2023-05-10 CC Packet - Laserfiche WebLink

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LOCi CONSULTING ■ The average rent for retail space was $18.84 per square foot per year in the Metro Area in the fourth quarter of 2022. Rents grew on average 3.4% per year between 2019 and 2022. Between 2010 and 2019, the average annual rental growth was 0.5% per year ■ Absorption has been very strong between the first quarter of 2021 and the fourth quarter of 2022. Market Conditions for Retail Commercial Real Estate in the Downtown Centerville PMA Figures 4.3 and 4.4 show average retail lease rates per square foot per year, vacancy rates, and absorption for the retail real estate in the Downtown Centerville PMA. ■ The vacancy rate for retail commercial real estate space in the PMA was 2.2% in the fourth quarter of 2022. ■ This vacancy rate is very low and suggests that potential tenants are having a tough time finding space in the PMA to meet their needs. ■ The average rent for retail space was $16.46 per square foot per year in the Metro Area in the fourth quarter of 2022. ■ Even with the lower vacancy rates, rents in the PMA have not risen comparably to the Metro Area as a whole. Profiled Shopping Centers in the Downtown Centerville PMA Figure 4.7 shows profiled existing shopping centers in the Downtown Centerville PMA. ■ There are seven shopping center properties profiled. One property is located in the City of Centerville. ■ The largest shopping center profiled is White Bear Marketplace, anchored by Cub Foods, with 119,000-square feet. ■ If it were combined into one property, the shopping center in Lino Lakes with Target and Kohl's would likely be the largest. However, the Market Analysis for Downtown Redevelopment City of Centerville Economic Development Authority April 3, 2023 anchor retailers are separate properties from the in -line retail. Occupancy for the group ranges from 72% to 100%. There is about 5,280-square feet of vacant space in these properties. The overall vacancy rate for the profiled properties is 1.3%. Quoted retail lease rates for these properties are $18 to $20 per square foot triple net (NNN). These lease rates are unlikely to support new construction. (Triple net —sometimes just labeled "NNN"—is a rental arrangement where the tenants pay all of the expenses on the property, including operating expenses, taxes, and sometimes external maintenance.) Pending Retail Developments in the Downtown Centerville PMA LOCI Consulting contacted city and county staff to identify planned and pending retail developments in and near the PMA. Centerville City officials said that the owners of Guys and Dolls Salon in Hugo have entered into a purchase agreement with the City of Centerville to purchase land at 1737 Main Street to build a 3,000-square foot salon. The owners have suggested that they would possibly add a coffee shop component to the business. The proposal would still need to be approved by the city before the owners could take possession of the land and begin construction. Forest Lake Page 168 Also mentioned in the multifamily section, Gaughan Companies, developer of the Lighthouse Lofts mixed -use project in Forest Lake, is proposing another 100-unit mixed -use development that would be located at the southeastern corner of Broadway and Highway 61. The project would be similar to its earlier project and would include a proposed 10,000- square-foot restaurant space and about 2,000- square feet of retail space. The developers are asking for Tax Increment Financing to assist the project. The city has not yet approved the proposal.