Research & Forecast Report

Q2 2013 | RETAIL

COLUMBIA, SOUTH CAROLINA RESEARCH & FORECAST REPORT

New Retail Development Springing Up

KEY TAKEAWAYS >> The overall retail occupancy rate in Columbia, SC remained steady at 91.64% during the second quarter of 2013. >> Average asking rental rates are down from 2012 to $7.28 NNN for anchor space, $6.47 NNN for junior anchor space and $13.06 NNN for shop space in the second quarter of 2013. >> New developments announced for Lexington and Northeast Columbia retail MARKET INDICATORS corridors. Q2 2013 Forecast >> Chipotle opened its doors to customers in the Vista. >> Home Goods opened at Columbiana on Park on the Harbison Boulevard retail VACANCY corridor joining co-tenants Staples, DSW and Ulta.

NET ABSORPTION CURRENT CONDITIONS RENTAL RATES Retail construction activity in Columbia, SC is picking up in 2013, ending the second quarter with a low vacancy rate of 8.36%. The Lexington, North Columbia, CONSTRUCTION Northeast Columbia and Southeast Columbia submarkets ended the quarter with decreased vacancy rates while Downtown and Forest Acres showed no change when surveying anchored shopping centers. The Harbison submarket has shown great activity over the past year with its vacancy rate dropping 1.48 percentage QUICK UPDATES points since mid-year 2012 to a rate of 9.85%. The Lexington submarket is down to a low rate of 2.36% and the Northeast Columbia submarket is down 26 basis >> VACANCY RATE REMAINS STEADY points from a year ago to 9.03%. BELOW 10%

>> NEW RETAILERS ALREADY VACANCY RATE TRENDS PLANNING TO EXPAND THEIR FOOTPRINT IN THE MARKET.

>> HARBISON AND LEXINGTON SUBMARKETS SHOW GREATEST ACTIVITY OVER THE PAST YEAR.

www.colliers.com/columbia RESEARCH & FORECAST REPORT | Q2 2013 | RETAIL | COLUMBIA

Over recent quarters, Columbia has welcomed new retailers including Trader Joe’s, Smashburger, Uncle Maddio’s Pizza Joint, Taziki’s and RECENT ANNOUNCEMENTS Marco’s Pizza, some of which are already planning to expand their footprint in the market. New developments are in the works for the Northeast Columbia and Lexington submarkets. Dental clinics and medical clinics such as Aspen Dental and Doctor’s Care are occupying retail spaces in or near anchored centers.

RECENT ANNOUNCEMENTS >> A new development is planned on 10.96 acres that recently sold on Two Notch Road across from the Village at Sandhill in Northeast Columbia. The planned 71,000 square foot center will open in March 2014 and include Hobby Lobby, Great Clips, Vitamin Shoppe, Select Comfort and Aspen Dental. >> Irmo will be getting a new retail center by the end of 2013 at 937 Lake Murray Boulevard. The approximately 5,400 square foot center will include Smashburger, Dunkin’ Donuts and Parkland Plaza, Cayce/West Columbia Submarket Marco’s Pizza. >> Uncle Maddio’s Pizza Joint opened their first South Carolina restaurant in downtown Columbia in Adesso at 601 Main Street, occupying a street level retail space that neighbors Yoghut. >> Basil Thai Restaurant and Festivity opened at Cross Hill Market bringing the center to full occupancy and leaving only two outparcels available. >> US Foods opened its first Chef’s Store in South Carolina during the second quarter. The wholesale food outlet is the third location in the nation and occupies a former 37,000 square foot grocery store at St. Andrews Square. Uncle Maddios, Downtown Submarket >> Anna’s Linens is to open at Northpointe Commons, a Wal-Mart anchored center on Two Notch Road in the northeast submarket. ECONOMIC UPDATE >> Rioz Brazilian Steakhouse opened its first Columbia Restaurant at 410 Columbiana Drive in the Harbison submarket. >> Dollar General continues to expand its footprint with the opening of its 6323 Monticello Road location in North Columbia. Another store is under construction on Two Notch Road in the northeast submarket. >> Sparkleberry Crossing in the Northeast Columbia submarket welcomes tenants Carolina Personalized Gifts, D’s Wings, Henry’s Restaurant and 9Rounds Kickboxing. >> Jewelry Warehouse is moving into 14,000 square feet at Parkland Plaza in Cayce which is undergoing a renovation. Low unemployment rates and high job growth are vital to a healthy economy. The unemployment rate was down to 6.9% for Columbia in month of May 2013. This is below the May IN THE MONTHS AHEAD 2013 state and national unemployment rates of 8.0% and 7.6%, Columbia, SC is rapidly growing with economic growth and respectively. Greenville, SC and Charleston, SC had unemploy- improvement attracting retailers to the thriving market. With the ment rates slightly lower than that of Columbia at 6.5% and growth of the University of South Carolina and general population, 6.4%, respectively. developments are anticipated to increase with restaurants and shops Total nonfarm jobs in South Carolina were up to 1,889,500 jobs filling the centers. Redevelopment of older centers is likely as tenants in June 2013, a 1.7% increase over the previous year. 361,900 are looking for quality space. Although rental rates are lower than jobs were reported in June 2013 in Columbia, a 2.6% increase previous quarters, rates are expected to rise as redevelopments occur. over June 2012. Greenville reported 311,900 jobs, a 1.1% increase over June 2012, and Charleston indicated 313,500 jobs in June 2013, a 1.6% increase over 2012.

www.colliers.com/columbia RESEARCH & FORECAST REPORT | Q2 2013 | RETAIL | COLUMBIA

Anchor Space Junior Anchor Space Shop Space Building Vacancy Asking Asking Asking Count Market Size Rate Available Rent Available Rent Available Rent 482 offices in Cayce/West 15 1,180,885 17.21% 63,609 $6.99 53,061 $5.98 86,568 $11.01 62 countries on Columbia Downtown 5 304,475 1.45% - - - - 4,400 $18.45 6 continents Forest Acres 3 775,469 1.28% - - - - 9,894 $18.78 • $2 billion in annual revenue Harbison/St. 32 3,406,288 9.85% 126,786 $8.82 30,298 - 178,342 $11.76 Andrews • 1.12 billion square feet under management Lexington 14 1,569,510 2.36% - - - - 37,005 $13.30 • Over 13,500 professionals North 6 389,774 14.65% 36,000 $8.00 - - 21,108 $10.00 Columbia • 78,000 Lease/Sale Transactions Northeast 23 3,867,113 9.03% 159,555 $6.30 10,706 $7.00 179,074 $15.35 • $71 Billion Total Transaction Value Southeast 8 1,011,605 4.88% - - - - 49,413 $10.45 Market 106 12,505,119 8.36% 385,950 $7.28 94,065 $6.47 565,804 $13.06

AROUND THE STATE FOR MORE INFORMATION: South Carolina is making a name for itself attracting quality retailers to cities throughout the state. Rox Pollard, Vice President & Principal Charleston and Greenville are seeing increased activity in development and each have projects under Manager | Retail Services Group construction. South Carolina 1301 Gervais Street CHARLESTON RETAIL DEVELOPMENTS Suite 600 >> Corners at Wescott, a 167,000 square foot retail development in North Charleston, is under Columbia, South Carolina 29201 construction and is to be anchored by Harris Teeter and co-tenants Marshalls and TJ Maxx. TEL +1 803 401 4242 >> Azalea Station in Summerville will soon complete its 12,700 square foot center to include Newk’s FAX +1 803 401 4242 Café, Jos. A. Banks and Smashburger. >> The Bi-Lo Shopping Center on Folly Road is a 45,000 square foot redevelopment on Folly Road. >> Horizon Square, another redevelopment project in Summerville, has leased to Dunkin’ Donuts. Liz H. McCary >> Charleston’s King Street, a nationally ranked top shopping destination, continued to attract new Director of Marketing |South Carolina retailers and restaurants including H&M and Lush Cosmetics, in addition to several new culinary 1301 Gervais Street hot spots. Suite 600 >> New mixed-use developments, Elan Midtown and Courier Square, on Upper King Street will bring Columbia, South Carolina 29201 more shop space and restaurants to first floor apartment and office buildings. >> TO DOWNLOAD THE REPORT: www.colliers.com/en-us/charleston/insights TEL +1 803 401 4269 FAX +1 803 401 4269 GREENVILLE RETAIL DEVELOPMENTS >> Magnolia Park, a 550,000 square foot redevelopment of the former Greenville Mall site, is home to anchors Regal Cinemas, Costco and Rooms to Go. Retailers Toys “R” Us and Babies “R” Us opened in the second quarter of 2013. Cabela’s announced plans earlier in the year to open their first southeastern location in the center. The redevelopment, located at the intersection of I-85 and I-385 on Woodruff Road, is anticipated to include over one million square feet of retail space Sources: Bureau of Labor Statistics, Colliers upon completion in 2014. International Research, CoStar Group, South Carolina >> Project ONE , a 395,000 square foot Class A mixed use project is to consist of approximately Department of Commerce 50,000 square feet of street level retail space. Retailers include Anthropologie, CertusBank and Tupelo-Honey, an Asheville based restaurant. Anthropologie, occupying 9,500 square feet of retail This market report is a research document of Colliers space was the first retailer to complete construction, opening its doors late in the first quarter of International. Information herein has been deemed 2013. reliable and no representation is made as to the >> TO DOWNLOAD THE REPORT: www.colliers.com/en-us/greenville/insights accuracy thereof. Colliers International South Carolina, Inc., and certain of its subsidiaries, is an independently owned and operated business and a member firm of Colliers International Property Consultants, an affiliation of independent companies with over 482 offices throughout more than 62 countries worldwide.

Accelerating success. Corners at Wescott, Charleston, South Carolina Magnolia Park, Greenville, South Carolina