Q3 2014 | RETAIL

GREENVILLE, SOUTH CAROLINA RESEARCH & FORECAST REPORT

Retail Development Heats Up KEY TAKEAWAYS >> The vacancy rate for the Greenville/Spartanburg, SC retail market was down to 11.98% at the end of the third quarter of 2014. Rental rates averaged $10.74 NNN for shop space in the market. >> Redevelopments of old shopping centers and the development of new centers are on the rise. >> Downtown residential and daytime population growth is driving the retail market in the MARKET INDICATORS Central Business District and surrounding areas. Q3 2014 Forecast >> Retailers continue to choose the Upstate for their first South Carolina location. >> Magnolia Park prepares for new openings. VACANCY >> New retailers backfill vacant big boxes. NET ABSORPTION CURRENT CONDITIONS RENTAL RATES The Greenville/Spartanburg, SC retail market ended the third quarter of 2014 with a vacancy rate of 11.98%, down from 12.40% at mid-year 2014. The market is receiving significant CONSTRUCTION attention from national retailers, many of which are new to the Upstate and South Carolina. Gabriel Brothers and Tijuana Flats, among others, have chosen Greenville for their first South DOWNTOWN RESIDENTIAL Carolina location. Retailers are backfilling vacant big boxes attributing to the decline in vacancy. 1 UPDATE Gabriel Brothers and Conn’s have backfilled vacant big box spaces at The Gallery located at Downtown Greenville has 583 Haywood Road that were formerly occupied by Steve and Barry’s and Babies “R” Us. several multifamily residential Redevelopments of older, less desirable suburban shopping centers are gaining momentum developments in the works. as more retailers show interest in the market. Magnolia Park, a redevelopment of the former 1. Stone + Main will offer Greenville Mall, is nearing completion and has brought several new retailers to the market 241 apartments and 21,175 including Nordstrom Rack, Dave & Busters and Toby Keith’s I Love This Bar. square feet of retail space. 2 Construction is to begin by Q3 2014 MARKET STATISTICS year-end 2014 and complete by mid-year 2016. VACANCY RATES 18.3% AVERAGE ASKING RENT SHOP SPACE 2. South Ridge, at Church Street $19.00 12.0% and University Ridge, will offer $16.28 10.7% $16.05 $15.45 360 apartments and 16,000 3 square feet of retail space. $10.74 3. Fountains Greenville will be 1.9% located at 210 E. Broad Street. 1.1%

The project will offer 210 DOWNTOWN HAYWOOD WOODRUFF PELHAM MARKET apartments and construction is HAYWOOD PELHAM WOODRUFF set to begin in the first quarter DOWNTOWN MARKET of 2015. Photo credit: Upstate Business Journal via The Beach Company and Proffitt Dixon Partners www.colliers.com/southcarolina RESEARCH & FORECAST REPORT | Q3 2014 | RETAIL | GREENVILLE

Downtown Greenville is experiencing heightened retail activity ONE GREENVILLE | 1 N. Main Street following improvements in the office market and an increase in planned residential developments. Downtown Greenville is transforming into a live, work and play environment, appealing to a mix of retailers. > Within the past year national retailers Anthropologie and Brooks Brothers have opened stores at ONE in Downtown Greenville. Orvis and Vann and Liv have planned their grand openings at ONE for November 1st. > Bevello, a Raleigh-based women’s clothing boutique is open at 123 N. Main Street. Source: 4240 Architecture

> Responding to the growing daytime and residential population, MAGNOLIA PARK | 1025 Woodruff Road Cianciolas, a deli-convenience store offering sandwiches, hot food, produce and grocery staples, plans to open on College Street near N. Main Street. > Universal Joint, a Georgia-based neighborhood bar and restaurant is open at 300 Stone Avenue, the site of a former gas station. The restaurant offers outdoor patio seating and items such as craft beers, tacos, burgers and salads. > Methodical Coffee will open by year-end at the Bank of America Plaza. The coffee shop, which aims to bring a city vibe, will occupy 875 square feet on the ground floor and include a 400 square foot mezzanine balcony. Source: Menin Development Rental rates are up for all types of retail space, anchor, junior anchor and shop space. Anchor space asking rental rates averaged $4.36 GARLINGTON STATION | 1143 Woodruff Road NNN at the end of the third quarter, up from $4.14 NNN at mid-year 2014. Asking rental rates for junior anchor space averaged $7.98 NNN, up from $7.84 NNN at mid-year 2014. Shop space asking rental rates averaged $10.74 NNN at the end of the third quarter, up from $10.03 NNN at mid-year 2014. The increased rental rates are the result of declining availability of retail space and have the potential to support future development in the market.

SUBURBAN REDEVELOPMENTS Source: Avison Young Redevelopments of dated shopping centers and dark big boxes are gaining momentum throughout the Greenville suburbs. As the Upstate HAYWOOD ROAD RETAIL | 586 Haywood Road population grows and job creation continues, retailers are being drawn to the region in hopes of meeting the growing demand for retail services. The recent shift of retailers from Haywood Road to Woodruff Road left shopping centers and big box spaces available, providing redevelopment opportunities. >> Magnolia Park continues to take shape along Woodruff Road and is nearing completion. Nordstrom Rack, Pier 1 Imports and Yard House are open to customers. Tuscanos Brazilian Grill, Fresh 2 Order and Dave & Busters remain under construction and expect Source: Carolina Holdings, Inc. to complete by year-end 2014. Toby Keith’s I Love This Bar is under construction and plans to open early in 2015. CVS | 2102 Augusta Street >> Freddy’s is under construction across the street from Magnolia Park and plans to open early in 2015. >> Several other Woodruff Road redevelopments are in the works. Garlington Station at 1143 Woodruff Road is being redeveloped. The 23,197 square foot center is adjacent to the Shops at Greenridge. An outparcel development is 100% preleased to Tijuana Flats and Stanton Optical. Across the street from the center is 25 Garlington, a new 5,565 square foot center under construction with space preleased to Chicken Salad Chick. Source: www.magnoliapark.com

www.colliers.com/southcarolina RESEARCH & FORECAST REPORT | Q3 2014 | RETAIL | GREENVILLE

Anchor Space Junior Anchor Space Shop Space Building Count Market Size Vacancy Rate Available Asking Rent Available Asking Rent Available Asking Rent Belton/Honea Path 5 260,281 22.78% 35,000 $3.95 0 - 24,300 $4.18 Boiling Springs 8 605,386 32.78% 129,000 $4.00 0 - 69,452 $9.14 Cherrydale/TR 5 453,054 13.94% 0 - 22,600 $12.00 40,556 $12.00 Clemson Boulevard 13 942,340 15.12% 118,749 - 0 - 23,772 $8.76 Clemson/Pendleton 7 292,637 29.41% 34,928 - 0 $7.00 29,890 $9.59 Downtown 3 169,726 1.13% 0 - 0 - 1,915 $19.00 Duncan/Lyman 4 219,302 27.43% 44,000 $4.00 0 - 16,161 $10.11 Easley 4 355,859 2.25% 0 - 0 - 8,000 $11.00 East Side 14 950,264 19.06% 82,960 - 26,142 - 71,976 $11.82 East Spartanburg 14 635,341 18.08% 34,928 - 15,400 - 64,566 $9.37 Greer 9 729,617 10.04% 0 - 28,158 - 45,125 $12.06 Haywood/Pleasantburg 16 1,392,071 10.68% 69,068 - 29,300 $9.00 50,238 $16.28 Highway 81 Corridor 3 175,362 1.73% 0 - 0 - 3,025 $7.00 Inman/Lyman 4 222,836 24.07% 34,928 - 17,500 $5.25 1,200 $11.00 Mauldin 7 467,788 3.35% 0 - 0 - 15,669 $13.31 Oconee County 8 741,796 4.50% 0 - 22,400 $5.00 11,000 $9.22 Pelham Road 9 326,825 18.33% 38,003 - 0 - 21,890 $15.45 Pickens/Liberty 5 205,758 4.80% 0 - 0 - 9,880 $12.00 Powdersville 2 142,584 0.00% 0 - 0 - 0 - Simpsonville 11 740,745 4.65% 0 - 0 - 34,425 $13.36 South Side 4 159,418 2.82% 0 - 0 - 4,500 $9.00 West Anderson 20 736,392 18.68% 64,396 $3.00 18,081 $8.50 55,070 $6.93 West Spartanburg 16 1,030,187 17.97% 97,857 $5.84 11,588 $13.50 75,646 $12.63 White Horse Road/Berea 10 777,987 3.99% 0 - 0 - 31,057 $8.82 Woodruff Road 35 1,622,032 1.94% 0 - 0 - 31,458 $16.05 Woodruff/Moore 3 145,400 0.00% 0 - 0 - 0 - Market 239 14,500,988 11.98% 783,817 $4.36 212,422 $7.98 740,771 $10.74 >> The former Wendy’s site at 586 Haywood Road is being redeveloped. RECENT ANNOUNCEMENTS Construction is underway on the 6,000 square foot strip center, Greenville is booming with existing retailer expansions and new retailers which can accommodate two tenants, and is anticipated to complete entering the market. by early 2015. >> Marco’s Pizza is expanding its presence through the Carolinas. >> A shopping center along Augusta Street is undergoing renovations. Recently, the pizza chain opened its location at 1120 N. Pleasantburg Upon completion, the renovated center at the northeast corner of Drive and plans to open another Greenville location in by year-end Augusta Street and East Faris Road will be home to Radio Shack and 2014. AT&T and have room for another tenant. Radio Shack will be >> QuikTrip is expanding its Carolina division and is currently under relocating from its former location across the street, which is being construction at Woodruff Road and Prado Way. The 5,700 square redeveloped into CVS. The pharmacy will be located on the site of a foot store is expected to open by year-end 2014. The Greer location former strip center. The new 15,000 square foot CVS is expected to along Highway 14 recently opened. complete by mid-year 2015. >> Captain D’s has a new look, healthier menu options and plans to >> Kohl’s is open for business in Piedmont Marketplace, the former expand its presence. The seafood chain plans to open 20 new K-Mart Plaza at 1320 Wade Hampton Boulevard in Greer. Kohl’s restaurants in the Upstate region over the next three years. Currently, occupies 66,000 square feet in the center and Tractor Supply the chain has one Upstate location, which will undergo renovations. Company occupies 21,500 square feet. A second phase of construction, which will include approximately 43,500 square feet of >> Coast Apparel plans to open a 1,920 square foot store at 3217 retail space, is projected to complete in the summer of 2015. Augusta Street in Pickwick Shopping Center. >> The former Walmart building across from Anderson Mall was recently >> CresCom, created in 2012 by a merger between Charleston-based acquired by Vanguard Associates Inc. The developer plans to upfit Community First Bank and Myrtle Beach-based Crescent Bank, plans the center at 3223 Martin Luther King Jr. Boulevard. Planet Fitness to open a loan production office and retail branch in Greenville. will occupy 18,000 square feet at the center and plans to open early >> NewBridge Bank, a North Carolina bank, plans to enter the Upstate, in 2015. Charleston and Columbia markets. Its first South Carolina location will be in Greenville.

www.colliers.com/southcarolina RESEARCH & FORECAST REPORT | Q3 2014 | RETAIL | GREENVILLE

IN THE MONTHS AHEAD RETAILERS NEW TO GREENVILLE The remainder of 2014 and beginning of 485 offices in 2015 is likely to bring further growth for 63 countries on Greenville and surrounding areas. The market will continue to see redevelopments 6 continents and new development projects, especially in suburban submarkets. Downtown • $2.1 billion in annual revenue Greenville has the potential to attract • 1.46 billion square feet under national retailers and new restaurants to the management growing entertainment district. Decreased • Over 15,800 professionals vacancy rates and higher asking rental rates • 80,000 Lease/Sale Transactions are anticipated for the market. • $75 Billion Total Transaction Value

AROUND THE STATE FOR MORE INFORMATION: CHARLESTON, SOUTH CAROLINA Frank Hammond, CCIM, CPM >> Tourism and residential growth continues to drive the retail market. Senior Principal | Greenville >> Gander Mountain, outdoor gear and apparel retail shop, opened their first South Carolina store in 201 East McBee Avenue North Charleston. The store will be located in a redeveloped 40,000 square foot space at the Suite 201 Promenade at Northwoods. Greenville, South Carolina 29603 TEL +1 864 527 5451 >> Earth Fare is currently under construction in Summerville and will anchor Horizon Square, a FAX +1 864 527 5444 planned 63,000 square foot shopping center, which will also house Petco. Liz H. McCary >> Summerville Towne Centre, a planned 230,000 square foot center for Summerville, will be anchored Director of Marketing | South Carolina by Academy Sports, Hobby Lobby and Aldi. 1301 Gervais Street, Suite 600 Columbia, South Carolina 29201 COLUMBIA, SOUTH CAROLINA TEL +1 803 401 4269 >> Plans for Killian’s Crossing in the Northeast Columbia submarket are underway and gaining momentum. The development, to be located at the intersection of Clemson Road and Farrow Road, will offer multifamily and single family residential units, hotel space along with retail space and outparcels. McDonald’s is currently under construction and nearing completion. >> Academy Sports, which opened earlier this year in the Harbison/St. Andrews submarket, will anchor a redevelopment along Park Terrace Drive at the former Staples and Hudson Smokehouse site. Guitar Center plans to enter the Columbia market and occupy space adjacent to Academy Sports. The development, which is under construction behind Columbiana on Park, will offer approximately 31,500 square feet of shop space in two buildings. Sport Clips and Salsaritas plan to locate in the center. Sources: Bureau of Labor Statistics, Colliers International >> J. Crew is open and Anthropologie is nearing completion at Trenholm Plaza. The retailers are Research, CoStar Group, Esri, U.S. Census Bureau

entering the Columbia market and backfilling space recently vacated by Books-A-Million in Trenholm This document has been prepared by Colliers Plaza. International for advertising and general information only. Colliers International makes no guarantees, >> Nordstrom Rack is open to customers. The retailer backfilled space vacated by Barnes and Noble. representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s). ©2014. All rights reserved.

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