RESEARCH & FORECAST REPORTGREENVILLE, SOUTH CAROLINA

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Retailers Find New Home in Recycled SpaceKEY TAKEAWAYS > The year ends strong with lower vacancy rates and higher asking rental rates.

> Vacated space is recycled by new retailers.

> Redevelopments and new developments continue.

> The market welcomes new retailers.

> Magnolia Park is sold shortly following completion.

> Grocery wars continue.

CURRENT CONDITIONSThe Greenville/Spartanburg, SC retail market ended 2014 with a significant quarter full of construction, retailer announcements, declining vacancy and increasing rental rates. The total vacancy rate for the market dropped to 11.76% at the end of the year from 11.95% at the end of the third quarter of 2014. Asking rental rates increased throughout the year and averaged $10.69 NNN for shop space at year-end, up from the third quarter rate of $10.41 NNN. Average asking rental rates for shop space range from $7.00 NNN to $19.25 NNN. Asking rental rates for anchor space held steady at $5.01 NNN over the quarter and asking rental rates for junior anchor space increased to an average of $8.92 NNN from $8.68 NNN at the end of the third quarter.

MARKET INDICATORS

Q4 2014 Forecast

VACANCY

NET ABSORPTION

RENTAL RATES

CONSTRUCTION

Q4 2014 | RETAIL

UPSTATE GROSS RETAIL SALESOCTOBER 2014: $3,248,164,510.29 OCTOBER 2013: $3,172,623,726.44

2.40% ANNUAL INCREASE

Gross retail sales in Greenville county totaled $1.3 billion in October 2014 and accounted for 39.4% of Upstate sales.

UPSTATE GROSS RETAIL SALES TRENDS

TOTAL VACANCY RATE TRENDS

$2.7 B

$3.0 B $3.0 B$3.2 B$3.2 B

$3.6 B$3.7 B

$3.8 B

$2.8 B

$3.2 B $3.2 B $3.2 B

2011 2012 2013 2014

August September October

8.75%

1.74%

4.80%

11.76%10.68%

2.53%

4.80%

11.95%

Haywood Woodruff Pelham Market

Q3-14 Q4-14

Source: South Carolina Department of Revenue

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RESEARCH & FORECAST REPORT | Q4 2014 | RETAIL | GREENVILLE

Construction completed at Magnolia Park during the fourth quarter of the year. The redevelopment of the former Greenville Mall has been an entry point for several retailers to the South Carolina market. Nordstrom Rack, Toby Keith’s I Love This Bar and Grill, Dave and Buster’s, Yard House, Cheddars, Firebirds and Bad Daddy’s Burger Bar all chose Magnolia Park for their first South Carolina location. Additional retailers in the center include Cabela’s, Toys “R” Us and Babies “R” Us, DXL and Golfsmith. Shortly following completion, the 800,000 square foot mixed-use development was acquired by MetLife Core Property Fund for more than $155 million.

High retail occupancy and low interest rates motivated investors to acquire shopping centers. Big Shopping Centers USA purchased 85% interest in Crosspointe Plaza for $18.96 million as part of a venture with Realty Link LLC. The center is home to TJ Maxx, DSW, Joann Fabrics and Crafts, Burke’s Outlet, Jason’s Deli and Chipotle, among others.

The market is seeing considerable interest from regional and national retailers. Both downtown and suburban submarkets are experiencing activity as new restaurants and stores enter or expand throughout the market. Retailers looking for space in Downtown Greenville have options in several mixed-use developments while retailers seeking space in suburban submarkets are finding space in redeveloped centers.

RECYCLING SPACEAs occupancy increases and quality retail space becomes difficult to find, retailers are finding themselves recycling and occupying recently vacated space. Retailers are redeveloping old restaurants and strip centers into new retail. Additionally, the retailer shift from Haywood Road to Woodruff Road that began in 2013 left big box space vacant along Haywood Road as retailers chose to locate in Magnolia Park. Much of the vacated space has since been occupied by new retailers.

> Gabriel Brothers and Conn’s have backfilled vacant big box spaces at The Gallery located at 583 Haywood Road that were formerly occupied by Steve and Barry’s and Babies “R” Us.

> Garlington Station at 1143 Woodruff Road is being redeveloped into a 23,197 square foot center adjacent to the Shops at Greenridge. An outparcel development is nearing completion and is 100% preleased to Tijuana Flats and Stanton Optical. Across the street from the center is 25 Garlington, a planned 5,565 square foot center with space preleased to Chicken Salad Chick.

> The former Wendy’s site at 586 Haywood Road is being redeveloped. Construction is nearing completion on the 6,000 square foot strip center, which has preleased space to Tijuana Flats and can accommodate one more tenant.

> A shopping center along Augusta Street is undergoing renovations. Upon completion, the renovated center at the northeast corner of Augusta Street and East Faris Road will be home to Radio Shack and AT&T and have room for another tenant. Radio Shack is relocating from its former location in the Faris @ Augusta strip center across the street, which has recently been demolished and is being redeveloped into CVS. The pharmacy will be located on the site of a former strip center. The new 15,000 square foot CVS is expected to complete by mid-year 2015.

> The former movie theatre site adjacent to The Earth Fare Plaza along Pelham Road is being redeveloped to offer shop space in several buildings. A 4-story Home 2 Suites hotel is under construction at the site and is expected to open by mid-year 2015. Taziki’s, Chicken Salad Chick and Mariana’s have pre-leased space at the redevelopment.

Magnolia Park , 1025 Woodruff RoadSource: Menin Development

CVS, 2102 Augusta StreetSource: Upstate Business Journal

220 N MAIN STREET, STE 315

GREENVILLE, SC 29601

864.752.0300 | WWW.COLLETT.BIZ

NEW RETAIL DEVELOPMENTPelham Rd & I-85Greenville, SC 29615

Bill Rungedirect: 864.752.0301wrunge@collett.biz

LEASING | Cortney Carterdirect: 864.752.0302

ccarter@collett.biz

Greg Carterdirect: 864.752.0303

gcarter@collett.biz

PROPERTY DETAILS• New Retail Development - 1st Quarter 2015 Delivery

• Retail Space: +/- 1,500 SF up to 20,000 SF

• Outparcel Opportunity Available: +/- 2,089 SF

• Adjacent to Earth Fare

• Signalized Access (2) and Pelham Road Pylon Signage

• Development to Include 4-Story Home2 Suites by Hilton Opening Spring 2015

• Co-Tenants: Earthfare, The Local Taco, Chicken Salad Chick, Mariani's Boutique, Sola Salon Studios, Baby Furniture Plus Kids, The UPS Store, Bacon Bros. Public House, The Lost Cajun Restaurant, Tazikis

DEMOGRAPHIC SNAPSHOT (2014)

TRAFFIC COUNTS

PopulationProjected Pop. (2019)Avg. Household Income

I-85Pelham Road

105,30523,718

5,7796,114

$83,875

48,22051,079

$94,510

1 mile 3 mile 5 mile

122,125129,331$82,891

AVAILABLE 1st QTR 2015

DAYTIME POPULATION

Total BusinessesTotal Employees

4266,893

2,67140,587

6,92594,835

Earth Fare Plaza, Pelham RoadSource: Collett

Garlington Station, 1143 Woodruff RoadSource: Avison Young

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RESEARCH & FORECAST REPORT | Q4 2014 | RETAIL | GREENVILLE

> Kohl’s opened earlier this year in Piedmont Marketplace, the former K-Mart Plaza at 1320 Wade Hampton Boulevard in Greer. Kohl’s occupies 66,000 square feet in the center and Tractor Supply Company occupies 21,500 square feet. The second phase of construction, which will include approximately 43,500 square feet of retail space, is expected to complete in the summer of 2015.

DOWNTOWN HEATS UPResidential and mixed-use developments, both planned and under construction, are drawing attention from retailers as the projected increase in daytime and residential population is sure to heighten the demand for retail services. Downtown Greenville is transforming into a live, work and play environment, appealing to a mix of retailers.

> Orvis recently opened at ONE joining retailers Vann and Liv, Anthropologie and Brooks Brothers.

> The Playwright, an Irish pub with a true Ireland theme will open late March 2015 at the new River’s Edge development, located at Broad and River Streets.

> Biscuit Head, an Asheville-based restaurant, plans to open its first Greenville location at the South Ridge development at Church Street and University Ridge. The restaurant expects to open early in 2016.

> The Alley, a high-end bowling alley, restaurant and music venue, plans to open at the former Handlebar space along Stone Avenue in 2015.

> Responding to the growing daytime and residential population, Cianciola’s Grocery & Deli, which will offer sandwiches, hot food, produce and grocery staples, plans to open on College Street near N. Main Street in Q1 2015.

Anchor Space Junior Anchor Space Shop Space

Building Count Market Size Vacancy Rate Available Asking Rent Available Asking Rent Available Asking Rent

Belton/Honea Path 5 260,281 24.51% 35,000 $3.95 0 - 28,800 $4.31

Boiling Springs 8 605,386 33.01% 129,000 $4.00 0 - 70,852 $8.77

Cherrydale/TR 5 453,054 14.90% 25,200 $4.00 0 - 42,300 $13.45

Clemson Boulevard 13 942,340 15.12% 118,749 - 0 - 23,772 $8.76

Clemson/Pendleton 7 292,637 29.41% 34,928 - 21,253 $7.00 29,890 $9.99

Downtown 3 169,726 0.00% 0 - 0 - 0 -

Duncan/Lyman 4 219,302 25.49% 44,000 $4.00 0 - 11,900 $10.00

Easley 4 355,859 0.00% 0 - 0 - 0 -

East Side 14 950,264 22.65% 128,102 $7.00 26,142 - 60,992 $12.30

East Spartanburg 13 1,007,450 20.20% 34,928 $7.25 38,163 $4.00 130,453 $8.31

Greer 9 729,617 8.13% 0 - 10,500 $18.00 48,804 $12.06

Haywood/Pleasantburg 16 1,392,071 8.75% 69,068 - 13,800 - 38,979 $19.25

Highway 81 Corridor 3 175,362 1.73% 0 - 0 - 3,025 $7.00

Inman/Lyman 4 222,836 26.54% 34,928 - 17,500 $6.25 6,720 $11.00

Mauldin 7 467,788 1.00% 0 - 0 - 4,700 $14.00

Oconee County 8 741,796 5.68% 22,400 $5.00 0 - 19,725 $7.96

Pelham Road 9 326,825 18.33% 38,003 - 0 - 21,890 $15.45

Pickens/Liberty 5 205,758 4.80% 0 - 0 - 9,880 $12.00

Powdersville 2 142,584 0.00% 0 - 0 - 0 -

Simpsonville 11 740,745 4.49% 0 - 0 - 33,225 $14.92

South Side 4 159,418 2.82% 0 - 0 - 4,500 $8.00

West Anderson 19 733,192 19.60% 64,396 $3.00 18,081 $8.50 61,233 $8.21

West Spartanburg 16 1,030,187 17.54% 97,857 $5.84 11,588 $13.50 71,265 $13.53

White Horse Road/Berea 10 777,987 2.76% 0 - 0 - 21,511 $10.00

Woodruff Road 35 2,196,732 1.74% 0 - 11,000 - 27,209 $17.00

Woodruff/Moore 3 145,400 0.00% 0 - 0 - 0 -

Market 237 15,444,597 11.76% 876,559 $5.01 168,027 $8.92 771,625 $10.69

DOWNTOWN RESIDENTIAL UPDATEDowntown Greenville has several multifamily residential developments in the works. 1. The Beach Company broke ground on Main

+ Stone, which will offer 292 apartments and 20,880 square feet of retail space. The complex plans on welcoming its first residents late in 2015.

2. South Ridge, at Church Street and University Ridge, will offer 360 apartments and 16,000 square feet of retail space.

3. Fountains Greenville will be located at 210 E. Broad Street. The project will offer 210 apartments and construction is set to begin in the first quarter of 2015.

Photo credit: Upstate Business Journal via The Beach Company and Proffitt Dixon Partners

1

2

3

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RESEARCH & FORECAST REPORT | Q4 2014 | RETAIL | GREENVILLE

GROCERY WARS REIGNITEOver the past year grocery stores made headlines with acquisitions, closures and expansions.

> Walmart Neighborhood Market opened its first South Carolina store at 805 W. Wade Hampton Boulevard in Greer early in 2013 and has been growing its presence since. Currently, there are four locations in the Greenville/Spartanburg area.

> Kroger acquired Harris Teeter in January 2014. The Harris Teeter brand is still operational and is reentering the Greenville market with a new store at Lewis Plaza. The 53,000 square foot store will offer high-end amenities such as a sit-down wine bar with outdoor terrace seating.

> The Fresh Market is opening a new store at the intersection of Woodruff Road and Feaster Road in Mauldin. The 21,000 square foot store will anchor a new development, which will offer an additional 6,300 square feet of retail space. Construction is expected to be complete in Summer 2015.

> BI-LO recently closed two stores. The Wade Hampton Boulevard store in Taylors and Anderson Road location in Greenville closed late in 2014.

2014 ANNOUNCEMENTS > Another Broken Egg Café, a breakfast, brunch and lunch restaurant,

is opening at 1025 Woodruff Road early in 2015.

> Freddy’s on Woodruff Road will be opening across from Magnolia Park in January 2015.

> A new Walmart Super Center is planned for 3136 N. Pleasantburg Drive near Cherrydale Point Shopping Center in Cherrydale. The store will be located on 20 acres, which were recently acquired for $6 million.

> Earlier this year, Bass Pro Shops announced plans to open another South Carolina location in Spartanburg. The location will be the company’s third in South Carolina and will be located between Greenville and Spartanburg on Interstate 85 at Highway 101. The store will be over 120,000 square feet and will be the primary anchor for a 75-acre mixed-use development to include retail, hotels and restaurants. The store will feature Uncle Buck’s Fishbowl and Grill, a nautical-themed restaurant located within the store.

> Two new Family Dollar stores are planned for Old Buncombe Road. One will be located at Old Buncombe Road and Sulphur Springs Road. The other store will be along Old Buncombe Road between Neely Street and Kerns Avenue.

> PDQ entered the Greenville market with a new restaurant at 3906 Pelham Road. The location is the restaurant’s second store in the state.

> Five Guys entered the Greer market and leased an outparcel space at Suber Commons at the intersection of Wade Hampton Boulevard and Suber Road.

> Verdae Development announced plans for a $100 million redevelopment of 100 acres between Laurens and Woodruff Road. The mixed-use development will include retail component that will consist of demolishing and redeveloping the former Best Buy and Sam’s Club sites along Laurens Road.

Walmart Neighborhood Market, Greer

Bass Pro Shops Outdoor World

Streetscape Rendering of planned Laurens Road RedevelopmentSource: Verdae

Harris Teeter Rendering, Lewis PlazaSource: Upstate Business Journal

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Horizon Square, Charleston, SC

• $2.1 billion in annual revenue

• 1.46 billion square feet under management

• Over 15,800 professionals

• 80,000 Lease/Sale Transactions

• $75 Billion Total Transaction Value

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FOR MORE INFORMATION:

Frank Hammond, CCIM, CPM Senior Principal | Greenville201 East McBee AvenueSuite 201Greenville, South Carolina 29603TEL +1 864 527 5451FAX +1 864 527 5444

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AROUND THE STATECHARLESTON, SOUTH CAROLINA > Tourism and residential growth continues to drive the retail market.

> Kitchen & Co. recently announced plans to join Nordstrom Rack and Dick’s Sporting Goods in the former K-Mart redevelopment in Mount Pleasant. The location will be Kitchen & Co.’s first South Carolina location.

> Earth Fare is currently under construction in Summerville and will anchor Horizon Square, a planned 63,000 square foot shopping center, which will also house Petco.

> Summerville Towne Centre, a planned 230,000 square foot center for Summerville, will be anchored by Academy Sports, Hobby Lobby and Aldi.

COLUMBIA, SOUTH CAROLINA > Plans for Killian’s Crossing in the Northeast Columbia submarket are underway and gaining

momentum. The development, to be located at the intersection of Clemson Road and Farrow Road, will offer multifamily and single family residential units, hotel space along with retail space and outparcels. McDonald’s completed construction and is open to customers.

> Academy Sports, which opened earlier this year in the Harbison/St. Andrews submarket, anchors a redevelopment along Park Terrace Drive at the former Staples and Hudson Smokehouse site. Guitar Center plans to enter the Columbia market and occupy space adjacent to Academy Sports. The development, which is under construction behind Columbiana on Park, will offer approximately 31,500 square feet of shop space in two buildings. Sport Clips and Salsaritas plan to locate in the center.

> J. Crew and Anthropologie are open at Trenholm Plaza. The retailers entered the Columbia market backfilling space recently vacated by Books-A-Million in Trenholm Plaza.

> Nordstrom Rack is open to customers. The retailer backfilled space vacated by Barnes and Noble.

FOR MORE STATEWIDE COMMERCIAL REAL ESTATE NEWS CHECK OUT OUR MARKET REPORTS AT:www.colliers.com/southcarolina/insights

Killian’s Crossing, Columbia, SC

RETAILERS NEW TO GREENVILLEIN THE MONTHS AHEAD2015 is likely to bring new retailers to the market driving down vacancy rates and pushing rental rates upwards. As redevelopment options run low, the market will begin seeing more ground-up construction. The completion of downtown residential and mixed-use projects will generate a greater demand for retail services resulting in greater retail activity. Greenville’s population and economy will continue to grow generating further retail development throughout the market.

RESEARCH & FORECAST REPORT | Q4 2014 | RETAIL | GREENVILLE