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MARKETBEAT

RETAIL SNAPSHOT
BALTIMORE, MD
A Cushman & Wakefield Research Publication

Q4 2012

ECONOMIC OVERVIEW
Retail sales growth in the U.S. declined in 2012 to 4.9% from 8.0% in 2011. While online holiday sales grew by an impressive 11.1%, according to the National Retail Federation, sluggish sales in bricks and mortar stores dragged holiday sales growth down to just 3.0%, a major disappointment for retailers. Consumers remained cautious due to economic and fiscal uncertainties, and curtailed their spending accordingly. The unemployment rate in the Baltimore Metro area decreased to 7.2% in 2012, mainly due to growth in the professional/business services and education/health sectors. Approximately 1,000 jobs were added in the retail trade sector, and an additional 500 among eating and drinking establishments.

OUTLOOK
Construction of The Marketplace at Fells Point is moving along with an anticipated completion date of first quarter 2014. The $40 million, mixed-use project centered on the 600 block of South Broadway, will bring 159 apartments and 28,000 sf of retail space to the market. Recent out-of-town investors entering the Baltimore market speak to the confidence in the areas strong demographics, labor force, and ability to attract tourist dollars. With a slowly improving economy and both public and private initiatives underway to improve infrastructure, the prospects for growth in the Baltimore retail market in 2013 remain strong.

ECONOMIC INDICATORS
NATIONAL GDP Growth CPI Growth Consumer Spending Growth Retail Sales Growth REGIONAL Household Income Population Growth Unemployment
Source: Moodys Analytics

2011 1.8% 3.1% 2.5% 8.0% 2011 $67,695 0.5% 7.5%

2012F 2.3% 2.1% 1.9% 4.9% 2012F $68,291 0.6% 7.2%

2013F 2.1% 2.1% 1.9% 3.1% 2013F $69,122 0.6% 7.3%

RETAIL MARKET OVERVIEW


One of Baltimores most iconic retail destinations was sold during the fourth quarter. Ashkenazy Acquisition Corporation, a private real estate investment firm out of New York City, purchased Harborplace for approximately $98.5 million, or $657 per square foot (psf). The two-story shopping center, comprised of the Pratt and Light Street Pavilions, has an estimated 93% occupancy rate. While it lost one of its long-time anchor tenants, Philips Seafood, in 2011, it has subsequently been able to attract H&M, McCormick World of Flavors, and Ripleys Believe it or Not! Odditorium. Another significant sale closed in 2012 was Towson Place, a 680,000square foot (sf) power center. Kimco Realty Corp, a REIT based in Long Island, NY, purchased the remaining 70% interest in the property for $181.4 million as part of its strategy to increase its shopping center portfolio in urban areas. Home furnishing, discount and department stores were active in the leasing market in 2012. Boscovs, a regional chain department store, returned to its anchor spot in the White Marsh Mall, leasing the nearly 200,000 sf it vacated upon declaring bankruptcy during the height of the recession. Roses, a Variety Wholesalers, Inc. department store, leased 76,000 sf at the Cromwell Field Shopping Center in Glen Burnie, with a planned opening of Spring, 2013, while The Sofa Store took 50,000 sf in Towson. In a major boon to Downtown Baltimore, Marshalls leased over 30,000 sf at Lockwood Place at 600 East Pratt Street. The discount retailer will fill the space vacated by Filenes Basement in late 2011, and plans to open during the first quarter of 2013.

RETAIL SALES AND CONSUMER CONFIDENCE TRENDS


$5,000 $4,500
Bil US$

120 100 80 60 40 20

$4,000 $3,500 $3,000

2008

2009

2010

2011

2012

RETAIL SALES
Source: Moodys Analytics

CONSUMER CONFIDENCE

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For more information, contact: Paula Munger, Regional Research Director 703 448 1200 paula.munger@cushwake.com

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