $30 $40 $50 For Spaces of 20,000 SF Premium Retail Rental Rates in Top 10 Markets ($/SF/Yr) New York, NY Los Angeles San Francisco Chicago Boston Dallas Seattle Denver Atlanta $0 $200 $400 $600 $800 $1,000 For Spaces of 2,500 SF Source: XTeam International

4 Sale & Lease Transaction Totals North American Business Activity Statistics Third Quarter 2012 North American Leasing The majority of new retail real estate transactions consummated each quarter are leases. Throughout 2012, leasing has represented 78% of the total value of all transactions (lease + sale) and approximately 82% of the total square footage. Because more consideration changes hands and more space is moved via leases, trends in leasing activity are an extremely reliable barometer of the strength of the retail sector, and by extension, the overall commercial real estate market and economy at large. Sales Activity The data described below captures all sales consummated by our Partners in a given quarter. This includes a broad mix of transactions including investment sales to investors, existing asset sales to users, redevelopment sales to developers and raw land sales to both users and developers. The breadth of transaction types captured by this data provides a more general commentary on retail real estate activity and trends from one quarter to the next. Leased ($ Volume) Leased SF (Millions of SF) $750M $500M $617 M $530 M $566 M 8M 7M 6M 5M 4M 4.47 M 7.31 M 6.02 M $250M 3M 2M 1M $0M 1Q 2Q 3Q 4Q 0M 1Q 2Q 3Q 4Q 2012 Year to Date = $1.71B 2012 Year to Date = 17.8 M/SF Sales ($ Volume) Sales (SF) $250M $200M $150M $100M $50M $172 M $213 M $112 M 2.0M 1.5M 1.0M 0.5M.652 M 1.39 M 1.85 M $0M Q1 Q2 Q3 Q4 0.0M Q1 Q2 Q3 Q Year to Date = $497,925, Year to Date = 3,895,039 The data above includes transaction totals from XTeam s North American offices. Source: XTeam International

5 Partner Profile Michael Salove President & CEO Michael Salove Company Philadelphia, PA Vibrancy and energy don t just happen they are created. Whether you re developing a mixed-use project, repositioning an office or residential asset, or transforming the entire retail landscape of your college campus, we are imaginative thinkers with a track record of relevant, impactful and innovative real estate solutions. Business Biggest challenge for your business at the moment: Managing the expenses associated with effectuating the above. We now have the infrastructure in place to execute our additional lines of business and while we are ahead of plan in terms of securing business, the stabilized cash flow will take time. In the next year: Aggressive growth. Biggest Mistake/Success: Mistake Trying to do too much myself for too long. Success Hiring people that are; honest, much smarter than me, diverse, creative, passionate and a pleasure to work with and learn from. How s business: Different. MSC believes that the traditional sources of revenue that sustained our model over the past 24 years have been altered in a manner that does not provide for adequate growth and opportunity for our firm. As such, we have been aggressively pushing into additional / alternative disciplines that are related to our core competencies and provide opportunities across our firm while also providing additional revenue sources. Biggest business strength/weakness: Strength MSC does not follow. We do not copy other s work product be it a business model or a marketing piece. We think and then we execute. Weakness Taking things too personally. I am still not sure what it means when someone says nothing personal after stabbing you in the face. Personal Most admired entrepreneur or role model: Don t laugh because I mean this; My wife. We have been together since we were kids and I have yet to meet another with her clarity and purpose. Favorite pastimes: Spending time with my wife, three daughters and mongrel. Associating with my work family outside of work. Exercising for my sanity. Favorite book: The obvious choices would not be truthful everyone says Steve Job s book or Clinton s autobiography or whatever. I will go out there with a totally nonintellectual poorly written story titled The Art of Racing in the Rain. It is a story about a family as told from their dog s perspective. Everyone knows I am over the top in love with my dog. Disclaimer You will cry if you read this. Favorite film: There are too many to mention but how do you not go with Blazing Saddles? Music you are listening to: Yuck, Alabama Shakes, The Whigs, any old jazz stuff, any classical with strings, I have a very diverse taste and appreciation of music.

6