Research & Forecast Report

Q4 2013 | RETAIL

COLUMBIA, SOUTH CAROLINA RESEARCH & FORECAST REPORT

Retail Development Keeps the Market Hot KEY TAKEAWAYS >> The overall vacancy rate remained steady throughout 2013 ending the year with a high occupancy rate of 91.3%. >> New developments and redevelopments of vacant retail space are springing up throughout Columbia, SC. >> Plans were announced for the vacant K-Mart site at Fort Jackson Boulevard and Garners Ferry Road across from Cross Hill Market. The redevelopment is anticipated to be MARKET INDICATORS beneficial for Downtown Columbia.

Q4 2013 Forecast >> Businesses are showing interest in Columbia as new retailers enter the market and existing ones expand their footprint. VACANCY CURRENT CONDITIONS NET ABSORPTION The market remained stable through the fourth quarter of 2013 which ended with an overall vacancy rate of 8.7%, down 8 basis points from the third quarter of 2013 but up 7 basis points RENTAL RATES from year-end 2012. Average asking rental rates for anchor, junior anchor and shop space were CONSTRUCTION $7.39, $7.27 and $13.95 NNN per square foot per year, respectively, at year-end. The average asking rental rate for shop space is up from $13.41 NNN per square foot per year at year-end 2012 while asking rates for anchor and junior anchor space declined as remaining larger retail spaces are in less demand. The greatest improvements through 2013 occurred in the Forest QUICK UPDATES Acres/East Columbia, Lexington, Northeast Columbia and Southeast Columbia submarkets. These areas have been outperforming other parts of Columbia as they contain growing >> VACANCY RATE REMAINS STEADY residential populations and strong retail corridors. BELOW 10% VACANCY RATE TRENDS >> INCREASED CONSTRUCTION >> NEW RETAILERS CONTINUE TO ENTER THE MARKET >> MAIN STREET AND THE VISTA ATTRACT NEW RETAILERS >> 2013 GROCER ACQUISITIONS >> BRIGHT OUTLOOK FOR THE FUTURE

www.colliers.com/columbia RESEARCH & FORECAST REPORT | Q4 2013 | RETAIL | COLUMBIA

An exciting redevelopment is soon to be underway in Downtown Columbia at the intersection of Fort Jackson Boulevard and Garners Ferry Road, across from Cross Hill Market. Georgia-based Bright-Meyers plans to redevelop the site of a former K-Mart into approximately 98,000 square feet of retail space. The redevelopment, to be called Rosewood Crossing, will house national tenants Marshalls, Michaels and PetSmart and is anticipated to complete in the fall of 2014. Upon completion, the center is likely to draw further activity to the up and coming retail corridor which is already home to Cross Hill Market, a Whole Foods anchored center, and a Target anchored center, Shoppes at Woodhill. A steady population, affluent neighborhoods and close proximity to the University of South Carolina provide a promising environment for retailers.

The Harbison Boulevard retail corridor will be seeing a new shopping center South Carolina BLUE Store, Harbison/St. Andrews Submarket on Park Terrace Drive behind Columbiana on Park. The planned center is to be RENTAL RATE TRENDS located on 10.3 acres, formerly the site of Roadhouse grill and Staples, and is to be developed by Dallas-based The Seitz Group. Plans include three buildings totaling approximately 116,000 square feet. Academy Sports & Outdoors will be the center’s anchor tenant with its second Columbia location. The store’s first location is in the Village at Sandhill in Northeast Columbia. Guitar Center, retailer of musical instruments, will also be locating at the new center. The store will be the retailer’s first Columbia location but third location in the state. Earlier this year, construction began on a new retail center on Two Notch Road across from the Village at Sandhill. The 71,000 square foot center is to open early in 2014 and will include tenants Hobby Lobby, Great Clips, Vitamin Shoppe, Select Comfort and Aspen Dental. RECENT ANNOUNCEMENTS >> Smashburger, a fast casual restaurant, opened its second Columbia location in a new retail center near the intersection of Lake Murray Boulevard and Columbiana Drive in the Harbison/St. Andrews submarket. Dunkin’ Donuts and Marco’s Pizza are cotenants in the center. >> BlueCross Blueshield of South Carolina opened its first Columbia retail store at ECONOMIC UPDATE | COLUMBIA, SC Columbiana Station in the Harbison/St. Andrews submarket. The 2,293 square foot South Carolina BLUE is located at 1260 Bower Parkway. >> Bikram Yoga plans to open its second Columbia, SC location at Columbiana Station early in 2014. >> Barnes & Noble closed its Harbison Boulevard location. The bookstore remains open at Midtown at Forest Acres. >> Sears will be closing at Columbiana Centre in the Harbison/St. Andrews submarket. >> Downtown Columbia’s Main Street welcomes more restaurants as the Main Street revitalization continues. >> Cantina 76 opened its doors on Main and Lady Streets during the fourth quarter. The unemployment rate was down to 5.9% in November 2013 >> Bourbon, a Cajun-creole restaurant and whiskey bar, is anticipated to open from 6.5% in October 2013 and 7.4% in November 2012. This early in 2014. is below the November 2013 state and national unemployment levels of 7.1% and 7.0%, respectively. Greenville, SC >> Salina Café, a deli at lunch and Ethiopian restaurant at night, opened near and Charleston, SC each had unemployment rates of 5.5% in the new Nickelodeon Theatre. November 2013. >> The recently renovated Marriott welcomed new restaurant Midlands. Total nonfarm jobs in South Carolina were up to 1,907,100 jobs >> The new Agape complex will be home to Good Life Café and Michael’s on in November 2013, a 1.8% increase over the previous year. Main which are set to open early in 2014. 364,400 jobs were reported in November in Columbia, a 1.8% increase over November 2012. Greenville reported 315,000 jobs, a 1% increase over November 2012, and Charleston indicated 310,500 jobs in November 2013, a 1.1% increase over 2012. www.colliers.com/columbia RESEARCH & FORECAST REPORT | Q4 2013 | RETAIL | COLUMBIA

Anchor Space Junior Anchor Space Shop Space Building Pass Vacancy Rate Count Market Size Throughs Available Asking Rent Available Asking Rent Available Asking Rent Cayce/West Columbia 15 1,180,885 19.48% $2.03 63,609 $6.99 65,889 $6.60 100,547 $12.29 Downtown Columbia 5 304,475 1.45% $7.44 - - - - 4,400 $18.45 Forest Acres/East Columbia 3 775,469 1.19% - - - - - 9,227 $17.95 Harbison/St. Andrews 33 3,441,558 11.46% $4.30 126,786 $8.82 65,158 $8.00 202,303 $11.70 Lexington 14 1,569,510 1.97% $2.85 - - - - 30,877 $12.72 North Columbia 6 389,774 12.88% - 36,000 $8.00 - - 14,208 $9.00 Northeast Columbia 23 3,867,113 8.43% $5.62 119,581 $6.27 10,706 $7.00 195,866 $17.28 Southeast Columbia 8 1,011,605 4.99% $2.14 - - 15,000 - 35,513 $11.83 Market 107 12,540,389 8.74% $4.20 345,976 $7.39 156,753 $7.27 592,941 $13.95

YEAR IN REVIEW Retailers were no strangers to headlines in 2013 with new retailers entering the market, existing ones expanding their footprints and announcements of grocer acquisitions. >> Highly anticipated Trader Joe’s entered the Columbia market in the first quarter of 2013 occupying a former gym along Forest Drive. >> Chipotle opened its doors to customers in the Vista during the second quarter of the year. >> Home Goods opened at Columbiana on Park on the Harbison Boulevard retail corridor joining co-tenants Staples, DSW Shoe Warehouse and Ulta. >> Sienna on Sunset, a new strip center at 5166 Sunset Boulevard welcomed Zoe’s Kitchen, Tropical Smoothie Café >> Uncle Maddio’s Pizza Joint opened its first South Carolina and Applause Catering. (pictured above) restaurant in Downtown Columbia in Adesso at 601 Main Street. The restaurant occupies a street level retail space that >> Grocer acquisitions and expansions were announced as neighbors Yoghut. grocers seek to grow their market share. >> Basil Thai Restaurant and Festivity opened at Cross Hill >> Piggly Wiggly announced plans to sell 29 of its stores and Market. close two locations. The grocer will be selling 22 stores to Bi-Lo and 7 stores to Harris Teeter throughout South >> Rioz Brazilian Steakhouse opened its first Columbia Restaurant Carolina and Georgia. Three Piggly Wiggly locations in the at 410 Columbiana Drive in the Harbison/St. Andrews Columbia market were sold to Bi-Lo. The three stores are submarket. located at 4711 Forest Drive in the Forest Acres/East >> US Foods opened its first Chef’s Store in South Carolina. The Columbia Submarket and 760 US Highway 378 and 4360 wholesale food outlet is the third location in the nation and Augusta Road in Lexington. occupies a former 37,000 square foot grocery store at St. >> Kroger acquired Harris Teeter in a transaction valued at Andrews Square. $2.5 billion. The 212 acquired stores will operate as a >> Sparkleberry Crossing in Northeast Columbia welcomed subsidiary of The Kroger Co. Harris Teeter does not plan tenants Carolina Personalized Gifts, D’s Wings, Henry’s on returning to Columbia, SC. Restaurant and 9Rounds Kickboxing. >> Publix is expanding its footprint in the Carolinas with plans >> Urban Outfitters opened its second South Carolina location on to enter the Myrtle Beach and Pawleys Island markets. Gervais Street in the Vista. The grocer purchased seven Bi-Lo stores in the Charlotte area and announced plans to enter the Asheville and Cary >> Grow Financial Credit Union announced plans in the third markets. quarter to enter the South Carolina with a new branch at the Village at Sandhill. The new 2,400 square foot branch is the credit union’s first branch outside of Florida. Fifteen branches are planned through South Carolina in Columbia, Greenville and Charleston. >> First Citizens Café opened on Main Street in Downtown Columbia.

www.colliers.com/columbia RESEARCH & FORECAST REPORT | Q4 2013 | RETAIL | COLUMBIA

IN THE MONTHS AHEAD §77 2014 is anticipated to bring declines in ¦¨ 482 offices in vacancy and higher asking rental rates ¦¨§26 Northeast Columbia for the retail market. The Garners Ferry 62 countries on Road and Fort Jackson Boulevard retail Harbison St. Andrews ¦¨§20 corridor is likely to attract more retailers 6 continents motivated by the recent announcement North Columbia Forest Acres • $2 billion in annual revenue of the vacant K-Mart redevelopment. ¦¨§126 East Columbia Lexington • 1.12 billion square feet under Growing the corridor will prove beneficial Downtown Columbia management to downtown as people will be able ¦¨§20 Southeast Columbia to work, live and shop and dine in the ¦¨§77 • Over 13,500 professionals Cayce same area. Northeast Columbia and West Columbia • 78,000 Lease/Sale Transactions Lexington submarkets will likely see • $71 Billion Total Transaction Value future development as neighborhoods are ¦¨§26 further developed in the areas providing more consumers for retailers.

AROUND THE STATE FOR MORE INFORMATION: Redevelopments are springing up throughout South Carolina and new retailers are entering the growing Rox Pollard, markets. Vice President | South Carolina Director | Retail Services Group CHARLESTON, SC 1301 Gervais Street, Suite 600 >> The Midtown redevelopment at the corner of King and Spring Street broke ground during the fourth Columbia, South Carolina 29201 quarter of 2013. The $80 million project on upper King Street will include a 10 story dual branded TEL +1 803 401 4242 Hyatt House and Hyatt Place Hotel with 304 rooms, retail shops and a 7 story parking structure. The FAX +1 803 401 4242 redevelopment will consist of four new structures and two renovated buildings giving the project a total of 433,000 square feet. >> K-Mart continues to struggle and announced plans to close its Mount Pleasant store at Johnnie Dodds Liz H. McCary Boulevard and Bowman Road. The big box retailer occupied 87,000 square feet in an old 131,000 Director of Marketing |South Carolina square foot. The age and quality of the center provides a redevelopment opportunity. 1301 Gervais Street, Suite 600 Columbia, South Carolina 29201 >> Bass Pro Shops Outdoor World announced plans to open in North Charleston at the intersection of I-26 +1 803 401 4269 and Northside Drive. The store will be the primary anchor for a two million square foot mixed-use TEL development and will include an Uncle Buck’s Fishbowl and Grill, a nautical-themed bowling alley and FAX +1 803 401 4269 restaurant. Construction is to begin in 2014 and be completed in 2015. >> H&M announced plans to open a second Charleston store. The 20,000 square foot store will be located at Tanger Outlet Center. H&M’s first Charleston store opened along King Street in the fourth quarter of 2013. >> Dickey’s Barbecue Pit entered the Charleston market with a North Charleston restaurant located at 7620 Rivers Avenue in a center with co-tenants Barnes & Noble and Guitar Center.

Sources: Bureau of Labor Statistics, Colliers GREENVILLE, SC International Research, CoStar Group >> Magnolia Park, an 800,000 square foot redevelopment of the former Greenville Mall, is doing exceedingly well at attracting new tenants to Greenville. >>Nordstrom Rack and Yard House are the most recent tenants to commit to the center, opening their This market report is a research document of Colliers first South Carolina locations. International. Information herein has been deemed >> reliable and no representation is made as to the Also new to South Carolina are restaurants Firebirds Wood Fired Grill and Bad Daddy’s Burger Bar accuracy thereof. Colliers International South Carolina, which have signed leases at the redevelopment. Inc., and certain of its subsidiaries, is an independently owned and operated business and a member firm of >>Cabela’s is opening its first Southeast store in the spring of 2014. The company recently announced Colliers International Property Consultants, an affiliation plans to open two more stores in the Carolinas in Fort Mill, South Carolina and Garner, North of independent companies with over 482 offices Carolina. The stores are set to open in 2015. throughout more than 62 countries worldwide. >>Costco, Rooms to Go, Regal Cinema, Toys R Us, Babies R Us, Jared Galleria of Jewelry and other retailers are already open at the center. >> Wal-Mart Neighborhood Market opened its second South Carolina location at 2014 Wade Hampton Boulevard. The store sells groceries and general merchandise. The first South Carolina location opened in Greer.

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