Monday, May 21, 2012

Southern New Hampshire KeyPoint Report Preview

The KeyPoint Report on retail real estate in Southern New Hampshire will be available soon at Below are highlights from the findings in this year’s report:

Total retail supply in Southern New Hampshire showed a modest gain to 28.9 million square feet, increasing by 77,000 square feet, or 0.3%, from last year. After reporting a rebound in the vacancy trend last year, when the amount of unoccupied space was reduced by a significant 15% and the vacancy rate decreased from 11.4% to 9.5%, the region reverted to the ways of the recent past, with the vacancy rate increasing to 10.6%.

With limited new construction and about 269,000 square feet of additional vacancy compared to last year, the region experienced approximately 195,000 square feet of negative absorption. While the 2012 absorption rate is clearly disappointing, the cause is mainly three big box closings: Lowe’s, Sears Essentials, and Building 19. These vacant units combine for approximately 308,000 square feet.

Big box vacancies such as those noted above were not the only factor contributing to a rise in vacancy. Only mid-range store size categories between 10,000 square feet and 49,999 square feet showed improvement. The 10,000-24,999 square foot range lowered its vacancy rate from 10.7% to 8.6% while the 25,000-49,000 square foot segment improved from 9.9% to 9.1%. The vacancy rate in all other categories moved significantly higher, with the exception being the two occupied stores that make up the 200,000 square foot category.

The larger size ranges were affected by the big box closings noted earlier, i.e. Lowes, Sears Essentials, and Building 19. In the 5,000-9,999 square foot category, the liquidation of Daddy’s Junky Music had the largest impact, closing two locations in this segment and three overall in the region. Independent mom and pops continue to be primarily responsible for much of the new vacancy in the under 5,000 square foot categories.

With respect to total retail supply, the top ten cities and towns remain the same as last year's results The "Big Three" within our regional coverage include Nashua, Manchester, and Salem, in that order, which contain 54% of the region’s retail space.

These regional retail hubs clearly distance themselves from other Southern New Hampshire towns, encompassing 6.2 million, 5.3 million, and 3.9 million square feet of retail space, respectively. Fourth place Bedford finished the year with 1.6 million square feet of retail space, nominally ahead of Seabrook, which is ranked fifth with1.5 million square feet.

Among towns with at least 500,000 square feet of retail space in Southern New Hampshire, Bedford was the only town with a vacancy rate below 5%, coming in at 4.5%. Amherst and Salem followed at 5.5% and 5.6%, respectively. Manchester and Merrimack tied for the highest vacancy rate at 16.7%, followed by Plaistow at 16.3%. Only five towns had vacancy above 10%, although there were 19 towns above that level when smaller retail communities are included.

The full report contains much more detailed information on these categories and more. Stay tuned!
Bob Sheehan, Vice President of Research

The KeyPoint Report examining the retail real estate marketplace for Southern New Hampshire focuses on the 11-month period beginning June 1, 2011 and ending April 30, 2012. The report examines supply, vacancy and absorption, retailer activity, and market composition by store size and retail categories. The studied market includes 39 cities and towns representing more than 835 square miles and approximately 540,500 permanent residents (41.0% of the state population). The KeyPoint Report for Eastern Massachusetts/Greater Boston will be released this month. The KeyPoint Report for Greater Hartford, Connecticut will follow soon.

In today's retail real estate community, unlocking value means providing the best possible information. Detailed, reliable market information is the essence of shopping center success and retail store profitability. KeyPoint Partners provides customized research consulting services ranging from preliminary desktop assessments to comprehensive evaluations which integrate field investigation and quantitative analysis for a variety of retail location and store types. The heart of our research superiority is GRIID™, which tracks all retail activity including supply, vacancy and occupancy, population shifts, demographics, and marketplace trends for close to 260 million square feet of retail properties and nearly 60,000 retailers and tenants in key markets in our territory. We use this information in mapping and comparative analysis applications.

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