Thursday, June 21, 2012

Greater Hartford, CT KeyPoint Report Preview

The KeyPoint Report on retail real estate in Greater Hartford, Connecticut will be available soon at Below are highlights from the findings in this year’s report:

Total retail space in Greater Hartford included 37.4 million square feet at the end of the 2012 study period, a nominal decrease from the 37.5 million square feet reported last year. Some spaces converted to non-retail uses, contributing to the negligible decline in inventory this year. The most salient point regarding total inventory in the region is that there was virtually no net change. New retail construction moved at a snail’s pace as developers remained on the sideline. Existing conditions in the market may be playing a large part in their decision.

Following an increasing trend in vacancy rates, Greater Hartford experienced a turnaround in 2011 when the rate dropped from 13.1% to 11.8%. But that turnaround was short-lived: 2012 saw a minor bump to 12.0%, signaling that the region isn’t out of the woods yet.

Much of the increase in vacancy stems from mom-and-pop closings in the City of Hartford, which experienced a spike in unoccupied space during the study period of more than 100,000 square feet, more than twice that of any other submarket in the Greater Hartford region. As a result, the vacancy rate in the City increased from 15.0% to 18.5%. This follows a year when the city lowered its vacancy rate from 19.3% to 15.0%, which reflected the most improvement in the region. Of the 96 new vacancies in the City, only eight are more than 5,000 square feet, emphasizing the fact that smaller independent retailers are struggling to maintain viability, particularly in urban markets where unemployment runs high and discretionary dollars are at a premium.

To further underscore the fact that small stores are the greatest concern within Greater Hartford, the vacancy rates increased in only three store size categories, the ones under 10,000 square feet. The highest vacancy rate,18.9%, was recorded by the smallest tenants, those under 2,500 square feet, up from 17.0% the prior year. Tenants in the under 2,500 category represent nearly one-fifth of the retail inventory in Greater Hartford, the largest segment within the region. The other small store categories experiencing vacancy rate increases were the 2,500-4,999 square foot segment, increasing from 12.8% to 14.5%, and the 5,000-9,999 square foot category, increasing from 14.2% to 14.9%.

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 Greater Hartford, Connecticut, with a focus on changes between June 1, 2010 and June 1, 2011, a 12-month span. This report provides an analysis of changes in the region's retail activity and examines supply, vacancy and absorption, retailer activity, and market composition by store size and retail categories. The Greater Hartford market includes 26 cities and towns and represents more than 835 square miles and approximately 801,500 persons, equating to 22.2% of the Connecticut total population. The KeyPoint Report for Eastern Massachusetts/Greater Boston has been released. The KeyPoint Report for Southern New Hampshire will be released this month.

In today's retail real estate community, unlocking value means providing the best possible information. Reliable market information is the essence of shopping center success and retail profitability. KeyPoint Partners provides customized research 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 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.

Company News

New Employee: Mahendran Subramaniam joined the Boston, MA Office as an Internal Auditor of Parking. Mahendran had been with Priority Parking in Brookline, MA....New Business: New assignments for the Leasing Team include: Norfolk Town Commons in the center of Norfolk, MA - a new 2,796 s/f free-standing building is available at the property, which is adjacent to a 75,000 s/f shopping center under construction at the site. VP of Leasing Don Mace is handling the assignment; Shaw’s Plaza, Pawtucket, RI. Leasing Associates Michael Branton and David Hough will handle leasing; and Beaver Brook, a mixed-use property in Dracut, MA which KPP will also manage.

Industry News: National

US chain store comp retail sales for May rose by 3.6% year-over-year as measured by the ICSC's tally of 22 major retail chains. May sales were “in line with ICSC's expectation, but continued to be mixed by retailer with those strong performers generally continuing so, and those weak also continuing to be so”. Among merchandise categories, Discount Stores led with a 5.3% gain, followed by Luxury Stores with a rise of 5.0% and Apparel with a rise of 4.6%. Wholesale Clubs were up 4.0%, Department Stores gained 1.7%, and Drug Stores dropped by 3.8%. Among individual retailers, Gap gained 2.0%, and Limited rose 6.0%; Costco was up 4.0%. Nordstrom was up 5.3% and Saks gained 4.0%; Target grew by 4.4% and TJX by 8.0%. Macy’s gained 4.2%, but Kohl’s fell by 4.2%; Rite Aid was up 1.1%, and Walgreens fell 5.8%. See retail sales results on Page 4...PayPal has made deals with Toys R Us, J.C. Penney, Office Depot, American Eagle Outfitters, Abercrombie & Fitch, Rooms To Go, Jos. A. Bank, Aeropostale, Foot Locker, Nine West, Jamba Juice, Guitar Center, TigerDirect, Advance Auto Parts and Barnes & Noble to accept PayPal payments in stores. PayPal has signed agreements with VeriFone Systems and Equinox Payments to get its payment technology onto their networks of checkout terminals. PayPal signed a similar deal with terminal provider Ingenico this year. These agreements give PayPal potential access to almost 40 million payment terminals already installed in stores worldwide.

Industry News: Accelerating

Ann Inc. expects to open 65 stores this year, but plans to downsize Ann Taylor stores and close 30 locations. It expects to have approximately 985 stores at fiscal year-end. At the end of the quarter, Ann had 947 stores…Subway has set 2012 development goals of 1,200 North American locations. Since January, Subway has opened nearly 900 new stores in 58 countries, 42 US states and 7 Canadian provinces…Dippin’ Dots, LLC, a newly-formed company, has finalized its acquisition of Dippin’ Dots, Inc, the manufacturer of flash-frozen ice cream. Presently, there are more than 1,600 Dippin’ Dots locations worldwide. By the close of 2012, the company plans to raise that number to 2,000...7-Eleven Inc. built, acquired or transitioned to the 7-Eleven brand 600 stores during 2011. 7-Eleven's 2012 goal is to exceed that number by adding at least 630 new stores by year-end. Globally, there are 46,400 7-Eleven stores in 16 countries. A new 7-Eleven store opens somewhere in the world approximately every two hours…Benihana Inc. will be acquired by Angelo, Gordon & Co.'s Private Equity Group for $296 Million. Benihana has 95 restaurants nationwide, including 62 Benihana restaurants, eight Haru sushi restaurants and 25 RA Sushi restaurants, and 16 franchised Benihana restaurants…Jack in the Box has sold 37 company-owned locations to franchisees in the Seattle area in two deals that generated about $20 million. Jack in the Box Inc. has been moving toward becoming an 80% franchised brand. At the end of fiscal 2011, Jack in the Box was 72% franchised. The 37 units are part of the projected 80 to 120 restaurants Jack in the Box expects to sell in fiscal 2012. The Jack in the Box chain includes more than 2,200 restaurants in 20 states. Jack in the Box Inc. also operates and franchises Qdoba Mexican Grill, which has more than 600 locations in 42 states...Costco Wholesale Corp.plans to open six additional warehouse clubs before the end of fiscal 2012…Tiffany & Co. is on track to add 24 stores this year. Four of these stores were opened in the first quarter...Ashley Furniture will open 50 sleep shops under the banner of Zzz's By Ashley this year...Fresh Market expects to open 14 to 16 new stores, as well as relocate one store and remodel two...Dollar General will open 625 stores, including 40 Dollar General Market stores, in 2012, and will remodel or relocate approximately 550 stores…Starbucks entered into an agreement to acquire Bay Bread and its La Boulange bakery brand. La Boulange, which also serves salads and sandwiches, has 19 Bay Area locations. Starbucks will serve the bakery’s pastries, breads and sandwiches in US stores under the La Boulange name, and will expand the company’s footprint in key US cities…Jersey Mike’s Subs will open 15 stores in the Washington, DC area before the end of the year, as part of a larger strategy to add up to 100 locations to its portfolio of 500 stores nationwide this year. There are currently 12 Jersey Mike’s locations in the Washington area. The company is aiming for 140 locations in the Baltimore-Washington area in seven years...Dick’s Sporting Goods will debut a specialty running store, True Runner, with the first location opening in Pittsburgh. The concept will cater to running enthusiasts with footwear, apparel and accessories, and is slated to open in summer 2012...Private equity firm Thomas H. Lee Partners will acquire a majority stake in Party City Holdings Inc. in a $2.69 billion deal. Party City operates 1,200 US/Canada stores...Starbucks’ Seattle’s Best division signed a deal with Coinstar to sell coffee in thousands of US kiosks at grocers, drugstores and mass-market retailers. The kiosks, which grind and brew beans on demand, will serve brewed coffee, mochas and vanilla lattes. Starbucks expects to sell about 10,000 cups of coffee a year from each kiosk...Gymboree will open 105 stores in fiscal 2012, including 80 Crazy 8 locations.

Industry News: Decelerating

American Eagle Outfitters is exploring a full or partial sale of children’s brand 77kids, which includes 22 stores and an online business...The Wet Seal Inc. is closing as many as 20 Arden B stores, and will open fewer Wet Seal stores. It plans to open 20 to 22 Wet Seal stores this fiscal year, rather than the previously planned 25 to 30 stores, and expects to close 15 to 20 Arden B locations. The company had 469 Wet Seal stores and 84 Arden B stores at the end of the period...Avenue Stores will close 96 stores over the next three months. The company will continue to operate more than 300 stores in 34 states, and offer online shopping...Men’s Wearhouse remains on track to close as many as 47 Men's Wearhouse and Tux stores and 2 K&G locations in the current fiscal year…Supervalu will cut as many as 2,500 positions at its Albertsons unit. The reductions should be completed July 1.

Industry News: New England

Avery Provision Co. and Sip Wine Bar & Kitchen will open next month at the Ritz Carlton Residences in Boston’s Downtown Crossing in the former Bina Osteria and Bina Alimentari spaces. The restaurant and bar are the latest additions to the Legendary Restaurant Group, which runs Scollay Square, Tavern on the Water, Max & Dylans, Papagayo, Andiamo, and Creative Palate CateringNational Amusements will open a 6-screen Cinema de Lux complex at the Chestnut Hill Shopping Center in Newton, MA. in March, at the 120,000 s/f former Macy’s site...New owner RD Management will fill the 133,000 s/f section of the Meadow Brook Center shopping plaza in Lowell, MA with new tenants Eblens, Dots, The Children's Place, Best Fitness, Five Below, GNC, Hair Cuttery and Sleepy's. The center will receive a new fa├žade and column treatments…Hot Harry’s Fresh Burritos, a fast-casual Mexican restaurant and catering franchise, will open its 9th location, this one in Boston. The company’s headquarters are in Pittsfield, MA where the first Hot Harry’s opened in 2004...Talbots Inc. failed to reach an agreement to be acquired by Sycamore Partners for $215 million within its exclusivity period. Talbots had more than 500 stores in the US and Canada at the end of fiscal 2011...Shreve, Crump & Low moved its flagship Boston store to 39 Newbury St. after operating at 440 Boylston St. for 7 years. Dubbed America's oldest jeweler, Shreve has operated in Boston since the late 18th century...Bertucci’s has closed at the Atrium Mall, Chestnut Hill, MA bringing the occupancy rate to under 20%...Tanger Factory Outlet Centers Inc. will build, manage and co-own the 320,000 s/f, 85-store mall proposed at Foxwoods Resort Casino, to be called the Tanger Outlets at Foxwoods…Tractor Supply Company has received approval from the Rochester, NH planning board to start building their new retail store as early as this fall, to be open this spring. The 19,000 s/f store, with a 15,000 s/f outdoor display area, will have access through Two Rod Road…Trader Joe’s grocery store will open in Nashua on July 16. The 9,850 s/f store, is only the second in northern New England. The grand opening day for the Trader Joe's store which will occupy 11,700 s/f at the former Pet Quarters location at The Crossings at Fox Run, Newington, NH has been set for Friday, Sept. 7. Nationwide, the company has more than 350 stores, including 17 in Massachusetts, and one in Maine...The Bulfinch Cos. is buying the Atrium Mall from Simon Property Group for $50 million in a deal expected to close this month. The Mall will likely be converted into medical offices. The 205,000 s/f mall has been on the market since January. Simon has owned a 49.1% stake in the Atrium Mall since 1999, when it acquired it as part of a purchase of 14 malls from New England Development...Self-serve frozen yogurt chain Orange Leaf will open a new location in the former Nikki’s Liquor’s space at 1726 Mass. Ave. in Lexington Center in the next few months.

May Retail Sales Report

Notes: figures gathered from individual company websites, press releases, and Federal filings.  Not all companies report all figures; results not reported will be marked “n/r”. Quarterly results will be updated when available; quarterly figures are shown in italics. Figures from companies not calculated to one decimal point automatically received an ending digit of 0. *Includes Hannaford Bros., Food Lion, Bloom, Bottom Dollar, Harveys, Kash n' Karry and Sweetbay

Commerce Department Monthly Sales

US retail sales declined in May, the Commerce Department said. Excluding gas station sales, retail spending rose just 0.1% in May. And retail sales dropped 0.1% in April after a revision by the government.

Source: U.S. Department of Commerce -

Treasury Yields

Consumer Confidence Index

The Conference Board Consumer Confidence Index®, which had declined slightly in April, fell further in May. The Index now stands at 64.9 (1985=100), down from 68.7 in April. The Expectations Index declined to 77.6 from 80.4, while the Present Situation Index decreased to 45.9 from 51.2 last month.

Source: The Conference Board -

Purchasing Managers Index

Manufacturing continued its growth in May as the PMI registered 53.5 percent, a decrease of 1.3 percentage points when compared to April's reading of 54.8 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

Source: Institute for Supply Management - Manufacturing Report on Business -