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 

CCIM Nashville Economic Outlook

I spent an interesting afternoon at the Nashville CCIM Economic Outlook Conference yesterday.

Nashville truly has exploded in the last decade and Janet Miller,  chief economic development and marketing officer for the Nashville Area Chamber of Commerce, provided fascinating facts.

Snap shot:

• In the last 16 Nashville has courted 99 projects for expansion to the metro area.  Janet emphisized these are SERIOUS opprotunities for the region not just phone calls for companies looking for handouts. 

• If Nashville was able to successfully recruit all the projects they would total 33,000 jobs and cover 18,000,000sft of commercial real estate (office and industrial)

• 60% of the projects were considered Corporate Headquarters.  Funny quote from Janet, "Twenty years ago if a headquarters called us looking for a location we would not know how to act."

• Data Centers have become a huge part of the relocation process.  Bank of New York has invested more than $1 BILLION into a new data center in Nashville.  Why?  Because Tennessee is not subject to severe weather (like hurricanes) and earthquakes.  Also, Nashville is not considered a prime terrorist target.  Bank of New York's previous data center was destroyed on 9/11.

• The key to recruitment can be "The Spread".  Basically the cost of living vs the cost of business.  

• Nashville is the #1 destination for companies and employees moving out of Los Angeles.

I hope the trend extends to Knoxville.

Blogging Change....

Time to make a change to the blogging platform...

I know most of you are asking "Why change now?  You haven't blogged in a LONG time."  Its a simple answer: Time.  The hours required to write a long-form blog are just to overwhelming to put together a quality product that I want to put a companies name on.  So we are going to try something different. 

Instead of a weekly, long blogs we are going to try shorter, more frequent posts.  Sometimes it may be posted a few times a week.  Other times is will be once a week.  It just depends on what information is coming out that day.  There will still be quarterly market reports and longer posts but they will not be as often.  However, the quality of the product will still be among the best in the business. 

Stay tuned for more...

John Adams (@johnmadams3 on twitter) is a presenter at this weeks SIOR National Convention in Los Angeles.  John is an expert in commercial real estate technology, along with being one of the best brokers in the region.  You can follow his blog at www.johnmadams3.blogspot.com.  He will have more information from SIOR. 

Next month we will be at the Cushman & Wakefield Symposium in Las Vegas.  Again it will be a great opportunity to gather information we can use on the blog. 

Thanks for reading. 

As always, you can reach us at 865-450-8883 or www.cornerstonecres.com