RETAIL

RETAIL

The retail market continued to gradually improve in 2013.  The overall vacancy rate at year-end was 12.3% compared to 13.7% at the end of 2012.  Much of the improvement was the result of increased absorption in the small strip centers that were developed in 2008 to 2010.  It has taken awhile but these centers have gradually attracted a variety of tenants to their properties with aggressive lease rates.

Vacancy rates continue to be tight in the Class A sector, especially in the northeast and northwest quadrants. Bradley Fair celebrated its 23rd anniversary by adding Apricot Lane Boutique, Versona Accessories and The LOFT, bringing the upscale center to 100% occupancy.  New Market Square continues to be a popular location for retailers and restaurants as the center ended the year with a very limited amount of space available.

As expected, the Greenwich corridor from 13th to K-96 continued to attract more businesses to the area. Hobby Lobby relocated to Regency Lakes at 21st and Greenwich while three major car dealerships relocated to the corner of 13th and Greenwich.  A second building was brought on line at the Village at Greenwich center on the northeast corner of 21st and Greenwich and late in the year Academy Sports announced plans for a second location at K-96 and Greenwich.  The growth in this corridor is expected to continue and the large sports and multi-use projects planned in the area will enhance the attractiveness to all types of retailers.

The renaissance in downtown Wichita has significantly reduced the number of vacancies along the Douglas corridor from Washington Avenue west through the Central Business District and the Delano area.    What used to be a “ghost area” of vacant store fronts has become a magnet for locally owned, small businesses and there are very few empty spaces anywhere along the corridor.

FORECAST

The retail market will gradually improve in 2014.  Greenwich Road between 13th and K-96 will be active with announcements of new development at Plazzio, Regency Lakes and The Village at Greenwich.  National tenants will continue to look favorably at Wichita but will still be cautious in the site selection process.  New construction will remain soft due to the cost and the lack of rent appreciation.

10 Year Vacancy Rates vs. Lease Rates Retail Class A

Year Lease Rate Price $ Vacancy Rate %
2004 15.05 $ 7.9%
2005 15.67 $ 6%
2006 15.50 $ 6.6%
2007 16.74 $ 5.6%
2008 15.64 $ 5.7%
2009 15.37 $ 8.5%
2010 15.82 $ 8.6%
2011 15.83 $ 10.3%
2012 14.57 $ 7.4%
2013 15.34 $ 8.9%

Total Retail Stats

Market #Bldgs Total SF Vac SF VAC% Quoted Rates
CBD 26 484,653 35,000 7.2% $12.29
Delano 49 261,789 7,200 2.7% $9.39
Northeast 111 3,161,106 469,154 14.8% $10.73
Northwest 117 2,913,748 222,393 7.6% $11.14
Southeast 98 2,805,926 401,913 14.3% $8.57
Southwest 51 1,079,924 181,219 16.7% $9.42
Totals 452 10,707,146 1,316,879 12.3% $9.99

Retail Class A Stats

Market #Bldgs Total SF Vac SF VAC% Quoted Rates
CBD 4 89,200 NA NA NA
Northeast 52 1,664,398 91,498 5.5% $14.72
Northwest 34 1,227,176 49,782 4.0% $17.07
Southeast 15 679,812 90,207 13.2% $10.83
Southwest 10 243,263 31,751 13% $14.67
Totals 115 3,903,900 263,238 6.7% $14.32

Retail Class B Stats

Market #Bldgs Total SF Vac SF VAC% Quoted Rates
CBD 21 333,453 28,000 8.4% $11.86
Delano 1 5,000 5,000 100% $10.00
Northeast 48 1,343,243 330,731 24.6% $9.84
Northwest 57 1,079,590 131,350 12.1% $10.04
Southeast 51 1,514,222 195,373 12.9% $9.54
Southwest 28 736,546 131,572 17.8% $8.42
Totals 206 5,012,054 822,026 16.4% $9.95

Retail Class C Stats

Market #Bldgs Total SF Vac SF VAC% Quoted Rates
CBD 4 62,000 NA NA NA
Delano 48 256,789 2,200 8.6% $8.00
Northeast 11 153,465 46,925 30.5% $9.21
Northwest 26 606,982 41,261 6.8% $7.47
Southeast 32 611,892 116,333 19% $5.17
Southwest 13 100,116 17,896 17.8% $7.48
Totals 134 1,791,244 224,615 12.5% $7.46
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