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First Quarter | 2013

MacKenzie Market Report

Submarket: Retail

Retail Submarket Map
Quarter Highlights
  • General Growth Properties has started a 70,000 sf renovation at the Mall in Columbia which will continue until mid-2014. The project will add 40,000 sf to the mall and refresh 30,000 sf of existing space. Once complete GGP plans to add new shops and restaurants, as well as a revamped entrance. One major change includes the demolition of the large L.L. Bean store along with some parking spaces to make way for a new, outdoor-based public gathering and retail space creating an open-air shopping mall that has the look and feel of an old-fashioned "Main Street”.
  • Nando’s Peri-Peri, La Tagliatella and On the Border Mexican Grill & Cantina will be the first three restaurants of eight in an $85,000,000 planned entertainment complex in downtownTowson. The complex, previously known as Towson Circle III, will center on a 90,000 sf Cinemark Theatres featuring 15 screens and 3,400 seats. Nando’s Peri-Peri, a Portuguese-African fusion restaurant, is also opening a location at 421 W. Baltimore St. in downtown’s westside.
  • In January 2013 a $70,000,000 redevelopment of the Rotunda office and shopping center in Hampden was approved. The Rotunda’s owner wants to add 382 apartment and townhouse units and 140,000 sf of retail space in two separate buildings on what is now the Rotunda’s rear parking lot.
  • World of Beer is taking 3,400 square feet in the recently completed McHenry Row shopping center off Fort Avenue and Key Highway in Locust Point. Specializing in uncommon breweries, the bar will carry anywhere from 550 to 600 brews ranging from $6.00 to $10.00 per bottle. The mixed-use development project is anchored by Harris Teeter and is the first location for World of Beer in Maryland.

Market Outlook

By W. Christopher "Chris" Walsh, Jr., MacKenzie Retail

Despite the high anxiety about the US economy, a 2.5 percent growth in retail sales has been reported for the 1st quarter of 2013. As we started the New Year, concerns continued to grow about employment, income growth, high gasoline prices, and the pending “fiscal cliff “ of tax increases and federal spending cuts. The silver lining lies amongst US retailers for exceeding the forecast by posting a sales jump of 1.1 percent this February, the largest gain in five (5) months.

Retail sales were supported by pent-up demand for automobiles and the gains in sales of sporting goods, electronics, appliances and building materials. Ford Motor Company and General Motors saw 9.3 percent and 7.2 percent increases, respectively, in sales from a year ago. Costco, the largest US warehouse club chain reported a 39 percent gain. Retailers took on almost 24,000 new jobs this quarter, which certainly affected the increase in spending within certain consumer expenditure categories. In contrast, indicators such as Walmart, the world’s largest retailer, and Target, the second largest discount chain, are off to a very slow start, given the fact that their core consumer has been largely affected by the payroll tax increase and rise in the price of gasoline.

Consumer confidence continues to support the overall explosion of development in South East Baltimore. The Inner Harbor, Fells Point, Harbor East and Canton Crossing areas continue to see increases in housing and retail activity. There is no shortage of great places to live, shop, take in live entertainment and experience casual and fine dining. With one-half billion dollars’ worth of construction nearly complete, Baltimore has become a showcase for mixed-use urban redevelopment. Plans are in the works as we shift to sidewalk development as evidenced by Remington’s 25th Street Station project which saw progress this quarter as the Maryland Court of Appeals struck down the community’s opposition to the City’s granting of zoning approval.

With at least 20 percent of Maryland’s economic output dependent on Federal spending, it remains to be seen what overall effect the sequestering will have on consumer spending. How will families plan to use their “Income Tax Refunds?” Strengthen their savings, pay down their debt or spend their refund on vacations and everyday expenses? What’s on the horizon? Smart phones get smarter; mobile commerce via phone or tablet will try to integrate with offline shopping; retailers will exploit social media to increase brand awareness; rental rates will remain flat, and capital markets will continue to fuel property sales.

Notable Transactions
Lease

Location Submarket Tenant Amount Leased SF
238 Putty Hill Avenue Towson Weis Supermarket 56,000 sf
5506-5520 Baltimore National Pike Baltimore County West Confidential 15,700 sf
4700 Belair Road Baltimore City Collision Center 15,700 sf

Sale

Location Submarket Price PSF Size
Baltimore Inner Harbor, 201 East Pratt Street City Center $98,500,000 $713.77 138,000 sf
Columbia Shopping Center Columbia $21,800,000 $217.17 100,380 sf
6581 Eastern Avenue Baltimore City $3,800,000 $447.06 8,500 sf

(r) Renewal

 

* All information furnished regarding property for sale, rent, exchange or financing is from sources deemed reliable. No representation is made as to the accuracy thereof and all such information is submitted subject to errors, omissions, or changes in conditions, prior sale, lease or withdrawal without notice. All information should be verified to the satisfaction of the person relying thereon. Portions of the base statistics are from CoStar Property data. Data as of 3/2103.