Coldwell Banker Commercial Mid-Year - Qtr2
2006 Retail Market Review
Retail Market by Sector & Type – Salt Lake
County Q2 2006
||Asked Rents||Q2 2006
Vacancy||Q2 2006 Total SF|
Source: Coldwell Banker Commercial NRT Qtr2 2006
The Rise of the Green Consumer
It is now a decade since Unilever stopped
providing refill pouches for its washing liquid in the UK
owing to lack of demand. But it seems that
consumers' forgotten environmental conscience is
Ecover, a private company based in Belgium that
makes ecological washing and cleaning products,
says sales are growing at the rate of 20 per cent per
year in the UK, its biggest market, reaching £35m
($66m) last year. The company is building a new
factory in France to keep up with demand.
A string of household names - including General
Electric, Wal-Mart, and Unilever - have been lining up
to show off their green credentials in an effort to
woo customers, at least at the high end of the
"This is becoming a lifestyle choice," says
Stephen Parker, managing director of Cred, an
environmental consultancy. "We are a consumer-
driven society, and consumption is often a more
reliable way of seeing what society wants than
politics these days."
The UK's Institute of Grocery Distribution reports
that sales of "ethical" products are increasing by 7.5
per cent a year, compared with 4.2 per cent for
General Electric, the US conglomerate, became
the biggest company to "go green" last year, when
chief executive Jeff Immelt announced a new push
into providing goods that minimize damage to the
environment. Mr Immelt insisted there were profits to
be made in the market for goods from wind turbines
to energy-saving light bulbs.
The results have been clear at GE, which
announced in May that revenues from products and
services under its Ecomagination brand - for
environmental products - had risen from $6.2bn in
2004 to $10.1bn in 2005.
One of the more recent converts to the "green"
consumer's cause has been Wal-Mart, the US retail
group better known for protests against its
employment practices than its environmental concern.
Lee Scott, chief executive, has pledged to invest
$500m in "sustainability" projects and to reduce by
30 per cent the energy used in the company's
stores, reduce solid waste by a quarter and double
the fuel efficiency of the company's vehicle fleet
within 10 years.
These companies are driven not just by the
desire to cash in on increasing environmental
awareness among customers.
There is a practical incentive for companies to
act, independently of what consumers think.
Rising fuel bills mean reduced energy use will
save companies money, with the attendant bonus of
cutting greenhouse gas emissions associated with
the burning of fossil fuels.
Companies are also keen to pre-empt any
strengthening of environmental regulations,
particularly moves to curb greenhouse gas emissions.
The UK government, for instance, is considering a
proposal to extend carbon dioxide emissions trading
to retailers and other businesses.
US states led by California are forging ahead with
plans to limit emissions and bypass the federal
government's reluctance to take precautionary
measures against climate change.
Against this backdrop, companies warn that
customers will make ecologically friendly choices only
if they believe they will get the same results from
products as they do at present.
A case in point is P&G's "Cool Clean" campaigns in
western Europe and North America for its laundry
detergent - named Ariel in Europe and Tide in the
US - which tell consumers they should lower the
temperature at which they wash clothes to save
"Consumers want better products that deliver a
better experience. Sustainability has to be an
additional benefit," said Gianni Ciserani, managing
director of P&G UK & Ireland.
"Whenever sustainable products come with trade-
off on performance, we win some [consumers] but
we lose others."
Companies have another reason to beware. A
previous wave of green consumerism in the 1970s
fizzled out, as consumers lost interest.
Just as Unilever stopped providing refill pouches
10 years ago, today's "green" wave could also break
if consumers lose interest or the economy falters.
Source: The Financial Times Limited 2006
Hotel Sales Market Humming Along
The rush to buy hotel properties is not slowing
down and investors will not soon quench their thirst
for investment grade hotels.
According to Jones Lang LaSalle Hotels, there are
five buyers for every two sellers in the U.S. hotel
market. And nearly half (or 45.9%) of all respondents
want to buy assets in 21 of the 26 surveyed markets
in North and South America. The survey polled the
2,000 largest hotel investors and owners in the world.
“Across the Americas, the low yield environment
over the last two years has been sustained, with cap
rates softening by a mere 10 basis points over the
course of the last six months [up] to 8.5%,” says
Arthur Adler, managing director and chief executive
officer (Americas) for JLL Hotels.
To some investors at least, it seems that prices
can’t climb much higher—even in the face of such
strong demand. The HISS Survey found that 18.9%
of polled investors, the highest level recorded in the
survey’s six-year history, are looking to exploit
capital appreciation by selling their assets. Their
willingness to sell assets into this market could help
drag sky-high pricing closer to the ground.
Certain markets stand out. For example, more
than half of respondents indicated a desire to buy
hotels in Hawaii, Vancouver, San Francisco and Los
Angeles, Washington, D.C., New York and Chicago.
Their interest in these markets hinges on the
perception that coastal cities will yield strong
performance over the next few years.
Why are these the hot spots? Vancouver, which
is a new entrant to the top “buy” market in the
survey, will host the 2010 Winter Olympics. On the
opposite coast, New York City is poised to boost its
already soaring occupancy rate in coming years; the
city has been a net loser of hotel rooms, thanks to
scant construction and condo conversions. One
reason is a lack of new hotel rooms in the city, a
trend that has also boosted the national hotel market
in recent years. San Francisco and Washington, D.C.
are likely to lure an increasing number of domestic
and foreign tourists over the next few years, say
The only possible cloud on the horizon is
accelerating construction Investors in the HISS
Survey indicate greater intentions to develop new
hotels since last year. New supply (as a % of
inventory) is expected to grow by 1.6% and 2.6%
during 2006 and 2007 respectively. Demand should
hold firm with this new supply. Yet rising construction
costs may keep a damper on new supply: Only 10.8%
of polled investors intend to build new projects in
2007. This mixed assessment suggests that new
supply won’t be a major problem for at least another
The three markets expected to absorb the most
new room supply in the near future are Buenos Aires,
the Caribbean and Mexico City. Nearly 28% of
respondents indicated a desire to build new hotel
projects in the Argentinean capital, followed by
23.4% in the Caribbean and 21.2% in Mexico City.
“ New supply has really quelled due to high
construction costs,” says Paider of JLL Hotels. “It’s
still cheaper to buy versus develop hotels.”
Source: National Real Estate Investor
Retail Studies - Salt Lake County
Rise of the Green Consumer!
Hotels are Back!
|Jon Springmeyer - New Bonneville Research VP
- For the past 5 years Jon has managed Excel
Construction and Commercial/Retail properties for
- Before Amsource, Jon
spent five years with Salt Lake County Parks and
Recreation as a director of recreation centers,
fitness centers, and outdoor aquatics centers.
is a licensed Real Estate Agent.
- Jon will take
the lead on Urban Renewal Projects for Bonneville
clients as well as funding/feasibility
studies for recreation/community facilities.
- Second week was better than the first!
- Made first payroll!!
Promote Bicycle Use!
- Bikes Belong
- POSTED: 9/12/2006
- FUNDING SOURCE: Bikes Belong
- ELIGIBILITY: Nonprofits
- $ AVAILABLE: N.A.
- GRANTS AVAILABLE: N.A.
- MAX GRANT SIZE: $10,000
- DEADLINE: 11/27/06
- CONTACT INFORMATION: http://bikesbelong.org
- DESCRIPTION: Grants to encourage
ridership growth, promote bicycling, build political
support, leverage funding and support bicycle
- Chain Store Sales
- Chain store sales retreated modestly in the
week ending September 9, despite support from
cooler weather and declining gasoline prices,
according to the ICSC. Sales fell 0.3%, and year-
over-year growth ticked down to 3.8%. The latter
remained the second best in 11 weeks.
- MBA Mortgage Applications Survey
- Mortgage demand increased 3.2% in the
week ending September 8. Purchase applications
increased 5.3% and refinance applications increased
- Consumer Price Index
- The seasonally adjusted consumer price
index rose 0.2% in August, after a 0.4% increase in
July. A much smaller increase in energy prices for the
month brought down top-line inflation. The core
index, excluding food and energy prices, rose 0.2% in
August; this was the second straight month with a
0.2% increase, following four consecutive 0.3%
monthly increases in the core CPI. Over the past
year core CPI inflation has run at a 2.8% pace.
Today’s report is good news on the inflation
- Risk of Recession
- The Moody’s Economy.com probability of
recession rose in August to 21.9%, relative to July’s
upwardly revised 20.1%. Inversion of the yield curve
is the main factor causing the rapid deterioration in
recession risks in the past two months. A moderation
in consumer confidence is also weighing on risks.
Improvement in equity markets and still-low levels of
unemployment insurance claims are limiting the
increase in recession risks. The chance of the
economy being in recession in six months is clearly
rising, although it remains relatively modest.
- Treasury Budget
- The unified deficit for August was $64.6
billion, slightly smaller than the CBO’s preliminary
estimate of $67 billion. Through the first 11 months
of fiscal year 2006 the U.S. has run a unified deficit
of $304.3 billion, 14% smaller than at the same point
- International Trade (FT900)
- The nominal U.S. trade deficit in goods and
services widened in July. The U.S. trade deficit came
in at $68.0 billion, which was $3.2 billion more than
June's revised $64.8 billion, according to the Bureau
of Economic Analysis. In July, exports decreased by
$1.2 billion, while imports increased by $1.9 billion.
Both changes contributed to the widening of the
trade deficit. The goods deficit with China, however,
narrowed $0.1 billion to $19.6 billion. Crude oil prices
increased in July, which, in return, increased the
nation's import bill for crude oil to $20.8 billion.
- Oil and Gas Inventories
- Crude oil inventories fell 2.9 million barrels for
the week ending September 8, according to the
Energy Information Administration, significantly above
expectations of a 1.9 million barrel drop. Gasoline
inventories rose 0.1 million barrels for the week, as
expected, and distillates posted a whopping 4.7
million barrel build, well above the 1.7 million barrel
build expected. This is another strongly bearish
report, and will keep prices in the mid-$60s this
- Retail Sales (MARTS)
- Total retail sales rose 0.2% in August, well
below July’s 1.4% gain. Auto sales surprisingly
contributed to the gain. Non-auto sales were up
0.2%, down from 0.6% in July. Gas station sales fell,
as did sales at clothing and department stores. Year-
over-year growth accelerated to 6.7% in total but
declined to 7.5% excluding autos.
- Business Inventories (MTIS)
- Total business inventories increased 0.6% for
July, in line with consensus expectations. Inventories
at retailers increased 0.4%. Total business sales
increased by 0.6%. The total I/S ratio remained
unchanged at 1.26.
- Quarterly Services Survey
- In the second quarter of 2006, the
information industry reported over-the-year revenue
increases of 6.2%. Administrative and support and
waste management and remediation services revenue
increased by 7.8%, and professional, scientific and
technical revenue was up 9.4% over the year.
Revenues in selected healthcare services increased
- ABC News/Washington Post Consumer
- The ABC News/Washington Post consumer
comfort index continues to inch higher. The headline
index gained two points to -13 in the week ending
September 10. Strength was concentrated in the
buying climate and economic components. The
indexes other main component, personal finances,
surrendered four points in the latest week.
Confidence is undoubtedly being nudged higher by
lower prices at the pump.
- World Business Confidence
- Business sentiment continues to slide.
Confidence has fallen sharply since early June to its
lowest level since the fall of 2003. Expectations have
fallen very sharply and are as low as they have been
since the survey began. North American confidence
has declined the most, particularly among real estate
firms, retailers, and vehicle manufacturers.
Confidence is highest and firm in South America. High-
tech, natural resource firms and manufacturers are
less confident than they were earlier in the year, but
they remain generally upbeat. The most positive
message in the survey is that pricing pressures, while
still high, are abating. These survey results suggest
that global economic growth has fallen below its
|This Weeks Leads
- Fun Factory, Island Fun and Jungle Fun
- Retail Concepts International trades as Fun
Factory, Island Fun and Jungle Fun at 23 locations
- The entertainment centers, which create
custom-themed environments that include games,
billiards, food, retail and rides,
occupy spaces of 2,000 sq.ft. to 12,000 sq.ft. in
entertainment, lifestyle, specialty and tourist centers
- Plans call for six openings throughout the
western region during the coming 18 months.
- Typical leases run five to 10 years. A vanilla shell
- Preferred demographics include a population of
100,000 within two miles
earning $60,000 as the average household income.
- Preferred cotenants include movie theaters and
- For more information, contact:
- Retail Concepts International
- 4050 Tarrybrae Terrace
- Tarzana, CA 91356
- Fax 818-758-9380
- Email: email@example.com
- Web site: www.funfactorygames.com.
- Sephora, a 130-unit chain operates locations
- The stores, selling make-up, fragrances and skin
occupy spaces of 5,500 sq.ft. to 5,800 sq.ft. in
upscale malls, lifestyle and strip centers.
- Plans call for 30 to 40 openings nationwide
during the coming 18 months.
- For details, contact
- Celia A. Wing
- Sephora USA, Inc.
- 525 Market Street, 11th Floor
- San Francisco, CA 94105
- 415-284-3300, Fax 415-284-3425
- Website: www.sephora.com
- Moe’s Southwest Grill
- Moe’s Southwest Grill operates 300 locations
- The restaurants, specializing in burritos, tacos,
fajitas, quesadillas, nachos and salads,
occupy spaces of 2,500 sq.ft. to 3,500 sq.ft. in
endcaps, entertainment, lifestyle,
power and strip centers and urban/downtown areas.
- Growth opportunities are sought throughout
northern NJ, and New York City and Westchester
County in NY
during the coming 18 months, with representation by
Schuckman Realty, Inc.
- For more information, contact:
- Ari Malul
- Schuckman Realty, Inc.
- 7600 Jericho Turnpike
- Woodbury, NY 11797
- Fax 516-496-8905
- Email: firstname.lastname@example.org
- Website: www.schuckmanrealty.com.
- Famous Footwear trades as Naturalizer.
200-unit chain operates locations nationwide.
- The stores, selling women’s footwear and related
accessories, occupy spaces of 1,200 sq.ft. in malls
and urban/downtown areas.
- Growth opportunities are sought nationwide
during the coming 18 months. Typical leases run 10
- Preferred cotenants include Ann Taylor, Banana
Republic and Casual Corner. Competition is cited as
Nine West and Enzo.
- For details, contact:
- Scott Jennerich
- 1200 US Highway 22, Suite 2000
- Bridgewater, NJ 08807
- 908-203-4677, Fax 908-725-0296
- Website: www.famousfootwear.com
- Elephant Bar Restaurant
- Elephant Bar Restaurant trades as Elephant Bar
Restaurant at 40 locations nationwide.
- The restaurants occupy spaces of 7,500 sq.ft.
to 9,300 sq.ft. in
freestanding locations, inline spaces, malls, endcaps
and power and entertainment centers.
- Growth opportunities are sought throughout AZ,
CA, FL, IL, IN, NV, MI, OH, PA, TX and Washington,
- The company will acquire sites and build-to-suit.
- For more information, contact:
- Mark Seferian Elephant Bar Restaurant
- 14241 Firestone Boulevard, Suite 315
- La Mirada, CA 90638
- Fax 562-207-6259
- Email: email@example.com
- Web site: www.elephantbar.com.
- Color Me Mine
- Color Me Mine Enterprises, Inc. trades as Color
Me Mine at 110 locations nationwide and
- The specialty stores, which allow customers to
paint their own ceramics, occupy spaces of 1,100
sq.ft. to 2,300 sq.ft.
in downtown areas and lifestyle centers.
opportunities are sought nationwide and
internationally during the coming 18 months.
- Preferred cotenants include bookstores, theaters
and restaurants. The company is franchising.
- For more information, contact:
- Maria Baker
- Color Me Mine Enterprises, Inc.
- 5140 Lankershim Boulevard
- North Hollywood, CA 91601
- 818-505-2100, Fax 818-509-9778
- Email: firstname.lastname@example.org
- Web site: www.colormemine.com.
Bonneville Research is a regional management-
consulting firm, which serves clients in business and
government. We measure our success by the
benefits, which accrue, to our clients through a
- Together - Making changes is never easy. We
work together with you and your key stakeholders to
define measurable objectives, set realistic schedules
and build collaborative/motivated teams.
- Objectivity - Scrupulous intellectual honesty
and the courage to "tell it like it is".
- Creativity - Openness to diverse ideas and
- Quality Results - Reflecting the contributions of
the best people working together in teams drawn
from multiple disciplines.
- Technology - Using the latest expert assisted
software, and custom- fit component econometric
models, reflecting the best professional techniques
- Toughest Problems - Working by your side to
solve your thoughest problems and achieve your
- Results - Providing workable results that
Bonneville Research lives by the quality and
relevance of our work for you!
If we can help, please call or email us at