Monday, August 18, 2014

Preview: KeyPoint Report for Southern New Hampshire

While the 2014 KeyPoint Report for Southern New Hampshire, based on our proprietary  GRIID™ retail database, is in production, we will again share some of the early results:

Vacancy Rate: The region continued its upward trend in retail inventory, reaching a level of 30.0 million square feet by the end of the year. This represents a gain of 283,500 square feet, or 1.0%, thanks in large part to Seabrook Commons, DDR’s first ground up development in New England. This 380,000-square-foot power center saw its initial tenant openings in June, highlighted by a new 189,567 square foot Walmart Supercenter (a relocation of its traditional format store in Seabrook).

There was a bump in the road, however: a sizeable increase in the vacancy rate during the year from 9.6% to 10.7%. Before you get too discouraged, there is a reasonable explanation for this increase. Stop & Shop’s decision to close all six stores it operated in Southern New Hampshire, creating 411,800 square feet of retail vacancy, reflects the lion’s share of incremental vacancy. While one of these locations was filled by Hannaford, the closing of two Shaw’s stores and a single Building 19 unit exacerbated the vacancy issue in the region. Hypothetically removing this vacant space from the region actually lowers the vacancy rate in Southern New Hampshire to 9.1%. Nevertheless, the reality is that this vacancy does exist and may present a lingering concern in the region for a considerable period. At the same time, given the toll that these vacancies have had on overall occupancy rates, the negative absorption rate in Southern New Hampshire of only 91,400 square feet should be somewhat encouraging.

Size Classifications: In assessing vacancy rates by store size, it was encouraging to see that other than the 50,000-99,999 square foot category, only one other size range experienced an increase vacancy. In fact, among the eight size breakdowns, four showed increased occupancy while two others remained stable. Stores between 5,000 and 24,999 square feet experienced the most improvement, with the vacancy rate of the 5,000-9,999 square foot segment declining by 140 basis points and a nearly 200 basis point decline in the 10,000-24,999 square foot range. The new Seabrook Commons development had much to do with this improvement. However, the 50,000-99,999 square foot category was clobbered by the aforementioned big box store closings, increasing the vacancy rate in that category from 11.4% to 13.3%.

Regional Submarket Rankings: There has been no change in the top ten largest regional markets, although Seabrook jumped ahead of Bedford during the year, also due to the Seabrook Commons effect. Nashua continues to rank first with 6.2 million square feet of inventory. Manchester follows at 5.4 million square feet and Salem is a distant third at 3.9 million square feet. These are the only cities or towns with inventory in excess of 2.0 million square feet, although Seabrook is edging closer to that threshold.

Southern New Hampshire Study Area
Town Rankings:  The year ended with Milford representing the sole newcomer to the top-five list of towns with the highest vacancy rates. A Stop & Shop closing was the cause. Manchester still leads the pack with a 22% vacancy rate. Seabrook, somewhat surprisingly, jumped into second place, largely a result of the vacant Walmart unit left behind by the relocation to Seabrook Commons. Nashua moved up three spots and is now among the five healthiest markets in the region. Bedford remains the top performer, followed now by Salem, Nashua, Amherst, and North Hampton.

Retailer Activity: Walmart is the largest contributor to new retail inventory in Southern New Hampshire this year, adding 98,700 square feet, the net change between its vacant traditional store and its relocated Supercenter store. Hannaford acquired the former Stop & Shop in Exeter, adding 65,200 square feet. Party City ranked third by acquiring four iParty stores, which added 40,000 square feet. Stop & Shop closed all six Southern New Hampshire locations, reducing its footprint by 411,800 square feet. Shaw’s closed stores in Seabrook and Manchester, contracting by 124,300 square feet, while the Building 19 liquidation resulted in the closing of its 72,300 square foot store in Manchester.

The complete report contains much more detailed information on these categories and more, and will be available soon at KeyPointpartners.com.

Bob Sheehan, Vice President of Research
BSheehan@KeyPoint Partners.com


This KeyPoint Report examines changes in supply, vacancy and absorption, retailer activity, and market composition by store size and retail categories during GRIID™ database maintains detailed information on virtually all retail properties in three key regions: Eastern Massachusetts, Southern New Hampshire and Greater Hartford, Connecticut. These markets encompass approximately 44% of all retail space in New England. GRIID™ has information on nearly 260 million square feet of retail space and approximately 60,000 retail establishments. The KeyPoint Reports contain a summary and analysis of market trends and activity for each studied area.
the period from August, 2013 through July, 2014. The study area includes 39 cities and towns, representing more than 835 square miles and approximately 554,200 people (42% of the state population).  KeyPoint Partners’

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