retail trends reportGreater Columbus reGion

www.colliers.com/columbus

Columbus reGion overviewColumbus’ retail market saw its fourth consecutive quarter of positive absorption with 49,058 square feet, continuing the trend of eleven of the last twelve quarters that have seen positive absorption. Vacancy now stands at 10 percent. the largest leases signed this quarter were dick’s sporting Goods and Best Buy renewing their 49,447 square foot lease and 30,000 square foot lease, respectively, at parkway Centre north. lucky’s Fresh Market also entered the Columbus market with a 24,000 square foot grocery in Clintonville.

ForeCasts and reFleCtions

• the retail market continues to slowly grow in Columbus. the boom in the development of new apartment buildings continues all across the city bringing with it new retail space. the construction outlook remains high as over 170,000 square feet of new retail space continues to be built.

• Giant eagle draws nearer to beginning construction on its two new stores in the Columbus market. an 84,000 square foot Giant eagle is being built at the northwest corner of Cemetery road and Britton parkway as well as a 92,000 square foot grocer at the new Grandview Yard development.

• Cabela’s completed construction of its 80,000 square foot retail store just north of polaris Fashion place. it opened to the public in early March.

• the largest sale transactions this quarter were the 220,079 square foot Westerville plaza and the 160,702 square foot arlington square as part of a portfolio sale between Kimco and Garrison investment Group. also of note was the 188,287 square foot Brice outlet Mall sold for $950,000 to 5780 scarborough llC.

market indiCators

rental rates ConverGe, biG box dipsasking rates

Q1

2013

Q2

2013*

vaCanCy

net absorption

ConstruCtion

rental rates — *projected change to following quarter

Q1 2013 | Retail

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

$16.00

Q108

Q208

Q308

Q408

Q109

Q209

Q309

Q409

Q110

Q210

Q310

Q410

Q111

Q211

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Anchored Strip Neighborhood Community Big Box0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

(700,000)

(500,000)

(300,000)

(100,000)

100,000

300,000

500,000

700,000

900,000

Q208

Q308

Q408

Q109

Q209

Q309

Q409

Q110

Q210

Q310

Q410

Q111

Q211

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Vaca

ncy

Rate

Com

plet

ions

and

Abs

orpt

ions

Completions Absorption Vacancy Rate

vaCanCy rate over Completions and absorptionsrental rates

the average asking rental rates for Big Box has dipped to $5.92, from its previous high of $6.51. anchored strip and neighborhood centers rates have met around the $11.50 mark. the region posted positive results during the fourth quarter of 2012, with vacancy rates decreasing to 10.0 percent from 10.1 percent.

Construction Fuels Retail Market in 2013

Fundamentalsthree sources are helpful when gauging retail consumer activity: the consumer confidence index, a weekly poll conducted by Gallup, and the Beige Book produced by the Federal reserve Bank semi-quarterly.

the consumer confidence index is produced by the Conference Board and is a survey of how confident consumers are in the current economic conditions by their spending and saving habits. the Conference Board Consumer Confidence index, which had improved in February, declined in March. the index now stands at 59.7, down from 68 in February. the present situation index decreased to 57.9 from 61.4 and the expectations index declined to 60.9 from 72.4 last month. possible explanation for the decrease in confidence is the recent sequester that has likely created uncertainty regarding the economic outlook.

Gallup’s consumer spending measure tracks the average dollar amount americans report spending or charging on a daily basis, not counting the purchase of a home, motor vehicle, or normal household bills. over the three month period between January and March, the 14-day rolling average increased from $83 to $84 with a high of $96 in

the second week of March. Gallup’s consumer spending measure is running at a higher level in early 2013 than has been the case over the past several years, but remains well below the $106 of early 2008.

the Cleveland Federal reserve reports on consumer spending twice a quarter in the Beige Book, and data comes from qualitative surveys of retailers in the fourth district, which includes Columbus. While many retailers reported strong sales, they noted they were still below year-ago levels. Most retailers, however, anticipate that transactions in the upcoming months will be above year-ago levels, in the low to mid-single digits. However, there is concern about the impact of rising gasoline prices on spending by lower-income households. increased volume was seen in apparel and firearms and vendor and shelf prices held steady. inventories rose slightly, but they were described as manageable. Capital expenditures were on plan for the fiscal year and no significant hiring is anticipated, except for staffing new stores. sales of new motor vehicles grew at a robust pace during January when compared to this time last year. dealers credited milder-than-normal January weather and pent-up demand for the sales boost.

the Columbus retail market includes 11 suburban submarkets and the Central Business district. this includes a total inventory of 60 million square feet of space with only 1 million of that space in the CBd.

update new supply, absorption and vacancy rates

sales aCtivity

property address sales date sale priCe size sF Grantor Grantee priCe / sF type submarket

87-133 Huber Village Blvd 1/7/2013 $2,500,000 220,079 Kimco Garrison investment Group $11.36 anchored strip northeast

5780 scarborough Blvd 1/10/2013 $950,000 188,287 Brice Mall investments llC 5790 scarborough llC $5.05 neighborhood Center southeast

1821-1851 Henderson road 1/7/2013 $12,250,000 160,702 Kimco Garrison investment Group $76.23 neighborhood Center northwest

1161 Columbus pike 1/31/2013 $2,600,000 84,247 delaware land Co d & d property Group llC $30.86 neighborhood Center delaware

1800 Hilliard rome road 2/8/2013 $15,403,123 54,261 p &p taylorsville llC realty income Corp $283.87 Freestanding northwest

4044-4052 Morse road 2/27/2013 $3,475,000 19,827 Casto northland 3 llC $175.27 neighborhood Center northeast

2582-2682 Hilliard rome

road

1/4/2013 $2,075,000 19,200 Hilliard rome square llC rainbow development Corp $108.07 Conv/strip Ctr northeast

2900 Bethel road 3/26/2013 $519,000 16,053 adam’s investment llC Madden’s pointe llC $32.33 Freestanding northeast

1130 n Memorial drive 2/4/2013 $672,500 15,500 dCr real estate iV llC energy Contractors llC $43.39 Freestanding Fairfield

Delaware County

Pickaway County

Union County

Madison County

Licking County

Fairfield County

North / Northeast

SoutheastSouthwest

Northwest

CBD

lease aCtiVitY

property address lease sF total size lessee askinG priCe (nnn) type submarket

1680-1760 stringtown road 49,447 400,000 dick's sporting Goods (renewal) $23.00 power Center southwest

1680-1760 stringtown road 30,000 400,000 Best Buy (renewal) $23.00 power Center southwest

2800 north High street 24,000 33,836 lucky's Fresh Market $13.00 Convenience/strip northeast

1680-1760 stringtown road 21,835 400,000 Michael's (renewal) $23.00 power Center southwest

1710-1850 Columbus pike 10,100 122,607 sears Hometown $10.00 power Center delaware

548-658 east Broad street 10,000 137,000 dollar tree $13.00 Convenience/strip licking

2605-2777 northland plaza drive 6,300 205,553 st. James Christian Center  - anchored strip Center northeast

338-770 Coleman's Crossing Blvd 6,075 461,330 total renal Care, inc. $11.50 power Center Union

2605-2777 northland plaza drive 5,600 205,553 Fiesta Jalisco  - anchored strip Center northeast

p. 2 | Colliers international

ReseaRch & foRecast RepoRt | Q1 2013 | Retail | GReateR Columbus ReGion

employment

Columbus was the 2nd ranked city in the Country in terms of job creation for the 1st quarter. Houston was the only city who outpaced Columbus. At the end of 2008, Ohio was 80 basis points higher than the national unemployment average. As we sit today, we are 110 basis points lower than the national average.

update market Comparisons

retail market

net absorption Construction asking rental rates

submarket total sF vacant sF vacancy % Current Quarter year-to-date Current Completions neighborhood power

CBd 1,102,826 51,399 4.7% - - 71,735 0 $12.00 -

FairField 3,960,854 388,911 9.8% 7,430 7,430 0 $14.86 $13.00

liCKinG 3,960,108 300,155 7.6% (8,260) (8,260) 0 $13.00 $15.90

Madison 214,406 22,892 10.7% (4,120) (4,120) 0 - -

nortH delaWare 2,190,769 129,820 5.9% 10,100 10,100 0 $25.00 $13.00

nortHeast 16,908,822 860,935 5.1% 25,881 25,881 7,007 80,000 $13.97 $14.15

nortHWest 13,191,214 1,195,122 9.1% 5,662 5,662 67,500 0 $10.67 $15.11

piCKaWaY 656,177 6,150 0.9% - - 0 $10.50 -

soUtHeast 10,036,965 1,485,253 14.8% (2,531) (2,531) 0 $8.95 $11.39

soUtHWest 7,092,147 1,555,327 21.9% (8,179) (8,179) 10,739 0 $10.14 $7.70

Union 1,161,503 56,650 4.9% 23,075 23,075 0 - $16.00

Grand total 60,499,791 6,052,614 10.0% 49,058 49,058 172,621 80,000 $11.45 $12.27

net absorption Construction asking rental rates

property type total sF vacant sF vacancy % Current Quarter year-to-date Current Completions (nnn)anCHored strip Center 11,984,834 1,342,335 11.2% 67,443 67,443 22,647 - $11.54

BiG Box 7,635,821 814,447 10.7% (1,426) (1,426) 10,739 80,000 $5.92

CoMMUnitY 4,140,660 615,184 14.9% (38,085) (38,085) - $10.46

ConV/strip Ctr 3,553,229 290,295 8.2% 11,085 11,085 - $12.01

FreestandinG 4,019,270 275,114 6.8% 566 566 71,735 - $11.17

neiGHBorHood 5,469,160 759,123 13.9% (7,585) (7,585) 67,500 - $11.45

poWer 15,949,195 1,195,846 7.5% 17,060 17,060 - $12.35

reGional Ctr 663,236 136,200 20.5% - - - $10.22

strip 133,012 33,320 25.1% - - - $12.35

sUpr reG Ctr 6,431,125 590,750 9.2% - - - $12.03

UrBan retail 520,249 - 0.0% - - - -

totals 60,499,791 6,052,614 10.0% 49,058 49,058 172,621 80,000 $11.18

Quarterly Comparison and totals

net absorption Construction asking rental rates

Quarter, year total sF vacant sF vacancy % Current Quarter year-to-date Current Completions neighborhood powerQ4, 2012 60,494,500 6,098,072 10.1 108,252 150,955 336,875 33,789 $11.40 $12.21

Q3, 2012 60,494,500 6,198,833 10.2 41,157 39,054 231,000 180,000 $11.82 $11.68

Q2, 2012 60,288,465 6,522,146 10.8 110,275 (4,478) 352,789 - $12.35 $12.03

Q1, 2012 60,288,465 6,632,421 11.0 (112,378) (112,378) 280,000 - $10.80 $11.07

ReseaRch & foRecast RepoRt | Q1 2013 | Retail | GReateR Columbus ReGion

Colliers international | p. 3

Cbdthe Central Business district (CBd) absorption remains flat, but is sure to increase in the coming quarters as the multi-family construction projects begin and are completed, opening the way for new retail opportunities. Construction continues on nearly 1,500 new units: Flats on Vine ii (120), the Goodale (174), liberty place phase ii (200), Columbus Commons (300), Harrison park (108), aston place(59), liberty Crossing ii (200) and neighborhood launch apartments (260).

norththe north submarkets include northwest, northeast and north delaware. the northwest submarket saw 5,662 square feet of positive absorption decreasing the vacancy rate to 6.7 percent. Construction on the 80,000 square foot Cabela’s was completed and the store opened to the public in early March. star lanes at polaris Fashion place finished their renovation for a 35,000 square foot bowling alley and event center that recently opened. Construction continues on the lane, a 67,500 square foot mixed-use development that will offer street-level retail space, second floor office space and more than 100 luxury apartments.

the northeast submarket led all markets with 25,881 square feet of positive absorption in large part to lucky’s Farmers Market moving into a 24,000 square foot space at 2800 n. High street. the positive absorption was intact even with the departure of a 36,487 square foot Marshall’s at northern lights shopping Center.

north delaware saw 10,100 square feet of positive absorption with sears Hometown being the only new tenant moving into the space at delaware Community plaza.

souththe southern submarkets are southeast and southwest. Both saw negative absorption for the first quarter after both recorded positive absorption to close out 2012. the southwest submarket saw 8,170 square feet of negative absorption but does have 10,739 square feet under construction as part of the larger Grandview Yard development site.

the southeast submarket saw a modest 2,532 square feet of negative absorption. However, a notable transaction took place in the Brice outlet Mall selling for $950,000.

eastthe eastern submarkets are licking and Fairfield counties. licking County saw 8,260 square feet of negative absorption, however, did see a lease signed by dollar tree for 10,000 square feet at Hazelwood plaza in pataskala. a notable transaction was completed at 1130 n. Memorial drive in lancaster selling for $672,500. recent news also indicated that Meijer plans to close its newark store in May or June.

westthe western submarkets include Union and Madison counties. Union County saw positive absorption of 23,075 square feet which is up significantly from the previous quarter. Coleman’s Crossing saw the majority of the changes including 6,075 square feet of space leased to daVita total renal Care and 4,500 square feet leased to tres potrillos Mexican restaurant. Madison County, however, saw negative absorption of 4,120 square feet for the first quarter.

market aCtivityMarket activity Volume is the sum of the absolute value of each absorption change in the market and it tells us a little more about what exactly happened to the market behind the absorption number. the Market activity Volume was more than 353,688 square feet. this is slightly below the average level of migration (444,548 square feet), meaning that retailers generally held steady with few closings.

the typical tenants seen most frequently entering the market are restaurants and food operators by a significant percentage. Fast food or fast casual restaurants are being aggressive. other types in the market include discount oriented tenants, auto parts, frozen yogurt, cell phone providers, and fitness concepts. there are currently 46 tenants looking for space between (1,000 and 10,000 square feet), and ten tenants looking for space 10,000 square feet or more.

tenants are finding operating expenses and real estate taxes continue to escalate, and ti allowance to be the biggest hurdles. With the retail leasing environment so competitive, landlords are seeing concessions to tenants as the biggest hurdle. Class a opportunities are especially competitive. another challenge is the gap in asking rates and rates sought for lease opportunities in Class B and C shopping centers. landlords are having difficultly finding good credit tenants in Class B and C centers.

Greater Columbus reGion

richard B. schuen sior CCiMCeo | principal | Columbustwo Miranova placesuite 900Columbus, ohio, 43215tel +1 614 410 5612

leslie Hobbsdirector of Marketing ohiotwo Miranova placesuite 900Columbus, ohio, 43215tel +1 614 410 5640

Jonathan schuenresearch analysttwo Miranova placesuite 900Columbus, ohio, 43215tel +1 614 437 4495

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this document/email has been prepared by Colliers international for advertising purposes. Colliers international statistics and data are audited annually and may result in revisions to previously reported quarterly and final year-end figures. sources include Columbus dispatch, Business First, xceligent, Costar, Chain store age, Wall street Journal, Bureau of labor statistics, Bureau of economic analysis, Gallup and the Cleveland Federal reserve.

www.colliers.com/columbus

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ReseaRch & foRecast RepoRt | Q1 2013 | Retail | GReateR Columbus ReGion