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Amarillo, Texas - January 2010    

Introduction:

This is the twenty-fourth annual survey of multiple-tenant retail properties 10,000 square feet or larger conducted by Coldwell Banker Commercial First Equity, Realtors. This survey is for use by real estate professionals including brokers, appraisers, lenders, property managers, property owners, and investors in their evaluation of the Amarillo retail market. It is not intended for consumer use and, therefore, contains no consumer-related disclosures and/or disclaimers. Careful attention has been paid to methods of collection and verification of the data contained in this survey and the comments and conclusions drawn thereon. However, Justin Kite, and Coldwell Banker Commercial First Equity, Realtors makes no representations and/or warranties with respect to the data, comments, or projections contained in the survey. All of the data collected for this survey is subject to change without notice. 

Scope:

The survey was conducted during December 2009 and January 2010. Justin Kite, retail specialist, with Coldwell Banker Commercial First Equity, Realtors contacted owners, leasing agents, and property management companies directly, in person or by telephone. All of the properties were personally inspected in order to verify occupancy. Due to changes in use (retail to office or vice-versa) and re-measuring of properties, the total amount of available retail square footage changes from year to year, though usually in amounts deemed insignificant. During 2009 there were no changes in total available square footage. Please note that Wolflin Pointe shopping center was not included in the survey results as it was not totally available for occupancy by December 31, 2009.

Findings: Occupancy

The overall retail occupancy rate in Amarillo decreased from 94% to a 92% overall occupancy rate, the first decrease in total occupancy since 2002. The total vacant square footage increased by 118,664 square feet during 2009. The Southwest Quadrant open air centers experienced a 118,463 square foot decrease in occupancy (with over half of the increased vacancies resulting from Circuit City closing, CVS moving from Puckett Plaza, and Michaels moving to Western Crossing Shopping Center) , the Southeast Quadrant centers gained 1,000 square feet of additional occupancy , the Northwest Quadrant open air centers absorbed 1,650 square feet (the sixth straight year to register an increase in occupied space), and the Northeast Quadrant occupancy fell by 7,501 square feet.

Findings: Rental Rates

Because of the diversity of condition, age, location, and management of the retail property inventory, it is difficult to quantify a precise percentage of change in retail rental rates. Not surprisingly, lower rental rates accompanied declining occupancies. Twenty-five (25) centers reported lower asking rates from last year and only two (2) centers reported slight increases in asking rates. This is the first survey since 1999 that reports a higher number of rate decreases than increases. Nearly all of the centers surveyed reported challenges to their rate structure by both new tenants and tenants seeking to renew or extend expiring leases.

2010 Outlook:

Currently, there is little activity by either national or regional retail tenants which eliminates a significant segment of retail space users. Additionally, there are few new local tenants entering the market and little downsizing/upsizing or movement between centers among existing tenants.

There is some activity, though weak activity, in the fast food and fast casual restaurant concepts.  Several existing establishments are considering an additional location and several new entries to the market are in the process of evaluating the market.

Overall, continued slow retail leasing activity and pressure on occupancy rates is expected in 2010, given 2009 retail sales tax collections were down nearly 5% and expected to decrease further in 2010.

Summary

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