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2Tho Gam:
<br /> MARKET ■ Some retail properties may be ■ In spite of challenging times for
<br /> recycled for use by communities for retailers, more national and regional
<br /> OUTLOOK schools,churches, housing or other non- retailers will expand into our market.
<br /> retail uses. Ample parking and central We have high disposable income relative
<br /> Oax ■ Many owners are poised to sell locations add to this general appeal. to other markets.
<br /> eir centers, especially if capital gains
<br /> reduction occurs this year.
<br /> ■ It is the older centers, or the w
<br /> unanchored centers that are suffering in
<br /> the overall market. These centers,if well
<br /> located, may offer a good return to PLAY
<br /> developers who can redevelop and MEDLA r
<br /> reposition them. C i /T
<br /> s ,
<br /> ■ Retailers are beginning to take -X- f Ce
<br /> part in an organized effort to reform g �EpOT
<br /> state property tax classifications. This
<br /> Y � °
<br /> vocal contingent of taxpayers could � IichadS _
<br /> make a meaningful difference in this T
<br /> SPQR MAR
<br /> growing controversy. _ -, .,.
<br /> ■ The tax abatement granted to
<br /> Southdale and Rosedale is just the
<br /> beginning of reassessments. Increasingly, f = _
<br /> this issue will influence net rent levels,as
<br /> more retailers demand gross rent terms.
<br /> ♦
<br /> ■ Owners and managers of retail Northtown Village,a 180,000 sq.1t.Community Center in Blaine was developed by Robert Muir Company
<br /> properties are recognizing the impor-
<br /> ce of providing safe and secure retail
<br /> vvironmentsandparking. As the popu- COMMUNITY CENTERS - HISTORICAL SUMMARY
<br /> lotion ages, the key consumers are MINNEAPOLIS-ST.PAUL METRO AREA(1987-1996)
<br /> acutely aware of safety. The additional
<br /> costs of security are passed on to tenants, NUMBER OF GROSS TOTAL PERCENT ANNUAL NET
<br /> another burden on limited profits. YEAR CENTERS LEASABLE AREA AMOUNT VACANT VACANT ABSORPTION
<br /> 1987 36 6,293,840 457,634 7.3 353,450
<br /> ■ As special events such as aquar- 1988 38 6,640,890 520,556 7.8 284,078
<br /> iums and dinosaur exhibits are hosted by 1989 38 6,682,446 412,888 6.2 149,224
<br /> Mall owners, the retailer now competes 1990 42 7,628,555 669,184 8.8 701,109
<br /> with these attractions. In the past only 1991 51 9,358,139 959,527 10.3 1,574,813
<br /> food venues provided competition for 1992 56 10,316,342 917,583 8.9 1,000,147
<br /> the visitors' time. 1993 60 11,229,655 888,955 7.9 751,641
<br /> 1994 61 11,358,829 872,790 7.7 144,776
<br /> ■ Retailers will face extremely 1995 64 11,878,829 1,017,746 8.6 375,607
<br /> difficult times due to rising costs for 1996 67 12,542,544 1,100,111 8.8 527,569
<br /> operations, occupancy, and advertising. ©Towle Real Esmte company
<br /> Margins are low, sales are down, and ♦ 50%of all development in the past 10 years was community centers.
<br /> many retailers cannot survive with esca- ♦ 30%of all current vacancy is in this category.
<br /> lating costs. ♦ 61%of all absorption was in community centers.
<br /> ♦ 31 community centers totaling 6,248,704 sq. h.was built in past 10 years.
<br /> ■ Competition for market share
<br /> will continue to be fierce among retail-
<br /> ers. Only the leaders in each category
<br /> will survive.
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