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HOCKING PLAZA SHOPPING CENTERLOGAN, OH
OFFERING MEMORANDUM
N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E
Confidentiality and DisclaimerThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to
be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other
person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to
provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of
interest in the subject property. The information contained herein is not a substitute for a thorough due diligence
investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with
respect to the income or expenses for the subject property, the future projected financial performance of the
property, the size and square footage of the property and improvements, the presence or absence of contaminating
substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the
improvements thereon, or the financial condition or business prospects of any tenant, or any tenant's plans or
intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure
has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not
verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding
these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the
information provided. All potential buyers must take appropriate measures to verify all of the information set forth
herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017
Marcus & Millichap. All rights reserved.
Non-Endorsement NoticeMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in
this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply
affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or
subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for
the purpose of providing tenant lessee information about this listing to prospective customers.
ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.
PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.
TABLE OF CONTENTS
SECTION
INVESTMENT OVERVIEW 01Investment Overview
Property Photos
Site Plan
Aerial
Regional Map
FINANCIAL ANALYSIS 02Executive Summary
Tenant Summary
Tenant Lease Summary
Pricing Detail & Operating Statement
MARKET OVERVIEW 03Demographic Analysis
Market Analysis
HOCKING PLAZA SHOPPING CENTER
4
INVESTMENT
OVERVIEW
HOCKING PLAZA SHOPPING CENTER
#
OFFERING SUMMARY
INVESTMENT OVERVIEW
5
• 82 Percent Occupied | 18,000-Square Foot Vacancy Upside
• Double-Digit Leveraged Cash-on-Cash Return
• Priced Below Replacement Cost at $35 Per Square Foot
• Main Retail Hub Serving a 15-Mile Radius
• New Roof & Facade in 2015 | Resurfaced and Restriped Parking Lot in 2014
INVESTMENT HIGHLIGHTS
Marcus & Millichap is pleased to present Hocking Plaza, a 100,886-square foot regional shopping center located in Logan, Ohio, the county seat of Hocking County. Located approximately 48-miles Southeast of downtown Columbus, Hocking Plaza is strategically positioned on a primary retail corridor that attracts shoppers from a 15-mile radius. Hocking Plaza has a stable presence in this region, and topographical constraints coupled with limited population prohibit competition from entering this market. Over 76 percent of the center’s current occupancy is supported by national tenants, and the property also benefits from a highly trafficked commuter corridor near State Route-33, great visibility and multiple points of ingress and egress.
Since 2014, the current owners have invested over $325,000 in improvements to the property including a brand-new roof, updated exterior facade and a resurfaced and restriped the parking lot. The Hocking Plaza has demonstrated excellent historical occupancy, and the recent upgrades revitalized the property and fostered incremental rent growth. The center is currently stabilized with anchor tenants such as Tractor Supply, Sears Hometown Store (a separate entity from Sears Holdings Corporation) and Peebles that signed initial ten-year term leases. While every other tenant, including Goodwill, Cash Land and Family Dollar executed a lease renewal option. Additional upside can be found by leasing the two vacant units totaling 18,000-square feet at net rents of $4 per square foot, potentially adding $72,000 of income. Furthermore, favorable non-recourse debt yielding a double digit cash-on-cash return can be assumed by the prospective buyer.
Logan Ohio is most well-known for its close proximity to the Hocking River and Hocking Hills State Park. Hocking Hills is a regional vacation destination that features nature caves, waterfalls, camping, hiking, rock climbing and a verity of other outdoor activities. The subject property is also located within close proximity to Logan Lake and the Hocking Valley Community Hospital. Hocking Plaza is shadowed by Kroger and is surrounded by other national retailers including; a Walmart Supercenter, CVS, Burger King, Dairy Queen, Taco Bell, McDonalds, Bob Evans, Auto Zone and PNC Bank.
HOCKING PLAZA SHOPPING CENTER
PROPERTY PHOTOS
6
HOCKING PLAZA SHOPPING CENTER
PROPERTY PHOTOS
7
HOCKING PLAZA SHOPPING CENTER
PROPERTY PHOTOS
8
HOCKING PLAZA SHOPPING CENTER
PROPERTY PHOTOS
9
HOCKING PLAZA SHOPPING CENTER
Family Dollar
(7,560 SF)
#
SITE PLAN
10
Sears Hometown Store
(8,510 SF)
Peebles
(12,800 SF)
Available
(12,000 SF) Available
(6,000 SF)
Los Amigos
(2,800 SF)
All The Buzz
(840 SF)
Cheap
Tobacco
(2,400 SF)
Cashland
(2,400 SF)
Goodwill
(20,576 SF)
Tractor Supply
(25,000 SF)
HOCKING PLAZA SHOPPING CENTER
AERIAL
11
HOCKING PLAZA SHOPPING CENTER
12
FINANCIAL
ANALYSIS
HOCKING PLAZA SHOPPING CENTER
#
EXECUTIVE SUMMARY
OFFERING SUMMARY
13
THE OFFERING
Property Hocking Plaza Shopping Center
Property Address 150 Hocking Mall, Logan, OH 43138
SITE DESCRIPTION
Built/Renovated 1979/2014
Gross Leasable Area 100,886 SF
Current Occupancy 82.16%
Lot Size +/- 15.97 Acre(s)
Ownership Fee Simple
MAJOR TENANTS
TENANT GLA LEASE EXPIRATION LEASE TYPE
Tractor Supply 25,000 01/15/2021 NNN
Goodwill Industries 20,576 12/31/2022 Gross
HOCKING PLAZA SHOPPING CENTER
MAJOR EMPLOYERS
EMPLOYER # OF EMPLOYEES
Ohio Environmental Protection 1,068
Walmart 300
Smead Manufacturing Company 175
Logan High School 150
Kindred Transitional Care 135
Kroger 129
C & L Supply 120
Indiana & Ohio Rail 120
Amanda Bent Bolt Company 110
Southeast District Office 105
Berne Union Elementary School 101
GE 100
DEMOGRAPHICS
3-Miles 5-Miles 10-Miles
2016 Estimate Pop 10,515 14,138 26,681
2010 Census Pop 10,596 14,206 26,746
2016 Estimate HH 4,290 5,589 10,290
2010 Census HH 4,370 5,682 10,400
Median HH Income $38,965 $41,573 $44,511
Per Capita Income $20,570 $20,868 $21,266
Average HH Income $50,262 $52,657 $54,938
FINANCIAL ANALYSIS
14
TENANT SUMMARY
Tenant Name Square
Feet
%
Bldg
Share
Lease DatesAnnual
Rent per
Sq. Ft.
Total Rent
Per Month
Total Rent
Per Year
Changes
on
Changes
to
Lease
TypeRenewal Options
Comm. Exp.
Peebles 12,800 12.7% 10/15/2013 01/31/2024 $4.00 $4,267 $51,200 02/01/2024 $102,396 Gross Four, Five-Year Terms
Sears Hometown Store 8,510 8.4% 12/01/2008 11/30/2018 $4.94 $3,500 $42,000 N/A N/A Gross N/A
Los Amigos Mexican Restaurant 2,800 2.8% 07/01/2011 08/31/2019 $8.08 $1,885 $22,615 09/01/2018 $23,180 NNN N/A
Family Dollar 7,560 7.5% 03/01/1984 12/31/2019 $5.55 $3,496 $41,952 N/A N/A NNN N/A
All the Buzz Nanette Flowers 840 0.8% 01/01/2007 08/31/2018 $11.07 $785 $9,420 N/A N/A NNN N/A
Cash Land 2,400 2.4% 03/01/2003 09/30/2018 $12.25 $2,450 $29,400 10/01/2018 $30,300 NNN Three, One-Year Terms
Cheap Tobacco 2,400 2.4% 04/22/2003 05/31/2018 $10.20 $2,040 $24,480 N/A N/A Gross N/A
Goodwill Industries 20,576 20.4% 09/21/2010 12/31/2022 $5.54 $9,500 $114,000 N/A N/A Gross TBD
Tractor Supply 25,000 24.8% 11/19/2010 01/15/2021 $3.02 $6,302 $75,624 01/16/2021 $83,184 NNN Four, Five-Year Terms
Vacant 6,000 5.9%
Vacant 12,000 11.9%
Total Occupied 82,886 82.2%
Total Vacant 18,000 17.8%
Total 100,886 100.0% $34,224 $410,691
*Goodwill- Ownership is currently negotiating lease extension
HOCKING PLAZA SHOPPING CENTER
TENANT SUMMARY
#
Tractor Supply Company
Tractor Supply Company is an operator of rural lifestyle retail stores in the United
States. The Company is focused on supplying the needs of recreational farmers and
ranchers and others, as well as tradesmen and small businesses. It is engaged in the
retail sale of products that support the rural lifestyle. The Company operates retail
stores under the names Tractor Supply Company, Del's Feed & Farm Supply and
Petsense, and operates Websites under the names TractorSupply.com and
Petsense.com. The Company's selection of merchandise consists of various product
categories, including equine, livestock, pet and small animal products; hardware,
truck, towing and tool products; seasonal products, including heating, lawn and
garden items, power equipment, gifts and toys; work/recreational clothing and
footwear, and maintenance products for agricultural and rural use. Its brands include
4health, JobSmart, Bit & Bridle, Paws & Claws, Blue Mountain, Redstone, Dumor,
Equistages and Royal Wing.
PRICING AND VALUATION MATRIX
PROPERTY NAMEOAKLEY STATION BUILDING
PRICING AND VALUATION MATRIX
PROPERTY NAME
15
TENANT SUMMARY
General Information
Tenant Name Tractor Supply Company
Lease Commencement November 19, 2010
Lease Expiration January 15, 2021
Gross Leasable Area (GLA) 25,000
Original Term Ten Years
Option Term Four, Five-Year Terms
Pro Rata Share of Project 24.78%
Headquarters Brentwood, TN
Website www.tractorsupply.com
Lease Years Annual Rent Monthly Rent Annual Rent/SF
11/19/2010 – 01/15/2021 $75,624 $6,302 $3.02
Base Rent
Lease Years Annual Rent Monthly Rent Annual Rent/SF
01/16/2021 – 01/15/2026 $83,184 $6,932 $3.33
01/16/2026 – 01/15/2031 $91,512 $7,626 $3.66
01/16/2031 – 01/15/2036 $100,656 $8,388 $4.03
01/16/2036 – 01/15/2041 $110,724 $9,227 $4.43
Option Rent
Expense Lease Summary
C.A.M. Tenant reimburses pro-rata share
Real Estate Tax Tenant reimburses pro-rata share
Insurance Tenant reimburses pro-rata share, Capped at $7,500
Management Tenant does not reimburse pro-rata share
Co-Tenancy None
HOCKING PLAZA SHOPPING CENTER
TENANT SUMMARY
#
Goodwill Industries
Goodwill Industries International supports the operations of about 165 independent
Goodwill chapters in the US and Canada. While it's most well known for its more than
3,000 thrift stores, the group focuses on providing rehabilitation, job training,
placement, and employment services for people with disabilities and others. Goodwill
is one of the world's largest providers of such services, as well as one of the largest
employers in the world of the physically, mentally, and emotionally disabled. Support
for its programs is generated primarily from the sale of donated goods, both at the
retail stores and through an online auction site, as well as from contract work and
government grants.
PRICING AND VALUATION MATRIX
PROPERTY NAMEOAKLEY STATION BUILDING
PRICING AND VALUATION MATRIX
PROPERTY NAME
16
TENANT SUMMARY
General Information
Tenant Name Goodwill Industries
Lease Commencement September 21, 2010
Lease Expiration December 31, 2022
Gross Leasable Area (GLA) 20,576
Original Term Seven Years
Option Term TBD
Pro Rata Share of Project 20.40%
Headquarters Rockville, MD
Website www.goodwill.org
Lease Years Annual Rent Monthly Rent Annual Rent/SF
12/31/2022 – 12/31/2022 $114,000 $9,500 $5.54
Base Rent
Expense Lease Summary
C.A.M. Tenant does not reimburse pro-rata share
Real Estate Tax Tenant does not reimburse pro-rata share
Insurance Tenant does not reimburse pro-rata share
Management Tenant does not reimburse pro-rata share
Co-Tenancy None
HOCKING PLAZA SHOPPING CENTER
FINANCIAL ANALYSISPRICING DETAIL & OPERATING DATA
17
Operating Data Current
Scheduled Base Rental Income $410,691
Expense Reimbursement Income
CAM $19,297
Insurance $12,767
Real Estate Taxes $14,364
Management Fees $0
Total Reimbursement Income $46,428
Effective Gross Revenue $457,118
Less: Operating Expenses ($161,885)
Net Operating Income $295,233
Debt Service ($195,456)
Net Cash Flow After Debt Service 14.62% $99,777
Principal Reduction $49,157
Total Return 21.82% $148,934
Operating Expenses Current Per/SF
Co
mm
on A
rea
Main
ten
an
ce
(CA
M)
Utilities Water $846 $0.01
Utilities L,H,P $11,770 $0.12
Trash Removal $616 $0.01
Snow Removal & Landscaping $15,133 $0.15
Parking Lot Sweeping $2,570 $0.03
General Maintenance $19,500 $0.19
Total CAM $50,435 $0.50
2017 Insurance Premiums $39,072 $0.39
Real Estate Taxes* $41,893 $0.42
Management Fee (4%) $18,285 $0.18
Owner Expense for Vacant Utilities $2,600 $0.03
Reserves $9,600 $0.10
Total Expenses $161,885 $1.60
*Real Estate Taxes are Based on 2017 Value of $2,622,200, Sale does not
Trigger a Reassessment
PRICING & FINANCING
Price $3,550,000
Cap Rate | Price/SF 8.32% | $35
Net Operating Income $295,233
Loan Type Assumable (CMBS)
Down Payment 19.23% / $682,500
Loan Amount $2,867,500
Interest Rate / Amortization 5.10% / 30 Years
HOCKING PLAZA SHOPPING CENTER
18
MARKET
OVERVIEW
HOCKING PLAZA SHOPPING CENTER
PROPERTY NAME
MARKETING TEAM
HOCKING PLAZA
DEMOGRAPHICS
Source: © 2016 Experian
Created on May 2017
POPULATION 3 Miles 5 Miles 10 Miles
▪ 2021 Projection
Total Population 10,715 14,462 27,359
▪ 2016 Estimate
Total Population 10,515 14,138 26,681
▪ 2010 Census
Total Population 10,596 14,206 26,746
▪ 2000 Census
Total Population 10,185 13,572 25,500
▪ Current Daytime Population
2016 Estimate 10,769 14,087 22,098
HOUSEHOLDS 3 Miles 5 Miles 10 Miles
▪ 2021 Projection
Total Households 4,404 5,756 10,615
▪ 2016 Estimate
Total Households 4,290 5,589 10,290
Average (Mean) Household Size 2.45 2.49 2.57
▪ 2010 Census
Total Households 4,370 5,682 10,400
▪ 2000 Census
Total Households 4,193 5,405 9,859
▪ Occupied Units
2021 Projection 4,404 5,756 10,615
2016 Estimate 4,842 6,399 12,049
HOUSEHOLDS BY INCOME 3 Miles 5 Miles 10 Miles
▪ 2016 Estimate
$150,000 or More 2.18% 2.35% 2.30%
$100,000 - $149,000 6.40% 7.21% 7.78%
$75,000 - $99,999 11.01% 11.54% 12.74%
$50,000 - $74,999 19.86% 20.96% 21.99%
$35,000 - $49,999 15.35% 15.76% 15.75%
Under $35,000 44.95% 41.92% 39.11%
Average Household Income $50,262 $52,657 $54,938
Median Household Income $38,965 $41,573 $44,511
Per Capita Income $20,570 $20,868 $21,266
HOUSEHOLDS BY EXPENDITURE 3 Miles 5 Miles 10 Miles
Total Average Household Retail Expenditure
$54,147 $55,702 $57,386
▪ Consumer Expenditure Top 10 Categories
Housing $13,963 $14,266 $14,618
Transportation $9,273 $9,519 $9,782
Shelter $7,765 $7,901 $8,059
Food $6,479 $6,652 $6,882
Health Care $4,112 $4,237 $4,334
Personal Insurance and Pensions $4,026 $4,224 $4,490
Utilities $3,416 $3,491 $3,584
Entertainment $2,377 $2,458 $2,557
Apparel $1,931 $2,025 $2,141
Cash Contributions $1,367 $1,440 $1,482
POPULATION PROFILE 3 Miles 5 Miles 10 Miles
▪ Population By Age
2016 Estimate Total Population 10,515 14,138 26,681
Under 20 26.24% 26.11% 25.79%
20 to 34 Years 18.86% 18.04% 16.60%
35 to 39 Years 5.97% 5.98% 5.94%
40 to 49 Years 11.80% 12.34% 13.40%
50 to 64 Years 19.83% 20.41% 21.80%
Age 65+ 17.27% 17.11% 16.49%
Median Age 39.08 39.90 41.29
▪ Population 25+ by Education Level
2016 Estimate Population Age 25+ 7,101 9,596 18,281
Elementary (0-8) 2.03% 1.96% 1.95%
Some High School (9-11) 11.13% 11.39% 11.47%
High School Graduate (12) 42.27% 42.09% 43.80%
Some College (13-15) 19.19% 19.28% 19.11%
Associate Degree Only 9.82% 9.97% 9.76%
Bachelors Degree Only 10.03% 9.63% 8.59%
Graduate Degree 5.10% 5.22% 4.93%
19
Income
In 2016, the median household income for your selected geography is
$38,965, compare this to the US average which is currently $54,505.
The median household income for your area has changed by 25.10%
since 2000. It is estimated that the median household income in your
area will be $45,962 five years from now, which represents a change
of 17.96% from the current year.
The current year per capita income in your area is $20,570, compare
this to the US average, which is $29,962. The current year average
household income in your area is $50,262, compare this to the US
average which is $78,425.
Population
In 2016, the population in your selected geography is 10,515. The
population has changed by 3.24% since 2000. It is estimated that the
population in your area will be 10,715.00 five years from now, which
represents a change of 1.90% from the current year. The current
population is 47.35% male and 52.65% female. The median age of
the population in your area is 39.08, compare this to the US average
which is 37.68. The population density in your area is 371.39 people
per square mile.
Households
There are currently 4,290 households in your selected geography. The
number of households has changed by 2.31% since 2000. It is
estimated that the number of households in your area will be 4,404
five years from now, which represents a change of 2.66% from the
current year. The average household size in your area is 2.45 persons.
Employment
In 2016, there are 4,618 employees in your selected area, this is also
known as the daytime population. The 2000 Census revealed that
47.50% of employees are employed in white-collar occupations in
this geography, and 52.34% are employed in blue-collar occupations.
In 2016, unemployment in this area is 5.56%. In 2000, the average
time traveled to work was 33.00 minutes.
Race and Ethnicity
The current year racial makeup of your selected area is as follows:
97.03% White, 0.69% Black, 0.00% Native American and 0.21%
Asian/Pacific Islander. Compare these to US averages which are:
70.77% White, 12.80% Black, 0.19% Native American and 5.36%
Asian/Pacific Islander. People of Hispanic origin are counted
independently of race.
People of Hispanic origin make up 0.99% of the current year
population in your selected area. Compare this to the US average of
17.65%.
PROPERTY NAME
MARKETING TEAM
HOCKING PLAZA
Housing
The median housing value in your area was $103,441 in 2016,
compare this to the US average of $187,181. In 2000, there were
2,800 owner occupied housing units in your area and there were
1,393 renter occupied housing units in your area. The median rent at
the time was $308.
Source: © 2016 Experian
DEMOGRAPHICS
20
MARKET OVERVIEW
Columbus Metro
Market Highlights
Logistics hub
▪ Rickenbacker Inland Port provides air, truck and rail transport throughout the U.S.
Midwestern commercial center
▪ Greater Columbus is home to four Fortune 500 companies and many regional operations.
Affordable housing costs
▪ The median home price in Columbus at $164,700 is well below the national level of $225,800.
COLUMBUS
The Columbus metro is composed of 10 counties located in the gently rolling hills of central
Ohio. It is Ohio’s most populated metropolitan area and has natural landmarks that include
reservoirs to the north and the Scioto River, which bisects the city. Franklin County, home to
Columbus, is surrounded by mainly rural counties.
Geography
21
HOCKING PLAZA SHOPPING CENTER
MARKET OVERVIEW
Columbus is a national transportation and distribution hub, with nearly 60 percent of the U.S. population within
an eight-hour driving radius. Interstates 70 and 71 intersect in Columbus, while I-270 forms a beltway around
the metro and I-670 bisects the city.
Port Columbus International Airport, located east of downtown, is the primary passenger facility. General
aviation airports Bolton Field and OSU Don Scott also provide air service. Rickenbacker International is one of
the world’s few international airports primarily dedicated to cargo transport. Freight rail service to the airport
and throughout the region is offered by CSX and Norfolk Southern railways.
Central Ohio Transit Authority provides bus service throughout Franklin County and portions of Delaware,
Fairfield, Licking and Union counties.
Infrastructure
The Columbus Metro is:
▪ 190 miles from Detroit
▪ 360 miles from Chicago
▪ 405 miles from Washington, D.C.
▪ 570 miles from Atlanta
Airports
▪ Port Columbus International Airport
▪ Rickenbacker International
▪ OSU Don Scott and Bolton Field general
aviation airports
Major Roadways
▪ Interstates 70, 71, 270 and 670
▪ Highways 23, 33 and 62
Rail
▪ Freight – CSX and Norfolk Southern
The Columbus metro contains a population of nearly 2 million people and comprises eight counties: Delaware,
Licking, Fairfield, Pickaway, Union, Morrow, Madison, Perry, Hocking and Franklin. The metro’s population will
increase 5.0 percent over the next five years, slightly above the national rate. Columbus, the capital city, also
has the largest population with 829,200 residents.
Metro
Largest Cities in Metro by Population
Columbus 829,200
Newark 48,100
Dublin 44,800
Lancaster 39,500
Grove City 38,900
Westerville 38,800
* Forecast
Sources: Marcus & Millichap Research Services; U.S. Census
Bureau; Experian
COLUMBUS
22
HOCKING PLAZA SHOPPING CENTER
MARKET OVERVIEW
Relatively diverse employment opportunities, Columbus’ designation as the state
capital and the presence of Ohio State University provide a strong foundation for
healthy local economic activity.
Major corporations are drawn to Columbus’ lower business costs, stellar
education system and strategic location. The metro is home to four Fortune 500
companies, L Brands, Cardinal Health, American Electric Power and Nationwide,
as well as many regional and subsidiary operations.
Columbus has a strong tradition of nurturing local enterprises into national and
global powerhouses. Wendy’s and L Brands, both headquartered in Columbus,
support thousands of jobs in the metro and are involved in community
development.
Information technology is a growing sector in Columbus with the recent addition
of IBM’s Client Center for Advanced Analytics. A collaborative partnership with
Ohio State University will draw and train workers in a business and technology
curriculum, preparing workers for data analytics jobs.
The housing sector in Columbus is improving. More than 7,300 residential
building permits were issued in 2015, and home sales are trending higher.
Economy
* Forecast
Sources: Marcus & Millichap Research Services; Bureau of Economic
Analysis; Moody's Analytics; U.S. Census Bureau; Fortune
COLUMBUS
23
HOCKING PLAZA SHOPPING CENTER
MARKET OVERVIEW
Local employers provide more than 1 million jobs in the Columbus metro, and the labor market is expected to
expand at an annual pace of 1.8 percent over the next five years as the region’s employment base becomes
more diversified. All major job sectors except manufacturing will post gains during this period. The
manufacturing industry’s share of total employment has diminished in recent years to 7 percent. The sector will
continue to play a role in the local economy.
The trade, transportation and utilities sector is a key industry to the local economy, accounting for 19 percent of
total employment. The sector’s dominance is linked to the metro’s central U.S. location, its well-developed
infrastructure and the presence of major corporations that ship worldwide. Employment in this segment is
expected to rise by 1.0 percent annually over the next five years.
The professional and business services, and government sectors are also major employers in the economy.
They provide 18 and 16 percent, respectively, of metro jobs, or roughly 350,000 workers. These segments will
increase at an annual pace of 3.4 percent and 1.0 percent, respectively through 2020. The construction sector
will have the largest growth during this period, at 5.8 percent.
Labor
* Forecast
Sources: Marcus & Millichap Research Services; BLS; Moody’s
Analytics
COLUMBUS
24
HOCKING PLAZA SHOPPING CENTER
MARKET OVERVIEW
Columbus’ standing as the state capital and Ohio State University’s impact on the local economy have helped the region remain popular with relocating and expanding
companies. The metro houses a number of nationally and globally recognized corporations in a wide array of industries.
Honda of America Mfg. has been in the metro since 1979, when it started producing motorcycles in Marysville. The company has moved its North American headquarters
from Los Angeles to Marysville. Additional Honda facilities are located in the nearby communities of Anna and East Liberty. Honda employs a significant portion of local
residents.
Nationwide Insurance, already one of the largest private employers in Columbus, is expected to grow in the years ahead as the vast group of aging baby boomers utilizes its
financial and insurance products and services for retirement and investment planning.
L Brands, (formerly Limited Brands), one of Columbus’ most recognized local firms, is an integral corporate entity to the metro economy. The company employs thousands
at its corporate offices and retail outlets. Successful subsidiary organizations of L Brands, including Victoria’s Secret and Abercrombie & Fitch, also maintain corporate
headquarters in the metro.
Employers
Major Employers
JPMorgan Chase
Nationwide Insurance
Honda of America
L Brands
Nationwide Children’s Hospital
PNC Financial Services Group
Huntington Bancshares Inc.
Cardinal Health
American Electric Power
Express Script Holdings Co.
Alliance Data Retail Systems * Forecast
Sources: Marcus & Millichap Research Services; BLS; Moody’s
Analytics; Experian
COLUMBUS
25
HOCKING PLAZA SHOPPING CENTER
MARKET OVERVIEW
Population growth in the Columbus metro will outpace the nation over the next five years with the addition of nearly 100,000 residents. These gains will be supported by a
steadily improving employment landscape.
Columbus will continue to benefit from the expansion of local companies as well as a projected influx of college students. The metro is relatively young, largely the result of
the presence of Ohio State University. The median age is 35.7 years, below the U.S. median of 37.5. Residents younger than 20 make up 27 percent of the population, while
those age 65 or older comprise just 12 percent.
The metro has cultivated a highly educated populace; 32.4 percent of residents age 25 and older have earned at least a bachelor’s degree and more than 11 percent have
also obtained an advanced degree. Educational attainment generally translates into high incomes.
Area inhabitants enjoy a median household income that remains slightly above the national median, and the presence of major corporations and the region’s entrepreneurial
spirit will keep median incomes slightly above the U.S. level during the coming years. High earnings and home prices that are well below the national median have resulted
in 63 percent of residents owning their home.
Demographics
COLUMBUS
* Forecast
Sources: Marcus & Millichap Research Services; AGS; Experian;
Moody’s Analytics; U.S. Census Bureau
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MARKET OVERVIEW
Columbus may be best known as a college town, but for a midsize community, it offers residents big-city amenities. The metro is home to major league sports teams: the
Blue Jackets (NHL) and the Crew (MLS). The Columbus Clippers are the Triple-A affiliate of the Cleveland Indians (MLB) and play their home games in downtown Columbus.
The city is host to the Columbus Symphony Orchestra, Ballet Met and Opera Columbus, in addition to more than a dozen theater companies, more than 100 art galleries
and dealers, and a variety of museums. Many of the galleries and restaurants are located in Short North, a vibrant neighborhood north of downtown. The metro is also home
to various annual festivals and the Ohio State Fair. Additionally, the world-famous Columbus Zoo and Aquarium is known for its unique exhibits.
Outdoor recreational opportunities abound. The metro hosts a multitude of golf courses, as well as nearby reservoirs and an extensive park system. For wintertime
activities, Columbus is a one-hour drive from Mad River Mountain ski area in Bellefontaine.
The region’s economic vitality and social scene are supported by a strong post-secondary education network. Columbus contains the nationally recognized Ohio State
University, as well as many other four-year colleges, universities, and two-year institutions.
* Forecast
Sources: Marcus & Millichap Research Services; Economy.com;
National Association of Realtors; U.S. Census Bureau
Quality of Life
COLUMBUS
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MARKET OVERVIEW
28
COLUMBUS METRO AREA
Midwest-Leading Yields, Improving Operations
Draw More Investors to Columbus
Metro benefits from stable net absorption as a shift in large retailers occurs. Hiring remains consistent,
with job creation among higher-paying professions leading the way. Employment expansion will encourage
further household creation, fueling spending at local retail establishments. The market will benefit from the
actions of Ikea, Amazon and Kroger, national retailers significantly investing in the metro, at a time when
Macy’s, Sears and The Limited are exiting. Properties in downtown, in the University District and in
northwest suburbs will profit from a record wave of apartment deliveries that will bring more consumers to
the area. Outside of a 355,000-square-foot Ikea at Polaris Fashion Place, only 100,000 square feet of retail
will be completed this year. Subdued completions will divert demand to existing properties and compress
the vacancy rate to its lowest level in the past 10 years.
Pool of multi-tenant buyers fills; single-tenant listings remain limited. Boasting initial returns higher than
other Midwestern and Ohio metros, Columbus continues to attract more in-state and regional buyers. The
appeal of assets located downtown, in the northwest suburbs and in Delaware County rises amid consistent
job creation, tightening vacancy and ongoing residential development. A dwindling pool of single-tenant
listings fuels increased competition among buyers, pushing up prices. Fast-food and drugstore assets will
trade at cap rates as low as 5 percent, with restaurants changing hands at initial yields in the 6 to 8 percent
range. The lack of single-tenant listings will increase some investors’ risk tolerance and shift focus to multi-
tenant assets. Stable neighborhood and community centers with strong regional and local tenants will trade
at cap rates starting at 7 percent. Buyers seeking assets with unrealized upside potential could eye east
Columbus markets including Westerville, where vacancy has tightened in reaction to the core’s limited
availability.
* Forecast
Sources: Marcus & Millichap Research Services; BLS; CoStar Group, Inc.
HOCKING PLAZA SHOPPING CENTER
MARKET OVERVIEW
29
COLUMBUS METRO AREA
2017 Market Forecast
Steady job creation and a decline in deliveries kept Columbus in 30th place
of this year’s NRI.
Employers add 21,000 workers in 2017, building on the 18,600 positions
created last year, when professional and business services dominated
growth.
Annual completions reach a five-year low, as less than half of last year’s 1.1
million square feet is scheduled to come online in 2017.
Stable net absorption and minimal deliveries drop vacancy to 4.4 percent
this year. The rate of compression slightly outpaces 2016, when the metro’s
vacancy rate contracted 40 basis points.
Limited leasable space translates to a second straight year of rent growth,
with average asking rent escalating to $12.33 per square foot. Rents
jumped 4.6 percent last year.
Buyer demand for existing properties near new residential development,
where new retail construction has yet to follow, escalates transaction
activity in downtown, the University District and the cities of Dublin
and Hilliard.* Forecast
Sources: Marcus & Millichap Research Services; CoStar Group, Inc.;
Real Capital Analytics
NRI Rank
30, no change
Employment
up 2.0%
Construction
456,000 sq. ft.
Vacancy
down 60 bps
Rent
up 2.5%
Investment
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