Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.
Issue link: http://cire.epubxp.com/i/206598
$50 million in U.S. sales, three categories are represented most ofen: burgers (Bareburger, Umami Burger, Mooyah, Elevation Burger, and Jake's Wayback Burgers), Mexican (Hot Head Burritos and Lime Fresh Mexican Grill) and healthy (Fresh Healthy Café, Muscle Maker Grill, and Te Veggie Grill). Technomic is watching other segments that have signifcant growth potential and don't currently have a leader with national coverage, in particular, Mediterranean, made-to-order pizza, barbecue, upscale chicken, and "green" fast-casual concepts. Technomic expects that fast-casual growth will continue to outpace industry growth, and that ongoing innovation and new development will come from both category leaders and upstarts. FASTEST-GROWING FAST-CASUAL CHAINS <$50 Million ranked by percentage growth in units 2011–12 Chain Name 2011 Unit Increase 1. Lime Fresh Mexican Grill 11 22 100.0% 2. Umami Burger 7 14 100.0 3. The Veggie Grill 8 16 100.0 4. Mooyah 23 47 95.8 5. Hot Head Burritos 20 42 90.9 6. Fresh Healthy Cafe 11 24 84.6 7. Bareburger 4 10 66.7 8. Elevation Burger 10 31 47.6 9. Darren Tristano is executive vice president of Technomic, Inc., a Chicago-based foodservice consultancy and research firm. For more information, visit www. technomic.com. Rank 2012 U.S. % Change Units Muscle Maker Grill 20 65 44.4 10. Jake's Wayback Burgers 18 62 40.9 Total 132 333 65.7% Source: Technomic, Inc. company reports IS THE RETAIL TIDE TURNING? 3Q13 vacancy holds steady for smaller centers. by Victor Calanog and Brad Doremus National vacancies for neighborhood and community shopping centers remained unchanged in third quarter 2013, according to Reis' preliminary results. This should come as no surprise, given the fragile nature of the recovery. The vacancy rate for smaller centers now stands at 10.5 percent, down 30 basis points year over year, and just a paltry 60 basis points below the peak vacancy rate of 11.1 percent recorded two years ago. Only 2.3 million square feet of space was absorbed this period, the slowest rate of increase in occupied stock this year. And this was despite the fact that 1.5 million sf of new space came online, the largest quarterly addition from new construction in 2013. Given the uncertain backdrop for retail properties across the nation, developers are justifiably reluctant to bring new space online. Only 3.6 million sf of new space has entered the market year-to-date, putting 2013 on track to beat the more than 32-year record low for new construction set in 2010, when only 4.4 million sf of new shopping centers were built. Asking rents grew by 0.3 percent in 3Q13, while effective rents grew by 0.4 percent. This growth rate roughly follows the pace of the last couple of quarters; however, when compared to 2012's average quarterly growth of between 0.1 and 0.2 percent, it does represent a slight acceleration. On an annual basis, asking and effective rents both grew by 0.5 percent in 2012 and should at least double that growth rate by year-end. This is certainly a welcome development for retail property owners and investors, suggesting that landlord pricing power, which declined severely for three years from 2008 to 2010, is now beginning to show some signs of strength. Still, neighborhood and community center rents lost a lot of ground given the severity of the recession and the sluggish recovery. Rents fell for about 10 quarters in a row from mid-2008 to mid-2010, and have been growing at a paltry rate for only the last eight quarters. Many submarkets around the country are still anywhere from 5 percent to 10 percent below peak rent levels from early to mid-2008, with attendant implications for new leases signed at lower rents, diluting landlord income. Financing is still generally unavailable for most new retail development, unless a project is backed by the soundest real estate investment trusts or boasts a pre-leasing rate of above 70 percent. Some submarkets show relatively more robust patterns in fundamentals, but the general landscape of retail can still be characterized as a world of haves and have-nots. Rich, insulated neighborhoods boast healthy retail centers while others contend with largely empty husks of older retail space. Victor Calanog is head of research and economics and Brad Doremus is senior analyst for New York-based research firm Reis. 24 November | December | 2013 Commercial Investment Real Estate