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Posts Tagged ‘retail space’

Waldenbooks, a division of Borders, is closing 200 stores nationwide and eliminating 1,500 jobs. The stores have been closing down, 66 a year on average, since 2001. Following this latest round of closures in January 2010, there will be 130 stores remaining.  The typical Borders store size is 25,000 square feet while Waldenbooks runs closer to 3,900 square feet.  Based on this average size, there will be 776,000 square feet of vacant mall space (where the stores tend to be) added to the market in the first quarter of 2010.

Here are the number of stores closing by state (two are in Oregon and two are in Washington):

1 – Alaska

1 – Alabama

2 – Arkansas

2 – Arizona

12 – California

1 – Connecticut

13 – Florida

6 – Georgia

3 – Iowa

9 – Illinois

5 – Indiana

1 – Kansas

2 – Kentucky

2 – Louisiana

5 – Massachussetts

4 – Maryland

8 – Michigan

1 – Minnesota

2 – Missouri

2 – Mississippi

2 – Montana

8 – North Carolina

1 – North Dakota

4 – Nebraska

3 – New Hampshire

8 - New Jersey

1 – New Mexico

2 – Nevada

10 – New York

16 – Ohio

4 – Oklahoma

2 – Oregon (Albany and Medford)

24 – Pennslyvania

1 – Rhode Island

4 – South Carolina

1 – South Dakota

2 – Tennessee

14 – Texas

1 – Utah

6 – Virginia

2 – Vermont

2 – Washington (Spokan and Bellingham)

3 – Wisconsin

2 – West Virginia

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SustainDex (environmental|sustainable|clean/bio tech)

Eastside

Sustainable NW Wood – 225 SE Division Pl | 7,500 SF

Solar City – Airport Biz Ctr | 6645 NE 78th | 855 SF

GeneralBizDex (consulting|finance|insurance|legal|other)

Central Business District

Umpqua Investments – Lakeview Village | 385 SW First | 2,941 SF

Morones Young Valuations – 625 SW Broadway | 2,704 SF

Westside

Tri State Employment Svs – Griffith Park | 4900 SW Griffith Dr | 1,011 SF

Byers & Hurlburt – 4000 Kruse Way  Pl | 1,876 SF

Eastside

Make One – North Main Village | 10558 SE Main St | 1,118 SF

HealthDex (hospital/provider|managed care|equipment)

Westside

Acumed – 4860 NW Shute Rd | 52,807 SF purchase

NonProfDex (charitable|education|trade assoc)

Central Business District

Portland Metro Realtors Assoc – Lloyd Tower | 825 NE Multnomah | 4,693 SF

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It’s not really a surprise that Blockbuster Video has filed an 8k form to begin closing a ton of stores around the country. With the onset of Netflix and other options that allow more flexibility (I don’t have to get out of my chair at home) for home movie viewing, it was just a matter of time before Blockbuster started shrinking like the rest of it’s competitors. So, the company plans to make these closures by the end of 2010, but we have yet to know which markets will be hit the hardest. More to come I’m sure…but for now, we only have numbers

  • 2009 Normal Closures — 280-300
  • 2009 Accelerated Closures — 300-385
  • 2010 Normal Closures — 100-125
  • 2010 Accelerated Closures — 130-150
  • Stores w/additional lease mitigation/termination efforts — 275-300
  • Stores that may be converted to outlets — 250-300
  • Total store closures and other actions — 1,335-1,560

For the full story, click here http://budurl.com/sqwx

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Many industry experts are predicting 2010 as one of the best year’s for tenants in a long, long time. Why? Because as more commercial properties exchange hands (whether through foreclosure or preemptive moves by distressed owners/banks) the cost basis for new owners will be significantly lower than for the previous asset holders. This will, in turn, push rents down as new owners no longer have such high cash flow needs to cover the debt on the building, called the Debt Coverage Ratio or DCR. This is a comparison between the monthly income of the property and the monthly debt payment on it. If the debt is lower, then the monthly income can be lower.

The escalating prices of an overheated market caused the value of commercial loans to rise dramatically over the last 3 years and thus drove up rents as the income on buildings had to increase in order to cover operations plus the cost of the loan.  As scores of owners walk away from their investments over the next year or two, banks will be forced to put up properties for sale at much lower prices than in 2006-2007.  Lower purchase prices, means buyers will be in a much healthier position to build a good tenant base through competitive rates and still meet their obligations as well as see a return on investment (albeit a much smaller return these days).

For landlords who can weather this transition and hold onto their properties, they face the dilemna of lowering their rents in order to be competitive.  While several owners already have a low cost basis and can be aggressive with rates (have owned their properties for a long time), others (who have purchased in recent years) will be facing losses for a period of time while they either (1) cut their rates and actually lose money on the front end or (2) hold on rates and see little leasing activity as a result.

The message here is take advantage of these unusual market conditions if and while you can. If you have a lease expiring within the next two years, you may want to start looking at the market now and exploring your options.

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Wrapping Fir Hallway

Wrapping Fir Hallway

ZIBA HQ INTERIOR SNEAK PREVIEW

Recently, I had a chance to see the interiors of the new Ziba Headquarters Building in the Pearl District. The building is slated for completion and occupancy in August with Ziba taking the entire 2nd floor and 3rd floors. 

 The interior design reminds me a bit of the Weiden+Kennedy offices with floating walkways and open space to the ceiling of the building. But the Ziba building has a lighter feel with long white walls and glass  walls, both interior and exterior.  As part of the LEED pursuit, repurposed wood is used throughout the building, with a swirling hallway on the east end of the building as the finale to a long corridor. (photo: left)

The architects, Holst Architecture of Hotel Modera and Bridgeport BrewPub renovation fame, have created a feeling of movement among the walls and stairwells to counter the building’s  long rectangle shape.  In order to deal with a long, narrow lot, the north facing wall is entirely glass and provides natural light to all of the building. 

View from library to walkway over stairwell entry

View from library to walkway over stairwell entry

The Ziba design library has built-in display cases for reviewing samples of past projects and seeking inspiration on new accounts.  At the opposite end of the building is an auditorium (which will be available for public events) with giant sliding doors that allow the stage to spill outside.  This area is finished off with an outdoor balcony/patio and a full kitchen at the top of the seating area.

Truly a unique building, if Ziba hosts an Open House in the Fall 2009 I would encourage you to attend and check it out. It appears to be a great venue to host industry events.

 Ziba Design World Headquarters

1044 NW Ninth Avenue

Portland, Oregon

76,000 RSF

3 Stories

 

TechDex (apps|provider|hardware|var)

Westside

Advantage Management Software – 8600 SW Salish, Wilsonville | 1,337 SF

HealthDex (hospital/provider|managed care|equipment)

Eastside

Manual Medicine and Rehab – Sunnyside Marketplace | 12034 SE Sunnyside | 1,702 SF

GeneralBizDex (consulting|finance|insurance|legal|0ther)

Central Business District

Venne & Co - 6915 SW Macadam, Ste 145 | 3,565 SF

Unum – Columbia Square | 111 SW Columbia St | 8,500 SF

Peters & Co. – Selling Building | 610 SW Alder St | 2,100 SF

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