Greater Lansing Retail Marketview

10.0% 8.8% Greater Lansing8.0% Retail 7.0% Unemploy 6.3% MarketView 6.0% 2H 2013 CBRE Global Research and Consulting 4.0% US UNEMPLOYMENT RATE MICHIGAN UNEMPLOYMENT RATE GREATER LANSING AREA UNEMPLOYMENT RATE 7.0% 8.8%2.0% 6.3% 2H 12 1H 13 0% 2H 13 RETAIL MARKET MARKS FOURTHLansing CONSECUTIVEMichigan U.S. PERIOD OF POSITIVE GROWTH Quick Stats Chart 1: Vacancy by Submarket

2H 2013 Current Change Change 35.0% 29.4% from last from last 30.0% Year Period 25.0% 21.8% Vacancy 17.0% i i 20.0% 17.0% 14.2% Rental Rates h h 15.0% Vac. by Sub 10.3% 10.0% +110,788 SF Net Absorption h h (+1.5%) 5.0%

Under Construction 40,000 SF h h 0% East North South West Mkt Avg Source: CBRE Research, 2H 2013. Hot Topics Encouraging trends and fundamentals at Delta is under construction west of I-96 first noted in the second half of 2012 on Saginaw. The new strip center brings • National retailers take greater continued throughout 2013. Absorption, strong national retailers to the area, interest in the Greater Lansing Area occupancy levels and net lease rates including Maurice’s, Ulta, Five Below, show steady signs of improvement. Retail Dress Barn and Lane Bryant. • Rental rates are increasing vacancies4.5% of leased space within the 4.1%Activity is also picking up in the East market4.0% average 17.0%, down from 18.0% Submarket’s regional 1.2 million-square- • Landlords remodeling centers to stay in 1H 2013 and down from 19.4% a year foot Meridian Mall (not included in this 3.5% competitive ago. survey), where Planet Fitness will soon Across3.0% the Greater Lansing area, property open a 23,000-square-footAbsorb. fitness center • Discount stores and thrift stores owners2.5% and investors continue to reinvent and H&M will locate its eighth Michigan expand throughout the market under-performing retail properties. This store within 18,000 square feet of a trend2.0% is visible in the East and South 30,000-square-foot mall expansion. 1.5% Submarkets,1.5% where a number of1.3% obsolete On the west side, a new 5,400-square- Notable Market Activity* strip centers have recently0.9% undergone foot Longhorn Steakhouse is under facelifts1.0% in order to compete with newer construction within the 700,000+-square- 0.3% Sears Hometown Outlet – properties.0.5% Redevelopment slated for 2014 foot Lansing Mall. will be scattered throughout the market 30,000 SF - Waverly Plaza 0% Interest from national retailers has and will include:East theNorth 46,800-square-foot South Westescalated Mkt Totalmarketwide, with users paying Planet Fitness – 23,000 SF - Trowbridge Plaza, across from Michigan top dollar to occupy new space in key State University; the 63,843-square-foot Meridian Mall areas. Struggling Class B/C properties 35.0%Delhi Village Square (South Submarket); also fared1H well12 during 2013, with over and the 10,123-square-foot long-vacated 130,000 square feet of less-than- 30.0% 2H 12 H&M – 18,000 SF - Meridian Mall former Cheeseburger in Paradise building prime retail1H 13 space absorbed by local, (West Submarket). regional 2Hand 13 nationally operated thrift 25.0%Demand for existing retail space is and overstock stores such as Salvation Tuesday Morning – 17,710 SF - 1 increasing throughout all submarkets, with Army, Habitat for Humanity, Volunteers of Frandor Shopping Center 20.2% 20.0%the East Submarket’s Frandor Shopping America,19.1% Value Land and HistoryOllie’s Bargain of Vac. 18.0% *Market data compiled ending December 30, 2013 Center a current hot spot with the recent Barn. 17.0% 15.0%additions of Tuesday Morning and With 2013 net absorption of leased Massage Green. Further, a new three- space totaling +1.5%, market recovery is building, 40,000-square-foot Marketplace 10.0% expected to carry on throughout 2014.

0% East North South West Mkt Avg

Part of the CBRE affiliate network

West 23% East Part of the CBRE affiliate network 38% East Market Comp. North South Part of the CBRE affiliate network South West 22%

North 17% Reverse Part of the CBRE affiliate network

Part of the CBRE affiliate network

1.5% 4.1% 1.3% 0.3% 0.9% (SF) 8,546 2H 13 11,788 70,364 20,663 11,215 17.0% Mkt Avg Absorption Unemploy Absorb. Market Comp. Market History of Vac. History of The unemployment rate within the Greater Lansing MSA Lansing The unemployment rate within the Greater 6.3% in 2H 2013. decreased from 8.1% in 1H 2013 to Over the same period, the Michigan unemployment rate increased from 8.7% to 8.8%, while the U.S. unemployment rate fell from 7.6% to 7.0%

West 2H 12 1H 13 2H 13 14.2% (%) Rate Rate 17.0% 14.2% 10.3% 21.8% 29.4% 17.0% Vacancy 18.0% 1H 12 2H 12 1H 13 2H 13 1.5% th 7.0% Mkt Total 19.1% est Mkt Avg East Nor South W 20.2% U.S. South 21.8% West 4.1% West

East 38% (SF) 8.8% Area Leasable 1.3% South 7,303,351 1,708,906 2,784,300 1,572,256 1,237,889 South Source: US Bureau of Labor Statistics: 2H 2013. 17% North North 29.4% Michigan 0.9% North k k k k k k North or or or or or or tw tw tw tw tw tw 6.3% 23% West 22% East South filiate ne filiate ne filiate ne filiate ne filiate ne filiate ne 10.3% East 0.3% East Lansing

e CBRE af e CBRE af e CBRE af e CBRE af e CBRE af e CBRE af th th th th th th 0% 0%

4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0% of of of of of of 5.0% 5.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% Submarket Market Total West East South North rt rt rt rt rt rt 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 0% Pa Pa Pa Pa Pa Pa 2.0% 4.0% 6.0% 8.0% Chart 3: Unemployment Rate Table 2: Market Statistics Table Note: End caps, drive-through and new centers have higher asking rates. foot. Center has asking lease rates up to $32.00 per square *Eastwood Towne

10.0% RETAIL MARKET STATISTICS MARKET RETAIL

2H 2013 Greater Lansing Retail | MarketView 2

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Reverse 2H 2013 Greater Lansing Retail | MarketView 3 - - k k k k k k - - or or or or or or tw tw tw tw tw tw filiate ne filiate ne filiate ne filiate ne filiate ne filiate ne e CBRE af e CBRE af e CBRE af e CBRE af e CBRE af e CBRE af th th th th th th of of of of of of rt rt rt rt rt rt Pa Pa Pa Pa Pa Pa Vac. by Sub Vac. Vac. by Sub Vac. Vac. by Sub by Vac.

Reverse Reverse 17.0% 17.0% Mkt Avg Avg Mkt Mkt Avg 17.0% Mkt Avg Unemploy Unemploy Absorb. Absorb. Unemploy Market Comp. Market Market Comp. Market History of Vac. History of History of Vac. History of Absorb. Market Comp. Market History of Vac. of History ing repurposed as a 12-screen Regal Theater, and the former ing repurposed as a 12-screen Theater, Regal be replaced by a restaurant will Cheeseburger in Paradise 13,000-square-foot house Vitamin retail strip center that will Shoppe and Mattress Firm. OF VACANCIES HISTORY retail space averages 17.0% vacant, down Greater Lansing from 18.0% charted in 1H 2013. is the market’sAveraging 10.3% vacant, the East Submarket weakest submarket is the Greater Lansing’s strongest sector. North of vacancy. North Submarket, struggling with 29.4% this sector Lansing/US-127 retail corridor, the thriving Lake opportunities. Over offers immediate big box and repurposing at Clark Corners 130,000 square feet is immediately available Center at Townsend 26,000 square feet is available (DeWitt); at Southpoint Mall (St. Johns); 36,000 square feet is vacant (St. Johns); and up to 46,000 square feet is available in the Center (St. Johns). K-Mart ABSORPTION Over the past six months, absorption of retail strip center Area totaled +110,788 space throughout the Greater Lansing square feet (+1.5%). All submarkets reported positive ab wood continues with two new hotels (Hyatt Place and Fairfield two new hotels (Hyatt Place and Fairfield wood continues with building featuring 142 units of multi- Inn) and a mixed-use of first floor retail. family housing and 15,000 square feet Submarket is also active as The Marketplace at The West (at I-96 and Saginaw Highway near Walmart) Delta Township feet to accommodate recently expanded by 40,000 square Bryant, Dress Barn and Maurice’s. In Ulta, Lane Below, Five Mall is be wing of the Lansing addition, the former Mervyn’s Submarket fared the best, with +70,364 sorption. The West square feet (+4.1%) of absorption, while the East Submarket gained the least ground, with +8,546 square feet (+0.3%) of absorption. lion square feet of leased space divided into four submarkets: divided into four feet of leased space lion square (38%) is largest submarket The South and West. East, North, The Michigan State University. home to the East Submarket, to Submarket (17%),home is the North smallest submarket the struggling Clark center and Eastwood Towne the popular outlet mall). Corners (former being seen throughout the market. The New construction is soon welcome three privately owned East Submarket will totaling approximately 328,000 square mixed-use projects all of which offer first floor Lansing, feet in downtown East received site plan has Foods Whole retail space. Additionally, 35,000-square-footapproval to build a store in Meridian Township. East development of The Heights at In the North Submarket, MARKET COMPOSITION MARKET 7.3 mil over comprises retail market Lansing The Greater

West West 2H 12 1H 13 2H 13 West 14.2% 2H 12 1H 13 2H 13 14.2%

West 2H 12 1H 13 2H 13 14.2% 17.0% 17.0% 18.0% 18.0% 17.0% 1H 12 2H 12 1H 13 2H 13 1.5% th 1H 12 2H 12 1H 13 2H 13 1.5% th 7.0% Mkt Total 19.1% est 7.0% Mkt Total 19.1% est 18.0% Mkt Avg East Nor South W Mkt Avg East Nor South W 1H 12 2H 12 1H 13 2H 13 1.5% th 7.0% Mkt Total 19.1% est Mkt Avg Mkt Avg East Nor South W 20.2% U.S. 20.2% U.S. 20.2% U.S. South South 21.8% South 21.8% West 4.1% West West 4.1% South West 21.8% Source: CBRE Research, 2H 2013. Source: CBRE Research, 2H 2013. Source: CBRE Research, 2H 2013. West 4.1% West East 38% East 38% East 38% 8.8% 8.8% 1.3% South 1.3% South 8.8% South South 17% 17% North North North 1.3% South 29.4% Michigan North North 29.4% Michigan South 17% North North 29.4% Michigan 0.9% North 0.9% North North North 0.9% North North 6.3% 23% 6.3% West 23% West 22% 6.3% 22% East East 23% South East West 10.3% South 10.3% East 0.3% 22% Absorption East 0.3% East East Lansing South East Lansing 10.3% East 0.3% East Lansing 0% 0% 0% 0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0% 0% 5.0% 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% Chart 6: 0% Chart 5: History of Vacancies Market Composition 4: Market Chart 5.0% 5.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 0% © 2014, CBRE, Inc. 0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 2.0% 4.0% 6.0% 8.0% 0%

5.0% 2.0% 4.0% 6.0% 8.0% 10.0% 5.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 10.0%

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rt rt rt rt rt rt +FOLLOW US +FOLLOW Global Research and Consulting – a network of preeminent researchers and consultants who collaborate to provide real and Consulting – a network of preeminent researchers and consultants who collaborate Global Research real estate investors and occupiers around the estate market research, econometric forecasting and consulting solutions to globe. to be reliable. While we do not doubt its accuracy Information contained herein, including projections, has been obtained from sources believed to confirm independently its accuracy and completeness. not verified it and make no guarantee, warranty or representation about it. It is your responsibility to the material are reserved and cannot be reproduced This information is presented exclusively for use by CBRE clients and professionals and all rights without prior written permission of the CBRE Global Chief Economist. DISCLAIMER AND CONSULTING RESEARCH GLOBAL U This report was prepared by CBRE|Martin, an affiliate office of the CBRE Pa Pa Pa Pa Pa Pa RESEARCH Jill M. Langosch of Research Vice President CBRE|Martin 1111 Michigan Avenue, Suite 201 MI 48823 East Lansing, For more information about this Local MarketView, please contact: MarketView, For more information about this Local CONTACT t: +1 616 726 5471 e: [email protected]

2H 2013 Greater Lansing Retail | MarketView 4

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