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Retail Traffic

TRAFFIC PATTERNS

SHOWERS AND GROWERS

The U.S. markets with the most retail space opening up in 2004 are not necessarily the markets that are experiencing job booms, according to the 2004 edition of Marcus & Millichap's National Retail Index. The Riverside-San Bernardino market in California's Inland Empire's 4.3 million square feet of new space will be supported by 4 percent employment growth in the region. By contrast, Chicago will see almost 4 million square feet of new space open this year, but the market's job growth is only estimated at 1.5 percent.

PAY SCALE WHO SPENT HOW MUCH ON WHAT?

$4.8 billion

Simon Property Group acquires Chelsea Property Group.

$4.6 billion

Lend Lease Corp. puts in a bid for rival Australian developer General Property Trust.

$3.2 billion

May Department Stores buys Marshall Field's and nine Mervyn's stores from Target Corp.

$350 million

Inland Western Retail Real Estate Trust buys 10 centers totaling more than 2 million square feet in Arizona, Colorado, Louisiana, Michigan, Nevada, South Carolina and Texas.

$110.7 million

Lightstone Real Estate Partners, a division of The Lightstone Group, buys five malls from PREIT.

$65 million

Vornado Realty Trust buys 25 Stater Bros. grocery stores in Southern California from Newkirk Master Limited Partnership, an entity in which Vornado owns a 22.3 percent stake.

$50.2 million

Steadfast Commercial Properties buys Everett Mall in Everett, Wash., from The Equitable Life Assurance Society.

BIG BUY FOR MAY

Compared to acquisition multiples for the past nine years, May Co.'s billion-dollar Field's purchase is one of the richest by far, exceeding the average requisitions multiple of about 1.2x revenues, according to research from Credit Suisse First Boston.

Mall Anchor Tenant Deals

Date Transaction Cost
Jul-94 Federated/Macy's merger $4.122 billion
Apr-94 Federated buys Horne's $120 million
Aug-95 Federated buys Broadway $1.6 billion
Aug-95 May/JCPenney buy Woodies $660 million
Aug-96 May buys Strawbridges locations $463 million
Oct-97 Proffitt's buys Carson Pirie Scott $790 million
Nov-97 Consolidated Stores/MacFrugal's merger $995 million
May-98 Dillard's buys Mercantile Stores $3 billion
Jul-98 Proffitt's buys Saks Holdings $2.3 billion
Jul-00 May buys David's Bridal $436 million
Sep-00 Nordstrom buys Faconnable S.A. $170 million
Jan-01 May buys Saks Locations $309 million
Apr-01 Dillard's buys Montgomery Ward stores $21 million
Feb-02 May buys Priscilla of Boston $7 million
Jun-02 Sears buys Lands' End $1.8 billion
Jun-04 May buys Marshall Field's & 9 Mervyn's Stores $3.24 billion

THE BIERI REPORT: BALTIMORE

Baltimore hasn't had a major new retail project since Towson Town Center. The project has been stable, and has significantly affected and influenced area shopping patterns. Downtown is an important destination for tourists and convention visitors, and retail centers here provide great destinations for these visitors. Mall in Columbia continues on a steady growth path. Towson is the best merchandise center in the market. And The Village of Cross Keys has the higher price point shoppers.

BALTIMORE TRAFFIC COUNTS

Shopping Center RANKING
Annapolis Mall A-
Arundel Mills A
Avenue at White Marsh C+
Eastpoint Mall C
Gallery at Harborplace C
Harborplace A-
Harford Mall C
Mall in Columbia B+
Marley Station B-
Mondawmin Mall C
Owings Mills C+
Security Square Mall C
Towson Town Center B+
Village of Cross Keys C
White Marsh Mall B+

BRAIN GAINS, BRAIN DRAINS

Competition among U.S. cities for smart migrants — recent college graduates, mid-career workers or retirees — creates winners and losers. Recently released migration data from the 2000 U.S. census reveals a few surprises: some of the most cosmopolitan, gray-matter-rich sections of the country are losing grip, even as many sun and fun areas are shedding their “dumb blonde” images.

Greatest Brain Gaining Metro Regions

Net domestic migration gains among college grads aged 25 and older, 1995-2000

MSA Change
1. Atlanta 76,443
2. Phoenix-Mesa, Az. 63,084
3. Dallas-Fort Worth, Tex. 54,814
4. San Francisco-Oakland-San Jose, Ca. 48,614
5. Denver-Boulder-Greeley, Colo. 40,973

Greatest Brain Draining Metro Regions

Net domestic migration gains among college grads aged 25 and older, 1995-2000

MSA Change
1. New York-Northern New Jersey-N.Y.-N.J.-Long Island, Conn.-Pa. -122,000
2. Chicago-Gary-Kenosha, Ill.-Ind.-Wisc -29,647
3. Pittsburgh, Pa. -20,065
4. Detroit-Ann Arbor-Flint, Mich. -17,244
5. Buffalo-Niagara Falls, N.Y -17,171

FLASH IN THE PANERA

More than 50 million square feet of lifestyle center space is currently on line, and St. Louis-based quick-service restaurant Panera Bread Co. is one of the few lifestyle tenants whose expansion plans are keeping pace. Panera plans to open between 140 and 150 of its company-owned bakery cafés this year. The company has targeted the Western states and the South for new stores. Fifty four percent of Panera's current storebase is in the Midwest. Same store sales will be up 2.6 percent for 2004, a solid but not quite stellar performance, says CIBC World Markets analyst John Glass. “A recent roll-out of low-carb breads is getting lukewarm response from customers,” he adds. But Via Panera, the company's catering service, is being rolled out successfully to all stores.

Total stores: 637
90% of stores are within 2 miles of a competing Subway store
AVERAGE CHECK $6.26
1,600 number of stores possible by 2014
$493.20 Sales per square foot
Average unit volume in 2004: $1.9 million
71% of stores are franchised
102 grams of carbohydrates in Panera's famous sourdough soup bowl
250% Stock price growth in past three years
$800,000 cost to build a new store

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