hocking plaza shopping center - loopnet · 2017. 9. 19. · cashland (2,400 sf) goodwill (20,576...

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. Â© 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


#

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.


PROPERTY PHOTOS

6


PROPERTY PHOTOS

7


PROPERTY PHOTOS

8


PROPERTY PHOTOS

9


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)


AERIAL

11


12

FINANCIAL

ANALYSIS


#

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


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


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


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


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


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.


PROPERTY NAMEOAKLEY STATION BUILDING


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


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


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


18

MARKET

OVERVIEW


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


▪ 2010 Census


▪ 2000 Census


▪ 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


Average (Mean) Household Size 2.45 2.49 2.57

▪ 2010 Census


▪ 2000 Census


▪ 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


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


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


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


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


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

26


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

27


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.


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


hocking plaza shopping center - loopnet · 2017. 9. 19. · cashland (2,400 sf) goodwill (20,576...

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