KNOXVILLE RETAIL SNAP SHOT

This morning Cushman & Wakefield | Cornerstone is releasing the third quarter results of the Knoxville retail market.  Its an interesting look at changes that have been made in the market in the last few months.  

RETAIL SNAPSHOT - KNOXVILLE, TN 3Q 2012  

The outlook for today’s retailers remains challenging as many find themselves confronted by reduced consumer spending and weak credit market conditions. New economic realities have resulted in a new order of buyers who are more price-conscious and careful about the discretionary purchases they make. The critical challenge for retailers under these circumstances will be delivering a compelling in-store experience that drives profitable growth in 2013. The one-size-fits-all approach doesn’t work for all shoppers – nor all locations. To grow, many retailers are shrinking, sometimes with smaller stores, sometimes by introducing smaller, more intimate and approachable locations within larger stores. 

RETAIL MARKET OVERVIEW    

The vacancy rate closed the quarter at 6.1%. Net absorption stands at a negative 348,579 square feet (sf). Rental rates increased slightly from the second quarter 2012 levels, ending at $11.31 per square foot (psf).

This summer, a South Carolina developer paid $1.7 million for a 4.4- acre site next to the Wal-Mart on Norris Freeway, and said it planned to develop a retail center for 10 tenants. Hibbett Sports recently announced that it will open a store at the site.

There were several significant lease transactions for the quarter including an 18,360-sf lease at 1665 E. Andrew Johnson Hwy. to Badcock Furniture (seller-represented by Cushman & Wakefield|Cornerstone). Also of note is the lease at 1115 N. Charles G. Seivers Blvd to United Grocery for 18,225 sf.

Several significant sales took place over Q3 12, including the closing of 640 Plaza (44,435 sf) for $5.2 million. Also, Goodwill Industries recently closed on a 45,178-sf neighborhood center in the North/Broadway submarket for $2.5 million. 

“The consumer hasn’t exactly thrown in the towel, which is encouraging because they’ve been battered and bruised in recent

months with very slow job growth,” said Millan Mulraine, senior U.S. strategist at TD Securities Inc. in New York. “We’re off to good a start in the third quarter. I do question the sustainability of the current level of spending. It can only be sustained if employment growth continues to accelerate.” 

OUTLOOK

“We have seen a major upswing in the Knoxville and east Tennessee retail market. With the new developments happening in West Knoxville, Oak Ridge, Halls and the growth at Emory Road, we feel very positive about new east Tennessee retail. National tenants are expanding into areas that had been previously underdeveloped and new anchors are moving into the area developments.”

-John Rebori, CCIM, Associate Director, Cushman & Wakefield | Cornerstone

If you want to see the entire report and stats please click on the link below.  

http://library.constantcontact.com/download/get/file/1104796466421-635/Knoxville_AMERICAS_MarketBeat_Retail_2page_Q32012.pdf