EDITION MAIN PAGE | Commercial Real Estate
GLOBAL RETAIL REAL ESTATE MARKET ROUNDUP
- So Ho Retail Space in NYC Goes for Record $4,457 Per SF
- Neechi Foods Plans $5M Development in Winnipeg, Canada
- New Deliveries This Year in Boston Will Be Down to 1M SF
- Buyers in Charlotte, NC Focusing on Single-Tenant Assets
- Cash-Heavy Buyers Starting to Enter Dallas--Fort Worth Market
Munich Investors Pay $41.9 Million for Ground-Floor Retail Site in NYC
Gll Partners of Munich have acquired 9,400 square feet of prime retail space on the ground floor of the four-year-old, 13 story 40 Mercer Street residential condominium community.
The $41.9 million sale price equates to $4,457 per square foot, a record in the So Ho retail corridor in Lower Manhattan, according to local brokers familiar with that market. The space at 465 Broadway is actually at the intersection of Broadway and Grand Streets.
It has taken two years to find a buyer for the 40-unit building, according to Studley, the brokerage house that listed the property. The space is currently leased to Bose, Dermalogica, Vivienne Tam and Wachovia Bank.
Studley broker Woody Heller said "the appeal of the unit -- both as a long-term investment to a buyer and to retail users -- is that modern store space is almost nonexistent in SoHo, least of all in a building designed by one of the world's most celebrated contemporary architects."
GLL Real Estate Partners GmbH (GLL) is a Munich based real estate funds management group. GLL was formed in 2000 by three senior executives of HypoVereinsbank, Germany's then largest real estate bank, in a joint venture with Lend Lease Corp. and Italian insurance giant Assicurazioni Generali. Generali has about €400 billion under management and is capitalized at over €40 billion.
During 2006, Lend Lease divested and the Group is now majority owned by its management team and the balance remains with Generali.
Among GLL's owned assets are Liberty Corner in Warsaw, Charles De Gaulle Plaza in Bucharest and 199 Fremont in San Francisco.
40 Mercer Street was developed in 2006 by Hines and Andre Balazs, according to the New York Observer.
Neechi Foods Co-op Plans July Ground-breaking for $5M Retail Project
Neechi Foods Co-operative, a 25-year-old Winnipeg-based firm with family roots dating back to 1869, plans to break ground in July on Neechi Commons, a $5 million retail development in the city's North End.
The blighted site previously housed the California Fruit Market on North Main Street. Neechi Commons will be home for a much-expanded Neechi Foods supermarket, 10 to 15 retailers, several office tenants, a culinary-arts school, a hydroponics operation and a year-round farmers market, according to the Winnipeg Free Press.
The project's designer is Winnipeg-based Bridgman Collaborative Architects headed by Wins Bridgman.
Astrid Lichti, administrator for the Mosaic Business Improvement Zone, said BIZ officials and area residents can't wait for the new development to open.
Lichti told the Free Press there have been a number of high-profile commercial developments on Main Street south of the Canadian Pacific Rail underpass, including the new Winnipeg Regional Healthy Authority and United Way of Winnipeg headquarters.
"We haven't seen a major, large-scale development like this in our zone in at least 15 years," says Lichti.
Winnipeg, the capital of Manitoba, has an estimated permanent population of about 1 million, according to the city's tourism department.
Neechi Foods president Russ Rothney told the Free Press he envisioned the retail courtyard becoming a meeting place for area residents. "The idea is that people will be able to sit down there and have a coffee or some bannock or whatever," he says.
With last fall's closing of California Fruit, Lichti said the area no longer has a larger grocery retailer that sells fresh fruits and vegetables. And a year-round farmers market would be welcome because the other one in the area is a seasonal operation.
Boston Developers Pull Back on New Retail Space
After adding 1.3 million square feet of new retail space to Boston inventory last year, developers are expected to slow deliveries to 1 million square feet in 2010, according to Marcus & Millichap's 2010 National Retail Report.
Gary R. Lucas
Supply growth and weak demand in suburban areas are expected to push up the vacancy rate 60 basis points this year to 8 percent, following a 120 basis point jump in 2009, says Lucas.
Much of the new stock will be delivering in high-vacancy suburban areas.
"Investor activity in Boston will center on single-tenant properties this year, with greater attention paid to location, tenant quality and lease strength due to concerns over consumer spending," Lucas adds.
Asking rents are forecast to fall 1.1 percent to $20.86 per square foot. Effective rents are projected to decline 3.7 percent to $18.30 per square. Last year, asking and effective rents dropped 3.3 percent and 5.6 percent respectively.
He also offers some good economic news. Boston-area employers will resume hiring this year, with 22,000 positions expected, a 0.9 percent increase. In 2009, about 55,000 jobs were lost.
Charlotte in Same Boat as Boston - Low Deliveries and High Vacancy
About the only good news coming out of Charlotte, NC so far is that employers are expected to expand local payrolls by 8,000 jobs this year, according to Marcus & Millichap. That number would be a 1 percent increase in new job volume. In 2009, about 35,600 positions were removed from the metro market.
"Retail investment activity in Charlotte will remain centered on single-tenant assets, with buyers focused on strength of tenants and location," says Gary R. Lucas, senior vice president, managing director and regional manager of Marcus & Millichap's Charlotte office.
Other highlights on the Charlotte market:
- About 250,000 square feet will be added to retail property stock in 2010, down from 1 million square feet last year. During the past five years, completions have averaged nearly 2 million square feet annually.
- After increasing 160 basis points in 2009, vacancy in the Charlotte metro is forecast to rise 60 basis points this year to 10.3 percent.
- In 2010, asking rents are projected to fall 1.6 percent to $17.11 per square foot, while effective rents are forecast to decline 4.4 percent to $14.40 per square foot. Last year, asking rents receded 3.8 percent, and effective rents dropped 6.5 percent.
Better Pricing in Dallas-Fort Worth Markets Lures Cash-Heavy Buyers from the Sidelines
Tim Speck
In the near term, rent renegotiations, especially in centers built between 2004 and 2008, will weigh on fundamentals.
"We are beginning to see cash-heavy buyers leave the sidelines to take advantage of better pricing in hopes of making acquisitions in 2010," says Tim Speck, first vice president and regional manager of Marcus & Millichap's Dallas office.
Highlights of the Dallas Retail Research Report:
- The Metroplex will lead the nation in job growth in 2010. By year end, 66,000 positions are anticipated to be created, a 2.3 percent rise, after 49,600 workers lost their positions last year.
- Developers are expected to finish several projects that broke ground in 2009, adding 2.4 million square feet of retail space to inventory in 2010. Nearly 4.1 million square feet came online last year.
- Despite a projected increase in space demand, vacancy is forecast to reach 13.2 percent in 2010, a 70 basis point climb.
- With vacancy still rising, asking rents are expected to slip to $14.97 per square foot this year, while effective rents will retreat to $12.74 per square foot, declines of 1.8 percent and 3.8 percent, respectively.
Copyright 2010 - 2012 WORLD PROPERTY CHANNEL NETWORKS, INC. All Rights Reserved.
Comment with