1. THE KNOWLEDGE REPORT
CINCINNATI, OH
www.colliers.com/cincinnati
RETAIL MARKET CLOSES OUT THE
YEAR ON A RESPECTABLE NOTE
EXECUTIVE SUMMARY
In the first quarter of 2012, the vacancy rate stood at 12.5%. At the close of the year, deal momentum
accelerated and the vacancy rate for the fourth quarter improved to 10.41%. With this activity, the
market saw 525,355 square feet of positive absorption in the last three quarters of 2012, and 57,667
square feet occurring in the fourth quarter. The biggest lease transactions during this period included:
91,723 square feet by Pease Warehouse and Kitchen Showroom at Hamilton Crossing Shopping
Center; 54,956 square feet by Hobby Lobby at Governor’s Pointe Shopping Center; and 31,260 square
feet by Ollie’s Bargain Outlet at Glenway Crossing.
Major purchases had a role in the overall market during fourth quarter as well. The City of Cincinnati
took the lead and purchased the distressed 70,000-square-foot Tower Place Mall in the
Central Business District. The proposed plan is to demolish the existing parking structure, Pogue’s
Garage, and build a 30-story mixed use high rise at the site. The development will contain 300 luxury
apartments, 1,000 parking spaces, and a 15,000 square-foot grocery store. The project also includes
the renovation of Tower Place Mall into 500 additional parking spaces and street level retail. This
major purchase, and several others, are all great signs for retail going into 2013.
DEVELOPMENT
Construction projects are moving forward as scheduled throughout the city. Excitement surrounding
the Horseshoe Casino development increased with the announcement of several premiere restaurants
joining the mix. Restaurants joining the development include: Margaritaville State of Mind, First Jack
Binion’s Steakhouse, and celebrity Chef Bobby Flay’s Bobby’s Burger Palace.
In May, it was announced that the Yard House Bar and Grill would join The Banks development at the
corner of Walnut Street and Freedom Way. This is one of the first steps in next major phase of
construction at the $600 million project. An additional 300 apartment units and 60,000 square feet
of retail space are planned and will be delivered throughout the year in 2013.
With the opening date set for March 5, 2013 for the casino, and construction at The Banks moving
ahead smoothly, 2013 is setting up as a strong year.
MARKET INDICATORS
*Projected Change to
the following Quarter.
Q4 12 Q1 13*
VACANCY
NET ABSORPTION
CONSTRUCTION
RENTAL RATE
Q4 2012 | RETAIL
OVERALL VACANCY RATE
10.0%
10.5%
11.0%
11.5%
12.0%
12.5%
13.0%
13.5%
1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12
Overall Vacancy Rate
2. UPDATE Recent Transactions
FIRST QUARTER ACTIVITY
PROPERTY TRADE AREA TENANT SIZE TYPE
Stone Creek Towne Center Northwest Oakbrook III 143,000 Sale
Hamilton Crossing Shopping Center Northwest Pease Warehouse and Kitchen Showroom 91,723 Lease
Shoppes of Mason Northeast Optimus Investment 80,800 Sale
Tower Place Mall CBD City of Cincinnati 70,000 Sale
Governor’s Pointe Shopping Center Northeast Hobby Lobby 54,956 Lease
7755 Montgomery Road Northeast U.S. Bank 40,500 Sale
Glenway Crossing West Ollies Bargain Outlet 31,260 Lease
10400 Reading Road Central Cincinnati Asian Market 31,000 Lease
Cincinnati Mall Northwest Place 2 B Night Club 29,000 Lease
Governor’s Pointe Shopping Center Northeast Marshall’s 28,600 Lease
Newport Plaza NKY Planet Fitness 28,000 Lease
Northgate Mall Northwest Marshall’s 27,000 Lease
3960 Red Bank Road Central Pet Medical & Cancer Care 25,000 Sale
7720 Voice of America Centre Drive Northwest Fresh Market 23,600 Lease
Cincinnati Mall Northwest Bee Active Adventure Zone 22,917 Lease
Shoppes of Deerfield Northeast Square Hill Properties LLC 20,156 Sale
Latonia Plaza Shopping Center NKY ACB American 18,150 Lease
8255 Colerain Avenue Northwest Victory Lady Fitness 15,000 Lease
3061 Madison Road Central David Millet Interiors 13,500 Lease
Newport Shopping Center NKY Ace Hardware 12,500 Lease
Harrison Center West Dollar Tree 12,000 Lease
Delhi Plaza West Dollar General 11,737 Lease
Tri-County Towne Center Northwest Casual Male DXL 11,240 Lease
Latonia Plaza Shopping Center NKY Aarons Rents 10,500 Lease
NATIONAL RETAIL SPOTLIGHT
With the urgency of the deficit
situation taking center stage at the
close of 2012, many national retailers
underestimated the magnitude of
consumer pullback that occurred in
December. This has been a high
profile issue for more than a year, but
it appears that it wasn’t until
December that many people realized
the potential negative impact to their
2013 tax liability. While we believed
that Congress would eventually
reach a deal to push off the “cliff”
ahead of the January 1st deadline,
discussions surrounding the last-
minute agreement kept consumers
and retailers on edge throughout the
holiday season. After Christmas,
heavy shopper turnout helped to
salvage the season for many stores.
FORECAST
2013 will be an interesting one to
watch. As employees’ first 2013
paychecks reflected the revision of
the Social Security payroll tax rate
from 4.2% to 6.2%, retailers worry
soft sales may occur at the beginning
the year. This lull in buying activity
may persist for a couple of months as
households recalibrate their budgets.
Transactions are believed to be accurate but not guaranteed.
UNEMPLOYMENT
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
8.0%
8.5%
9.0%
9.5%
10.0%
10.5%
11.0%
Jan-09
Mar-09
May-09
Jul-09
Sep-09
Nov-09
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
July-12
Sep-12
Nov-12
US Unemployment Rate
Ohio Unemployment Rate
Cincinnati Unemployment Rate
Columbus Unemployment Rate
Cleveland Unemployment Rate
J
M
M
J
S
N
J
M
M
J
S
N
J
M
M
S
N
J
M
M
J
S
No
THE KNOWLEDGE REPORT | Q4 2012 | RETAIL | CINCINNATI
P. 2 | COLLIERS INTERNATIONAL
3. SUBMARKET Total Inventory
Total Vacant
SF
Vacancy Rate
Quarterly
Absorption
YTD
Absorption
Avg. Rate
Central 4,856,891 390,990 8.05% 59,385 115,875 $11.50
East 7,108,541 646,176 9.09% 28,584 206,341 $13.70
Monroe/Middletown 3,254,481 299,869 9.21% (29,621) (32,251) $10.26
Northern Kentucky 10,864,972 566,991 5.22% 5,946 30,483 $13.63
Northeast 9,081,505 867,086 9.55% 107,689 247,433 $12.72
Northwest 17,379,700 2,424,210 13.95% (9,529) 189,644 $8.10
West 6,292,265 930,118 14.78% (104,787) (7,692) $12.29
Market Totals 46,872,923 6,125,440 10.41% 57,667 749,833 $10.77
SUBMARKET DATA
QUARTERLY NET ABSORPTION
SquareFeet
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12
Quarterly Net Absorption
The Retail Market
saw 57,667 square
feet of positive
absorption
this quarter.
THE KNOWLEDGE REPORT | Q4 2012 | RETAIL | CINCINNATI
COLLIERS INTERNATIONAL | P. 3
4. CEO | PRINCIPAL:
Shenan P. Murphy, CCIM
+1 513 721 4200
Colliers International statistics are audited annually
and may result in revisions to previously reported
quarterly and final year-end figures
Colliers International | Greater Cincinnati
425 Walnut Street, Suite 1200
Cincinnati, OH 45202
Retail & Investment Services | Greater Cincinnati
Michael P. Ziegler, SCLS
Brokerage Senior Vice President
mike.ziegler@colliers.com
DIR +1 513 562 2224
Ken Arbino
Brokerage Vice President
ken.arbino@colliers.com
DIR +1 513 562 2238
Justin T. Rex, MICP™
Brokerage Associate
justin.rex@colliers.com
DIR +1 513 562 2218
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Steven L. Timmel, CCIM
Brokerage Senior Vice President
steve.timmel@colliers.com
DIR +1 513 562 2221
Jeffrey E. Johnston, CPA
Brokerage Senior Vice President
jeff.johnston@colliers.com
DIR +1 513 562 2231
Christopher B. Prosser, CCIM
Brokerage Senior Vice President
chris.prosser@colliers.com
DIR +1 513 562 2232
THE KNOWLEDGE REPORT | Q4 2012 | RETAIL | CINCINNATI