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Gross Taxable Retail Sales – August
2006
- The “Top Ten” represent 44% of the State-
Wide market.
- The “Top Twenty-Five” represent
65% of all sales.
- State-wide March increases
were 17.6%
- The “Top 20%” gainers include:
- South Jordan +91.5%
- Lehi +52.1%
- Vernal +45.5%
- Lindon +30.4%
- Spanish Fork
+26.1%
- Draper +25.4%
- West Valley City
+22.2%
- The “Bottom 10%” include:
- Springdale -
6.8%Holladay -3.2%
- Moab -3.0%
- Morgan
City -1.1%
August 06 Retail Sales – Top 25 Cities (Large
Monthly Filers Only)
| Rank (05)
| City | August 2006 (000)
| % Change 06/05 | Mkt Share
August 06 (% of State Total) |
|---|
| 1 | Salt Lake
City | $418,913 | +11.6%
| 11.8% |
| 2(3)
| Orem | $175,777 | +17.
4% | 5.0% |
| 3(2)
| Sandy | $167,354 | +11
.5% | 4.7% |
| 4(6) | West
Valley | $159,939 | +22.2%
| 4.5% |
| 5(4) | Murray
| $145,319 | +5.9%
| 4.1% |
| 6(5) | St George
| $145,033 | +6.3%
| 4.1% |
| 7(7) | South Salt
Lake | $141,462 | +19.0%
| 4.0% |
| 8(8) | Ogden
| $99,726 | +12.7%
| 2.8% |
9(10) | West Jordan
| $99,614 | +14.4%
| 2.8% |
10(9) | Layton
| $97,7327 | 11.0%
| 2.8% |
| 11(11)
| Provo | $97,189 | +15.6
% | 2.7% |
| 12(12) | Logan
| $59,181 | +11.8%
| 1.7% |
| 13(13) | Riverdale
| $54,272 | +8.8%
| 1.5% |
| 14(14) | American Fork
| $48,754 | +15.9%
| 1.4% |
| 15(15) | Midvale
| $48,274 | +15.3%
| 1.4% |
| 16(16) | Cedar City
| $45,868 | +17.8%
| 1.3% |
| 17(20) | Vernal
| $43,727 | +45.8%
| 1.2% |
| 18(17)
| Draper | $43,313 | +25.
4% | 1.2% |
| 19(18)
| Taylorsville | $38,638 |
+15.4% | 1.1% |
| 20(27) | South Jordan
| $38,569 | +91.5%
| 1.1% |
| 21(21) | Lindon
| $38,477 | +30.4%
| 1.1% |
| 22(19) | Bountiful
| $32,510 | +8.1%
| 0.9% |
| 23(25)
| Lehi | $31,993 | +52.1
% | 0.9% |
| 24(-) | Cottonwood
Heights | $27,453 | -
| 0.8% |
| 25(22) | Park
City | $26,530 | +6.7%
| 0.7% |
- The “Top 15” Major Sectors represent 91%
of the market.
- The “Top Five” represent almost
50% of sales.
- State-wide November increases
were 17.6% - The “Top 5” gainers include:
- Mining +170%
- Agriculture/Forestry/Fishing
+129%
- Construction +102%li>Services - Health
+35%
- Wholesale – Durable +34%
- Categories with declining sales were led by:
- Private Motor Vehicle Sales -24%
- Communications --15%
- Occasional Retail
Sales -15%
Source: Utah State Tax Commission
2007 Forecasts More of the Same
The 2006 holiday sales
numbers, which posted
the weakest growth in four years last week, are a
sign of what’s ahead for the United States’ retail
market in 2007 – a year of modest expectations.
Experts expect retail real estate to remain a stable
investment, but it will no longer yield the high returns
as experienced in 2004 and 2005.
California remains the top market as far as
demand and pricing goes. Average cap rates are at
6.33 percent, while the Midwest region is near the
bottom because of troubles in the manufacturing
sector. Cap rates there range between 6 percent
and 8 percent.
The top five destinations for retail investment
this year, based on population growth, will be
Washington, D.C., Dallas/Fort Worth, Los Angeles,
Houston and Las Vegas, according to the 2007 Real
Estate Forecast produced by brokerage firm Grubb &
Ellis. This mirrors last year’s forecast, when
Washington, D.C., Los Angeles, Phoenix, Ariz.,
Dallas/Fort Worth and Las Vegas ranked in the top
five.
Top 5
Markets| Top 5 Market
2006 | Top 5 Market 2007 | Cap
Rate |
| Washington, D.C. | Washington,
D.C. | 6.1% |
| Los Angeles | Dallas/Fort
Worth | 7.2% |
| Phoenix | Los
Angeles | 6.2% |
| Dallas/Fort Worth
| Houston | 7.2% |
| Las
Vegas | Alanta | 7.2% |
Source: Grubb & Ellis
On the operating side, owners can expect
another year of modest rent increases, says Robert
Bach, senior vice president for research and client
services with Grubb & Ellis. In 2006, he says, asking
rent increases across the nation averaged 3.5
percent. Outperforming markets included Dallas/Fort
Worth, where asking rents rose 10 percent, to
$22.25 per square foot. Also, Orange County, Calif.,
Jacksonville, Fla. and Nashville posted 10 percent
increases in asking rent, reports Grubb & Ellis.
“We are still in an expansion cycle,” says
Bach. “Retail sales have held up pretty well through
2006 and there weren’t any factors to cause any
markets to really sink to the bottom or rise to the
top.”
Meanwhile, the two factors that are causing
investors’ headaches – the slowing housing market
and the mixed forecasts for the national economy –
won’t have as much of an impact on the retail sector
as many fear, cites Grubb & Ellis. The firm estimates
that employers will create an average of 100,000
new payroll jobs a month in 2007, compared with
135,225 per month in 2006, that will keep cash
registers ringing.
But job growth and economic health vary across
the nation.
“Overall, I think the economy will continue to
muddle through and create jobs,” Bach says. “But
the manufacturing sector has weakened, so that can
have an effect on retail spending and development in
manufacturing-sensitive areas.”
Bernie Haddigan, managing director of the
national retail group with Marcus & Millichap, an
Encino, Calif.-based broker says, coastal and sun
belt states and densely populated areas will continue
to do well in 2007.
“Michigan and Ohio have gotten their noses
bloodied a bit because investors are not as
interested in those older, industrial locations,” says
Haddigan.
Investors, Haddigan says, are staying in prime
markets and concentrating on centers that are
anchored by high credit tenants. That is a shift from
2005 and early 2006, when properties in secondary
and tertiary markets would entertain multiple bids.
Average cap rates for multi-tenant retail
properties hit bottom in the first quarter of 2006, at
6.61 percent, and slowly rose throughout the rest of
the year finishing at 7.12 percent, according to
Marcus & Millichap.
But investors will be not be flooding the market.
Haddigan expects another year of declining deal
volume in 2007. In 2006, there were $41.43 billion
worth of retail property transactions in the domestic
market, down 18 percent from $50.50 billion in 2005,
according to Real Capital Analytics.
Meanwhile, real estate investors continue to look
for higher returns in developing markets in Asia and
Eastern Europe.
Asia’s GDP growth is projected to reach 7.9
percent in 2007, according to the international
financial services firm Credit Suisse, while Eastern
European countries will experience growth rates
averaging between 5 percent and 6 percent. The
global rate of growth for 2007 is expected to be 4.9
percent.
Source: Retail Traffic
Grants
Improve Rural Business!
- Rural Business Opportunity Grants
- POSTED: 12/8/2006
- FUNDING SOURCE: USDA
- ELIGIBILITY: Empowerment Zones, Enterprise
Communities, Rural
- Economic Area Partnerships
and Indian Tribes $ AVAILABLE: N.A.
- GRANTS AVAILABLE: N.A.
- MAX GRANT SIZE: $150,000
- DEADLINE: 3/30/07
- CONTACT INFORMATION: Cindy Mason, 202-690-
1433
- DESCRIPTION: Grants for a variety of activities to
improve business opportunities in rural areas.
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| Economic Snapshot |
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First Five Months FY2007
- Sales and Use Taxes (Gen Gov’t)
+6.2%
- Corporate Franchise Taxes (Gen Gov’t)
+39.7%
- Individual Income Taxes (Education)
+13.5%
- Severance Taxes (Gen Gov’t) -14.4%
- Motor Fuel Taxes (Transportation) +1.3%
Source: Utah State Tax Commission, 12/13/06
Utah's jobless rate fell to an unprecedented low
last month, according to the latest data from the
Department of Workforce Services. The state's
unemployment rate fell to 2.5 percent for October,
down from 2.8 percent in September. At this time
last year, the jobless rate was 4.2 percent.
Source: State of Utah – Workforce Services
Utah's population estimates, released in
November, show Utah's 2006 population at
2,615,129 — an estimated growth of 2.7 percent, or
67,740 people since 2005.
Source: Bureau of Census
The number of building permits issued for new
houses, condominiums and apartments is falling
across Utah, but in Utah County permits are
skyrocketing. Residential permits issued across the
state from Jan. 1 through Sept. 30 fell to 20,387,
down 4.5 percent from 21,347 permits handed out
during the same nine-month period in 2005,
Source: University of Utah's Bureau of Economic
and Business Research.
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| Economic Notes: |
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- Global Business Confidence
- Global business confidence improved during the
last week of the year, although these results should
be discounted given the typically low response rate
during the week between Christmas and New Year's.
Sentiment declined more or less throughout 2006,
ending the year near levels last experienced in the
summer of 2003, and consistent with global growth
that is below potential. Confidence is weakest among
vehicle and transportation companies, followed
closely by residential real estate firms. The most
upbeat respondents are from South America, and
retailers were generally happy with Christmas sales.
The best news from the survey is that pricing
pressures are off sharply from their summer peaks.
- Construction Spending (C30)
- Construction spending decreased 0.2% in
November. Private construction decreased 0.6%, due
to a 1.6% decline in residential construction. In
addition, public construction increased 1.0%.
- MBA Mortgage Applications Survey
- Mortgage demand increased 3.6% in the week
ending December 26. Purchase applications increased
4.3% and refinance applications increased 2.2%.
- Vehicle Sales – AutoData
- Vehicle sales improved in December to 16.7 million
units, from 16 million in November thanks to the year-
end incentive push. However, the year did not end
on a happy note for U.S. manufacturers. Most of the
gains were garnered by international manufacturers
and the Big Three market share fell to 52%, a record
low.
- Chain Store Sales
- Chain store sales grew 3.1% in December, up
from 2.5% (revised) in November, according to the
ICSC chain store index. Results were modestly above
expectations in total although more retailers
disappointed than surprised on the upside. Warm,
wet weather was blamed for weak apparel sales. The
holiday season was decent, in line with our
expectations.
- Manufacturing Index
- The national ISM manufacturing index posted an
unexpected expansion in December, rising to 51.4
from 49.5 in November. Both new orders and
production boosted the overall index back into
expansionary territory. Employment and inventories
continue to contract.
- Jobless Claims
- Initial jobless claims rose 10,000 to 329,000 for
the week ending December 30, a larger than
anticipated increase. The four-week moving average,
which adjusts for week-to-week fluctuations and is
more representative of the true trend, edged up to
317,500.
- Factory Orders (M3)
- Factory orders rose 0.9% in November, slightly
less than expected. The manufacturing sector is still
struggling with some excess inventories here and
there, but once these excesses are worked off,
orders and shipments should improve by mid-2007
against a strong fundamental backdrop.
- Weekly Natural Gas Storage Report
- Underground storage of natural gas decreased by
47 billion cubic feet during the week ending
December 29, less than the expected draw of 55 Bcf.
Inventories are now 15.3% above the five-year
average. This report will put more bearish pressure
on prices. Underground storage of natural gas
decreased by 47 billion cubic feet during the week
ending December 29, less than the expected draw of
55 Bcf. Inventories are now 15.3% above the five-
year average. This report will put more bearish
pressure on prices.
- Oil and Gas Inventories
- Crude oil inventories fell by 1.3 million barrels for
the week ending December 29, according to the
Energy Information Administration. The drop was
above expectations of a drawdown of 800,000
barrels. Distillate inventories rose by 2 million barrels.
Gasoline stocks rose by 5.6 million barrels, well above
expectations. Refinery activity slightly increased. The
report will provide no relief to the oil bulls as oil will
continue to trade down.
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| This Weeks Leads |
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- Coach
- Coach Inc. trades as Coach. The 235-unit chain
operates locations nationwide and internationally.
- The stores, specializing in leather accessories for
men and women, occupy spaces of 2,500 sq.ft. in
freestanding locations, malls and urban/downtown
areas.
- Plans call for 30 openings nationwide
during the coming 18 months.
- For details, contact:
- Tony Galvin
- Coach Inc.
- 516 West 34th Street
- New York, NY 10001
- 212-615-2070, Fax 212-615-2508
- Email: tgalvin@coach.com
- Web site: www.coach.com
- Dillard’s
- Dillard’s, Inc. trades as Dillard’s.
- The 340-unit
chain operates locations throughout the midwest,
southern and western states.
- The stores occupy
spaces of 70,000 sq.ft. to 300,000 sq.ft. in malls.
- Growth opportunities are sought nationwide
during the coming 18 months.
- For more information, contact:
- Wes Cherry
- Dillard's Inc.
- 1600 Cantrell Road
- Little Rock, AR 72201
- Web site: www.dillards.com
- Fred Meyer Jewelers, Littman Jewelers
and Barclay Jewelers
- Fred Meyer Jewelers trades as Fred Meyer
Jewelers, Littman Jewelers and Barclay Jewelers.
- The 420-unit chain operates locations
nationwide.
- The jewelry stores occupy spaces of
1,400 sq.ft. in malls.
- Plans call for 10 openings
throughout CA, DE, FL, MD, NJ, NY, OR, PA and WA
during the coming 18 months.
- Typical leases are
10 years.
- Preferred demographics include a
population of 200,000 within five miles earning
$48,000 to $50,000 as the average household
income.
- Preferred cotenants include jewelers and
upscale fashion retailers.
- For details, contact:
- Dave Schmidt
- Fred Meyer Jewelers
- 3800 South East 22nd Street
- Portland, OR 97202
- 503-797-3874, Fax 503-797-7797
- Email: dave.schmidt@fredmeyer.com
- Web site: www.fredmeyerjewelers.com
- Dunn Brothers Coffee
- Dunn Bros. Coffee Franchising, Inc. trades as
Dunn Brothers Coffee at 78 locations throughout IA,
KS, MI, MN, MO, ND, SD, TN, TX and WI.
- The
coffee shops occupy spaces of 1,200 sq.ft. to 1,400
sq.ft. in freestanding locations, malls, lifestyle,
outlet, power, specialty, strip and tourist centers
and urban/downtown areas.
- Plans call for 30
openings throughout the existing markets during the
coming 18 months.
- Typical leases run 10 years.
- A vanilla shell is required.
- Competition is cited
as Caribou Coffee, It’s a Grind and Starbucks.
- For more information, contact
- Chris Eilers,
Dunn Bros.
- Coffee Franchising, Inc.,
- 111 3rd
Avenue South, Suite 220,
- Minneapolis, MN 55401;
- 612-334-9746,
- Fax 612-334-9749;
- Email:
chris@dunnbros.com;
- Web site:
www.dunnbros.com.
- Wish, Duo, Fabrik, Habita and Method
- AA Concepts trades as Wish, Duo, Fabrik, Habita
and Method at 25 locations throughout the south
and southwestern regions.
- The apparel stores
occupy spaces of 2,000 sq.ft. to 5,000 sq.ft. in
lifestyle centers and urban/downtown areas.
- Plans call for 20 openings throughout the existing
markets during the coming 18 months, with
representation by Wulfe & Co.
- Typical leases run
10 years with options.
- A vanilla shell is required.
- For more information, contact
- Adam
Brackman,
- Wulfe & Co.,
- 12 Greenway Plaza,
Suite 1500,
- Houston, TX 77046;
- 713-621-
1700,
- Fax 713-621-3244;
- Email:
abrackman@wulfe.com;
- Web site:
www.wulfeurban.com.
- Big Dog Sportswear
- Big Dog USA trades as Big Dog Sportswear at
155 locations nationwide, excluding AR, MT, ND, SD
and WY.
- The stores, offering t-shirts, shorts,
outwear, caps, watches and bags, occupy spaces of
1,500 sq.ft. to 3,000 sq.ft. in outlet centers.
-
Plans call for three openings nationwide during the
coming 18 months.
- Typical leases run five
years. A vanilla shell and specific improvements are
required.
- Preferred cotenants include Carters,
Dress Barn, Famous Footwear and Target.
-
Preferred demographics include a population of
200,000 within 10 miles earning $40,000 to $45,000
as the average household income.
- For more
information, contact
- Joe Cattivera,
- Big
Dog USA,
- 121 Gray Avenue,
- Santa Barbara,
CA 93101;
- 805-963-8727,
- Fax 805-962-
6460;
- Email: joec@bigdogs.com;
- Website:
www.bigdogs.com.
- California Pizza Kitchen
- California Pizza Kitchen, Inc. trades as California
Pizza Kitchen at 200 locations nationwide and
internationally.
- The pizzerias occupy spaces of
5,000 sq.ft. to 6,000 sq.ft. in malls, entertainment,
mixed-use, and specialty centers and
urban/downtown areas.
- Growth opportunities
are sought nationwide during the coming 18 months.
Typical leases run 10 years.
- Preferred cotenants
include Barnes & Noble, Neiman Marcus, Nordstrom
and Saks.
- Preferred demographics include a
population of 250,000 within five miles earning
$70,000 as the average household income.
- For
more information, contact
- Cal Marsh, Ed
Schwartz, Kevin Rielly,
- California Pizza Kitchen,
Inc.,
- 6053 West Century Boulevard,
- Los
Angeles, CA 90045;
- 310-342-4619;
- Email:
chowell@cpk.com;
- Website:
www.cpk.com.
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| BONNEVILLE RESEARCH - People, Passion & Pride |
| |
Successful client work requires a superior team of
outstanding people working fluidly together.
Bonneville Research is committed to excellence.
We work to help clients achieve enduring results
and improve the communities in which we live.
BONNEVILLE RESEARCH
Bonneville Research is a Utah-based consulting
firm providing economic, financial, market and policy
research to public and private sector clients
throughout the intermountain west.
Our services include:
- Financial Analysis
- Urban Renewal & Redevelopment
Analysis and Budgets
- Strategy and Policy Analysis
- Economic and Fiscal Impact Analysis
- Statistical and Survey Research
Each of our studies is tailored to address the
unique needs of our clients and their communities.
If we can help, please call or email us at
- Bob
- 801-364-5300
- BobSpring@BonnevilleResearch.com
- Jon
- 801-746-5706
-
JonSpring@BonnevilleResearch.com
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