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Mary Beth Jenkins_ President

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Mary Beth Jenkins_ President Powered By Docstoc
					                       THE LARAMIE COMPANY




Mary Beth Jenkins, President
21 st   Century Retail
              Consumers

• Consumer habits are
  changing
                                  Consumer Savings as Percent of Disposable Income
• Saving more
                              8
• Shopping less               7
                              6
                              5
                    Percent   4                                                  % Saved
                              3
                              2
                              1
                              0
                                     2000-2008       Dec-08        May-09
            Spending Less


• Shopping closets
• Value-oriented, fear of job loss
• Big ticket items with incentives
  – Cars
  – Large appliances
  – Housing
   Spending Time, not Money

• Suburban Denver
  Shopper
  – 106 minutes
  – $42.65 per visit
• U.S. Shopper
  – 78.5 minutes
  – $86.69
Just the Facts
                    Denver Retail Vacancy

                                 Denver Retail Vacancy, 2007-2009

                    10
Percent Vacancy




                     8
                     6
                                                                               Vacancy
                     4
                     2
                     0




                                                                          TD
                      1Q




                                          1Q




                                                              1Q
                           2Q

                                3Q

                                     20 4Q


                                               2Q
                                                    3Q

                                                         20 4Q


                                                                   2Q

                                                                          3Q
                                                                        4Q
                     07




                                       08




                                                           09
                  20




                                                Quarter
                       Retail Vacancy by City

                          Denver vs. Phoenix Vacancy, 2007-09
                                                                2007 1Q
                  14                                            2Q
                  12                                            3Q
Percent Vacancy




                  10                                            4Q
                   8                                            2008 1Q
                   6                                            2Q
                   4                                            3Q
                   2                                            4Q
                   0                                            2009 1Q
                            Denver                 Phoenix      2Q
                                                                3Q
                                       Quarter
                                                                4QTD
                  Retail Vacancy by City

                       Denver vs. Atlanta Retail Vacancy, 2007-09

                  12
                                                                    2007 1Q
                  10                                                2Q
Percent Vacancy




                                                                    3Q
                   8
                                                                    4Q
                                                                    2008 1Q
                   6
                                                                    2Q
                   4                                                3Q
                                                                    4Q
                   2                                                2009 1Q
                                                                    2Q
                   0
                                                                    3Q
                          Denver                     Atlanta
                                                                    4QTD
                                       Quarter
    Denver Retail Absorption

                                    Denver Retail Absorption, 2007-09

              1,400,000

              1,200,000

              1,000,000

               800,000
Square Feet




               600,000

               400,000                                                                                  Denver
               200,000

                     0
                          1Q 2007

                                     2Q

                                          3Q

                                               4Q

                                                    1Q 2008

                                                              2Q

                                                                   3Q

                                                                        4Q

                                                                             1Q 2009

                                                                                       2Q

                                                                                            3Q

                                                                                                 4QTD
               -200,000

               -400,000

               -600,000
              Retail Absorption by City

                       Denver vs. Phoenix Retail Absorption, 2007-09

              3,000,000                                                2007 1Q
              2,500,000                                                2Q
              2,000,000                                                3Q
                                                                       4Q
Square Feet




              1,500,000
                                                                       2008 1Q
              1,000,000
                                                                       2Q
                500,000
                                                                       3Q
                      0
                                                                       4Q
               -500,000
                                                                       2009 1Q
              -1,000,000                                               2Q
                                 Denver                 Phoenix
              -1,500,000                                               3Q
                                            Quarter                    4QTD
    Retail Absorption by City

                           Denver vs. Atlanta Retail Absorption, 2007-09

              3,000,000
                                                                           2007 1Q
              2,500,000
                                                                           2Q
              2,000,000
                                                                           3Q
              1,500,000
Square Feet




                                                                           4Q
              1,000,000                                                    2008 1Q
                500,000                                                    2Q
                      0                                                    3Q
               -500,000                                                    4Q
              -1,000,000                                                   2009 1Q
              -1,500,000                                                   2Q
                                  Denver                  Atlanta
              -2,000,000                                                   3Q

                                               Quarter                     4QTD
Denver Retail Rental Rates

                                            Denver Rental Rates, 2007-09
Avg. $ Rental Rate NNN




                           17
                         16.8
                         16.6
                         16.4
                         16.2                                                              Denver
                           16
                         15.8
                         15.6
                         15.4




                                                                                      TD
                             1Q




                                                 1Q




                                                                     1Q
                                  2Q

                                       3Q

                                            20 Q



                                                      2Q

                                                           3Q

                                                                20 Q



                                                                          2Q

                                                                               3Q
                                                 4




                                                                     4




                                                                                    4Q
                            07




                                              08




                                                                  09
                         20




                                                       Quarter
Retail Rental Rates by City

                            Denver vs. Houston Retail Rental Rates, 2007-09

                                                                              2007 1Q
                         17.5
Avg. $ Rental Rate NNN




                                                                              2Q
                           17
                                                                              3Q
                         16.5
                                                                              4Q
                           16
                                                                              2008 1Q
                         15.5
                                                                              2Q
                           15
                                                                              3Q
                         14.5
                                                                              4Q
                           14
                                                                              2009 1Q
                         13.5
                                                                              2Q
                                      Denver              Houston
                                                                              3Q
                                                Quarter                       4QTD
                           Rental Rates by City

                            Denver vs. Atlanta Retail Rental Rates, 2007-09

                         17.5
                                                                              2007 1Q
Avg. $ Rental Rate NNN




                          17
                                                                              2Q
                         16.5
                                                                              3Q
                          16
                                                                              4Q
                         15.5                                                 2008 1Q
                          15                                                  2Q
                         14.5                                                 3Q
                          14                                                  4Q
                         13.5                                                 2009 1Q

                          13                                                  2Q
                                                                              3Q
                                     Denver                 Atlanta
                                                                              4QTD
                                                Quarter
                    Denver New Retail

                           Denver New Retail, 2007-09

              3,000,000
Square Feet
 Completed




              2,500,000
              2,000,000
              1,500,000                                      Denver
              1,000,000
                500,000
                      0
                            3Q




                                          3Q




                                                        3Q
                      1Q




                                    1Q




                                                   1Q
                    07




                                   08




                                                 09
                  20




                                 20




                                               20
                                         Quarter
                               New Retail by City

                                Denver vs. Phoenix New Retail, 2007-09
                                                                         2007 1Q
                        4,000,000
Square Feet Completed




                                                                         2Q
                        3,500,000
                                                                         3Q
                        3,000,000
                                                                         4Q
                        2,500,000
                                                                         2008 1Q
                        2,000,000
                                                                         2Q
                        1,500,000
                                                                         3Q
                        1,000,000
                                                                         4Q
                          500,000
                                                                         2009 1Q
                                0
                                                                         2Q
                                        Denver             Phoenix
                                                                         3Q
                                                 Quarter
                                                                         4QTD
                                    New Retail by City

                                     Denver vs. Atlanta New Retail, 2007-09

                        4,000,000
                                                                              2007 1Q
                        3,500,000
Square Feet Completed




                                                                              2Q
                        3,000,000                                             3Q
                        2,500,000                                             4Q
                        2,000,000                                             2008 1Q
                                                                              2Q
                        1,500,000
                                                                              3Q
                        1,000,000
                                                                              4Q
                         500,000                                              2009 1Q
                               0                                              2Q

                                         Denver                   Atlanta     3Q
                                                                              4QTD
                                                     Quarter
     Retail Vacancy by Submarket


                            Denver Retail Vacancy by Submarket, 2007-09

                  30
                                                                                       2007 1Q
                  25
                                                                                       2Q
Percent Vacancy




                  20                                                                   3Q
                                                                                       4Q
                  15                                                                   2008 1Q
                                                                                       2Q
                  10
                                                                                       3Q
                  5                                                                    4Q
                                                                                       2009 1Q
                  0                                                                    2Q
                       Denver Metro   FlatIron   SouthGlenn    Park     Cherry Creek   3Q
                                                              Meadows
                                                                                       4QTD
                                                 Submarket
Retail Absorption by Submarket


                  Denver Retail Absorption by Submarket, 2007-09

               250,000
                                                                                 2007 1Q
               200,000
                                                                                 2Q
               150,000                                                           3Q
                                                                                 4Q
               100,000
 Square Feet




                                                                                 2008 1Q
                50,000                                                           2Q
                     0                                                           3Q
                                                                                 4Q
                -50,000
                                                                                 2009 1Q
               -100,000                                                          2Q
                                                                                 3Q
               -150,000
                          FlatIron   SouthGlenn   Park Meadow s   Cherry Creek   4QTD
               -200,000

                                            Submarket
                        Why Denver?

•   5th smartest city (Daily Beast)
•   2nd most popular city to live in, after New York (Harris Survey)
•   Colorado among the first states to recover from recession (Denver Post)
•   8th fastest growing state
•   20% projected growth by 2018
•   Young money—Douglas County is 5th young/rich and Broomfield is 10th
    in U.S. (Nielsen)
•   4th busiest airport in U.S.; 10th busiest airport in world
•   3rd highest concentration of high-tech workers
•   345,000 conventioneers annually add $584 million to economy
•   Largest city in 600 miles; draws shoppers from six-state region
•   Great weather year-round
That’s Hot/That’s Not
        The Big Box Issue




• 58 empty in Denver
  – 22,000-50,000 SF each
  – 29 are Mervyn’s, Linens & Things, Circuit City,
    Albertson’s
      That’s Hot—Big Boxes


• Wholesale clubs—Costco, Sam’s
• Target—26 new stores nationwide in ’09
• Walmart
                 That’s Not
• Circuit City
• Home Expo
• Linens ‘n’ Things
That’s Hot—Destination Retail



 • Cabela’s
 • Bass Pro Shops
 • Ikea
That’s Hot—Department Stores


            • Macy’s
          • Nordstrom

        The Watch List
        • Neiman Marcus
       • Saks Fifth Avenue
That’s Hot— Apple
That’s Hot—Frugal Fashion



– Forever 21
– H&M
– Top Shop
That’s Not—Old-Fashioned Fashion



  • J. Jill
  • Talbots
  • Old Navy
  • Abercrombie
   & Fitch
    That’s Hot—Luxury

• Hermès
• Ralph Lauren Polo
• Von Maur

          Frugal Luxury
• Neiman Marcus Last Call
• Saks Off Fifth
• Nordstrom Rack
    That’s Hot—Frugal Anything


Most active discounters in 2009:

•   TJ Maxx, Ross Dress for Less, Kohl’s
•   Dollar Tree, Family Dollar, Big Lots
•   Jo-Ann Fabrics, Hobby Lobby
•   Goodwill Industries
          That’s Hot—Food


• Fast casual
   – Which Wich
   – Mongolian Grill
   – Smashburger
• Family dining
   – Red Robin
   – Olive Garden
• Great local restaurants

                       That’s Not—Food

               • Five-star restaurants
   That’s Hot—Entertainment

• Dinner date movie theater
• Kids’/family entertainment centers
  – Locals (bowling, skateboarding, skating rink,
    sports center)
  – Nationals (Dave & Buster’s, Monkey Bizness,
    Chuck-e-Cheese)
• Fitness centers
  – Lifetime Fitness
  – Planet Fitness
  – Powerhouse Gym
 That’s Hot—Grocery Stores

• Anything ―natural‖
  – Whole Foods
  – Sunflower Farmers Market
  – Sprouts Farmers Market
• Local markets
  – Tony’s Market
  – Spinelli’s Market
  – Marczyk Fine Foods
            That’s Not—Groceries
                   Albertson’s
Recession’s Top Producers

            Retailers with Highest % Revenue Increase, 2007-
                                   2009

90
80
70
60
50
40                                                        % Revenue Increase
30
20
10
 0
                      on




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Retail Forecast 2010
                      Holiday Sales


                      Holiday Sales % Change, 2004-09

                 8
                 6                              General
                                                Merchandise
Percent Change




                 4
                                                (GAFO)
                 2
                                                Shopping Centers
                 0
                 -2
                                                Chain Stores
                 -4
                 -6
                 -8
                             Year
          Denver Retail, 2010

•   No new construction for two years
•   9% vacancy; 7% in 2011
•   $16 average rental rates
•   200,000 SF absorption per quarter
       21st Century City Beautiful
                    Orchard Town Center




                                                   Union Station

Streets at SouthGlenn




                                          Belmar
Shopping Center of the Future

• Mixed use
  – Retail, office, residential
• Development density
  – Future: 4-6 million SF per 100 acres
  – Now: 2 million SF per 100 acres
• Intermodal access
  – Highway, bus, mass transit
• Location
  – 250,000 population within 5-7 miles
  – Major interchange/freeway access
        Retail of the Future

• Consolidation
• Fewer traditional anchor department
  stores
• Destination retail—civic, service, school
• Entertainment—dinner movie theater,
  performing arts
• Back to the future, Main Street style
• 2,000 malls today; 800 in 2019 in U.S.
       What It Will Take in 2010

• Projects
  – Well-located, well-anchored, inviting outdoor space
• Owners
  – True dealmakers—aggressive for right deal
  – Pay brokers’ commissions promptly
• Retailers
  – No better time to make a deal
• Brokers
  – Know your tenants, help owners make deal quickly
• Cities/counties
  – Be pro-active; invest in market data and strategy

				
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posted:12/2/2011
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