RetailReview

A publication of Mid-America® Real Estate Group FALL 2013 Site Selection Strategies: Business as Usual?

In the past five years, the real estate According to Mid-America Broker majority of existing A space leased, and market has been in recovery mode and (Mich.) Susan Acciaioli, “Co-tenancy there is opportunity for new ICSC it seems that things are almost back to clauses continue to be one of the construction,” he says. “Smaller retail where they were in 2008. But is biggest sticking points in negotiating a tenants are dictating the location of Deal Making everything the same? Have tenants deal. For national retailers, obtaining a these sites and will pay for a strong October 2 – 3, 2013 changed their criteria for the number of co-tenancy clause makes it easier to get location, especially if it out positions stores they plan to open? Do they look deals approved. But landlords deem their competitor. Larger developments 600 East Grand Avenue at sites differently now than pre-2008? them a liability.” She says that, “Typically are still on the horizon as they require a Chicago, IL 60611 Below are some insights from language can be negotiated to satisfy critical mass of retailers.” Stop by and visit us at the Mid-America’s tenant experts as to the retailer’s ‘worst case scenario,’ and Exit Strategy Mid-America Real Estate Group how the recovery has influenced the at the same time provide the landlord at Booth #911 or at the ChainLinks retail trades. with replacement tenant flexibility.” Although the market is steadily Booth #711. improving, it is still important to be “One fundamental that seems back in Location Scrutiny aware of possible changes in the future. vogue is that successful retail Office: development follows, not leads, In the still-changing economy, it’s more Mid-America Principal and Vice One Parkview Plaza, 9th Floor residential population and growth,” important than ever for brokers to be President Dan Tausk says, “Retailers Oakbrook Terrace, Illinois 60181 aware of potential pitfalls in helping need to be cognizant of an exit strategy 630.954.7300 says Jeff Kuchman, Mid-America Principal and Director of Tenant clients with site selection. Mid-America on each individual site more than ever Chicago Office: Brokerage. “Most retailers and projects Principal (Minn.) Mike Sims says, before. Kick out clauses have become a 435 N. Michigan Avenue, Ste 2009 that continue to struggle exist on the “Tenants who were active during the big issue for both tenants and landlords Chicago, Illinois 60611 630.954.7327 fringes, where stores jumped out in recession, albeit few, were fortunate trying to protect themselves from front of rooftops in an attempt to drive that there was not much competition. mistakes while giving each side some Wisconsin Office: growth plans.” Overall activity is improving now, but flexibility to move on.” 648 N. Plankinton Avenue, Ste 264 retailers are still very selective on Milwaukee, Wisconsin 53203 The retail real estate market will More Reserved Retailers locations. Retailers are scrutinizing 414.273.4600 inevitably continue to change, and site each and every site and deal.” With that in mind, the lessons of recent selection strategies will have to evolve Minnesota Office: 5353 Wayzata Boulevard, Ste 650 years are apparent in retailers’ decision Mid-America Principal (Mich.) Tony to keep up with those changes. Having , Minnesota 55416 making process as the market Schmitt says that when retailers are an experienced broker in your corner 952.563.6600 continues to gain momentum. One looking for a site, they must ask with the most comprehensive, current Michigan Office: example is concern about possible themselves if there are new market knowledge may be one of the 6230 Orchard Lake Road, Ste 230 turnover in a potential center. development options. “We’ve seen the best strategies of all. West Bloomfield, Michigan 48322 248.855.6800 www.midamericagrp.com Illinois Activity 2

Principal Richard Spinell reports the following new and renewal retail leases recently MAAMCO Leasing Activity completed by Mid-America Asset Management (MAAMCO) leasing representatives:

Shopping CenteR tenants Total Sq. Ftg. tenants Total Sq. Ftg. 180 N. Jefferson Nail 2NE1, Subway 2,643 Ogden Mall Lotus Terrace 1,800 Chicago, IL Naperville, IL 1480 N. Orchard Road Illini Legal Services 1,120 Parker Square Full Steam Staffing 1,240 Aurora, IL Minook, IL Asbury Plaza Bed, Bath & Beyond, Dress Barn, Maurices, Petco 47,202 Parkview Plaza Fred Loya 940 Dubuque, IA Chicago, IL Aurora Marketplace DuPage Medical Group 4,200 Plaza del Prado McDonald’s, Zoup! 7,500 Aurora, IL Glenview, IL Bloomingdale Square Blooming Nails 2,656 Poplar Creek Crossing Dunkin Donuts, PJ’s Avon Beauty Center 3,628 Bloomingdale, IL Hoffman Estates, IL Brewster Creek Square Sherwin Williams 3,500 Prairie Ridge West Cheddar’s 2 acres Bartlett, IL Pleasant Prairie, IL Broadway at Surf Bed, Bath & Beyond, Sprint, TJ Maxx 71,850 The Quarry Bedding Experts, Cost Cutters 5,050 Chicago, IL Hodgkins, IL Broadview Village Square Vintage Cleaners 630 -College Green Planet Fitness 20,924 Broadview, IL Elgin, IL Burr Ridge Village Center Red Mango 1,658 Rice Lake Square Pure Barre, Pinwheel Toys, Smile More Dental 6,560 Burr Ridge, IL Wheaton, IL California & Armitage Sally Beauty 1,475 River Forest Town Center LOFT, Tilly’s, Ulta 20,515 Chicago, IL River Forest, IL Carillon Court Stella’s 2,718 Scharrington Square Sally Beauty Supply 1,245 Romeoville, IL Schaumburg, IL Carillon Square Advocate Health Care, Athletico, Dickey’s BBQ Pit, Onomoli, Schaumburg Plaza JD Kids Ice Cream 900 Glenview, IL Prime Devices Corp. 16,515 Schaumburg, IL Church Street Plaza Pure Barre, Second Time Around 2,970 Shops at State Place European Wax Centers 1,778 Evanston, IL Chicago, IL Cicero Annex Sleepy’s 6,075 Southport Plaza Pier 1 Imports 9,981 Chicago, IL Kenosha, WI Clark-Wellington FedEx 5,006 Surrey Ridge Wasabi 1,750 Chicago, IL Arlington Heights, IL Crossroads at Briargate Molly’s Deli 1,546 Town Square Creative Touch Interiors, Lester Starr Jewelers 3,911 South Elgin, IL Schaumburg, IL Dempster Plaza Advocate Lutheran General 14,700 Village Crossing Radio Shack, Subway 3,712 Niles, IL Niles, IL Dorchester Commons Red Snapper 1,500 Village Square of Bradley Hair Works 800 Chicago, IL Bradley, IL Evanston Plaza DaVita, Papa Romeo’s Pizza, US Army & Marines 12,911 Village Square of Northbrook Verizon Wireless 2,464 Evanston, IL Northbrook, IL The Fresh Market Center Firehouse Subs, Great Clips 3,250 Webster Place Barnes & Noble, Pet Stuff 31,950 Glen Ellyn, IL Chicago, IL Fullerton Plaza Chase, Party City 15,800 Westmont Village Rusco Windows 1,808 Chicago, IL Westmont, IL Garden Market George’s Hair Design, Yumz Frozen Yogurt 3,477 Willard’s Corner Sears Appliance 5,000 Western Springs, IL North Aurora, IL Gateway Centre Dunkin Donuts, T-Mobile 4,204 Willow Creek Sleepy’s 6,507 Chicago, IL Glenview, IL Aveda/Annabella Salon & Spa, The Children’s Place, Claddagh Irish Pub, Windsor Pointe Lavish Spa 1,395 Geneva, IL Destination Maternity, Express, Forever 21, Massage Envy, New York & Co., Kenosha, WI Sleep Number, Soma Intimates 54,522 The Mid-America Asset Management team can be reached at 630.954.7300. Glenbrook Marketplace EcoGym 8,700 Glenview, IL The Grove Pastabilities 1,600 Buffalo Grove, IL High Point Square Laredo’s Hospitality 1,750 Romeoville, IL MAAMCO News & Notables Hoffman Village Goodwill 20,630 Hoffman Estates, IL Kensington North Verizon Wireless 2,763 Michelle Panovich to Receive Lifetime Industry Plainfield, IL Leadership Award LaGrange Crossing Pure Barre 1,612 LaGrange, IL Mid-America is proud to announce that C. Michelle Panovich, MAAMCO Main Street Commons Embroid Me, World Market 19,675 Principal and Executive Vice President, will be honored with the Lifetime St. Charles, IL Market Meadows Heartland Blood Center, SAS Comfort Shoes 4,865 Industry Leadership Award at the 12th annual Real Estate Gala hosted Naperville, IL by the Marshall Bennett Institute of Real Estate at Roosevelt Marshfield Plaza Skechers 7,497 on November 7, 2013. Chicago, IL University McHenry Commons Family Video 4,200 Michelle has more than 30 years of experience McHenry, IL Midway Square Hanway Insurance 1,102 in real estate construction, development and Chicago, IL management. Among her many accomplishments, Milwaukee & Concord Presence Healthcare, UPS Store 4,627 Chicago, IL she has directed the redevelopment of The Streets Mount Prospect Plaza Famous Footwear 5,838 of Woodfield in Schaumburg and Brickyard Mt. Prospect, IL Mall in Chicago, and the retail revitalization of Naperville Crossings C2 Education, Nothing Bundt Cake 4,342 Naperville, IL downtown LaGrange and Park Ridge. North Lake Commons The UPS Store 1,411 Lake Zurich, IL According to Jon DeVries of Roosevelt University, Oakland Place Sears 9,290 “Michelle’s leadership and contributions to the Dekalb, IL profession, community and our school have been significant.” Report from Illinois Brokers 3

Principal Jeff Kuchman reports the following transactions recently handled by MAREC Activity Mid-America Real Estate Corporation (MAREC) brokers:

PROJECT Leasing Tenant Representation

Location tenant Sq. Ftg. Broker Tenant Location Broker Chicago: Aldi Big Rapids, MI; Galesburg, IL Mike Phillips, Andy Bulson 218 W. Washington Fifth Third Bank 980 Peter Scannell Associated Bank Sturgeon Bay, WI Peter Scannell 556 W. Diversey Aligned Modern Health 2,400 Matt Gould, Paul Bryant, Dan Tausk Aspen Dental Alton, IL; Glen Carbon, IL Willie Hoag 835 W. Wilson property sale .63 acre Andrew Becker Athletico Greenfield, WI; Orland Park, IL; Oswego, IL Peter Scannell 1560 N. Damon Stan’s Donuts 1,340 Paul Bryant, Dan Tausk, Andrew Becker Buffalo Wild Wings McHenry, IL Brian Adams, Steve Frishman 1832 N. Clybourn Buffalo Wild Wings 9,462 Paul Bryant, Dan Tausk, Andrew Becker Camper Chicago, IL Paul Bryant, Dan Tausk 2500 W. North Avenue Dental Magic 1,900 Stephen Ansani, Paul Bryant, Dan Tausk Chick-fil-A Chicago Ridge, IL; Elmhurst, IL; Rockford, IL Steve Frishman, Greg Bayer 3404 N. Southport Jeni’s Splendid Ice Cream 1,600 Matt Gould Chili’s Bradley, IL Steve Frishman, Brian Adams 5300 N. Broadway Pizza Hut 1,260 Peter Caruso, Andrew Becker Chipotle Grill Highland, IN; Norridge, IL Steve Frishman Sleepy’s 8,625 Elsie’s Place Oaklawn, IL Stephen Ansani California & Armitage Sally Beauty 1,475 Matt Gould, Stan Nitzberg EP Clock Tower East Peoria, IL Andy Bulson, Mike Phillips The UPS Store 1,475 Express Chicago, IL Greg Bayer, Paul Bryant, Dan Tausk Webster & Lincoln Mrs. Greens Natural Market 20,000 Paul Bryant, Dan Tausk, Andrew Becker Francesca’s Collections Chicago, IL Matt Gould Webster Place Pet Stuff 1,200 Andrew Becker G Spot Salon Chicago, IL Michael Wexler Wicker Park Commons Vitamin Shoppe 3,200 Greg Bayer, Dan Tausk, Paul Bryant Icebreaker Chicago, IL Greg Bayer, Stan Nitzberg, Paul Bryant, Dan Tausk Illinois & Beyond: Jason’s Deli Bloomington, IL; Normal, IL Willie Hoag, Brian Adams 44 S. Washington St. China Spring Restaurant 2,964 Peter Caruso, Paige Winkels Jeni’s Splendid Ice Cream Chicago, IL Andrew Becker Hinsdale, IL Kate Spade Chicago, IL Greg Bayer, Stan Nitzberg 417 E. Route 173 Blackhawk Restaurant Group 1,393 Kevin McLoughlin Antioch, IL La Colombe Torrefaction Chicago, IL Michael Wexler 737 Chicago Avenue Pie and Coffee 2,608 Peter Caruso, Stan Nitzberg, Paige Winkels LA Fitness Chicago, IL; Glenview, IL Jeff Kuchman, Greg Bayer, Evanston, IL Willie Hoag, Dan Tausk, Paul Bryant 1080 S. Roselle Rd. Title Max 2,400 Peter Caruso, Paige Winkels Lowe’s (pad site disposition) Galesburg, IL Jeff Kuchman, Paige Winkels Schaumburg, IL Lowe’s (surplus asset disposition) Ionia, IL Jeff Kuchman, Paige Winkels 1315 W. North Avenue Olive Garden 55,000 Steve Frishman, Brian Adams Maggiano’s Vernon Hills, IL Steve Frishman Melrose Park, IL Massage Envy Algonquin, IL; Highland, IN; Plainfield, IL Peter Scannell, Steve Frishman, 1518 Market St. Elite Fitness & Training 11,619 Andrew Becker, Peter Caruso Brian Adams Des Plaines, IL Tap House 6,720 Nordstrom Rack Chicago, IL; Skokie, IL Jeff Kuchman, Stan Nitzberg, 2825 Rockingham Ripple & Frenell Auto Sales 14,860 Peter Caruso, Mike Phillips, Andy Bulson, Dean Welch Davenport, IA Paige Winkels Pier 1 Imports Chicago, IL; Schererville, IN; Oak Brook, IL; Andy Bulson, Mike Phillips 7130 East State Street Chick-fil-A .99 acre Jeff Kuchman Wheaton, IL Rockford, IL Ross Dress For Less Chicago, IL Andy Bulson, Mike Phillips, Panera Bread 4,000 Steve Frishman Paul Bryant, Dan Tausk Norridge, IL Sleepy’s Algonquin, IL; Bannockburn, IL; Batavia, IL; Jeff Kuchman, Willie Hoag, Merrillville Plaza Affordable Dentures & Crowns 3,172 Peter Caruso, Jeff Kuchman, Paige Winkels Berwyn, IL; Bolingbrook, IL; Greg Bayer, Dan Tausk Hobart, IN JoAnn Fabrics 26,157 Chicago, IL (9 locations); Crystal Lake, IL; NEC Indianapolis Blvd Massage Envy 3,300 Steve Frishman Evergreen Park, IL; Frankfort, IL; Glenview, IL; & Main St. Physicians Immediate Care 3,290 LaGrange, IL; Lake Zurich, IL; Naperville, IL; Highland, IN Vitamin Shoppe 3,012 Oak Brook, IL; Orland Park, IL; Vernon Hills, IL NEC Rand Rd. & Rte. 22 Sleepy’s 4,200 Peter Caruso, Paige Winkels Sportclips Chicago, IL (2 locations); Elgin, IL; Peter Scannell, Stephen Ansani, Lake Zurich, IL Vitamin Shoppe 3,000 Elk Grove Village, IL; LaGrange, IL; Orland Park, IL; Matt Gould, Dean Welch Rockford, IL; South Barrington, IL NEC Weber & Airport Rds. TJ Maxx 22,500 Peter Caruso, Steve Frishman, Romeoville, IL Kevin McLoughlin, Paige Winkels XOCO Frontera Chicago, IL Paul Bryant, Dan Tausk, Peter Scannell NWC Northwest Highway & Rte. 31 Texas Roadhouse 6,872 Peter Caruso, Brian Adams, Steve Frishman Crystal Lake, IL For site and location criteria for these clients, please contact Mid-America Real Estate NWC 159th & La Grange Games Workshop 862 Peter Caruso, Paige Winkels Corporation at 630.954.7300. Orland Park, IL The Shops at Fox River Buffalo Wild Wings 5,687 Kevin McLoughlin, Peter Caruso McHenry, IL Torrid 2,500 SWC Grand Ave. & Hunt Club Heartland Dental 3,000 Peter Caruso, Steve Frishman Gurnee, IL Illinois Market Highlights Urban Grocery Study Shows Gourmet Sector on the Rise in Chicago by Dan Tausk and Nancy Fetsch The Mid-America Urban Team has offered the Chicago retail market food for thought with its second biennial Urban Grocery Study, authored by principal and vice president Dan Tausk along with analyst Nancy Fetsch. The study, released in mid-September, notes a 60% increase in new square footage devoted to the gourmet sector since the 2011 study. Gourmet also saw a 41.94% increase in the number of new store openings. The near future is also being led by gourmet. Continued on page 8… Wisconsin Activity 4

Project Leasing Report Wisconsin Market Highlights

Principals Daniel J. Cohen and Daniel E. Rosenfeld report the following transactions The greater Milwaukee area has seen demand for small shop space, with recently handled by the Mid-America Real Estate-Wisconsin team: junior anchor space extremely competitive in the last several quarters. For quality sites in high-demand trade areas, national retailers have been Project Leasing forced to “pay up” to make deals, something that was rarely seen in this Property/Location Retailer Sq. FtG. Broker market in the past. Bayshore Town Center Ulta Beauty 10,277 Teresa Shemitis, Dan Rosenfeld Glendale, WI Tenant Expansion: Active to Very Active Brady Place GNC 1,440 Ryan Holzhauer Milwaukee, WI Subway 1,230 Notable retailers pushing for new units throughout Wisconsin include Brooktown Plaza Cycle Gear 3,432 Teresa Shemitis Meijer, Buffalo Wild Wings, Starbucks, Panda Express, Planet Brookfield, WI Fitness, Ulta, Blaze Pizza, Discount Tire, Dollar General, Dunkin Brownstones Shopping Center Blaze Pizza 2,650 Andrew Prater Brookfield, WI Donuts, and Heartland Dental. Concord Corporate Center 4 2nd Wind Exercise Equipment 4,410 Teresa Shemitis Mequon, WI Redevelopments: The Best Bet for Retailers Delavan Crossings rue 21 5,200 Andrew Prater, Teresa Shemitis Delavan, WI With limited ground-up activity, retailers have turned to redevelopments of Former Circuit City Sears Outlet 45,572 Ryan Holzhauer, Dan Rosenfeld Grand Chute, WI retail and non-retail sites for expansion opportunities. Notable projects in Germantown Market Place Bellisima Spa 1,159 Joe Kleiman the Wisconsin market include: Germantown, WI Heritage Village Mall Staples .29 acre Joe Kleiman, Dan Rosenfeld Mayfair Collection – One of Milwaukee’s most dynamic projects in over Beaver Dam, WI ten years has started to take center stage. Phase I of this multi-phase HSA Horizon Plaza maurices 4,664 Dan Rosenfeld Appleton, WI Commercial development is currently under construction, and will include Oak Creek Commons Express Cleaners 1,081 Andrew Prater over 265,000 SF of retail space at Highway 45 and Burleigh Street. Space is Oak Creek, WI Yen Hwa Chinese Restaurant 2,028 scheduled for delivery in January of 2014 with an April grand opening Pine Tree Plaza Dress Barn 8,184 Teresa Shemitis, Andrew Prater Janesville, WI Eyemart Express 3,500 planned. Key tenants include Nordstrom Rack, Saks Fifth Avenue Off Ruby Isle Kid Spa Salon & Parties 1,813 Teresa Shemitis 5th, Dick’s Sporting Goods, Old Navy, and Ulta. Brookfield, WI Serenity Spa Salon & Boutique 3,220 The Shoppes at Fox River Hobby Lobby 55,000 Ryan Holzhauer The Corners – This proposed project in Brookfield, Wisconsin will be Waukesha, WI anchored by a 140,000 SF Von Maur and will include an additional Shoppes at Prairie Ridge Affordable Dentures & Crowns 3,127 Teresa Shemitis Pleasant Prairie, WI 243,000 SF of retail and restaurant shops. Hopkins, Minnesota-based The Shops of Grand Avenue Jake’s Deli 771 Ryan Holzhauer, Teresa Shemitis CarVal Investors, LLC, an independent subsidiary of Cargill, Inc., and Milwaukee, WI Southport Plaza Pier 1 9,981 Teresa Shemitis, Barb Kading Chicago-based real estate investment company M & J Wilkow, Ltd., Kenosha, WI were recently named as equity partners in the development, along with Milwaukee-based hotel and theater operator Marcus Corp. The project is Tenant Representation slated for a late 2015 opening. Tenant Location Broker Drexel Town Square (Spotlighted in the Spring 2013 Retail Review) – Blaze Pizza Brookfield, WI Dan Cohen, Dan Klister Located in the south suburb of Oak Creek, this project is continuing to move PROJECTBuffalo Wild Wings OVERVIEWManitowoc, WI; Racine, WI- PHASE Adam1 Dreier forward with the TIF agreement approved in early August and Meijer Cherry Berry Yogurt Bar Oshkosh, WI Tony Colvin Cycle Gear Brookfield, WI Tony Colvin secured as anchor. The project will include hospitality, medical and health A REGIONALGrace & Shelly’s Cupcakes SHOPPING Whitefish Bay, WI DESTINATION Dan Cohen club tenants. Site work is scheduled to start in September with delivery to The MayfairStaples Collection’s first phase,Beaver Dam,which WI broke ground on AprilDan 16 Cohenth, 2013, tenants in spring of 2015. consists ofJimmy adaptively John’s repurposingDelavan, functionally WI; Glendale, WIobsolete warehouse Adam buildings Dreier along HighwayMenchie’s 45 into new, contemporaryDelavan, WI; Sheboygan, retail WI environments that,Adam throughDreier Ground-up Development: Pabst Farms Expansion Outpost Natural Foods Cooperative Mequon, WI Dan Cohen unique design, celebrate the property’s industrial heritage. With commitments and are being proposed for 7-Eleven Milwaukee, WI Tony Colvin, Dan Cohen Sam’s Club Pabst Farms Town from strong national retailers, this 270,000 square foot initial phase will serve Starbucks Lake Delton, WI; Sussex, WI Tony Colvin Centre in Oconomowoc as an addition to the Market Place at Pabst as the catalyst for future mixed-use development for the balance of the 69 Farms, currently anchored by Roundy’s Pick ‘n Save. Construction is acres at the “Burleigh Triangle” and along the greater Burleigh corridor for years Land and Building Sales projected to begin in 2014 on the 590,000 SF project, part of a 1,500 acre to come. master-planned community. Property Location Size Broker HSA Commercial7512 W. Mequon Real Road Estate is Mequon, continuing WI to identify and1.9 acres recruit Dan first-class, Cohen category-leadingFormer Associated retailers Bank that areSturgeon seeking Bay, WI a regional3,290 presence sf / .8 acre in Joethe Kleiman Mayfair Mall tradeChuck area. E. Cheese The following Brookfield, tenants WI have signed leases19,800 sf for Dan the Cohen Mayfair w/MAREC CollectionCrisp and will be opening in Milwaukee,Spring 2014: WI 5,300 sf Teresa Shemitis Glenwood Crossings Kenosha, WI 87,504 sf Dan Rosenfeld w/MAREC • NordstromGoodwill Rack Sheboygan, WI 20,035 sf Dan Rosenfeld w/MAREC • Saks MeadowOff 5th Creek Market (outlot) Pewaukee, WI 1.77 acres Dan Cohen, Joe Kleiman • Dick’sPrairie Sporting Ridge West Goods Pleasant Prairie, WI 2.4 acres Dan Rosenfeld • Ulta BeautyThe Shoppes at Nagawaukee – Delafield, WI 96,231 sf Dan Cohen w/MAREC Phase II • Old Navy The Shoppes at Nagawaukee – Delafield, WI 9,600 sf Dan Cohen w/MAREC • Carter’sPhase III Former Walmart Berlin, WI 58,984 sf Andrew Prater, Dan Rosenfeld Please seeFormer the Walmart following page forMilwaukee, a copy WI of our merchandise140,002 sfplan. Andrew Prater, Dan Rosenfeld The Mid-America Real Estate - Wisconsin team can be reached at 414.273.4600.

Mayfair Collection

The Mayfair Collection Wauwatosa, Wisconsin 6A Development by HSA Commercial, Inc. Minnesota Activity 5

Activity Minnesota Market Report Principal Doug Sailor announces the following new and renewal retail leases Former Brookdale Mall Redevelopment recently completed by Mid-America Real Estate-Minnesota project brokers: Continues On Strong Pace Project Leasing Report by Doug Sailor, Principal Leasing and Management Property/Location Retailer Sq. FtG. , the first and largest new development project to Bloomington Shoppes Papa Murphy’s, Smokeless Smoking, Total Renal Care, 15,586 hit the Twin Cities since the recession, is on track for new fall openings. Phase I Bloomington, MN We Care Childhood Development Center Brooklyn Park Auto Mall Brookdale Auto Sales, Trust Transmission & Auto Repair, Universal Car Service 7,060 of the 840,000 square foot redevelopment of the former Brookdale Regional Brooklyn Park, MN Mall was completed with the opening of Walmart on September 12, 2012. Cedar Grove Business Center Eagan Resource Center 4,952 Mid-America Real Estate-Minnesota, LLC, represented Walmart in the Eagan, MN Cliffview Plaza Cathy’s African Beading, Ignite Hookah 3,914 transaction, and is now representing Fort Lauderdale, Fla.-based developer Burnsville, MN Gatlin Development in the leasing and sales of the rest of the project. Commerce Hill Chuck E Cheese 15,000 Woodbury, MN After Walmart opened, Phase II commenced with the construction of outlot Coon Rapids Auto Mall PTL Detail 4,561 Coon Rapids, MN structures. These included three multi-tenant small shop buildings, a new Corner House Shoppes Family Cuts 1,232 LA Fitness, and Discount Tire and Panda Express pad sites. LA Stillwater, MN Fitness is scheduled to open in September 2013, with all other Phase II small County Fair Marketplace Liberty Tax 1,115 Hutchinson, MN shop and pad sites slated for delivery in September as well. Leasing of the Crossroads Center Safire Nutrition 1,195 small shop buildings is on pace to be 100% leased by the end of 2013. Eden Prairie, MN Crystal Gallery Mall Allstate Insurance, Comfort Massage, Great Clips, Home Choice, Vision World 13,995 Phase III is scheduled to begin in late fall 2013. This phase will entail new Crystal, MN construction of the junior box site in the last remaining area of the former Dunkirk Square E Cigarettes of MG 1,240 Maple Grove, MN regional mall building. The existing area will be razed and construction Eagan Promenade Spire Federal Credit Union 2,343 begun for T.J. Maxx, Michaels and two additional junior box tenants Eagan, MN whose deals are currently in negotiation. Also infilling smaller tenant areas Eagan Town Centre Sally Beauty, Sears 6,983 Eagan, MN within the new junior box building will be a national full service salon group Foxridge Shoppes Almax Auto 1,800 and a national beauty products group. Eagan, MN Hudson Marketplace Toy Riffic 1,032 Phase IV, consisting of pad sites to the north and east of Walmart, along Hudson, WI Knollwood Crossing Yogurt Lab 1,200 with small and medium size tenant spaces, will commence in spring/ Hopkins, MN summer 2014. This phase will consist of more food users with a focus on Lakeland Village Comfort Massage 1,586 fast casual, full service family and entertainment. continues to own Lakeland, MN Sears Main Street Marketplace Little Caesars, Penn Cycle 6,437 its real estate separately, with Kohl’s a long time tenant of the site as well. Blaine, MN Mapleridge Ace Cash 1,211 The activity at Shingle Creek Crossing has been overwhelmingly positive Maplewood, MN with juniors as well as small shop retailers. Normandale Village Bloomington Family Chiropractic 3,035 Bloomington, MN North Branch Marketplace Papa Murphy’s, Wireless Zone 2,740 North Branch, MN Northstar Marketplace Cellular Experts, Dollar Cents 4,694 Ramsey, MN The Promenade of Wayzata Olives & Sprigs 1,450 Wayzata, MN Richfield Shoppes Dr. Berg Dental, El Tejaban Mexican, Hairtenders, Hot Comics, 19,712 Richfield, MN NCS Marketing Services, LLC, Perez Chiropractic, Richfield Flowers Rosemount Market Square Ten Tiny Toes Photography 540 Shingle Creek Crossing Rosemount, MN Shingle Creek Crossing AT&T, Discount Tire (sale), Foot Locker, Qdoba, Schlotzsky’s 54,166 Brooklyn Center, MN Principal Mike Sims announces the following transactions recently handled by The Shoppes of Willmar Sally Beauty 1,627 Willmar, MN Mid-America Real Estate-Minnesota Tenant Representation brokers: Shops at Riverdale Commons Cash-N-Pawn 2,480 Coon Rapids, MN Tenant Representation Shorewood Village Shopping Center KathrynMak Designs 2,283 Shorewood, MN Tenant Location Broker Southcross Shoppes First Resource Bank 3,843 Advance Auto Parts Lakeville, MN Johnny Reimann Savage, MN AT&T Maple Grove, MN; Woodbury, MN Patrick Daly Stadium Village Plaza Burger King, European Wax 3,828 Banana Republic Factory Eagan, MN Johnny Reimann, Stefanie Meyer Minneapolis, MN Brush! St. Louis Park, MN Patrick Daly Tamarack Village The Joint, Totally Tan, The Woods 9,196 Woodbury, MN Cherry Berry Hudson, WI; Minnetonka, MN; Oshkosh, WI Patrick Daly Tonka Village Shopping Center Bellasaluti 1,400 Family Dollar International Falls, MN Johnny Reimann, Stefanie Meyer Tonka Bay, MN Gap Outlet Eagan, MN; St. Cloud, MN Johnny Reimann, Stefanie Meyer University Car X Eco Garage 4,216 Home Goods Fargo, ND Johnny Reimann, Stefanie Meyer St. Paul, MN Honey & Rye Bakehouse St. Louis Park, MN Stefanie Meyer Waterford Plaza Big Frog 1,406 Plymouth, MN Marshalls Bloomington, MN; Fargo, ND Johnny Reimann, Stefanie Meyer Westview Shopping Center Goodwill, Nu-Wave Hair 30,777 OfficeMax Maplewood, MN Stefanie Meyer, Johnny Reimann Hastings, MN Potbelly Sandwich Shop St. Paul, MN Patrick Daly Woodbury Village Massage Retreat & Spa 2,800 Salon Concepts Apple Valley, MN; Blaine, MN; Minneapolis, MN Patrick Daly, Johnny Reimann, Woodbury, MN Eden Prairie, MN Stefanie Meyer, Patrick Daly TJMaxx St. Paul, MN Johnny Reimann, Stefanie Meyer Walmart (land sales) Andover, MN; Cottage Grove, MN; Mike Sims, Patrick Daly Mountain Iron, MN; Roseville, MN The Mid-America Real Estate – Minnesota team can be reached at 952.563.6600. Michigan Activity 6

Michigan Market Highlights Project Leasing Activity

Principals Brad Rosenberg & Tony Schmitt report the following transactions Detroit Bankruptcy Impact recently handled by the Mid-America Real Estate-Michigan team: It is unfortunate that the national media coverage of Detroit’s Chapter 9 project leasing bankruptcy hasn’t painted the entire picture. Most people are of the opinion that this bankruptcy is a positive step for the City of Detroit, a step forward to Property/Location Retailer/Seller SQ. FTG. Broker 2262 Telegraph Road Bloomfield Grill 9,500 Daniel Stern, Karen Mullane, a point of financial stability and economic growth, and a chance for the city Bloomfield Twp, MI Brad Rosenberg to “right-size” itself and move forward. The news unavoidably affected some 2340 Silver Fox Run American Fitness 8,800 Karen Mullane, Adam Goodman Holly, MI short-term deal making, but that perception can and will be overcome. Now, 4934 Marsh Road DigiLink Technology 4,000 Daniel Stern, Cynthia L. Kratchman, those who doubted realize that Detroit, Metro-Detroit and the state of Okemos, MI Christina Roberts 14712 Mack Avenue Footlocker 5,656 Adam Goodman, Gabe Schuchman Michigan are growing and open for business more so than ever before. Detroit, MI 16360 26 Mile Road Henry Ford Health Systems 3,580 Gabe Schuchman, Karen Mullane, Macomb, MI Daniel Stern Local Retail Activity 43711 Ford Road Canton Sports 5,665 Adam Goodman Canton, MI Since June 2013, Meijer, K&G Fashion Superstore, Marshalls, 50679 Waterside Drive Party City 11,343 Brad Rosenberg, Gabe Schuchman, Petco and Whole Foods have all opened their first stores in the City of Chesterfield Twp, MI Tony Schmitt, Adam Goodman, Karen Mullane, Christina Roberts Detroit. Gordmans entered the Michigan market with their first location in Beltline Plaza Max 10 6,700 Gabe Schuchman, Brad Rosenberg, Norton Shores currently under construction, and is assessing other Muskegon, MI Karen Mullane, Daniel Stern Fairplain Plaza Dunhams Athleisure 53,683 Brad Rosenberg, Daniel Stern, “out-state” markets. LA Fitness and Dick’s Sporting Goods continue to Benton Harbor, MI Christina Roberts be active in the metro Detroit market. Jo-Ann Stores opened a new store Meridian Town Square SVS Vision 2,800 Cynthia J. Kratchman, Daniel Stern Okemos, MI in Grandville and relocated stores in Roseville and Battle Creek, and is Telegraph Plaza Maurices 4,800 Gabe Schuchman, Karen Mullane, Monroe, MI Brad Rosenberg, Christina Roberts currently assessing smaller Michigan markets for expansion. Ollie’s Village Knoll Pack and Ship Plus 1,975 Adam Goodman, Tony Schmitt Bargain Outlets nears completion of their penetration into Michigan for Bloomfield Twp, MI Wildwood Shopping Center Ollie’s Bargain Outlet 31,000 Adam Goodman, Tony Schmitt, the time being after opening Lansing, Flint, Saginaw and Ypsilanti in July and Westland, MI Susan Acciaioli, Jack Uhazie August. The former big boxes once occupied by Circuit City, Walmart, Kmart and Borders are continuing to be backfilled with national retailers Tenant Representation absorbing the vacant space and in turn, driving up rents. Tenant Location BrokeR

Achatz Burgers Macomb Township, MI Christina Roberts, Brad Rosenberg, Development Activity Susan Acciaioli Aspen Dental Brighton, MI; Ft. Gratiot, MI Gabe Schuchman, Tony Schmitt, New construction is dictated somewhat by where retailers want to be. The Karen Mullane most construction and development activity continues to be the purchase AT&T Troy, MI Tony Schmitt, Gabe Schuchman and redevelopment of small freestanding buildings or out parcels to Dollar Tree Benton Harbor, MI; Cedar Springs, MI; Kalamazoo, MI; Lowell, MI; Taylor, MI; Waterford, MI Jack Uhazie accommodate the needs of retailers such as Vitamin Shoppe, Mattress Guitar Center Allen Park, MI; Bellingham, WA Jack Uhazie Firm, Tim Horton’s, fast casual restaurants and cellular stores. Headquarters Haircuts for Men Shelby Twp, MI Brad Rosenberg, Christina Roberts Dine-in, sit down restaurants are also more active in the marketplace than LA Fitness Clinton Twp, MI; Grosse Pointe, MI Tony Schmitt Maurices Cadillac, MI; Monroe, MI Cynthia Kratchman they have been in the past and are looking for strong outlot opportunities to Ollie’s Bargain Outlet Flint, MI; Saginaw, MI; Westland, MI; Ypsilanti, MI Susan Acciaioli, Tony Schmitt, purchase or ground lease. Jack Uhazie Party City Chesterfield Twp, MI Adam Goodman, Brad Rosenberg, Tony Schmitt Potbelly Sandwich Works Bingham Farms, MI; Grandville, MI Adam Goodman, Brad Rosenberg Pro Martial Arts Canton, MI Adam Goodman, Tony Schmitt Subway Detroit, MI Adam Goodman The Mid-America Real Estate - Michigan team can be reached at 248.855.6800.

Home of the Detroit Tigers Meijer in Detroit Investment Group Sales 7

Net Lease Market Reaches Peak Investment Group Activity

by Tom Fritz Following are year-to-date sales transactions by the Mid-America Investment Sales Group:

With the 10 year treasury up 100+ basis points in the past four months, the Property Location anCHORS Sq. FtG. Net Lease Investment market appears to have reached its peak. Cap rates have been extremely aggressive over the past year, with McDonald’s Colerain Towne Centre Cincinnati, OH Walmart Supercenter, Dick’s Sporting Goods 409,960 leading the market and reaching as low as 4.00% while banks were second Mount Prospect Plaza Mt. Prospect, IL Marshalls, Ross, LA Fitness, Aldi, Walgreens, in line selling as low as 5.00%. Investors have been able to borrow at (Walmart – Shadow Anchor) 301,045 3.50%-4.00% to create positive leverage. Now that interest rates are moving Danada Square East Wheaton, IL Dominick’s, Petco 202,036

towards 4.50%-5.00%, that same positive leverage is dependent upon cap Milwaukee Portfolio Various locations, WI Walmart 174,705 rates increasing as well. If we were to draw a bell curve depicting the past Van Dorn Plaza Lincoln, NE Sun Mart, Hobby Lobby 168,888 three years and the next three years, it is our estimate that July 1st of this year would be right at the peak. Clocktower Square Des Moines, IA TJ Maxx, Office Max 142,356 Warsaw Commons Warsaw, IN TJ Maxx, PetSmart, (Kohl’s - Shadow Anchor) 120,000 Changing Demand South Oaks Plaza St. Louis, MO Shop ‘n Save, Michaels, Walgreens 112,300

The net lease market has been so aggressive over the past three years due to The Shoppes at Nagawaukee Delafield, WI Marshalls, Sports Authority, a couple of reasons: (a) the artificially low cost of capital; and (b) the long term (Kohl’s & Sentry Foods - Shadow Anchors) 105,921

credit leases have become a safe haven for long term cash flow. Investment Lincoln Crossing Chicago Hts, IL Food 4 Less 101,498 funds have been raising money faster than they could spend it, thus inflating Glenwood Crossings Kenosha, WI Pick ‘n Save 87,504 demand. Now that interest rates are on the rise and the stock market is beginning to rebound, demand will likely start to change as well. Since 2009, Savage Towne Square Savage, MN Cub Foods 87,181 investors slowly started buying net lease investment property again, now to Meridian Towne Center Okemos, MI Marshalls, Five Below, Ulta, a point where it became a frenzy towards the middle of 2013. If someone had (Target & - Shadow Anchors) 86,891 $2 million in cash, they may have placed roughly 70% in secure net lease Evergreen Marketplace Evergreen Park, IL Michaels, Ross, property and kept the rest in cash. The thought was that achieving a 4.00% (Meijer & Menards – Shadow Anchors) 49,225 return on a McDonald’s was better than 0.50% in a money market account. LA Fitness Plainfield, IL Single Tenant Net Lease 43,227

Today, an investor who has the same $2 million may choose to diversify a Whole Foods Minnetonka, MN Single Tenant Net Lease 33,225 little more by placing 40% in real estate, keeping 20% in cash, but now placing PetSmart/Dollar Tree Decatur, IL PetSmart, Dollar Tree 30,087 40% back into the stock market, which continues to show improvement. As we write this, the Dow Jones is up over 14% since the start of 2013. Goodwill Sheboygan, WI Single Tenant Net Lease 20,035 Chuck E. Cheese Brookfield, WI Single Tenant Net Lease 19,800 For the funds that have been raising millions of dollars on what seemed to be a daily basis, three things are likely to happen going forward: (a) their demand Dollar General Milwaukee, WI Single Tenant Net Lease 19,800 should decrease as investors move money to the stock market; (b) the cost Prairie Town Center Oak Lawn, IL ATI Physical Therapy, AT&T, Eva’s Bridal 17,659

of capital should increase, limiting their profit margins; and (c) their required Aldi Elk River, MN Single Tenant Net Lease 16,224 rate of return to investors should increase in order to compete with alternative Walgreens Antioch, IL Single Tenant Net Lease 14,820 investments. This means the primary driver helping to keep cap rates low is likely going to start seeking a higher yield, thus pulling cap rates up with it. GSA Davenport, IA Single Tenant Net Lease 11,877 Quarry Outlot Hodgkins, IL GameStop, Payless ShoeSource, Verizon Wireless 9,650 Back to Basics Aaron’s Hillsboro, OH Single Tenant Net Lease 8,028 Meanwhile, our leasing brokers are busier than ever doing a great job of Savannah Crossing (Lot 7) Aurora, IL Chipotle, Great Clips, LA Tan 7,380 creating new supply. This takes us back to the basic principles of Econ 101. Advance Auto Lake Geneva, WI Single Tenant Net Lease 6,895 Increasing inventory and decreasing demand means oversupply and price decreases. We have already started to see signs with McDonald’s and bank Advance Auto New Richmond, WI Single Tenant Net Lease 6,895 ground leases now receiving offers 25-50 basis points over where they were Fifth Third Bank Matteson, IL Single Tenant Net Lease 4,200 selling four months ago. Investment funds have increased cap rates on Chase Bank Chicago, IL Single Tenant Net Lease 4,020 certain offers, while other REITs have recently issued bonds 50-100 basis total 2,423,332 points higher than bonds issued 6-12 months ago. This indicates investors The Mid-America Investment Sales Group can be reached at 630.954.7300. and shareholders are demanding higher returns. Our advice to developers committing capital to projects 12 months out: underwrite at least 50 basis points higher than you would today. Our advice to current owners of net lease property: it’s still a good time to sell.

Walmart Mount Prospect Plaza 8

The past six years have caused the consumer to On the Corner become healthy by spending less, controlling the by Dan Cohen, Director of Tenant Representation and household budget, and retaining equity in their Principal, Mid-America Real Estate – Wisconsin, L.L.C. homes. It also required them to budget the family paycheck in a more reasonable fashion, and to be Back by Popular Demand less reliant on debt. Thus, the consumer is ready Tell me if you’ve heard this before: “The market is coming back,” or “We’re to go again, albeit at a controlled, measured cautiously optimistic that things are better,” or “I think you’ll see a slight pace. They will be more critical and conscientious improvement next year.” Well, I’m here to tell you that none of those are true on where and how they spend their hard-earned anymore. The market is definitely back. Significant retailer demand is driving dollars (tell me if you’ve heard that one before). occupancy rates higher, rental rates higher, valuations higher, and dare I say, Getting It Right there’s potential for new ground up development. Our retailer friends have also gotten their houses in order. There’s nothing like a Okay, so not all this can happen over the next six months before our spring 2014 shy customer to force retailers to control inventory levels, shed excess square Retail Review is published, but it’s a start. Changes in both retailer demand and footage, pare down general overhead expenses, and focus on operational the consumer were evident in the recent improvement of retail sales and margins. By spending the last six years becoming more efficient, retailers are consumer confidence numbers. This is the starting point for what those of us in ready to grow again. Thus, DEMAND is back. Retailers and restaurateurs are now the retail real estate trade needed to see before becoming believers that the end confident that they have the right merchandising mix and the right operating of the recession is near. efficiencies to draw the customers’ money out of their wallets. In short, they’re Six Years Later feeling good again about their ability to meet the customer’s expectations, have the customer shop with them again, and leave the bad times behind. When you think about it, it’s logical. The consumer and our retail economy have been down and in a recession since the 3rd quarter of 2007. Economists may try So with our demand side “fixed,” things are looking up. If we could only get our to define the recession as beginning in a different place and time, but for the supply side in order, which should be no later than 2017, we’d really be back in retailers, this was the first obvious quarter of changing sales and consumer business. So, whether you’re looking for space, acquiring space, or leasing spending expectations. So we have been in this retail quagmire for six years - space, contact your friendly real estate firm (that’s us, by the way) and get back in longer than any period in our American post-World War II economy. the game. We look forward to seeing you soon.

downsizing slightly, cautious about expanding, which reflects the same trend in non-grocery retailers, in general. Meanwhile, the number of full-service grocery stores continues the decline noted in the 2011 study: this year netting 8 less stores than in 2011 (including the closing of 2 Jewel and 2 Dominick’s), and losing 5% of the overall square footage.

Increase in Size, Not Numbers

…Continued from page 3 Although the total number of grocers in the 2013 study increased by one, the square footage of operating grocery space increased by 443,218 square feet, Gourmet Expanding with proposed new grocery totaling more than 1.05 million square feet – about “Of the 21 stores proposed for 2013, 15 are gourmet, 3 are full-service and 3 are 180,000 more square footage than in 2011. The figures show an overall increase discount,” says Tausk. Adding to gourmet’s momentum was a major change in in store size by nearly 17,000 square feet. store size for that category. Independents Losing Ground “Some in the gourmet sector are expanding their merchandise to include more staples Across all grocery categories, about 400,000 square feet of grocer development and choices offering one-stop shopping, and reversing the recent trend to split proposed in 2011 was delayed or killed by 2013. Tausk says that 11 of the 17 stores grocery dollars heavily between discount, warehouse, specialty and gourmet stores.” that closed in Chicago and the close suburbs between 2011 and 2013 were in the Leading the way in expanding store size and offerings is Mariano’s, whose Near South/ SW submarket (8 closings) and the South/Southeast sub-markets (3 average store is now 70,000 square feet, compared to a 50,000 square foot closings) – markets with boundaries that are already underserved with regards to average grocery store size in the study area. Between 2011 and 2013, Mariano’s square footage of operating grocery stores per person or household. Overall, the opened 5 stores, and proposes an additional 9 for the rest of 2013 and beyond. dramatically underserved submarkets of the West City and S/SE City still rank at Whole Foods was also active with 2 new stores proposed in 2013. the bottom of penetration statistics with 1.56 square feet/person and 1.29 square feet/person respectively, while the city’s average is now 3.47 square feet/person Much of the gourmet activity is concentrated in the higher income Central City (Zone 1; refer to map). http://www.midamericagrp.com/downloads/ “Of course, our study does not take into account the positive impact from recent Grocery_Study_2013.pdf city initiatives on food deserts, such as the addition of food trucks, drugstore food, city farms and farmer’s markets in these areas,” Tausk says. “But the food Discount, Full-Service Shrinking deserts are obviously still severely underserved by traditional stores.” There’s a dramatic shift in the opposite direction for the discount category, which “In our 2011 study, we thought we were seeing some hopeful signs with stores lost 4.08% of its store count between 2011 and 2013. Just two years prior, proposed for development there, but these fell through due to the economy and a discount was experiencing a 24.05% increase in stores count. lack of any new construction getting out of the ground everywhere.” “Discount declined significantly because of an increase in store closings among To read the full Urban Grocery Study, go to both independent and chain grocers,” says Mr. Tausk. Discount grocers are also www.midamericagrp.com/press/9.16.13.html