2013 RETAIL REAL ESTATE MARKET REVIEW

Author David Machupa Cushman & Wakefi eld | THALHIMER

Survey Collection Kyllie Brinkley Bullion E.V. Williams Center for Real Estate and Economic Development Old Dominion University

Data Analysis/ David Chapman, Ph.D. Layout Old Dominion University

Financial The E. V. Williams Center for Real Estate and Economic Support Development (CREED) functions and reports are funded by donations from the CREED IPAC and Council Advisory Boards, organizations, and individuals.

Disclosure The data used for this report are deemed reliable; however, neither Old Dominion University, the E.V. Williams Center for Real Estate and Economic Development, nor sponsoring companies and/or individuals makes any representation or warranty as to its accuracy. 2013 RETAIL

13 2013 RETAIL

General Overview

his report analyzes the 2012 retail real estate con- ditions within the Virginia Beach-Norfolk-New- port News, Virginia Metropolitan Statistical Area (MSA) which is commonly referred to as Hampton Roads. The report examines supply, vacancy, con- struction, absorption, and rent data to provide a comparison of data for the specifi c submarkets and product types located within the Southside and Peninsula regions of the Hampton Roads MSA. Southside properties surveyed for the purpose of this report included those located in the cities of Chesapeake, Norfolk, Portsmouth, Smithfi eld, Suffolk and Virginia Beach. Peninsula properties surveyed are located in the cities of Gloucester, Hampton, Newport News, Poquoson, Williamsburg, and York County.

This survey is recognized as the most comprehensive analysis of retail real estate trends in the Hampton Roads MSA. The report includes information on all retail property types including regional malls, freestanding buildings and strip centers of various classifi cations. The scope of the report also includes a summary of new retail construction activity, an analysis of absorption, and a review of selected retail investment sales that have occurred in the region in 2012.

METHODOLOGY This survey gathered information about strip shopping centers and regional malls located in the Hampton Roads MSA that were generally 30,000 square feet in size or larger. Additionally, information on retail-oriented freestanding buildings at least 23,000 square feet and freestanding buildings that contained furniture stores, discounters, grocery stores or category killer retailers that met the established size criteria were included in the survey.

Automotive uses and buildings containing “downtown storefronts” were not included. Although available retail space in many submarkets (e.g. Ghent) is best described as a collection of small specialty shops, storefronts or freestanding buildings, practical limitations dictated that the focus of the survey be on larger product types.

The survey data was collected between October 2012 and January 2013. Questionnaires were mailed to owners, leasing agents and property managers responsible for retail properties meeting the selection criteria. Direct contact was utilized as a follow-up to the mailing to encourage participation. Information on square footage for freestanding buildings was obtained from building owners, tax records, store managers and retail real estate representatives. Sales information was obtained from property owners, real estate agents, appraisers and real estate assessors.

14 2013 Hampton Roads Real Estate Market Review DEFINITIONS OF TERMS

Asking Rates: The market rate per square foot of a retail property (excluding freestanding buildings and malls), exclusive of additional rents that may be paid under a triple net lease. Interpretation of average retail rates in different product types and submarkets should be viewed cautiously given the tremendous variability in rates for like products and for properties located within the same submarket. Factors such as visibility, co-tenancy and accessibility are some of the many sources of variation in market rates which should be considered.

Big Boxes: Contiguous retail space that is at least 23,000 square feet and located in any one of the identifi ed product types. Retailers occupying big boxes include, but are not limited to, the following: category killers, specialty stores, discounters, furniture stores, grocery stores and theaters. Bowling alleys, automotive uses, roller rinks and ice-skating rinks were not included.

CAM: Common Area Maintenance.

Product Types: Properties were classifi ed according to one of the following nine retail product types. The Inter- national Council of Shopping Centers defi ned the fi rst six categories. Three additional categories were included to accurately categorize the remaining properties.

Neighborhood Center 30,000 to 150,000 square feet; supermarket anchored Community Center 100,000 to 350,000 square feet; discount department store, supermarket or drug store anchored Fashion/Specialty Center 80,000 to 250,000 square feet; fashion anchored Power Center 250,000 to 600,000 square feet; category killer, home improvement and discount department store anchored Theme Festival Center 80,000 to 250,000 square feet; restaurants, entertainment anchored Outlet Center 50,000 to 400,000 square feet; manufacturer’s outlet store anchored Freestanding Individual building not considered a shopping center Mall Shopping center with area designed for pedestrian use only Other Any center that does not fi t into a typical category 2013 RETAIL Regional Mall Node: Submarket anchored by regional mall.

Small Shop: In-line retail space usually less than 10,000 square feet located in a multi-tenanted shopping center.

Submarkets: Hampton Roads is divided into 35 retail submarkets (25 Southside submarkets and 10 Peninsula submarkets) which refl ected general concentrations, pockets or corridors of retail product type. Geographical boundaries of the retail submarkets were infl uenced by density of existing retail product, physical or geographical obstacles, existing transportation networks, municipal boundaries, population concentrations and retailers’ per- ceptions of the MSA. Final determination of specifi c boundaries of each submarket was made by a subcommittee of retail real estate professionals who are actively involved in the MSA. Also highlighted were specifi c submarkets that are anchored by regional malls. A map which identifi es the general location of each submarket is included in the centerfold of this report.

Triple Net Lease: Type of lease under which a tenant pays its pro-rata share of real estate taxes, insurance and common area maintenance.

15 2013 RETAIL

YEAR IN REVIEW

The Hampton Roads market is in a gradual recovery. At the end of 2011 we saw economic indicators and trends that lead us to believe the gradual recovery would continue, and continue it did in 2012. On a national level, the retail market improved, and it also did, here in Hampton Roads. There was less culling of the herd amongst retailers this past year and, as such, less occupied retail came back to market. The fi nancing market is making its way back as well. While not as robust as at the peak of the market, fi nancing is available and lenders are actively looking for opportunities. A disconnect still remains on product valuation between buyers, sellers and lenders of retail centers and, as such, we did not see a great deal of investment sales this past year. With a decreasing vacancy rate, we witnessed an increase in the average asking rents across Hampton Roads and renewed tenant interest in the market. We ended 2011 cautiously optimistic as we moved in 2012, and do so again entering 2013.

Fortunately, 2012 brought increased activity from various mid-size and big box users. WalMart was under construction with a new Super Center in Newport News along with several of the smaller Neighborhood Market concepts. Bally’s went bankrupt and their locations were backfi lled; Harris Teeter opened in Portsmouth and signed a lease and announced a new Wards Corner location in Norfolk; Kroger became aggressive and purchased the former Super KMart location on Holland Road in Virginia Beach and is currently under construction with their 124,000 square foot concept. Additionally, Kroger is under contract in various cities across Hampton Roads, including Portsmouth and Suffolk. Target opened on the backside of and was a catalyst for Off Broadway to join them there; Hampton Roads welcomed its fi rst Whole Foods in the Hilltop area of Virginia Beach; Dave and Busters announced at ; Urban Outfi tters opened in Downtown Norfolk; and 7-11 made a push by acquiring existing gas stations and rebranding. Cookout entered the market with locations in Newport News, Norfolk, and Portsmouth, and is under contract in Chesapeake. Starbucks added three new locations to the market and continues to expand and develop sites. Settler’s Market in Williamsburg is again pushing dirt for the mid box retailers that expressed an interest when the project initially started. This activity speaks well regarding the direction of the market.

There has been a bit of downside concerning retailers as some continue to struggle on a national level, and some of the Hampton Roads locations are impacted. Sears closed the Military Highway location in 2012; Blockbuster announced the closing of four out of fi ve remaining stores in Hampton Roads; but, on a larger scale, there is concern about Sears and Kmart on a national level, Best Buy continues to struggle as more and more electronics sales are lost to the internet, JCPenney miscalculated with a new pricing policy and chased customers away from an already struggling concept. Barnes and Noble continues to be impacted by electronic books and the offi ce product sector as a whole is downsizing stores. These retailers may impact the market due to their inability to adapt to the new retail reality.

Hampton Roads is improving and at a pace that we realistically expected. One concern for the retail market is how the military will be impacted by the new budget cutbacks and how those cutbacks will be felt by the retailers. Retailers have fl ourished in the market because of a stable military presence and Hampton Roads is home to almost 100,000 military personnel. Having said that, it is expected that the market will continue to improve and outperform 2012.

16 2013 Hampton Roads Real Estate Market Review 2013 RETAIL 17

MARKET SURVEY SURVEY MARKET HAMPTON ROADS ROADS HAMPTON The Hampton Roads retail market contains approximately 53,456,802 market contains approximately retail The Hampton Roads with in 424 properties (“GLA”) leasable area feet of gross square of $15.96 triple net. The US Census rate rental an average asking 1.7 of Hampton Roads is approximately indicates the population Bureau supply per feet of retail square in a 31.45 million, resulting (e.g., the inclusion of methodological differences person. Certain cult to malls in this survey) make it diffi buildings and freestanding average statistic. per capita supply in the MSA to a national compare We move forward acknowledging that 2013 is trending in the right direction. We will see the size of the overall We in the right direction. acknowledging that 2013 is trending forward move We under construction or in the currently expansion as multiple new centers are store due to grocery market increase will be slow and gradual, and 2012 numbers have consistently stated that the recovery stage. We pre-leasing Just three rates gradually increase. continues to be absorbed, we will see rental As supply ect that projection. refl to 7.85% in 2012. market had a vacancy rate just under 10% compared short years ago, the Hampton Roads retail The Peninsula also experienced some mixed changes this past year. The 138 properties on the Peninsula that were The 138 properties mixed changes this past year. The Peninsula also experienced some Although the average asking price of small shop space of product. feet surveyed combined for 18,532,649 square in the vacancy rate on the we did witness a slight increase foot triple net, by $.22 to $15.06 per square decreased in the Peninsula market activity and interest to 10.73%; however, .22% Peninsula. The vacancy rate increased rst quarter of 2013. The Williamsburg that submarket saw stabilization of some newer projects in the fi is strong during the recession. suffered The overall 8.51% vacancy rate in 2011 continued its gradual recovery. In 2012, the Hampton Roads market in the deal and tenants continue to get creative in 2012 as landlords gave way to a vacancy rate of 7.85% well as new developments as themselves within the market creating repositioning Retailers are making process. due to mass product saturated with retail second generation opportunities. Unlike years past, the market was not as it appears the retailers’ watching carefully that we are a few retailers are Having said that, there closings. store continue to landlords as coming to an end. Hampton Roads should continue the gradual recovery life cycles are up, consumer demand is up, sales are pursue leases. While we will face challenges in 2013, retail aggressively in the Hampton Roads market. interest and tenants continue to express supply is slowly reducing Hampton Roads consist of two markets, the Southside and Peninsula. The Southside market has approximately the Southside and Peninsula. The Southside market has approximately Hampton Roads consist of two markets, The average in the market, in 286 properties. footage 66% of the total square feet, roughly 34,924,153 square in rental 2011 numbers to $16.36 triple net. The increase $.33 over for small shop space increased asking rent 7.42% in 2011. to 6.31% in 2012 from as vacancy rates reduced in demand rates can be attributed to the increase amounts of new constructioncant came on line in 2012, we have signifi feet of new construction While 57,442 square coming in 2013. 2013 RETAIL

Market Overview Table

New Number of Construction in Occupied Absorption Properties GLA in SF Vacant SF % Vacant SF in SF in SF 2013 Southside 286 34,924,153 2,206,614 6.32% 57,442 32,717,539 1,896,773 Peninsula 138 18,532,649 1,989,028 10.73% 6,576 16,543,621 775,368 Total 424 53,456,802 4,195,642 7.85% 64,018 49,261,160 2,672,141 2012 Southside 279 34,150,108 2,534,765 7.42% 103,380 31,615,343 794,577 Peninsula 138 18,494,461 1,944,109 10.51% 999,389 16,550,352 782,099 Total 417 52,644,569 4,478,874 8.51% 1,102,769 48,165,695 1,576,676 2011 Southside 274 34,019,555 2,523,754 7.42% 18,880 31,495,801 675,035 Peninsula 138 18,548,407 2,175,793 11.73% - 16,372,614 604,361 Total 412 52,567,962 4,699,547 8.94% 18,880 47,868,415 1,279,396 2010 Southside 273 33,535,280 2,714,514 8.09% 302,352 30,820,766 (288,440) Peninsula 136 18,160,963 2,392,710 13.18% 981,463 15,768,253 362,777 Total 409 51,696,243 5,107,224 9.88% 1,283,815 46,589,019 74,337 2009 Southside 265 33,265,028 2,155,822 6.48% 275,252 31,109,206 238,525 Peninsula 133 17,112,012 1,706,536 9.97% - 15,405,476 (109,898) Total 398 50,377,040 3,862,358 7.67% 275,252 46,514,682 128,627 2008 Southside 263 33,086,160 2,215,479 6.70% 1,038,291 30,870,681 339,596 Peninsula 133 17,133,079 1,617,705 9.44% 1,009,000 15,515,374 100,485 Total 396 50,219,239 3,833,184 7.63% 2,047,291 46,386,055 440,081 2007 Southside 259 32,407,761 1,876,676 5.79% 1,552,392 30,531,085 1,741,962 Peninsula 131 16,895,155 1,480,266 8.76% 1,042,451 15,414,889 576,788 Total 390 49,302,916 3,356,942 6.81% 2,594,843 45,945,974 2,318,750 2006 Southside 246 30,852,210 2,063,087 6.69% 593,520 28,789,123 1,280,869 Peninsula 129 16,337,458 1,499,357 9.18% 618,179 14,838,101 687,097 Total 375 47,189,668 3,562,444 7.55% 1,211,699 43,627,224 1,967,966 2005 Southside 243 30,184,395 2,676,141 8.87% 271,610 27,508,254 341,736 Peninsula 125 15,799,778 1,648,774 10.44% 185,000 14,151,004 496,338 Total 368 45,984,173 4,324,915 9.41% 456,610 41,659,258 838,074 2004 Southside 243 30,336,266 3,169,748 10.45% 419,458 27,166,518 419,138 Peninsula 127 16,094,161 2,027,477 12.60% 330,000 14,066,684 412,018 Total 370 46,430,427 5,197,225 11.19% 749,458 41,233,202 831,156 2003 Southside 245 30,180,691 3,433,311 11.38% 574,400 26,747,380 535,167 Peninsula 126 15,546,085 1,891,419 12.17% 676,000 13,654,666 932,008 Total 371 45,726,776 5,324,730 11.64% 1,250,400 40,402,046 1,467,175 2002 Southside 239 29,760,443 3,548,230 11.92% 828,800 26,212,213 1,185,818 Peninsula 123 14,906,530 2,183,872 14.65% 202,750 12,722,658 242,563 Total 362 44,666,973 5,732,102 12.83% 1,031,550 38,934,871 1,428,381 2001 Southside 230 29,436,515 3,760,087 12.77% 918,100 25,676,428 (158,181) Peninsula 121 14,477,970 1,997,875 13.80% 212,229 12,480,095 147,115 Total 351 43,914,485 5,757,962 13.11% 1,130,329 38,156,523 (11,066) 2000 Southside 220 28,816,383 2,933,294 10.18% 2,064,727 25,883,089 1,344,209 Peninsula 118 15,249,617 2,012,637 13.20% 758,370 13,236,980 292,785 Total 338 44,066,000 4,945,931 11.22% 2,823,097 39,120,069 1,636,994 1999 Southside 208 27,089,939 2,551,059 9.42% 1,414,805 24,538,880 1,961,927 Peninsula 112 14,548,482 1,604,287 11.03% 1,253,342 12,944,195 1,592,805 Total 320 41,638,421 4,155,346 9.98% 2,668,147 37,483,075 3,554,732 1998 Southside 195 25,463,588 2,886,635 11.34% No Data 22,576,953 No Data Peninsula 102 12,952,845 1,601,455 12.36% No Data 11,351,390 No Data Total 297 38,416,433 4,488,090 11.68% No Data 33,928,343 No Data

18 2013 Hampton Roads Real Estate Market Review 2013 RETAIL 19 Rate PSF Small Shop % Vacant

Vacant SF Vacant GLA in SF Average Properties Number of 14 1,750,498 61,898 3.54% $17.85 8 1,822,451 173,347 9.51% $17.60 4 484,281 80,815 16.69% $12.42 (Including Chesapeake)

(From Kempsville Road to Holland Road)

(Virginia Beach Boulevard to Holland Road)

The range of vacancy rates in the Southside submarkets can be seen in the table below. can be seen in the table below. rates in the Southside submarkets The range of vacancy There are 25 retail submarkets on the Southside this year. The average size of a typical submarket is 1,396,966 average size of a typical submarket The this year. submarkets on the Southside 25 retail are There 8.58% in from with vacancy decreasing performance in 2012 had a strong feet. The Hilltop submarket square foot, which is $21.14 per square $20.83 to from increasing and average small shop rents 2011 to 3.27% in 2012, Southside submarkets. of all rent the highest asking SOUTHSIDE SUBMARKETS SOUTHSIDE KEMPSVILLE VIEW CORNER/OCEAN LITTLE CREEK ROAD /WARDS LITTLE NECK ROAD LYNNHAVEN 17 1,762,977 169,827 9.63% $15.31 12 1,216,659 12 141,780 1,459,428 11.65% 18,745 $15.42 1.28% $16.61 BAY FRONT BAY BIRDNECK/OCEANFRONT CAMPOSTELLA CHURCHLAND-PORTSMOUTH/HARBORVIEW DAM NECK DOWNTOWN GHENT BRIDGE GREAT 17 BOULEVARD GREENBRIER/BATTLEFIELD 1,996,260 NECK HILLTOP/GREAT 5 49,225 HOLLAND/GREEN RUN 201,350 INDIAN RIVER/COLLEGE PARK 2.47% 6 12 1,294 6 2,294,809 304,258 26 $17.13 75,544 332,921 0.64% 4,287,237 20,702 205,178 85,015 3.29% $13.96 6.80% 25.54% 8 4.79% 4 $17.33 1,520,256 $18.00 18 1,329,283 13 $12.39 $19.66 47,340 1,383,063 1,604,624 10 29,675 9 132,429 3.11% 52,406 853,000 396,454 2.23% 9.58% 73,505 3.27% $19.81 32,324 $14.17 $16.17 8.62% 8.15% $21.14 $13.63 $18.06 SOUTHSIDE BY SUBMARKET MIDDLE PORTSMOUTH MIDDLE PORTSMOUTH HIGHWAY/JANAF MILITARY NEWTOWN ODU PEMBROKE PRINCESS ANNE ROAD 16 15 3,252,612 1,770,272 196,856 95,631 11.12% 2.94% 11 $12.33 $12.78 579,332 22 90,479 2,777,253 1 262,334 15.62% 49,875 9.45% $12.60 5,220 $17.13 10.47% $21.00 SMITHFIELD SUFFOLK Total 5 15 281,150 1,213,850 11,050 286 34,924,153 93,995 2,206,614 3.93% 7.74% 6.32% $16.00 $16.62 $16.36 2013 RETAIL

PENINSULA SUBMARKETS

There are 10 retail submarkets on the Peninsula with an average size of 1,853,264 square feet. The two largest Peninsula submarkets are now Patrick Henry and Williamsburg. The Patrick Henry submarket is anchored by a regional mall and has the lowest vacancy rate on the Peninsula.

The Patrick Henry submarket continues to be one of the most highly desired submarkets in Hampton Roads having 4,374,256 square feet and a vacancy rate of just 3.6%. The Williamsburg market continues to have good retail activity along the Monticello corridor.

PENINSULA BY SUBMARKET Average Number of Small Shop properties GLA in SF Vacant SF % Vacant Rate PSF

COLISEUM CENTRAL 16 4,051,110 492,006 12.14% $16.80 DENBIGH 15 1,785,033 425,040 23.81% $11.65 FOXHILL/BUCKROE/EAST MERCURY 7 687,014 37,431 5.45% $12.80 GLOUCESTER 8 894,676 68,664 7.67% $14.38 HAMPTON MISC 2 118,972 19,470 16.37% $10.75 NEWMARKET/MAIN (To include Hampton) 12 1,021,071 169,297 16.58% $9.81 PATRICK HENRY/OYSTER POINT/KILN CREEK 31 4,374,256 157,511 3.60% $17.08 POQUOSON 2 108,521 20,169 18.59% $13.50 WILLIAMSBURG 33 4,652,273 524,805 11.28% $18.52 YORK COUNTY 12 839,723 74,635 8.89% $14.41 Total 138 18,532,649 1,989,028 10.73% $15.06

RETAIL PRODUCT TYPE

The Neighborhood Center remains the predominant product type with 175 properties containing over 12 million square feet of GLA. The Community Centers comprised almost 10 million square feet with both product types showing a decrease in vacancy rates and an increase in rental rates.

20 2013 Hampton Roads Real Estate Market Review 2013 RETAIL 21 Average Average Average Average CAM PSF CAM PSF CAM PSF Average Average Average Average Average Rate PSF Rate PSF Rate PSF Small Shop Small Shop Small Shop Small Shop % Vacant % Vacant % Vacant Vacant SF Vacant SF Vacant SF Vacant New New New in SF in SF in SF Construction Construction Construction Construction GLA in SF GLA in SF GLA in SF Properties Properties Properties Number of Number of Number of Number of Peninsula By Type Peninsula Southside By Type Total Retail Product By Type Product Retail Total Neighborhood Center Community Center Center Fashion/Specialty Center Power 48 Center Theme Festival 3,390,899 2 21 Outlet Center Other 3,759,795 483,000 Freestanding - Mall 10 - Total 330,497 4,180,509 - - 9.75% - 1 507,689 54,967 13.50% 6,576 $13.90 33 349,927 11.38% 20 517,732 $2.26 3,466,773 $15.17 $26.00 12.38% - $2.41 832,750 $5.40 138 $20.95 3 - 18,532,649 2,068,996 $2.88 - No data - 333,412 No data - - No data 9.62% 6,576 No data 125,060 1,989,028 15.02% No data 10.73% - $11.25 data No 119,671 $2.38 $14.95 $15.06 5.78% $2.61 $2.46 No data $17.75 Neighborhood Center Community Center Center Fashion/Specialty 127 Center Power Center Theme Festival 8,966,072 8 36 Outlet Center 1,056,686 Other 6,074,826 36,000 Freestanding 1,069,086 1 Mall 11.92% 22 21,442 100,000 Total 7,225,330 344,382 $15.49 - - 5.67% $2.71 53,681 5.08% 41 $16.00 - 44 4,279,267 - $2.47 $24.13 - 250,904 1,572,327 $3.77 3.47% - 286 7 No data 34,924,153 5,649,645 $19.88 - - No data $3.59 - 13,450 No data 57,442 162,047 2,206,614 0.31% 10.31% - 6.32% No data - $14.50 $16.03 313,064 $16.36 No data $3.45 $2.96 5.54% $2.92 No data $20.50 $18.86 Neighborhood Center Neighborhood Community Center Center Fashion/Specialty 175 Center Power 12,356,971 Center Theme Festival 10 57 Outlet Center 1,539,686 Other 9,834,621 36,000 1,399,583 Freestanding 1 11.33% Mall 32 21,442 100,000 Total 11,405,839 $15.05 - 852,071 108,648 $2.72 1 8.66% 7.06% 6,576 74 349,927 $15.69 - 768,636 $24.33 64 7,746,040 $2.47 6.74% $3.77 2,405,077 10 - 424 $20.23 No data - 53,456,802 7,718,641 $3.59 No data - No data 346,862 - 64,018 - 287,107 4.48% No data 4,195,642 11.94% No data - 7.85% $13.06 data No 432,735 $15.67 $3.45 $15.96 5.61% $2.96 $2.83 $20.50 $17.75 2013 RETAIL

BIG BOX VACANCY

Big Box vacancy in 2012 slightly decreased in the Hampton Roads market. Having said that, there is concern with several big box retailers and the region may see product in the big box category increase dramatically as retailers such as Sears, Kmart, Best Buy, Barnes and Noble, JCPenney, and the entire offi ce supply sector struggle to keep stores open. The 1,589,630 square feet of vacant space represents 38% of the total retail vacancy in the market. It is important to note some of the vacant boxes are now functionally or practically obsolete for today’s retailer. They will remain on the report as retail product until such time as they are demolished, converted to a non-retail use or redeveloped.

Big Box Vacancy

4,000,000 Southside 3,500,000 Peninsula TOTAL 3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000 Vacant Square Feet Square Vacant 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Big Box Vacancy

Southside 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1,607,323 2,073,115 2,207,416 2,220,935 1,906,391 1,513,523 1,142,319 957,887 948,288 907,688 1,102,093 880,568 855,979 821,993

Peninsula 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1,232,255 1,328,841 1,435,489 1,407,021 1,556,029 1,141,207 982,263 819,163 827,360 880,805 989,305 837,025 794,484 767,637

TOTAL 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2,839,578 3,401,956 3,642,905 3,627,956 3,462,420 2,654,730 2,124,582 1,777,050 1,775,648 1,788,493 2,091,398 1,717,593 1,650,463 1,589,630

22 2013 Hampton Roads Real Estate Market Review Retail Submarkets Southside Peninsula

1 Bayfront 11 Hilltop/Great Neck 21 ODU 26 Coliseum Central 2 Birdneck/Oceanfront 12 Holland/Green Run 22 Pembroke 27 Denbigh 3 Campostella 13 Indian River/College Park 23 Princess Anne 28 Foxhill/Buckroe 4 Chesapeake Square 14 Kempsville 24 Smithfi eld 29 Gloucester 5 Churchland/Harbourview 15 Little Creek Road/ 25 Suffolk 30 Hampton Miscellaneous 6 Dam Neck Wards Corner 31 Patrick Henry 7 Downtown Norfolk 16 Little Neck 32 Poquoson 8 Ghent 17 Lynnhaven 33 Newmarket/Main 9 Great Bridge 18 Middle Portsmouth 34 Williamsburg 10 Greenbrier/Battlefi eld 19 Military Highway/Janaf 35 York County Boulevard 20 Newtown

23 The following is a list of the properties Planet Fitness Plaza A 52,966 Greenbrier Market Center D 487,580 included in this year’s survey listed by Poplar Hill Plaza B 102,326 Greenbrier Shops A 37,500 submarket with a code representing the Sterling Creek A 75,660 Greenbrier South SC A 97,500 type of property. Town Point Square A 58,989 Home Depot H 130,060 The GLA of the property is also listed. Victory Crossing D 500,000 K-Mart/Offi ceMax H 165,000 Knell’s Ridge Square G 40,000 A Neighborhood Center F Outlet Center B Community Center G Other DAM NECK Lowes H 114,000 C Fashion/Specialty Center H Freestanding 2236 General Booth Blvd A 11,500 Orchard Square A 88,910 D Power Center I Mall Dam Neck Crossing B 138,571 Parkview @ Greenbrier A 83,711 E Theme Festival Dam Neck Square A 67,917 Plantation Woods A 16,800 General Booth Plaza A 71,639 Regal Cinemas H 60,763 SOUTHSIDE Red Mill Commons D 750,000 The Shoppes at Greenbrier G 40,000 Red Mill Walk B 240,000 Towne Place at Greenbrier C 127,109 BAY FRONT Sandbridge SC A 66,800 Village Square G 15,000 Cape Henry Plaza A 58,424 Strawbridge Marketplace A 173,829 Volvo Parkway SC G 41,874 Chic’s Beach Shopping Center A 79,397 Wal-Mart Way Crossing G 80,160 Kroger H 47,000 DOWNTOWN Wal-Mart/Sam’s Club/Kohl’s D 433,821 Kroger Shops A 13,540 Berkley Center A 47,945 Lake Shores Plaza Shopping Center A 58,230 Church Street Crossing A 51,000 HILLTOP/GREAT NECK Marina Shores G 47,667 MacArthur Center Mall I 1,100,000 Great Neck Square A 93,887 Waterside Festival Marketplace I 130,338 Great Neck Village A 73,736 BIRDNECK/OCEANFRONT Hilltop East C 144,100 Birdneck SC A 65,460 GHENT Hilltop North B 202,511 Farm Fresh H 29,296 201 Twenty One A 15,616 Hilltop Plaza B 152,025 Harris Teeter H 48,000 21st Street Pavilion G 21,000 Hilltop Square B 270,093 Linkhorn Shops A 48,899 Center Shops A 139,081 Hilltop West G 60,000 Pacifi c Plaza A 9,695 Colley Village A 44,585 La Promenade C 63,280 Ghent Place G 13,000 Marketplace at Hilltop C 113,000 CAMPOSTELLA Harris Teeter H 27,000 Mill Dam Crossing A 25,776 Atlantic Commons A 63,393 Palace Shops I, II C 78,669 Regency Hilltop B 236,549 Bainbridge Marketplace A 46,444 Palace Station G 37,503 Renaissance Place G 47,667 Campostella Corner A 43,375 The Corner Shops G 20,000 Target H 122,000 George Washington Commons A 44,942 Holly Point SC A 65,338 GREAT BRIDGE HOLLAND/GREEN RUN Southgate Plaza A 69,429 Cahoon Commons D 278,023 Auburn Place A 42,709 Cedar Lakes Center A 35,659 Chimney Hill B 207,175 CHESAPEAKE SQUARE Centerville Crossing A 46,000 Green Run Square A 75,000 BJ’s H 115,660 Country Club Shoppes H 17,700 Holland Plaza SC A 155,000 Castle Shops A 37,464 Crossings at Deep Creek A 68,970 Holland Windsor Crossing B 47,400 Chesapeake Center B 270,602 Dominion Marketplace A 73,103 Lowes H 125,323 Chesapeake Square Mall I 800,000 Dominion Plaza SC A 63,733 Lynnhaven Green A 50,838 Chesapeake Square Shops A 13,559 Glenwood Square A 73,859 Rosemont Center A 12,700 Crossroads Center at Chesapeake Square D 332,464 Great Bridge SC A 156,937 Shipps Corner A 63,355 Food Lion @ Chesp Sq H 45,000 Hanbury Village A 100,560 Timberlake SC A 73,500 Home Depot H 130,060 Harbor Watch Shoppes G 21,505 Lowes H 115,000 Las Gaviotas A 82,000 INDIAN RIVER/COLLEGE PARK Shops at Chesapeake Square A 25,000 Millwood Plaza G 16,930 (Including Chesapeake) Taylor Road Plaza A 60,000 Mt Pleasant Shopping Center A 112,021 College Park I & II B 183,874 Wal-Mart Supercenter/Sam’s Club H 350,000 Mt Pleasant Village A 34,180 Indian River Plaza B 126,017 Wilson Village A 52,500 Indian River SC A 123,752 CHURCHLAND-PORTSMOUTH/HARBORVIEW Woodford Shoppes B 9,760 Tidewater Plaza A 50,638 Academy Crossing G 45,483 Woodford Square B 139,623 Churchland Place Shoppes G 21,000 Churchland SC A 149,741 GREENBRIER/BATTLEFIELD BOULEVARD Churchland Square A 72,189 Battlefi eld Marketplace G 30,000 College Parkway Crossing at Harbour View A 86,130 Chesapeake Crossing B 287,679 Grand H 30,000 Country Club Square H 12,600 Harbor View Shoppes A 17,000 Crossways Ctr I & Eden Way Shops D 438,725 Harbour View East D 172,000 Crossways II D 152,686 Harbour View Marketplace D 300,000 Edinburgh Commons D 184,232 Harbourview Station East D 217,308 Edinburgh East D 133,000 Harbourview Station West D 83,007 Gainsborough Square A 88,862 Marketplace Square A 12,461 I 899,665

24 KEMPSVILLE Gilmerton Square G 43,236 Northern Super Center G 36,588 Arrowhead Plaza A 97,006 Manor Commerce Center G 67,060 Pembroke East B 24,806 Fairfi eld SC B 239,763 Manor Shops G 14,573 Pembroke Mall I 570,000 Kemps Corner Shoppes G 25,929 Old Towne Marketplace A 42,000 Pembroke Meadows SC A 81,592 Kemps River Center A 62,507 Rodman SC A 45,000 Pembroke Place B 165,000 Kemps River Crossing B 245,268 Super Wal-Mart H 200,000 Pembroke Plaza G 34,900 Kempsville Crossing A 94,477 Triangle SC A 84,437 Roomstore H 50,000 Kempsville Plaza A 60,778 Victory Crossing D 500,000 The Town Center of Parkway Marketplace A 26,602 Victory West Shopping Center A 167,102 Virginia Beach C 313,590 Providence Square SC A 135,915 Williams Court B 214,739 University Shoppes A 26,100 PRINCESS ANNE ROAD Witchduck Exchange A 50,000 MILITARY HIGHWAY/JANAF (from Kempsville Road to Holland Road) Woods Corner A 152,314 3455 Azalea Garden Road A 1,024 Brenneman Farm SC A 254,197 Best Square B 140,030 Courthouse Marketplace A 122,000 LITTLE CREEK ROAD /WARDS CORNER/OCEAN VIEW Broad Creek SC D 205,417 Home Depot H 130,000 Ames/Kroger B 140,568 Bromley SC A 67,790 Kempsville Marketplace A 71,460 Dollar Tree Shopping Center A 51,415 CostCo H 110,000 Landstown Commons D 505,766 East Beach Marketplace B 202,000 Dump/Mega Offi ce G 115,854 Lynnhaven Square S C G 22,933 East Beach Shoppes A 63,000 Farm Fresh H 60,000 Parkway SC A 64,820 Farm Fresh - Little Creek H 66,120 Food Lion #170 H 41,000 Pleasant Valley Glenwood Shoppes A 53,255 Grand Outlet H 35,000 Marketplace A 88,107 Little Creek and Tidewater Shops B 119,820 Janaf D 878,381 Princess Anne Little Creek Square A 82,300 Lowes H 115,000 Marketplace B 209,500 Meadowbrook S C G 27,260 Military Crossing D 192,000 Princess One SC A 84,725 Mid-Town A 75,768 Military Triangle G 10,061 Salem Crossing D 92,316 Mid-Way SC G 31,000 Super K-Mart & Shoppes B 200,000 Salem Lakes Ocean View SC A 73,658 Super Wal-Mart H 224,513 Marketplace A 42,087 Roosevelt Gardens SC A 109,175 The Gallery @ Military Circle I 856,542 Salem Lakes SC A 37,087 Southern Shopping Center B 243,264 Woodtide SC A 25,500 Super Wal-Mart H 225,000 NEWTOWN Wards Corner Strip A 61,540 Cypress Point A 117,958 SMITHFIELD Wedgewood SC A 137,834 Diamond Springs N (Shopping Center) A 23,880 Cypress Run SC G 25,000 Diamond Springs Shoppes H 18,840 Eagle Harbor A 77,400 LITTLE NECK Newpointe SC A 92,978 Shoppes at Eagle Birchwood SC A 358,635 Newtown Baker Crossing A 91,687 Harbor A 24,386 Colony Building A 23,625 Newtown Center G 19,876 Smithfi eld Plaza B 89,120 Home Depot H 130,060 Newtown Convenience Center G 19,800 Smithfi eld Square A 65,244 Kroger H 45,000 Northampton Business Center G 85,000 London Bridge Plaza B 114,584 Thomas Corner SC G 23,557 SUFFOLK Lowes H 160,000 Weblin Square G 31,552 Bennetts Creek Crossing A 119,812 Lynnhaven 2600 A 13,326 Wesleyan Commons Bennetts Creek Lynnhaven Convenience G 36,900 Shopping Center A 54,204 Food Lion A 64,544 Lynnhaven Shopping Center B 191,136 Centerbrooke Village A 12,600 Princess Anne Plaza West C 77,558 ODU Creekside Village A 18,835 Regatta Bay Shops G 60,000 First Floor Retail Shops Holland Plaza A 9,345 Sam’s Club Plaza D 248,604 at University Village Apartments G 49,875 Kensington Square A 66,421 Lowes H 150,000 LYNNHAVEN ROAD (Virginia Beach Boulevard to Holland Road) PEMBROKE Mattress Discounters Lynnhaven Crossing G 55,550 Aragona SC A 69,700 Plaza A 59,892 Lynnhaven East B 97,303 Best Buy H 45,000 Oak Ridge A 38,700 Lynnhaven Mall I 1,293,100 Collins Square A 123,870 Suffolk Plaza B 176,733 Lynnhaven North B 176,254 Columbus Village East A 63,000 Suffolk Plaza West A 60,000 Lynnshores Shopping Center G 12,692 Columbus Village Suffolk Shopping Center B 155,733 Lynnway Place G 30,213 Entertainment Center E 100,000 Suffolk Specialty Shops G 15,200 Parkway Plaza G 44,227 Dean Plaza (Former HQ) D 140,000 Suffolk Village SC G 11,875 Wal-Mart H 113,112 Former Bloom Brothers H 165,000 Wal-Mart Super Center H 194,160 Giant Square B 150,000 MIDDLE PORTSMOUTH Goodwill H 34,000 Afton SC A 106,500 Haverty’s H 55,000 Airline Marketplace A 69,000 Haygood SC B 165,000 Airline Plaza A 99,549 Haynes H 228,000 Alexander’s Corner Shopping Center A 50,826 Hunter’s Mill Shoppes G 22,827 Elmhurst Square A 66,250 Loehmann’s Plaza C 139,380

25 PENINSULA Dresden SC G 35,000 Marketplace Forest Park Square B 150,000 Shopping Center A 36,000 COLISEUM CENTRAL Fransisco Village A 55,865 Monticello Marketplace B 299,792 Coliseum Corner A 49,267 Hampton Plaza B 173,199 Monticello SC A 82,000 Coliseum Crossing B 221,004 Hilton SC A 74,000 New Town Shops on Main C 253,000 Coliseum Marketplace A 105,998 Midway Shopping Center G 58,780 Norge Crossing H 52,000 Coliseum Specialty Shops G 15,026 Plaza at Newmarket B 117,377 Olde Towne SC G 30,000 Coliseum Square G 43,307 Warwick Center A 150,000 Prime Outlets F 349,927 Goodwill Store & Warehouse H 122,000 Warwick Village A 75,400 Quarterpath Crossing A 85,600 Hampton Towne Centre D 376,100 Settlers Market Hampton Woods A 89,092 PATRICK HENRY/OYSTER POINT/KILN CREEK at New Town B 37,051 Home Depot H 130,060 Bayberry Village A 72,883 Staples H 37,400 Newmarket South D 368,085 Best Buy Building H 135,000 The Marquis (Phase I) D 1,000,000 Peninsula Towncenter I 1,174,389 City Center C 230,000 The Shops at High Street B 114,449 Riverdale Plaza D 260,316 Commonweatlh Center G 30,279 Village Shops at Kingsmill G 82,200 Sports Authority H 40,000 Fairway Plaza G 37,950 Wal-Mart SuperCenter H 210,000 The Power Plant D 621,150 Glendale SC G 30,000 Williamsburg Crossing A 150,000 Todd Center & Todd Lane Shops B 242,000 Grand Furniture H 35,000 Williamsburg Farm Fresh A 79,188 Wal-Mart Super Center H 193,316 Harris Teeter H 52,334 Williamsburg Marketcenter B 120,920 DENBIGH Haverty’s H 45,000 I 180,000 Beaconsdale SC A 28,000 Haynes H 85,000 Williamsburg Denbigh Speciality Shops G 24,504 Hidenwood SC A 100,000 Pavillion Shops G 50,000 Denbigh Village Centre B 334,299 Jefferson Commons D 400,000 Williamsburg SC I & II B 251,000 Denbigh Village Shopping Center H 327,322 Jefferson Greene G 57,430 Williamsburg Towne Ferguson Center G 118,000 Jefferson Plaza D 178,200 and Cnty A 49,802 Former Hills Denbigh H 86,589 Kroger H 55,000 WindsorMeade Jefferson Crossing Lowes H 120,000 Marketplace D 189,605 (formerly Denbigh Crossing) A 145,000 Market Place Yankee Candle H 42,000 Kmart H 115,854 at Oyster Point A 69,660 Lee Hall Plaza A 36,000 Newport Marketplace D 450,000 YORK COUNTY Newport Crossing B 200,000 Newport Square B 184,126 Grafton SC A 32,000 Richneck Shopping Center A 63,425 Offi ce Depot H 30,122 Heritage Square A 73,865 Stoneybrook Shopping Center A 74,340 Oyster Point Plaza A 73,197 Kiln Creek Center A 45,700 Turnberry Crossing A 53,775 Oyster Point Square A 83,089 Lakeside 17 H 8,400 Village Square A 40,000 I 714,607 Marketplace @ Yorktown A 73,050 Warwick Denbigh SC B 137,925 Patrick Henry Place A 17,000 Patriots Square A 47,231 Sam’s Club H 133,880 Pavilion at Kiln Creek A 26,820 FOXHILL/BUCKROE/EAST MERCURY The Shoppes Shady Banks SC A 56,634 Buckroe SC A 76,000 at Oyster Point G 30,000 Wal-Mart SuperCenter H 220,000 Farm Fresh Phoebus H 39,000 Victory Center Washington Square Kmart H 94,500 at Kiln Creek A 78,000 Shopping Center B 183,403 Langley Square A 120,646 Village Square York Square A 48,720 Marketplace @ Nickerson A 75,850 at Kiln Creek B 263,000 Yorkshire Downs G 23,900 Nickerson Plaza A 83,849 Villages of Kiln Creek G 45,300 Willow Oaks Village Square S C B 197,169 Wal-Mart Super Center H 201,146 Yoder Plaza SC D 337,053 GLOUCESTER Food Lion H 40,000 POQUOSON Hayes Plaza SC A 52,651 Poquoson SC A 57,458 Hayes SC A 100,000 Wythe Creek Plaza SC A 51,063 Home Depot H 100,000 Lowe’s H 125,000 WILLIAMSBURG Shoppes at Gloucester B 82,025 Colony Square A 66,806 Wal-Mart Super Center H 220,000 Ewell Station A 68,048 York River Crossing B 175,000 Festival Marketplace G 16,216 HAMPTON MISC Gallery Shops G 18,187 Kecoughtan SC A 64,327 Governor’s Green SC A 100,000 The Shops at Hampton Harbor G 54,645 Home Depot H 130,000 James York Plaza B 137,708 NEWMARKET/MAIN (TO INCLUDE HAMPTON) Kingsgate Green B 138,348 4113 W Mercury Blvd H 49,770 Lowes H 163,000 4205 W Mercury Blvd H 28,080 Marketplace Shoppes G 32,026 Brentwood SC A 53,600

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