Centers Are Usually Open Air And Include At Least 50,000 Sq. Ft. Devoted To National Upscale Chain Specialty Stores Offering Apparel

Trends in Real Estate 2003

Presented by LSU Real Estate Institute and Commercial Investment Division of the Greater Baton Rouge Association of Realtors

Dottie Tarleton, CCIM

Vice President

Stirling Properties

The Baton Rouge Retail Market

By Dottie Tarleton, CCIM

Typical Shopping Center


Center in the Eyes of the Developer


Major Tenant Concept


City Father’s Concept


REINVENTING RETAIL 1973 – 2003

A TOUR OF SOME OF THE MOST PROMINENT CENTERS IN BATON ROUGE


Esplanade Mall


Esplanade Mall

The first enclosed mall built in Baton Rouge Built in 1973- anchored by Rubenstein’s Department

Store. Reinvented itself into an Entertainment Mall as hotels

and offices users crowded the landscape after the extension of Corporate Blvd. in the late 80’s.


Cortana Mall


Cortana Mall

Built in 1974 Slowly evolved as the retail climate changed Fashion Park Cortana Square Freestanding retailers-Lowe’s, Just for Feet, Old Navy


Cortana Mall


Cortana Mall

Wal-Mart Super Center Bed, Bath and Beyond Shoe Carnival


Oak Villa Extension


Mall of Louisiana


Mall of Louisiana

Mall was built in 1997 Bluebonnet Parc was built in 2002 Separate ownership The retail mix between the two centers compliment

each other


STRIP CENTERS


Concord Park


Concord Park

Built in 1972- Anchored by Kmart and National Grocery Store.

Tenants have changed but the center is still discount oriented.

Good design


Village Square


Village Square

Built in three phases with construction starting in 1976. Anchored by Kroger, Service Merchandise, and K & B

Drugs. Precursor to the power center. Design is functionally obsolete in today’s market.


COMING SOON!

YOUR FRIENDLY NEIGHBORHOOD

WAL-MART SUPERCENTER


Village Square


Siegen Village


Siegen Village


Siegen Village

Built in 1985 but later expanded. United Artist and Kmart were the original tenants. Newest Discount Store—Big lots


THE POWER CENTER


Hammond Aire Plaza


Hammond Aire Plaza

Built in 1985 First Power Center in Baton Rouge Value Oriented Category Killer Stores—

Shoe Station, Michaels, Home Depot Neighborhood Component—

Jr. Department Stores:

Stein Mart, Burlington Coat Factory, Marshall’s


The Mixed Use Concept


Citi Place


Citi Place

Built in 1995 First mixed use project in Baton Rouge Combines office, entertainment, restaurants, and retail

all in one project


Siegen Lane Regional Shopping District 2003


Siegen Lane Regional Shopping District 2003

Zero to 1.2 million square feet of discount and off price retail in 20 years

And so – the point is that the mall is no longer the king of regional retail!!!! Marketplace at Siegen Lane 700,000 sq. ft. Target Plaza 353,000 sq. ft. Siegen Village 174,378 sq. ft.

TOTAL 1,227,378 sq. ft.


The State of Wal-Mart

$240 Billion in sales annually 3 Million Associates Most respected company on Fortune 500 List Biggest employer in 21 States World’s biggest grocer, driving down prices an average

of 13% in the markets they enter. One of the contributing factors for low inflation

“Everyday Low Prices”


The State of Wal-Mart (cont.)

Two daily non-stop flights from LaGuardia Airport to Bentonville daily. Zero non-stop flights to any other cities in Arkansas from LaGuardia

Baton Rouge MSA-New Super-centers to begin construction in 2003LocationBaker 186,000 Sq. Ft.Cortana 223,000 Sq. Ft.College Dr. 188,000 Sq. Ft.Prairieville 207,000 Sq. Ft.TOTAL NEW SQ. FT. 2003 804,000 Sq. Ft.



Small Marts– Neighborhood Grocery Store



Newest Wal-Mart concept 40,000 sq. ft. grocery store with drive thru pharmacy. Gas pumps in some locations where space permits. Scouting sites in Baton Rouge now.


The New Kid on the BlockLife Style Centers

Caters to the needs and lifestyle of their customers. Are usually upscale projects located near affluent

neighborhoods. Size is usually 150,000 – 500,000 sq. ft. Centers are usually open air and include at least

50,000 sq. ft. devoted to national upscale chain specialty stores offering apparel, home goods, books and music.


The New Kid on the BlockLife Style Centers (cont.)

Typical tenants may include Ann Taylor, Banana Republic, Barnes and Noble, Bath and Body Works, Gap Concepts, Pottery Barn, Talbot’s, William Sonoma, Chico’s and a mixture of local successful mom and pop operators.

Specialty grocery stores such as Whole Foods may also be found in lifestyle centers.


Town Center at Cedar Lodge

Proposed new development to be built on the Witter Tract at Corporate Blvd. and Jefferson Hwy.


Town Center at Cedar Lodge (cont.)

440,000 mixed use development Office Retail Restaurants Zoning has been approved


Sales Tax Collections East Baton Rouge Parish 1999-2000

120,000,000

121,000,000

122,000,000

123,000,000

124,000,000

125,000,000

126,000,000

127,000,000

1999 2000 2001 2002

1999

2000

2001

2002

Year to date 2003 Sales Tax (Jan.-Feb.) is up 4.7%


Rents and Vacancies

Overall rents are up and vacancy is down. Overall 2002 rents are up 18% over 2001. Overall vacancy has fallen 4.74% over 2001. Neighborhood centers experienced a decrease in

vacancy from 26.57% to 16.62%. Rents increased from $10.43 psf to $11.99 psf.


Rents and Vacancies (cont.)

Community Centers experienced an increase in vacancy from 16.63% to 18.37%. Rents increased from $9.07 psf to $11.13 psf.

Regional centers experienced a decrease in vacancy from 6.79% to 1.56 % with an increase in rent from $20.85 psf to $29.72 psf. *Market place a Siegen Lane was added to the survey which contributed to the decline in the vacancy rate.


Rents by Shopping Center Type

0

5

10

15

20

25

30

Neighborhood Regional

Spg 98Spg 99Spg 00Spg 01Fall 01Fall 02

Community Overall


Vacancies by Shopping Center Type

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

Neighborhood Regional

Spg 98

Spg 99

Spg 00

Spg 01

Fall 01

Fall 02

Community Overall


Total Retail Building Permits

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,0001999 2000

2001 2002


New Big Box Construction 2001

Petsmart Siegen 19,250 sq. ft.

Wal-Mart Central 184,435 sq.ft.

Kirschman’s Furniture Siegen 55,000 sq. ft.

Rack Room Shoes Siegen 8,000 sq. ft.

TOTAL 266,685 sq. ft.


Best Buy Bluebonnet 45,416 sq. ft.

Linen’s N Things Bluebonnet 32,380 sq. ft.

Books A Million Siegen 12,540 sq. ft.

Cost Plus Bluebonnet 18,349 sq. ft.

David’s Bridal Bluebonnet 9,867 sq. ft.

Lifeway Christian Books Bluebonnet 10,000 sq. ft.

Rave Movie Theatre O’ Neal Lane 73,292 sq. ft.

TOTAL 201,844 Sq. Ft.

New Box Construction 2002


Big Box Space Proposed and Under Construction Year To Date 2003

Ross Dress For Less Siegen 30,187 Sq. Ft.

Petco Siegen 13,500 Sq. Ft.

Co-Op Book Store Burbank Dr. 26,124 Sq. Ft.

Stoma’s Furniture Addition Perkins Rd. 10,000 Sq. Ft.

Walgreen’s Perkins Rd. 14,490 Sq. Ft.

Wal-Mart Cortana 223,000 Sq. Ft.

Wal-Mart Baker 186,000 Sq. Ft.

Wal-Mart College Dr. 188,000 Sq. Ft.

Wal-Mart Prairieville 209,000 Sq. Ft.

Academy Siegen 75,000 Sq. Ft.

Bed, Bath and Beyond Cortana 20,000 Sq. Ft.

Shoe Carnival Cortana 10,000 Sq. Ft.

TOTAL 1,005,301 Sq. Ft.


Small Strip Centers 2001-2002

Floorscapes Center Coursey at Cedarcrest 24,000 sq. ft. 2001

Coursey Plaza Coursey at American Way 18,000 sq. ft. 2001

Sherwood Square Sherwood at Florida 26,000 sq. ft. 2001

University View Burbank Dr. at LSU 20,000 sq. ft. 2001

Albertson’s Plaza Airline at Highland 32,000 sq. ft. 2002

Central Plaza Wax at Sullivan 49,000 sq. ft. 2002



Proposed Strip Centers 2003

Pearson's 7949 Jefferson Hwy. 29,500 sq. ft.

Marblegate Phase II George O’Neal at Jones Creek 70,000 sq. ft.

Wal-Mart Strip Wax Rd. 13,850 sq. ft.

Coursey Plaza III Coursey at Sherwood 46,333 sq. ft.

Southgate Retail Burbank 15,260 sq. ft.

Highland Greens Highland at CCLA 15,444 sq. ft.



Large Tract Land Sales

Location Sale Date Price Size Acres Price/SF

Coursey at Hickory Ridge 6/02 $950,000 5.36 $4.07

Coursey at Hickory Ridge 6/02 $932,000 3.78 $5.66 Future Development

Hatteras Ave. at I-12 10/02 $4,000,000 17.32 $5.30

Airline at Jefferson 10/02 $1,706,749 9.13 $4.29 All Star Auto

Sherwood at Southfork 07/02 $1,300,000 4.13 $6.85 Teche Fed Bank

Reiger Rd. 12/02 $3,516,076 15.82 $5.10

Airline Hwy. 01/03 $1,300,000 6.68 $4.47 Future Development

Brightside Dr. 02/03 $571,000 3.09 $4.25

Brightside Dr. 12/02 $1,965,744 10.03 $4.50 Condo Development


Small Tract Land Sales

Location Sale Date Price Size Acres Price/SF

Coursey @ Airline (Exxon Mobil Oil)

12/02 $1,561,866 1.515 $23.66

Coursey @ Airline(Amsouth Bank)

12/02 $1,200,000 1.210 $22.77

Highland @ Perkins (Exxon Mobil Oil)

03/03 $1,447,000 1.661 $20.00

TOP OF THE MARKET PRICES


Conclusions

Overall rental rates on existing space increased across the board in 2002.

Vacancy rates decreased across the board as building permits dropped during 2001 and 2002.

The greatest vacancies are found in centers anchored by grocery stores built before 1980. Twelve centers fall into the category, followed by three centers built between 80-84 and two centers built between 85-94.

Florida Blvd. has the greatest number of vacancies, which can be attributed to changes in traffic pattern and growth along I-10 and I-12.


Conclusions (cont.)

Discount and value retailing dominate retail growth. Department stores are carrying more and more private label items as consumers continue to look for value.

Hugh influx of new retail construction is dominated by new Wal-Mart Super centers.

The Baton Rouge MSA will continue to lead the rest of the state in growth with a projected population increase of over 33,000 people during the next five years.


Why?

The growth is most predominate in Livingston and Ascension Parishes which are the two fastest growth Parishes in the State.

As a comparison, the Lafayette and New Orleans metro areas will both see projected increases of roughly 18,000 people, about half of the Baton Rouge growth.

Baton Rouge also has the highest average household income (53,000+/-) and the most educated work force in the state with 16% of the population having attained a Bachelor degrees and 8.8% having graduate degrees.

These demographic influences should help fuel continued retail growth in our market.

Trends in Real Estate 2003

Presented by LSU Real Estate Institute and Commercial Investment Division of the Greater Baton Rouge Association of Realtors

Dottie Tarleton, CCIM

Vice President

Stirling Properties

The Baton Rouge Retail Market

Business

Centers Are Usually Open Air And Include At Least 50,000 Sq. Ft. Devoted To National Upscale Chain Specialty Stores Offering Apparel