Chainlinks 2012 National Retail Forecast-TRS

ChainLinks Retail Advisors
U.S. National Retail Report 2012 Forecast
2012 Retail Forecast

Welcome to ChainLinks 2012 Retail Forecast Report. This report not only contains our forecast for the national retail real estate market in 2012, but also includes a statistical summary of the activity that we witnessed during the third quarter of 2011 and detailed expansion plans of just a few of the retailers that we are tracking throughout our 60+ offices across nearly every major market in the United States.
2011 Holiday Sales Season Forecast

Before we focus on this years coming holiday sales season, lets recap what happened last year. Heading into the 2010 holiday sales season, analysts were generally skeptical about retail sales. Luxury retailers had only seen a return to positive monthly same-store comparables in September. Prior to that, many had endured as many as 18 consecutive months of double digit monthly declines. Consumer confidence was in the 50swell below the historical average of 95 and the most recent ranking (October 2011) of 71.8. Last year, groups as diverse as the International Council of Shopping Centers (ICSC) and the National Retail Federation (NRF) were predicting that holiday sales would only increase by about 2.5%. Then, the unexpected happened. Consumers showed up. By early December, most think-tanks were upwardly revising their forecasts. By mid-December it was clear that nearly everyone had underestimated just how much the American consumer would spend. Depending upon the data source, we closed the 2010 holiday sales season with sales increases in the 5% to 6% range. As important as this was in terms of the general economy, what occurred next was even more critical to retail real estate; Brought to you by:
retailers significantly upped their growth plans. Retailers had already been increasing expansion plans over the virtually non-existent levels of 2009, but this had primarily been driven by discounters and other concepts that had benefited from the newfound frugality of the American consumer. Following Christmas 2010, we saw middle-of-the-road and luxury concepts getting back in the game. We also saw discounters adding extra units to their growth plans. Prior to the 2010 holiday sales season, retail requirements had been up about 20% over 2009 levels. By February 2011, requirements were up over 40% above the past years levels. The surprising success of the 2010 holiday sales season was one of the driving forces behind keeping occupancy growth in the black this year. Retailer sentiment remained high through the annual ICSC ReCon event in Las Vegas this past May, when many retailers further bolstered growth plans in the face of an economic outlook that looked to be improving. This, unfortunately, only lasted until the debt ceiling/credit downgrade debacle of August. As the economic outlook darkened with uncertainty and fears of a double-dip recession, retailers began to pull back on planned expansion. At the very least, those who did not trim their number of planned new units, were suddenly taking much longer to get deals done. While we are now past the worst of this late summer swoon, the economic outlook remains extremely cloudy at best. Most economists have downgraded job growth and GDP forecasts for the coming year; the Eurozone sovereign debt crisis will likely morph into a European recession and retailers continue to trim growth plans. That being said, the impact of last years holiday shopping season cannot be understated. It was a catalyst behind a
Garrick H. Brown
ChainLinks Research Director 916.329.1558 gbrown@terranomics.com
Matt Kircher
ChainLinks President 650.931.2220 mkircher@terranomics.com
Chainlinks Retail Advisors
U.S. National Retail Report

significant amount of retail growth throughout the United States over the past year. Now, it may be true that most of this growth was mitigated by just a few major retailer bankruptcies (as we will discuss later in this report), however, we are firm in our conviction that the impact of last years holiday season is what sent us on a positive trajectory for 2011. Despite the fact that economic uncertainty dominated the landscape throughout the majority of the third quarter of this year, it was only in the third quarter that we finally saw vacancy levels moving downward. Growth over the first half of the year was largely cancelled out by just the Borders and Blockbuster vacancies. Other, smaller retail failures thrown into the mix certainly didnt help. But overall, what we saw was minor increases in demand from most of the marketplace, swallowed up by a few big failures. So where does this leave us heading into the 2011 holiday shopping season?
The Death of Black Friday

First, retail real estate statistics aside, the impact of Black Friday is slowly slipping away. As this report went to press, Black Friday 2011 numbers were not yet available. However, we were seeing trends that seem to suggest that Black Fridays days may be numbered as more and more retailers are pushing up their opening times. This year, Target, Best Buy, Kohls and Macys all opened their stores at midnight to accommodate early holiday shoppers. Abercrombie & Fitch, Justice, Hollister, Ann Taylor, The Gap, Old Navy, Banana Republic, GameStop and dozens of other chains also followed suit with many of their locations. But a number of retailers have taken things even farther. Both Toys R Us and Walmart opened stores as early as 9 PM on Thanksgiving night. While this has created some backlash (a Target employee started an online petition to urge the Minneapolis-based retailer to return to opening stores no earlier than 5 AM on Black Friday so that employees could still enjoy their Thanksgiving holiday it garnered over 190,000 signatures in less than a week), the reality is that consumers have continued to show up in record numbers at ungodly hours to get an early jump on their holiday shopping. It may take a year or two, but we expect the majority of retailers and shopping centers to eventually be open on Thanksgiving Day. It already is one of the busiest days of the year for movie theaters and many restaurant chains (an estimated 14 million Americans ate out this Thanksgiving). With retailers facing ever more intense competition from both online retailers and one another and consumers continuing to demonstrate that they are willing to show up earlier to cash in on deals, we see it as only a matter of time before Thanksgiving Day becomes the new Black Friday. But even as the importance of Black Friday seems to be fading into the past, the question remains how will the market perform this year? The predictions from ICSC and the NRF have, so far, been in the 2.5% to 3.0% increase range. Of course, the
problem in this negative media cycle has been that many media outlets have run with stories that headline reduced growth ahead. The problem with this is that even these projections are looking towards sales growth. They just dont see sales growth matching the level of increase we saw last year. Yet, to the uneducated reader, many of these articles would seem to paint a picture of declining sales revenues not increasing sales revenues that are simply not living up to last years surprising results. Yet, we think these numbers are low to begin with. First off, the projections of the major think-tanks are right back to where they were last year. That being said, this year we have concerns over the Eurozone, political dysfunction and a whole new palette of issues plaguing the economy. But, one year ago there was a similar set of issues hanging over the economy in fact, they were issues that were actually more prescient than our current crisis of confidence driven issues. And, despite all of these challenges, we are actually heading into this holiday shopping season with higher levels of consumer confidence than where we were last year. We expect sales gains this year to be in the 3.5% to 4.0% range. The year-over-year increase will not be as high as last years jump, but these numbers will still translate into a relatively strong holiday shopping season. We are more bullish in our forecast than the NRF or ICSC, although we are not as optimistic (though we hope they are right) as Customer Growth Partners, a research group that recently published a report forecasting 6.5% annual sales growth. But regardless of whether our more positive forecast turns out to be true, this does not necessarily mean that this will translate into a surge of retailer demand this year. In fact, our informal polling of retailers is telling us that they are in a much more conservative state of mind this year. The reality is that most economists and most retailers are expecting 2012 to be a year of slow, grinding growth thanks to the implications of both the likely European recession and the continued ineffectiveness of our government (which will be exacerbated by a gridlocked election year) to create any sort of economic policy relief. Of course, the political issues go deeper than this, to the fear

that political dysfunction may actually derail the economy. It certainly threatened to do so this summer, so many see it as a looming potential issue at least through November 2012. So while we see a strong holiday sales season ahead, we do not see the same surge in retailer demand occurring that happened last year. So where does this leave us? and ethnic themed grocery chains will be expanding with these smaller footprints, we will see increasing consolidation from unionized, mid-priced regional chains that will be returning stores (typically in the 50,000 to 80,000 square foot range) to the marketplace. While fast food and fast casual chains will continue to expand, we also expect casual dining chains (with a few exceptions) to continue to contract. Meanwhile, retailers in the middle will continue to be squeezed. While The Gap and Christopher & Banks have announced plans to close hundreds of stores between them in the coming year, we suspect there will be more. Meanwhile, mom-and-pop retail will largely continue to out of the picture until home prices stabilize (home equity loans remain the primary initial source of funding for small retail startups). Meanwhile, even as growth continues to be tempered by economic headwinds, we will also continue to see retailers shrinking their footprints. The bad news is that we dont expect retailer demand and leasing activity to increase above this years levels in the year ahead. The good news is that we also dont expect retailer bankruptcies and failures to take as severe a toll in 2012 as they did in 2011. Retail shopping center vacancy throughout the United States stood at 9.3% as of the close of the third quarter. Vacancy levels over the first half of 2011 had remained firm at 9.4% despite strong leasing activity. The failures of Borders and Blockbuster alone translated into nearly 12 million square feet of space being returned to the marketplacemitigating nearly all of the growth the market recorded over the first half of the year. These, of course, werent the only bankruptcies impacting the market, but retail closures continued to keep pace with growth over the first six months of 2011. It was only in the third quarter that the market finally began to see some movement in overall vacancy rates. While we expect retailer bankruptcies to diminish in 2012, they will remain an issue. Throughout 2011, retail failures largely mitigated what would have been respectable growth levels. As of the close of the third quarter, year-to-date shopping center absorption stood above 12 million square feet. Take just the failure of Borders and Blockbuster out of the mix and this number would have doubled. Looking forward, we continue to have strong concerns over mid-priced retail chains. Consumer shopping patterns have diverged to the extremes; luxury retail is back for the higherend consumer and discount retail is flourishing. Across every segment of the retail industry, it is the mid-priced retailer who is suffering most. Middle-class consumers have downsized and there are no signs that the new frugality will end any time soon. Chains caught in the middle will be where the most contraction occurs and though we dont expect retail closures to approach last years levels, they will continue to mitigate growth across the board. Vacancy will shrink in 2012, but it will be at a slow pace, measured more by basis points than by percentage points.
Retailer Demand Survey

We recently completed our quarterly retailer demand survey, which asks over 600 top retail brokers in over 50 markets nationally to rank current retailer demand on a scale of one (reflecting the lowest levels of demand possible) to ten (reflecting the highest levels of demand possible). While the national average of retailer demand remained stable at a ranking of sevenindicating levels of retailer demand that are slightly above average, we did see a number of cracks in the faade that our brokers at the local level reported to us. First off, one almost unanimous response was that deals were taking longer to get done. Retailers have responded to big picture economic uncertainty with caution. Secondly, urban levels of demand were immensely higher than those that we are seeing in suburban marketplaces. Markets that saw no movement in retailer demand included; Albuquerque, Atlanta, Baltimore, Birmingham, Dallas, Denver, Detroit, Indianapolis, Inland Empire, Las Vegas, Miami, New Orleans, New York, North New Jersey, Oakland/East Bay, Omaha, Orange County (CA), Orlando, Philadelphia, Pittsburgh, Portland (OR), Salt Lake City, San Diego, San Francisco, San Jose/South Bay, St. Louis and Tampa/St. Petersburg. Markets that saw improvement in retailer demand include; Austin, Boston, Charlotte, Chicago, Des Moines, Jacksonville, Kansas City, Los Angeles, Milwaukee, Minneapolis, Nashville, Oklahoma City, Phoenix, Raleigh/Durham, Sacramento, San Antonio, Seattle, Tucson and Washington DC. Markets that saw retailer demand drop included; Charleston (SC), Cincinnati, Cleveland, Houston, Little Rock, Louisville, Memphis, Mobile, Newport News/Norfolk, Hampton Roads, San Jose/South Bay and Tulsa.
2012 Retail Forecast

We expect retail vacancies to continue to fall over the coming year at an extremely slow pace. Though we do expect a strong holiday shopping season, we expect retailers to be in cautious growth mode throughout the majority of 2012. Retailer expansion will be dominated once again by discounters and grocery store chains, as well as new fast casual restaurant concepts. But discounter expansion (with the exception of dollar stores) may begin to slow by year-end, if for no other reason than players like TJX or Ross have already been in aggressive growth mode for a couple of years now and prime second-generation sites are becoming harder to find. Meanwhile, grocery growth will come mostly in the form of smaller format stores in the 20,000 to 40,000 square foot range. Even while discount, luxury/organic

Retailer Demand Survey
Albuquerque NM Atlanta GA Austin TX Baltimore MD Birmingham AL Boston MA Charlotte NC Charleston SC Chicago IL Cincinnati OH Cleveland OH Dallas TX Denver CO Des Moines IA Detroit MI Houston TX Indianapolis IN Inland Empire CA Jacksonville FL Kansas City MO Las Vegas NV Little Rock AR Los Angeles CA Louisville KY Memphis TN Miami/Dade County FL Milwaukee WI Minneapolis MN Mobile, AL Nashville TN New Orleans LA New York City NY Newport News/Norfolk/Hampton Roads VA North New Jersey Oakland/East Bay CA Oklahoma City OK Omaha NE Orange County CA Orlando FL Philadelphia PA Phoenix AZ Pittsburgh PA Portland, OR Raleigh/Durham NC Sacramento CA Salt Lake City UT San Antonio TX San Diego CA San Francisco CA San Jose/South Bay CA Santa Barbara CA Seattle CA St. Louis MO Tampa/St. Petersburg FL Tucson AZ Tulsa OK Washington, DC NATIONAL AVERAGE 2Q 2010 4 5 3 6 4 7 4 4 3 5 2 4 4 3 5 4 4 4 4 5 2 4 6 7 4 5 2 2 4 4 3 7 3 5 5 5 2 6 5 5 2 7 4 3 2 3 4 6 5 5 6 3 3 6 2 6 6 4 3Q 2010 4 5 3 6 4 7 4 4 4 5 3 5 4 3 5 5 4 4 4 5 3 4 6 7 5 5 2 2 4 4 3 8 3 5 6 5 2 6 5 5 2 7 4 3 3 4 5 7 6 6 7 4 5 6 2 6 6 5 4Q 2010 4 6 4 7 4 7 4 4 4 5 5 6 4 3 5 6 4 4 4 5 4 5 7 7 6 5 2 3 5 5 3 8 4 6 7 5 4 6 5 7 3 8 5 3 3 4 5 8 7 6 8 6 6 6 3 6 7 6 1Q 2011 5 6 5 8 6 8 5 5 5 6 6 6 5 4 5 8 5 5 4 7 5 6 8 8 8 6 3 4 7 6 3 8 4 7 7 5 5 7 5 7 4 9 6 3 3 5 6 8 8 7 8 7 7 6 3 7 8 6 2Q 2011 5 6 5 8 6 8 5 5 5 6 6 6 5 4 6 8 5 5 4 7 6 7 8 8 8 6 3 4 8 8 3 8 5 7 7 5 6 8 5 7 4 9 6 3 4 5 6 8 8 7 8 7 7 6 3 7 8 7 3Q 2011 5 6 6 8 6 9 6 4 6 5 5 7 5 6 6 6 5 5 5 8 6 5 9 7 7 6 5 6 7 9 3 8 4 7 7 6 6 8 5 7 6 9 6 8 5 5 7 8 8 6 8 8 7 6 4 6 9 7
* 1 = Lowest retail demand, 10 = Highest retail demand

All Non-Freestanding Retail
Date
2011 3q 2011 2q 2011 1q 2010 4q 2010 3q 2010 2q 2010 1q 2009 4q 2009 3q 2009 2q 2009 1q 2008 4q 2008 3q 2008 2q 2008 1q 2007 2006
Inventory Total GLA

5,069,201,889 5,065,247,702 5,062,097,464 5,057,394,530 5,052,622,083 5,049,211,922 5,043,595,741 5,037,960,510 5,026,815,183 5,011,135,098 4,999,079,812 4,977,692,359 4,945,402,262 4,916,766,171 4,892,964,344 4,831,698,194 4,695,183,349
Vacancy 3Q 2011 Direct SF

457,504,675 457,617,631 458,033,472 456,989,483 462,013,427 465,558,527 466,297,255 460,073,427 453,893,597 438,695,345 415,019,402 383,794,975 365,724,488 356,312,841 341,802,157 323,880,737 300,270,596
Total SF
473,335,738 475,232,612 475,415,263 474,111,757 480,156,901 485,086,768 487,198,344 482,282,268 476,027,894 461,828,311 441,308,508 404,545,987 379,627,595 370,738,985 356,055,164 337,691,106 313,723,383
Vac %
9.3% 9.4% 9.4% 9.4% 9.5% 9.6% 9.7% 9.6% 9.5% 9.2% 8.8% 8.1% 7.7% 7.5% 7.3% 7.0% 6.7%
Net Absorption
5,851,061 3,332,889 3,399,428 10,817,591 8,340,028 7,727,757 719,155 5,167,457 1,480,502 (8,464,517) (15,375,068) 7,371,705 19,747,481 9,118,006 30,424,157 112,547,122 59,871,127
Deliveries
3,954,187 3,150,238 4,702,934 4,772,447 3,410,161 5,616,181 5,635,231 11,426,531 15,680,085 12,055,286 21,387,453 32,290,097 28,636,091 23,801,827 47,613,010 136,514,845 130,879,842
Under Const SF
11,895,901 13,532,383 13,201,909 15,160,219 17,102,928 17,563,750 19,385,680 19,860,548 27,399,864 38,185,547 44,145,750 56,323,050 77,450,844 92,177,317 95,163,914 115,924,341 125,737,666
Quoted Rates
$14.39 $16.67 $17.01 $16.82 $17.52 $17.66 $17.94 $18.31 $18.79 $18.87 $19.45 $19.66 $19.49 $19.44 $19.36 $20.87 $20.01
Third Quarter 2011 Statistical Recap

As of the close of the third quarter of 2011, national retail shopping center vacancy stood at 9.3%, down slightly from the 9.4% mark where it had held steady since the fourth quarter of 2010. The market absorbed over 5.8 million square feet of space during the third quarterits best performance year-to-date, but well below pre-recession quarterly averages which typically ranged in the 15 to 20 million square foot mark. For example, at the peak of the last real estate cycle in 2007, the market absorbed an average of 28 million square feet of space per quarter. So far this year the market has recorded total occupancy growth in excess of 12.5 million square feet, or an average of nearly 4.2 million square feet. By comparison, last year the market netted total positive absorption in excess of 27.5 million square feet, or an average of nearly 6.9 million square feet per quarter. But while occupancy growth numbers are down, retailer demand and leasing activity are actually up. In fact, demand has been up substantially over last year. So why are the numbers down? Retailer bankruptcies continue to mitigate growth in the marketplace. The Borders bankruptcy and liquidation alone translated into nearly 12 million square feet of space being returned to the marketplace. Blockbuster, meanwhile, has closed over 1,000 locations this year. Between just these two retailers over 17 million square feet of occupancy loss was recorded this year. Take these out of the mix and the market would be approaching 30 million square feet of growth on the year already. But the loss of just these two retailers was enough to counter improving growth trends over the first half of the year and keep vacancy levels flat. It wasnt until this quarter that market vacancy levels finally began to show signs of traction. The good news is that the positive vacancy trends that we saw during the third quarter should continue over the final three months of the year. In fact, barring any unforeseen large-scale retailer bankruptcies following the holiday shopping season, this trend should continue at least into the first quarter of 2012. The
problem is that we cannot discount the possibility of some more large-scale retailer bankruptcies. The fact is that retailer closures continue. While we dont expect anything at the level of Borders or Blockbuster in the months ahead, there will be additional bankruptcies and there will be more chains in contraction mode returning space to the market. In fact, Christopher & Banks recently announced plans to close 100 stores (nearly half a million square feet) during the first quarter of 2012. The Gap, meanwhile, has plans to close 189 U.S. storesroughly 21% of its domestic store countover the next couple of years. While positive occupancy growth from expanding retailers has largely been cancelled out by space being returned from a few large bankruptcies, there is one other factor that has significantly helped to keep vacancy levels from increasing. New development remains at record lows. So far this year only 11.7 million square feet of new shopping center product has been delivered to the marketplace. We are currently on place to close 2011 with roughly 13 million square feet of new deliveries nationally. Keep in mind that at the peak of the last real estate cycle (2004 to 2007) deliveries averaged over ten times this total, or 135 million square feet per year. We are tracking just under 12 million square feet of shopping center space currently under construction throughout the United States, the lowest amount that we have ever tracked. That being said, we are likely at the low-water mark for retail development. The number of proposed retail projects in the development pipeline has increased considerably over the course of the past year and many of these will begin to move dirt in 2012. However, new construction levels will remain modest and projects will be dominated by the expansion/renovation of existing centers as well as urban redevelopment and mixeduse projects. New suburban shopping center construction will be scarce.
Specialty Center Update

Specialty retail center vacancy now stands at 7.2%. This category of shopping centers includes lifestyle centers, as well as theme

Specialty Centers
Date
Inventory Total GLA

87,764,617 87,764,617 87,756,837 87,614,772 86,965,782 86,956,323 86,901,449 86,753,089 86,668,804 86,660,404 86,520,130 86,371,719 84,879,434 84,722,329 83,804,839 80,933,086 76,640,519

6,412,525 6,562,495 7,162,106 6,998,929 6,523,359 6,565,344 6,701,910 6,406,020 6,112,951 6,048,762 5,761,382 5,338,266 5,167,803 5,210,941 4,983,784 4,000,106 3,540,868
Total SF
6,469,262 6,617,232 7,216,426 7,197,749 6,735,729 6,781,334 6,917,900 6,511,768 6,214,295 6,207,451 5,933,694 5,486,831 5,258,798 5,311,682 5,065,639 4,114,779 3,590,341
Vac %
7.4% 7.5% 8.2% 8.2% 7.7% 7.8% 8.0% 7.5% 7.2% 7.2% 6.9% 6.4% 6.2% 6.3% 6.0% 5.1% 4.7%
Net Absorption
147,970 606,974 123,388 186,970 55,064 191,440 (257,772) (213,188) 1,556 (133,483) (298,452) 1,264,252 209,989 671,447 (256,151) 3,768,129 2,160,781
Deliveries
0 7,780 142,065 648,990 9,459 54,874 148,360 84,285 8,400 140,274 148,411 1,492,285 157,105 917,490 430,158 4,292,567 3,470,922
Under Const SF
863,334 212,889 220,669 156,840 791,055 800,514 855,388 533,234 617,519 98,764 229,753 369,764 1,862,049 1,968,711 2,074,423 2,027,336 4,368,537
Quoted Rates
$14.39 $14.84 $14.98 $14.68 $17.17 $17.15 $17.22 $17.71 $18.67 $17.93 $17.55 $17.86 $17.46 $17.57 $17.79 $23.74 $19.58
and entertainment centers, and outlet centers. Thanks in large part to the performance of outlet centers; it is one of the stronger segments of the retail market. That being said, lifestyle centers are also performing well and are making a bit of a comeback after having been overdeveloped at the peak of the last real estate cycle. This quarter marks the second consecutive quarter in which vacancy levels have declined. Last quarter vacancy stood at 7.5%. Vacancy had peaked during the first quarter of this year at 8.2%. Specialty centers absorbed nearly 148,000 square feet of space during the third quarter. Year-to-date absorption now stands at 878,000 square feet. These are modest totals compared to pre-recession averages. The market recorded nearly 3.8 million square feet of occupancy growth in 2007 at the peak of the last cycle. Like every other shopping center type, performance has been bifurcated by class. Class A centers in every market, even those with the highest overall vacancy levels, have performed strongly this year and are typically averaging vacancy levels of 5% or less. Class B centers have performed well in all but the weakest markets and are typically averaging vacancy levels in core markets of 10% or less. Class C centers continue to struggle everywhere. Specialty centers overall have performed well because the national inventory of specialty centers overwhelmingly consists of Class A and B product.
butter tenant base, mom-and-pop retailers, remain missing in action. Mom-and-pop retailers will not be back in any significant numbers until the nations housing market begins to recover home equity loans are usually the initial line of funding for startups and family-owned businesses. That being said, Class A neighborhood and community centers are doing well in nearly every major U.S. market. Though the bankruptcy of Blockbuster largely impacted drug and grocery-store anchored shopping centers, much of this space was situated in Class A and B centers and has been generating significant touring and leasing activity. Neighborhood and community centers, meanwhile, were largely spared the impact of Borders liquidation. Borders typically utilized space at power/regional centers. Community, neighborhood and strip centers accounted for over 5.1 million square feet of occupancy growth during the third quarter. Year-to-date net absorption now stands above 7.9 million square feet. These numbers should improve over the final quarter of 2011. Leasing activity continues to be driven by strong activity from fast casual dining concepts; meanwhile, most of the pending closures that we are aware of will inordinately impact malls and power/regional centers. That being said, the improvement will continue to be limited to the strongest centers.
Power Centers Update

Vacancy for power/regional centers crept up slightly during the third quarter from 6.9% to 7.0%. Though deliveries accounted for only 1.2 million square feet of space this quarter, this number outpaced occupancy growth. Roughly 369,000 square feet of space was absorbed this quarter. This product type took the biggest hit with Borders liquidation. We estimate that over nine million square feet of the 12 million that Borders returned to the marketplace was at power/ regional centers. Despite this, this product type has continued to record modest occupancy growth this year. Year-todate net absorption now stands at just under two million square feet.
Community, Neighborhood & Strip Update

Vacancy levels for community, neighborhood and strip centers fell from 11.0% to 10.9% during the third quarter. This is the largest segment of the shopping center market that we track, accounting for over 3.3 billion square feet of the over five billion square feet of space that we track. This is also where we see the greatest variances in terms of individual shopping center performance. Bifurcation by class is the overriding trend in the marketplace. Strip centers almost universally fall into the Class C category and continue to struggle because their bread-and-

Shopping Centers (includes Community, Neighborhood & Strip)
Date
Inventory Total GLA

3,363,644,082 3,361,820,570 3,359,973,722 3,356,659,013 3,353,412,580 3,351,460,250 3,348,992,249 3,345,877,982 3,340,817,952 3,334,139,772 3,325,849,019 3,313,859,286 3,298,059,329 3,282,719,129 3,270,006,615 3,260,690,895 3,183,915,396

354,756,692 356,915,294 356,423,914 355,024,488 357,047,928 358,351,261 358,647,936 353,406,020 349,267,530 338,025,242 321,758,610 304,189,591 293,273,864 285,416,884 276,081,185 265,173,809 242,552,616
Total SF
366,000,610 369,297,311 368,919,534 367,017,453 369,798,150 371,977,376 373,166,495 368,740,901 364,366,145 353,695,913 338,238,891 317,716,154 304,507,384 297,297,141 287,780,287 277,102,762 254,006,637
Vac %
10.9% 11.0% 11.0% 10.9% 11.0% 11.1% 11.1% 11.0% 10.9% 10.6% 10.2% 9.6% 9.2% 9.1% 8.8% 8.5% 8.0%
Net Absorption
5,120,213 1,469,071 1,412,628 6,027,130 4,131,556 3,657,120 (1,311,327) 961,778 (3,992,052) (7,166,269) (8,533,004) 2,591,187 8,129,957 3,195,660 14,784,959 53,679,374 28,601,389
Deliveries
1,823,512 1,846,848 3,314,709 3,246,433 1,952,330 2,468,001 3,114,267 5,341,234 6,678,180 8,290,753 11,989,733 15,799,957 15,340,200 12,712,514 26,718,629 76,775,499 79,841,937
Under Const SF
5,013,856 5,845,647 5,822,283 7,380,312 9,384,297 9,398,868 8,676,141 8,408,358 11,719,805 15,870,038 20,232,749 26,985,023 36,838,021 42,431,561 43,532,881 57,581,800 65,730,770
Quoted Rates
$14.85 $14.90 $15.00 $15.14 $15.29 $15.46 $15.64 $15.93 $16.32 $16.46 $16.77 $16.90 $16.94 $16.85 $16.76 $16.62 $15.84
Power/regional centers are continuing to show strong leasing activity for junior box space, however, also are seeing challenges from continued closures. We expect continued slow growth ahead. Though we expect vacancy to continue to trend downward, these decreases will be measured in basisnot percentagepoints.
Geographic Updates
Of the five markets that we track in the Northeast United States, only oneBostonrecorded declining vacancy levels. Vacancy for Philadelphia remained flat, while New York, Northern New Jersey and Pittsburgh saw slight increases. Despite this, retail demand in all of these markets remains high. Urban retail demand remains particularly high in Boston, New York, Philadelphia and Pittsburgh. Within the South Atlantic region, eight of the 12 markets that we trackCharlotte, Hampton Roads, Jacksonville, Miami, Orlando, Richmond, Tampa and Washington DCrecorded declining vacancy levels. Demand and leasing activity remain strong in the greater Washington DC/Virginia/Maryland markets despite the fact that Baltimore was one of the markets where we saw vacancy tick up during the third quarter. Activity also appears to be on the rise for most of Floridas retail markets. Atlanta, Baltimore, Charleston and Raleigh all recorded increased vacancy in the third quarter, but in most cases these increases were nominal. We track five markets in the East South Central region. Three of these marketsBirmingham, Mobile and Nashvilleregistered vacancy declines. Only Louisville saw an increase in vacancy, while occupancy remained flat in Memphis. We track eight markets in the West South Central region. Five marketsAustin, Houston, Little Rock, New Orleans and Tulsa recorded vacancy declines this quarter. Houston led the way with over 860,000 square feet of occupancy growth. Occupancy levels remained flat in the Oklahoma City metro. Both the Dallas and San Antonio metros recorded modest increases in vacancy. We track six markets in the East North Central region. All but two recorded decreased vacancy in the third quarter. Chicago, Cleveland, Indianapolis and Milwaukee all saw vacancy levels creep downward. Chicago leads all other markets in terms of occupancy growth with over 1.2 million square feet. Cincinnati and Detroit both saw vacancy levels creep up slightly.
Mall Update
Mall vacancy currently stands at 5.8%, up slightly from the 5.7% mark recorded at the mid-year mark. Vacancy had stayed firm at 5.7% since the fourth quarter of last year. Despite the fact that vacancy crept upward during the third quarter, occupancy growth remained modestly positive. The market netted nearly 214,000 square feet of occupancy growth over the past three months. The problem is that during this same time, the market also experienced roughly 901,000 square feet of deliveries. Supply (new construction) outpaced demand (occupancy growth) and so vacancy levels crept up slightly. This is despite the fact that both new construction and occupancy growth totals were miniscule compared to historical averages. Though malls have been one of the strongest performing segments of the market in terms of retailer demand and leasing activity, they are also the segment of the market that we expect to be most impacted by the next round of retail closures. For example, both the planned closure of 100 Christopher & Banks and 189 Gap stores will almost exclusively impact malls. While luxury and discount retailers are doing well, mid-price retailers are facing the greatest challenges. The middle-class consumer they used to cater to has largely downscaled. Meanwhile, a number of the retailers on our watch list are primarily mall users. While we expect a strong holiday sales season, there will be more retail failures in 2012. And many of these will include concepts that are mall-based. Looking forward, we expect vacancy levels to stay at or near current levels, but any movement will be up. The good news for mall landlords is that they remain at the top of the list for most expanding concepts.

Power Center
Date
Inventory Total GLA

607,588,728 606,358,662 606,259,593 605,232,699 604,705,555 603,941,222 602,996,063 602,066,233 599,531,575 595,943,570 593,815,870 588,373,991 580,418,192 572,879,522 568,016,289 560,836,359 533,353,909

40,219,833 39,268,341 39,745,698 39,802,055 40,909,227 42,682,726 43,800,226 43,970,755 43,108,787 42,178,628 38,808,866 32,742,146 30,220,658 29,528,204 28,257,703 25,743,435 26,143,520
Total SF
42,676,733 41,815,662 42,182,619 42,306,443 43,754,176 45,771,607 47,284,819 47,860,703 47,129,014 46,666,226 44,261,857 37,207,020 31,546,158 30,911,769 29,577,370 26,625,776 27,254,241
Vac %
7.0% 6.9% 7.0% 7.0% 7.2% 7.6% 7.8% 7.9% 7.9% 7.8% 7.5% 6.3% 5.4% 5.4% 5.2% 4.7% 5.1%
Net Absorption
368,995 466,026 1,150,718 1,974,877 2,781,764 2,458,371 1,505,714 1,802,969 3,125,217 (276,669) (1,612,958) 2,294,937 6,904,281 3,528,834 9,389,509 28,110,915 17,760,484
Deliveries
1,230,066 99,069 1,026,894 527,144 764,333 945,159 929,830 2,534,658 3,588,005 2,127,700 5,441,879 7,955,799 7,538,670 4,863,233 11,583,802 27,482,450 24,853,935
Under Const SF
1,749,358 2,396,424 2,081,001 2,666,505 2,055,893 2,200,177 2,771,823 2,981,972 4,989,995 7,523,400 8,748,090 12,534,470 17,751,789 22,875,947 23,824,569 28,090,981 27,424,184
Quoted Rates
$17.20 $17.44 $18.12 $17.70 $17.74 $17.85 $18.61 $18.81 $19.33 $19.41 $19.66 $20.36 $20.47 $20.44 $20.28 $20.10 $19.38
Malls
Date
Inventory Total GLA

1,010,204,462 1,009,303,853 1,008,107,312 1,007,888,046 1,007,538,166 1,006,854,127 1,004,705,980 1,003,263,206 999,796,852 994,391,352 992,894,793 989,087,363 982,045,307 976,445,191 971,136,601 929,237,854 901,273,525

56,115,625 54,871,501 54,701,754 55,164,011 57,532,913 57,959,196 57,147,183 56,290,632 55,404,329 52,442,713 48,690,544 41,524,972 37,062,163 36,156,812 32,479,485 28,963,387 28,033,592
Total SF
58,189,133 57,502,407 57,096,684 57,590,112 59,868,846 60,556,451 59,829,130 59,168,896 58,318,440 55,258,721 52,874,066 44,135,982 38,315,255 37,218,393 33,631,868 29,847,789 28,872,164
Vac %
5.8% 5.7% 5.7% 5.7% 5.9% 6.0% 6.0% 5.9% 5.8% 5.6% 5.3% 4.5% 3.9% 3.8% 3.5% 3.2% 3.2%
Net Absorption
213,883 790,818 712,694 2,628,614 1,371,644 1,420,826 782,540 2,615,898 2,345,781 (888,096) (4,930,654) 1,221,329 4,503,254 1,722,065 6,505,840 26,988,704 11,348,473
Deliveries
900,609 1,196,541 219,266 349,880 684,039 2,148,147 1,442,774 3,466,354 5,405,500 1,496,559 3,807,430 7,042,056 5,600,116 5,308,590 8,880,421 27,964,329 22,713,048
Under Const SF
4,269,353 5,077,423 5,077,956 4,956,562 4,871,683 5,164,191 7,082,328 7,936,984 10,072,545 14,693,345 14,935,158 16,433,793 20,998,985 24,901,098 25,732,041 28,224,224 28,214,175
Quoted Rates
$19.01 $19.48 $19.93 $19.77 $19.87 $20.16 $20.29 $20.77 $20.84 $21.68 $23.83 $23.51 $23.09 $22.88 $22.64 $23.02 $25.21
In the West North Central region we track five markets. St. Louis and Kansas City both saw vacancy retreat during the third quarter. Omahas occupancy levels remained flat this quarter. Both the Des Moines and Minneapolis markets saw vacancy levels creep up by a basis point. We track seven markets in the Mountain region. Performance here was evenly mixed; three markets improved, three markets declined and one remained flat. Vacancy decreased in the Denver, Reno and Salt Lake City markets. Denver led the way for occupancy growth and has recorded over 1.2 million square feet of absorption so far this year. Las Vegas remained flat at 13.4% vacancy. The
Albuquerque, Phoenix and Tucson markets all saw increased vacancy levels. We track 12 markets in the Pacific region. Seven of these markets recorded increased vacancy levels this quarter. Vacancy improved in the Inland Empire, Oakland/East Bay, San Diego, San Jose/ South Bay and Seattle markets. Vacancy increased in Hawaii, Los Angeles, Orange County, Portland, Sacramento, San Francisco and Santa Barbara
Northeast

Northeast U.S. - New England
Boston MA
Specialty Centers Shopping Centers Power Centers Malls All Non-Freestanding Retail Existing Inventory # Blds 6 1,619 37 36 1,698 Total GLA 1,619,941 85,582,567 15,741,807 27,359,618 130,303,933 Vacancy 3Q 2011 Direct SF 15,794 5,770,826 685,522 966,399 7,438,541 Total SF 15,794 6,054,988 689,122 971,665 7,731,569 Vac % 1.0% 7.1% 4.4% 3.6% 5.9% Historical Vacancy 2Q 2011 0.5% 7.0% 4.9% 3.4% 6.0% 3Q 2010 4.6% 7.6% 4.4% 2.9% 6.2% Net Absorption 2,389 444,862 733,395 (180,467) 1,000,179 Deliveries 0 263,145 600,000 0 863,145 Under Const SF 0 50,900 240,000 0 290,900 Quoted Rates $21.40 $15.30 $11.62 $26.94
Northeast U.S. - Middle Atlantic

New York City NY
Specialty Centers Shopping Centers Power Centers Malls All Non-Freestanding Retail
Existing Inventory # Blds

2 7 2 1 12

0 33,443 16,135 36,866 86,444
Historical Vacancy Vac % 2Q 2011

0.0% 0.9% 1.9% 6.9% 2.3%
Total GLA
331,000 949,808 833,680 493,000 2,607,488
Total SF
0 33,443 16,135 36,866 86,444
3Q 2010
0.0% 0.7% 0.8% 0.0% 1.9%
Net Absorption
0 (21,446) 4,196 (2,674) (19,924)
Deliveries
0 0 0 0 0
Under Const SF
0 0 0 0 0
Quoted Rates
N/A N/A N/A N/A
0.0% 3.5% 1.9% 7.5% 3.3%
Northern New Jersey


13 1,792 58 44 1,907

123,301 8,651,593 1,380,076 926,001 11,080,971
Historical Vacancy Vac %

4.0% 9.8% 7.2% 2.3% 7.4%
Total GLA
3,070,018 90,773,327 20,997,279 40,033,427 154,874,051
Total SF
123,301 8,860,454 1,510,331 937,747 11,431,833
2Q 2011
4.3% 9.4% 6.0% 2.4% 7.1%
3Q 2010
2.6% 8.5% 5.4% 2.1% 6.7%
Net Absorption
(14,929) (590,243) 57,251 52,254 (495,667)
Deliveries
0 266,593 339,689 0 606,282
Under Const SF
0 222,000 0 0 222,000
Quoted Rates
$23.78 $20.02 $22.00 $32.64
Philadelphia PA

21 2,274 85 64 2,444

183,657 14,030,171 2,042,862 1,766,879 18,023,569

4.2% 9.8% 5.6% 4.2% 7.9%
Total GLA
4,379,557 148,028,235 36,476,257 51,657,997 240,542,046
Total SF
183,657 14,522,660 2,045,862 2,178,078 18,930,257
2Q 2011
1.9% 9.8% 5.3% 4.7% 7.9%
3Q 2010
2.6% 10.1% 6.5% 5.1% 8.0%
Net Absorption
(9,340) 128,552 506,055 71,535 696,802
Deliveries
0 712,935 250,970 134,583 1,098,488
Under Const SF
0 366,544 74,492 1,370,861 1,811,897
Quoted Rates
$13.04 $14.45 $15.02 $22.44
Pittsburgh PA
Existing Inventory # Blds 1 531 29 21 582 Total GLA 190,230 31,940,767 11,889,383 18,513,563 62,533,943
Vacancy 3Q 2011 Direct SF 0 2,067,611 697,514 1,233,214 3,998,339 Total SF 0 2,171,659 697,514 1,265,158 4,134,331 Vac % 0.0% 6.8% 5.9% 6.8% 6.6%
Historical Vacancy 2Q 2011 0.0% 7.0% 5.5% 6.5% 6.5% 3Q 2010 2.5% 8.0% 5.9% 6.5% 6.9%
Net Absorption 0 398,755 (17,914) (27,488) 353,353
Deliveries 0 6,800 0 124,829 131,629
Under Const SF 0 150,000 0 8,500 158,500
Quoted Rates N/A $11.29 $15.46 $15.80

South U.S. - South Atlantic
Atlanta GA
Specialty Centers Shopping Centers Power Centers Malls All Non-Freestanding Retail Existing Inventory # Blds 17 3,110 65 41 3,233 Total GLA 2,537,204 139,458,781 27,287,943 35,838,707 205,122,635 Vacancy 3Q 2011 Direct SF 364,126 20,424,458 2,627,737 2,049,837 25,466,158 Total SF 364,126 21,025,608 2,683,938 2,066,067 26,139,739 Vac % 14.4% 15.1% 9.8% 5.8% 12.7% Historical Vacancy 2Q 2011 9.8% 14.8% 8.5% 6.2% 12.6% 3Q 2010 4.3% 15.0% 8.7% 6.0% 12.5% Net Absorption 120,908 (287,836) (534,957) (172,594) (874,479) Deliveries 0 11,400 0 0 11,400 Under Const SF 0 447,075 0 0 447,075 Quoted Rates $11.59 $13.21 $14.58 $20.46
Baltimore MD

2 796 22 24 844

3,030 3,594,639 480,820 1,642,604 5,721,093

1.2% 8.2% 6.0% 8.8% 8.1%
Total GLA
261,838 45,662,037 9,015,188 18,743,645 73,682,708
Total SF
3,030 3,753,847 541,010 1,647,129 5,945,016
2Q 2011
0.0% 7.6% 6.7% 7.5% 7.4%
3Q 2010
8.3% 8.6% 7.5% 7.7% 8.1%
Net Absorption
0 (155,625) 13,117 72,391 (70,117)
Deliveries
0 36,459 63,000 19,419 118,878
Under Const SF
0 13,610 0 589,000 602,610
Quoted Rates
N/A $18.55 $19.03 $26.22
Charleston SC

2 284 4 3 293

0 1,356,787 150,389 27,765 1,534,941

0.0% 9.9% 6.3% 1.5% 8.1%
Total GLA
576,075 13,220,211 1,376,537 2,499,265 17,672,088
Total SF
0 1,396,776 150,389 29,034 1,576,199
3Q 2010
0.0% 10.8% 5.6% 6.7% 8.1%
Net Absorption
0 146,608 (32,733) 51,490 165,365
Deliveries
0 46,560 0 0 46,560
Under Const SF
0 5,400 0 0 5,400
Quoted Rates
$23.70 $13.79 $13.68 $20.57
0.0% 10.6% 10.9% 1.2% 8.9%
Charlotte NC
Existing Inventory # Blds 3 1,081 20 32 1,136 Total GLA 1,257,180 50,884,651 8,327,101 19,572,713 80,041,645
Vacancy 3Q 2011 Direct SF 82,123 5,707,741 289,042 1,878,041 7,956,947 Total SF 84,123 5,857,784 317,602 1,898,985 8,158,494 Vac % 6.7% 11.5% 3.8% 9.7% 10.2%
Net Absorption 5,581 256,864 40,748 81,033 384,226
Deliveries 0 73,652 0 0 73,652
Under Const SF 0 79,102 0 0 79,102
Quoted Rates $22.46 $12.95 $20.93 $18.29
Hampton Roads VA
Existing Inventory # Blds 4 856 16 14 890 Total GLA 1,101,386 41,248,269 5,946,923 10,861,822 59,158,400
Vacancy 3Q 2011 Direct SF 80,034 4,352,106 179,967 400,618 5,012,725 Total SF 80,034 4,362,665 179,967 401,428 5,024,094 Vac % 7.3% 10.6% 3.0% 3.7% 8.5%
Net Absorption 0 202,937 (12,826) 27,486 217,597
Deliveries 0 126,909 12,192 0 139,101
Under Const SF 0 119,000 0 0 119,000
Quoted Rates $33.48 $12.91 $17.51 $18.96

South U.S. - South Atlantic cont.
Jacksonville FL

3 750 6 10 769

5,585 4,456,841 460,545 335,383 5,258,354

0.9% 12.4% 19.5% 5.0% 11.4%
Total GLA
647,973 36,274,102 2,364,897 7,574,259 46,861,231
Total SF
5,585 4,507,719 460,545 378,943 5,352,792
2Q 2011
0.9% 12.4% 19.2% 5.6% 11.5%
3Q 2010
0.7% 13.5% 16.7% 5.2% 11.7%
Net Absorption
1,050 262,132 (45,245) (20,590) 197,347
Deliveries
0 61,752 0 0 61,752
Under Const SF
0 5,000 0 0 5,000
Quoted Rates
$15.50 $13.44 $11.42 $16.64
Miami FL

7 1,328 8 19 1,362

87,631 2,640,721 47,707 528,066 3,304,125

9.3% 5.9% 1.5% 3.3% 5.1%
Total GLA
943,056 44,880,994 3,118,113 16,162,636 65,104,799
Total SF
87,631 2,666,451 47,707 538,635 3,340,424
2Q 2011
9.5% 6.2% 2.4% 3.2% 5.3%
3Q 2010
10.6% 6.6% 4.8% 3.0% 5.8%
Net Absorption
2,638 302,339 55,354 (6,473) 353,858
Deliveries
0 55,561 0 0 55,561
Under Const SF
0 58,780 0 0 58,780
Quoted Rates
$30.97 $22.46 $39.71 $30.43
Orlando FL

18 1,309 23 25 1,375

359,876 7,175,373 721,885 867,368 9,124,502

6.8% 11.6% 7.7% 4.9% 9.7%
Total GLA
5,302,625 62,234,506 9,507,915 17,801,082 94,846,128
Total SF
359,876 7,230,852 733,681 867,368 9,191,777
2Q 2011
6.3% 12.0% 7.8% 4.5% 9.9%
3Q 2010
6.3% 11.7% 8.7% 4.3% 9.9%
Net Absorption
23,513 105,985 162,313 22,312 314,123
Deliveries
0 99,583 27,255 4,034 130,872
Under Const SF
0 52,703 0 0 52,703
Quoted Rates
$18.50 $15.20 $16.31 $23.01
Raleigh NC
Net Absorption 0 462,798 89,980 41,245 594,023
Deliveries 0 451,360 15,600 0 466,960
Under Const SF 0 40,800 706,300 0 747,100
Quoted Rates $18.00 $15.56 $15.64 $22.44
Richmond VA
Vacancy 3Q 2011 Direct SF 0 3,186,965 84,465 303,614 3,575,044 Total SF 0 3,229,161 94,465 306,693 3,630,319 Vac % 0.0% 11.0% 3.0% 3.3% 8.7%
Net Absorption 0 153,700 45,728 97,520 296,948
Deliveries 0 97,372 1,430 9,302 108,104
Under Const SF 0 38,222 0 175,365 213,587
Quoted Rates $25.00 $13.75 $14.55 $20.08

South U.S. - South Atlantic cont.
Tampa FL

4 2,017 28 21 2,070

102,613 9,229,966 645,669 654,906 10,633,154

15.0% 11.0% 6.6% 3.9% 9.6%
Total GLA
684,769 86,780,375 9,759,152 16,910,133 114,134,429
Total SF
102,613 9,576,899 645,669 663,298 10,988,479
2Q 2011
7.9% 11.1% 7.4% 4.1% 9.7%
3Q 2010
8.2% 11.2% 7.7% 4.0% 9.4%
Net Absorption
(8,875) 263,161 19,461 32,373 306,120
Deliveries
0 139,181 0 0 139,181
Under Const SF
0 50,932 0 0 50,932
Quoted Rates
$14.40 $13.33 $17.23 $24.22
Washington DC

10 1,262 33 53 1,358

37,659 5,795,863 465,581 1,113,909 7,413,012

2.6% 7.4% 3.0% 2.8% 5.5%
Total GLA
1,523,520 82,172,293 16,101,461 41,672,269 141,469,543
Total SF
38,919 6,081,017 479,760 1,157,124 7,756,820
2Q 2011
1.4% 7.4% 3.8% 2.6% 5.6%
3Q 2010
2.2% 7.8% 3.5% 4.0% 6.2%
Net Absorption
(15,525) 208,077 (57,170) 645,902 781,284
Deliveries
0 259,308 0 750,553 1,009,861
Under Const SF
0 68,373 40,670 0 109,043
Quoted Rates
N/A $22.36 $24.65 $26.05
South U.S. - East South Central

Birmingham AL

6 574 14 12 606

390,956 3,726,545 213,032 1,273,800 5,604,333

22.7% 14.3% 4.9% 18.6% 14.0%
Total GLA
1,740,801 26,595,014 5,998,835 6,950,615 41,285,265
Total SF
395,394 3,811,225 294,889 1,292,600 5,794,108
2Q 2011
23.3% 14.0% 6.0% 20.6% 14.2%
3Q 2010
15.9% 13.4% 6.2% 17.6% 13.8%
Net Absorption
20,874 14,511 109,063 2,291 146,739
Deliveries
0 75,500 0 0 75,500
Under Const SF
0 0 35,000 0 35,000
Quoted Rates
$13.11 $9.21 $15.77 $16.55
Louisville KY

3 503 5 6 517

299,307 3,191,686 124,877 79,282 3,695,152

24.0% 11.7% 6.3% 2.4% 10.2%
Total GLA
1,245,871 27,956,364 2,438,016 6,590,433 38,230,684
Total SF
299,307 3,274,550 153,366 157,782 3,885,005
2Q 2011
22.5% 11.5% 6.8% 2.4% 10.0%
3Q 2010
30.5% 11.8% 10.4% 3.1% 10.5%
Net Absorption
(16,112) 301,509 30,093 13,573 329,063
Deliveries
0 28,905 0 0 28,905
Under Const SF
0 10,400 0 0 10,400
Quoted Rates
$7.75 $10.95 $19.55 $7.21
Memphis TN
Net Absorption (6,548) 33,349 159,284 (44,646) 141,439
Deliveries 0 313 183,164 0 183,477
Under Const SF 0 8,786 0 0 8,786
Quoted Rates $12.53 $10.78 $8.95 $3.69

South U.S. - East South Central cont.
Mobile AL

2 239 3 5 249

1,600 966,605 48,930 301,795 1,318,930

0.3% 11.4% 3.3% 9.2% 9.6%
Total GLA
559,860 9,237,008 1,474,274 3,805,666 15,076,808
Total SF
1,600 1,054,011 48,930 349,029 1,453,570
2Q 2011
0.3% 11.9% 9.3% 9.8% 10.7%
3Q 2010
0.7% 12.1% 10.9% 10.4% 11.1%
Net Absorption
0 114,845 8,651 84,225 207,721
Deliveries
0 21,548 0 0 21,548
Under Const SF
0 0 0 0 0
Quoted Rates
$24.00 $12.07 $18.22 $22.85
Nashville TN

6 648 16 13 683

82,400 3,075,987 293,080 914,059 4,365,526

10.0% 10.6% 4.8% 8.4% 9.4%
Total GLA
827,996 30,140,620 6,218,548 10,880,415 48,067,579
Total SF
82,400 3,208,200 295,947 914,059 4,500,606
2Q 2011
10.5% 10.8% 4.8% 8.6% 9.5%
3Q 2010
9.9% 10.9% 3.2% 11.5% 9.7%
Net Absorption
1,898 106,083 (75,109) 208,390 241,262
Deliveries
0 5,724 0 149,000 154,724
Under Const SF
0 0 0 0 0
Quoted Rates
$5.14 $13.67 $18.42 $24.44
South U.S. - West South Central

Austin TX

5 562 21 11 599

105,643 2,825,723 372,284 158,597 3,462,247

7.0% 10.9% 4.0% 2.1% 7.8%
Total GLA
1,500,509 26,392,190 10,103,709 7,867,328 45,863,736
Total SF
105,643 2,883,403 406,775 164,797 3,560,618
2Q 2011
6.9% 11.4% 4.5% 1.9% 8.3%
3Q 2010
8.0% 10.7% 5.4% 3.5% 7.9%
Net Absorption
13,660 (41,073) (4,171) 75,520 43,936
Deliveries
0 30,468 5,700 0 36,168
Under Const SF
72,889 66,050 0 0 138,939
Quoted Rates
$24.78 $17.88 $18.50 $20.20
Dallas TX

19 3,424 69 43 3,555

189,695 20,735,593 2,236,237 2,305,351 25,466,876

7.5% 14.3% 8.7% 6.1% 12.1%
Total GLA
2,521,029 149,109,638 26,517,330 38,107,100 216,255,097
Total SF
189,695 21,264,425 2,298,580 2,309,911 26,062,611
2Q 2011
1.1% 13.9% 7.0% 6.9% 11.8%
3Q 2010
5.6% 13.3% 7.7% 7.1% 11.2%
Net Absorption
35,149 164,424 228,696 114,485 542,754
Deliveries
0 282,254 581,451 103,714 967,419
Under Const SF
90,000 493,918 138,452 3,530 725,900
Quoted Rates
$12.13 $13.13 $18.17 $21.98
Houston TX
Existing Inventory # Blds 12 3,509 46 45 3,612 Total GLA 1,712,037 149,570,140 18,677,841 35,990,638 205,950,656
Vacancy 3Q 2011 Direct SF 112,308 14,275,970 1,044,351 2,642,780 18,075,409 Total SF 112,308 14,584,793 1,138,683 2,721,319 18,557,103 Vac % 6.6% 9.8% 6.1% 7.6% 9.0%
Net Absorption (16,077) 749,016 67,710 59,852 860,501
Deliveries 0 445,941 9,600 0 455,541
Under Const SF 0 194,238 16,912 0 211,150
Quoted Rates $7.49 $14.16 $15.79 $22.80

South U.S. - West South Central cont.
Little Rock AR

0 428 6 8 442

0 0 1,223,510 194,658 86,011 1,504,179

0.0% 8.6% 7.5% 2.3% 7.6%
Total GLA
Total SF
0 1,225,510 194,658 86,011 1,506,179
3Q 2010
0.0% 8.3% 12.3% 2.4% 7.4%
Net Absorption
0 8,675 261,096 (6,050) 263,721
Deliveries
0 0 180,000 0 180,000
Under Const SF
0 0 0 0 0
Quoted Rates
N/A $9.65 $14.70 $8.44
0.0% 8.2% 7.0% 3.0% 7.3%
14,952,262 2,782,688 2,841,392 20,576,342
New Orleans LA

3 360 3 11 377

75,074 1,875,490 40,498 364,329 2,355,391

21.2% 10.7% 2.8% 4.7% 8.7%
Total GLA
377,761 17,911,987 1,469,160 7,872,226 27,631,134
Total SF
80,074 1,908,594 40,498 369,437 2,398,603
2Q 2011
15.7% 11.3% 5.0% 6.6% 9.7%
3Q 2010
15.5% 11.0% 4.6% 5.9% 9.8%
Net Absorption
(20,611) 16,383 29,890 96,668 122,330
Deliveries
0 21,219 0 17,542 38,761
Under Const SF
0 9,315 0 0 9,315
Quoted Rates
$20.00 $13.02 $22.00 $6.78
Oklahoma City OK

5 775 10 10 800

79,579 2,817,024 151,841 997,018 4,045,462

8.9% 10.9% 4.7% 20.1% 11.6%
Total GLA
889,801 26,522,179 4,083,986 5,927,671 37,423,637
Total SF
79,579 2,889,761 191,617 1,190,017 4,350,974
2Q 2011
24.6% 11.7% 4.6% 15.8% 11.6%
3Q 2010
52.8% 9.7% 2.4% 17.8% 11.3%
Net Absorption
(10,779) 112,463 (57,065) (12,753) 31,866
Deliveries
0 56,320 0 0 56,320
Under Const SF
0 12,736 0 8,000 20,736
Quoted Rates
$10.89 $9.53 $14.45 $16.68
San Antonio TX

4 1,205 13 16 1,238

20,378 4,283,505 761,504 554,389 5,619,776

13.5% 10.5% 12.5% 4.1% 9.2%
Total GLA
150,826 42,935,067 6,155,616 14,665,672 63,907,181
Total SF
20,378 4,487,647 769,438 607,425 5,884,888
2Q 2011
8.4% 10.6% 10.8% 3.5% 9.0%
3Q 2010
3.5% 10.7% 8.0% 3.0% 8.9%
Net Absorption
(10,838) 284,813 (115,950) (76,605) 81,420
Deliveries
0 282,380 50,056 0 332,436
Under Const SF
0 334,248 0 0 334,248
Quoted Rates
$11.00 $14.01 $22.86 $15.49
Tulsa OK
Net Absorption (9,127) 202,844 9,403 (2,090) 201,030
Deliveries 0 6,525 0 0 6,525
Under Const SF 0 0 0 0 0
Quoted Rates $5.82 $9.83 $6.93 $11.02
Midwest

Midwest U.S. - East North Central
Chicago IL
Specialty Centers Shopping Centers Power Centers Malls All Non-Freestanding Retail Existing Inventory # Blds 13 3,783 75 45 3,916 Total GLA 3,207,366 160,784,982 33,213,523 41,123,885 238,329,756 Vacancy 3Q 2011 Direct SF 25,143 19,285,397 2,238,379 1,463,354 23,012,273 Total SF 25,143 19,415,930 2,371,374 1,546,723 23,359,170 Vac % 0.8% 12.1% 7.1% 3.8% 9.8% Historical Vacancy 2Q 2011 1.0% 12.3% 7.2% 3.6% 10.0% 3Q 2010 1.3% 12.4% 10.4% 3.0% 10.3% Net Absorption 2,419 249,609 821,832 155,258 1,229,118 Deliveries 0 80,004 0 0 80,004 Under Const SF 190,445 5,600 0 0 196,045 Quoted Rates $15.00 $15.87 $17.01 $23.30
Cincinnati OH

5 763 17 15 800

75,062 4,841,771 755,219 1,071,715 6,743,767

9.8% 14.5% 11.1% 10.9% 13.2%
Total GLA
768,846 34,863,005 7,030,676 11,486,375 54,148,902
Total SF
75,062 5,051,736 779,719 1,256,715 7,163,232
2Q 2011
9.7% 14.0% 11.1% 11.3% 13.0%
3Q 2010
9.9% 13.0% 14.2% 7.5% 12.7%
Net Absorption
(11,800) 278,876 164,331 55,693 487,100
Deliveries
0 214,000 134,500 0 348,500
Under Const SF
0 0 0 0 0
Quoted Rates
N/A $10.83 $12.39 $11.00
Cleveland OH

9 981 29 18 1,037

74,351 5,805,678 1,163,158 2,479,153 9,522,340

2.0% 13.4% 8.8% 14.3% 12.4%
Total GLA
3,663,456 48,073,881 13,233,859 17,387,824 82,359,020
Total SF
74,351 6,457,353 1,163,158 2,479,943 10,174,805
2Q 2011
1.7% 13.7% 8.2% 15.9% 12.6%
3Q 2010
4.5% 12.5% 8.0% 18.4% 12.2%
Net Absorption
622,222 (177,235) (88,406) (13,724) 342,857
Deliveries
0 20,966 18,352 0 39,318
Under Const SF
0 0 0 30,000 30,000
Quoted Rates
$8.83 $11.14 $14.66 $9.53
Detroit MI

5 1,737 45 25 1,812

77,311 10,632,965 1,132,255 2,002,331 13,844,862

4.9% 15.6% 6.8% 8.0% 12.4%
Total GLA
1,569,073 70,297,079 18,477,431 25,327,675 115,671,258
Total SF
77,311 11,001,171 1,249,794 2,027,954 14,356,230
2Q 2011
6.8% 15.6% 7.1% 5.8% 12.0%
3Q 2010
7.7% 16.2% 6.7% 3.9% 12.3%
Net Absorption
(1,832) 151,408 (93,396) (85,127) (28,947)
Deliveries
0 47,368 0 0 47,368
Under Const SF
0 42,000 0 0 42,000
Quoted Rates
$15.00 $12.55 $13.67 $11.47
Midwest

Midwest U.S. - East North Central cont.
Indianapolis IN

0 813 24 16 853

0 0 4,596,377 730,209 940,408 6,266,994

0.0% 12.6% 8.7% 6.1% 10.5%
Total GLA
Total SF
0 4,774,700 784,473 949,841 6,509,014
3Q 2010
0.0% 13.2% 7.7% 5.6% 10.8%
Net Absorption
0 (45,841) (100,820) (191,810) (338,471)
Deliveries
0 9,000 0 0 9,000
Under Const SF
0 0 0 0 0
Quoted Rates
N/A $11.87 $16.04 $15.88
0.0% 12.1% 7.6% 6.6% 10.1%
39,450,465 10,295,370 14,449,006 64,194,841
Milwaukee WI
Net Absorption 12,900 116,195 (3,013) (49,003) 77,079
Deliveries 0 9,140 0 0 9,140
Under Const SF 0 42,190 0 0 42,190
Quoted Rates $21.41 $11.78 $16.77 $8.72
Midwest U.S. - West North Central

Des Moines IA

1 233 2 8 244

2,000 925,318 74,525 308,680 1,310,523

1.1% 8.9% 7.9% 5.5% 7.7%
Total GLA
188,881 10,524,063 944,503 5,570,389 17,227,836
Total SF
2,000 937,723 74,525 308,680 1,322,928
2Q 2011
1.1% 9.3% 5.1% 5.2% 7.6%
3Q 2010
0.0% 9.7% 6.0% 5.2% 7.5%
Net Absorption
200 103,103 (23,566) (28,296) 51,441
Deliveries
0 0 0 0 0
Under Const SF
0 0 0 0 0
Quoted Rates
$12.00 $11.72 $11.35 $15.17
Kansas City MO

5 671 21 15 712

143,880 5,127,996 594,037 593,840 6,459,753

8.9% 14.0% 6.5% 6.2% 11.2%
Total GLA
1,733,809 39,045,899 9,190,917 12,062,181 62,032,806
Total SF
153,880 5,448,073 594,037 744,218 6,940,208
2Q 2011
7.3% 14.5% 6.7% 6.6% 11.6%
3Q 2010
12.7% 14.8% 5.5% 7.9% 11.9%
Net Absorption
5,020 157,150 28,192 93,959 284,321
Deliveries
0 45,000 23,171 14,440 82,611
Under Const SF
0 0 33,272 0 33,272
Quoted Rates
$8.36 $12.18 $17.52 $24.27
Midwest

Midwest U.S. - West North Central cont.
Minneapolis MN

7 1,289 27 20 1,343

38,367 5,217,978 475,992 568,290 6,300,627

4.4% 9.9% 4.5% 3.5% 7.7%
Total GLA
1,419,830 53,649,704 10,777,637 18,278,841 84,126,012
Total SF
62,930 5,332,326 488,492 630,763 6,514,511
2Q 2011
5.1% 9.8% 4.5% 3.0% 7.6%
3Q 2010
5.0% 9.7% 2.5% 5.6% 7.6%
Net Absorption
10,002 (119,519) (113,655) 616,279 393,107
Deliveries
0 190,219 0 0 190,219
Under Const SF
0 10,900 0 26,000 36,900
Quoted Rates
$18.62 $13.49 $16.84 $18.69
Omaha NE

1 364 9 8 382

63,000 2,119,586 321,232 184,212 2,688,030

31.8% 13.0% 8.9% 3.5% 10.6%
Total GLA
197,863 16,585,975 3,620,381 5,332,968 25,737,187
Total SF
63,000 2,160,213 321,232 184,212 2,728,657
2Q 2011
31.8% 13.2% 8.3% 3.6% 10.6%
3Q 2010
31.8% 12.6% 7.2% 4.6% 10.8%
Net Absorption
0 (37,107) 5,416 (1,415) (33,106)
Deliveries
0 8,127 26,380 0 34,507
Under Const SF
0 0 5,328 9,816 15,144
Quoted Rates
N/A $10.57 $13.89 $7.57
St. Louis MO
Existing Inventory # Blds 4 1,122 24 21 1,171 Total GLA 955,002 54,322,249 9,391,265 19,647,828 84,316,344
Net Absorption 0 85,589 (243,256) (75,754) (233,421)
Deliveries 0 26,225 0 0 26,225
Under Const SF 0 235,530 11,500 0 247,030
Quoted Rates $11.46 $12.61 $13.39 $15.95
West

West U.S. - Mountain
Albuquerque NM
Specialty Centers Shopping Centers Power Centers Malls All Non-Freestanding Retail Existing Inventory # Blds 0 349 6 4 359 Total GLA 0 17,646,014 2,259,500 3,393,656 23,299,170 Vacancy 3Q 2011 Direct SF 0 2,098,063 247,858 235,501 2,581,422 Total SF 0 2,142,268 265,694 235,501 2,643,463 Vac % 0.0% 12.1% 11.8% 6.9% 11.3% Historical Vacancy 2Q 2011 0.0% 11.3% 12.9% 7.8% 10.8% 3Q 2010 0.0% 11.3% 11.0% 8.4% 10.7% Net Absorption 0 (42,606) 18,980 6,690 (16,936) Deliveries 0 86,275 6,000 0 92,275 Under Const SF 0 69,330 0 0 69,330 Quoted Rates N/A $13.73 $14.28 $28.00
Denver CO

5 1,348 44 23 1,420

16,647 6,686,848 1,075,899 1,714,500 9,493,894

1.2% 9.6% 6.1% 8.6% 8.8%
Total GLA
1,397,024 69,947,480 18,707,059 21,142,078 111,193,641
Total SF
16,647 6,746,631 1,149,380 1,820,486 9,733,144
2Q 2011
4.3% 10.1% 7.6% 7.9% 9.2%
3Q 2010
6.3% 10.3% 7.5% 7.0% 9.5%
Net Absorption
1,270 1,150,394 62,603 32,524 1,246,791
Deliveries
0 468,734 0 270,000 738,734
Under Const SF
0 140,411 31,100 0 171,511
Quoted Rates
$22.33 $13.85 $17.49 $21.35
Las Vegas NV

9 994 24 19 1,046

135,704 7,545,921 1,175,453 931,489 9,788,567

6.2% 16.0% 11.4% 6.6% 13.4%
Total GLA
2,195,181 50,739,269 10,538,083 14,122,763 77,595,296
Total SF
135,704 8,095,620 1,202,053 931,489 10,364,866
2Q 2011
6.3% 16.0% 11.0% 7.2% 13.4%
3Q 2010
5.2% 15.3% 7.8% 5.0% 12.8%
Net Absorption
(811) (396,182) (251,177) 40,731 (607,439)
Deliveries
0 7,730 0 199,528 207,258
Under Const SF
0 28,800 0 273,750 302,550
Quoted Rates
$18.31 $16.88 $18.47 $39.63
Phoenix AZ

14 1,811 47 32 1,904

313,752 16,792,439 1,705,506 2,626,307 21,438,004

7.8% 16.6% 8.7% 10.4% 14.3%
Total GLA
4,148,769 103,958,181 20,378,390 25,764,770 154,250,110
Total SF
323,028 17,227,461 1,781,969 2,670,477 22,002,935
2Q 2011
9.1% 16.1% 8.1% 10.3% 13.9%
3Q 2010
10.0% 15.4% 9.9% 10.7% 13.3%
Net Absorption
(17,034) (638,700) (155,583) 220,648 (590,669)
Deliveries
0 114,938 13,739 134,785 263,462
Under Const SF
0 68,143 0 0 68,143
Quoted Rates
$16.10 $14.29 $19.37 $21.67
Reno NV

1 158 4 5 168

28,000 1,241,567 357,220 262,849 1,889,636

50.0% 13.5% 17.9% 6.9% 12.6%
Total GLA
56,000 9,849,328 2,004,965 3,897,638 15,807,931
Total SF
28,000 1,330,577 358,522 269,392 1,986,491
2Q 2011
50.0% 15.7% 19.1% 4.5% 13.6%
3Q 2010
50.0% 15.2% 19.4% 3.3% 14.4%
Net Absorption
0 71,818 (27,442) (33,130) 11,246
Deliveries
0 0 0 0 0
Under Const SF
0 0 0 0 0
Quoted Rates
$21.00 $15.73 $21.63 $13.63
West

West U.S. - Mountain cont.
Salt Lake City UT
Specialty Centers Shopping Centers Power Centers Malls All Non-Freestanding Retail Existing Inventory # Blds 7 864 12 21 904 Total GLA 1,701,457 41,057,951 4,690,529 13,627,463 61,077,400 Vacancy 3Q 2011 Direct SF 17,649 2,888,436 184,313 1,118,111 4,208,509 Total SF 17,649 2,922,141 184,313 1,118,111 4,242,214 Vac % 1.0% 7.1% 3.9% 8.2% 6.9% Historical Vacancy 2Q 2011 2.2% 7.7% 3.0% 7.9% 7.2% 3Q 2010 3.1% 8.0% 4.6% 8.4% 7.6% Net Absorption 22,251 487,175 (12,058) (7,536) 489,832 Deliveries 0 169,106 0 2,225 171,331 Under Const SF 10,000 13,740 0 124,000 147,740 Quoted Rates $20.19 $14.10 $16.87 $14.65
Tucson AZ

5 518 9 6 538

11,639 2,716,073 268,641 434,441 3,430,794

2.3% 12.2% 8.8% 8.7% 11.1%
Total GLA
504,830 22,405,340 3,063,583 5,018,719 30,992,472
Total SF
11,639 2,729,163 268,641 434,441 3,443,884
2Q 2011
2.5% 11.9% 9.3% 8.0% 10.9%
3Q 2010
1.1% 10.9% 12.5% 6.9% 10.8%
Net Absorption
3,524 (184,418) 28,279 (49,748) (202,363)
Deliveries
0 17,617 0 0 17,617
Under Const SF
0 16,442 0 3,280 19,722
Quoted Rates
$5.11 $14.57 $22.73 $25.11
West U.S. - Pacific

Hawaii

5 246 4 10 265

63,721 676,793 45,997 193,319 979,830

15.6% 4.0% 2.5% 3.2% 3.8%
Total GLA
458,746 17,159,205 1,870,423 8,082,542 27,570,916
Total SF
71,535 679,375 45,997 255,412 1,052,319
2Q 2011
14.4% 3.9% 0.1% 2.2% 3.3%
3Q 2010
16.9% 4.2% 5.3% 1.9% 4.4%
Net Absorption
15,434 (8,828) (44,897) (101,356) (139,647)
Deliveries
17,681 0 0 0 17,681
Under Const SF
0 0 0 0 0
Quoted Rates
N/A $31.69 $42.61 $40.44
Inland Empire CA

17 1,674 40 24 1,755

347,188 9,506,250 1,501,885 1,120,465 12,475,788

10.1% 11.5% 9.5% 7.0% 10.5%
Total GLA
3,426,635 85,140,209 16,308,970 19,908,650 124,784,464
Total SF
347,188 9,804,590 1,546,350 1,400,241 13,098,369
2Q 2011
10.1% 12.1% 9.7% 6.7% 10.8%
3Q 2010
8.4% 11.8% 8.1% 5.6% 10.6%
Net Absorption
(82,456) 61,876 181,026 (317,467) (157,021)
Deliveries
1,780 84,200 0 0 85,980
Under Const SF
0 93,958 98,160 0 192,118
Quoted Rates
$16.23 $17.34 $20.49 $20.17
Los Angeles CA

20 4,219 48 60 4,347

216,369 9,686,266 1,092,064 1,540,959 12,535,658

5.2% 6.8% 5.7% 3.3% 5.9%
Total GLA
4,159,485 146,297,996 20,546,076 47,820,931 218,824,488
Total SF
216,369 9,978,623 1,169,365 1,578,245 12,942,602
2Q 2011
4.4% 6.7% 5.3% 3.1% 5.8%
3Q 2010
5.2% 6.8% 5.7% 4.0% 5.9%
Net Absorption
149,524 83,958 (18,164) 61,457 276,775
Deliveries
142,065 156,188 0 157,626 455,879
Under Const SF
0 63,905 0 50,000 113,905
Quoted Rates
$19.83 $22.64 $23.41 $30.19
West

West U.S. - Pacific cont.
Oakland/East Bay CA
Specialty Centers Shopping Centers Power Centers Malls All Non-Freestanding Retail Existing Inventory # Blds 4 850 17 15 886 Total GLA 812,397 40,151,527 6,762,178 12,013,927 59,740,029 Vacancy 3Q 2011 Direct SF 83,205 2,571,991 191,418 463,993 3,310,607 Total SF 83,205 2,620,325 312,729 463,993 3,480,252 Vac % 10.2% 6.5% 4.6% 3.9% 5.8% Historical Vacancy 2Q 2011 11.0% 6.5% 3.9% 5.2% 6.0% 3Q 2010 0.0% 7.5% 6.5% 6.5% 6.4% Net Absorption (4,866) 305,410 131,592 (61,904) 370,232 Under Const SF 450,000 30,154 318,000 18,410 816,564 Quoted Rates $31.90 $21.11 $26.03 $17.59
Deliveries 0 4,500 0 0 4,500
Orange County CA

12 1,452 25 22 1,511

189,765 3,949,942 708,410 641,280 5,489,397

7.2% 6.6% 8.3% 3.5% 6.2%
Total GLA
2,625,396 63,562,629 9,985,076 18,103,417 94,276,518
Total SF
189,765 4,170,172 825,248 641,280 5,826,465
2Q 2011
5.3% 6.7% 6.6% 3.6% 6.1%
3Q 2010
16.8% 6.6% 7.8% 3.4% 6.2%
Net Absorption
58,101 47,839 (105,117) (12,362) (11,539)
Deliveries
0 20,222 0 0 20,222
Under Const SF
50,000 0 0 0 50,000
Quoted Rates
$43.19 $22.38 $31.15 $33.34
Portland OR

3 719 14 11 747

0 2,708,730 372,670 329,319 3,410,719

0.5% 8.3% 5.5% 3.6% 7.0%
Total GLA
271,931 34,612,203 6,406,181 8,974,544 50,264,859
Total SF
0 2,831,236 382,433 336,604 3,550,273
3Q 2010
1.2% 8.4% 5.7% 4.0% 7.2%
Net Absorption
3,203 367,431 37,773 8,896 417,303
Deliveries
0 340,775 0 0 340,775
Under Const SF
0 4,700 0 0 4,700
Quoted Rates
$32.00 $17.30 $19.80 $20.98
0.5% 8.2% 6.0% 3.8% 7.1%
Sacramento CA

10 1,165 29 12 1,216

303,787 6,738,019 796,635 661,451 8,499,892

12.2% 14.0% 8.5% 7.3% 12.3%
Total GLA
2,494,948 50,660,959 10,576,764 9,023,258 72,755,929
Total SF
303,787 7,071,323 897,948 661,451 8,934,509
2Q 2011
13.3% 13.9% 8.2% 6.5% 12.1%
3Q 2010
9.6% 14.0% 9.0% 6.6% 12.3%
Net Absorption
11,494 217,877 88,426 139,751 457,548
Deliveries
0 20,263 7,200 242,378 269,841
Under Const SF
0 5,000 5,500 310,285 320,785
Quoted Rates
$16.24 $16.93 $21.13 $26.16
San Diego CA

11 1,204 23 18 1,256

46,747 3,946,856 419,975 360,128 4,773,706

4.3% 7.7% 5.2% 2.3% 6.3%
Total GLA
1,082,876 54,174,272 10,138,861 16,137,243 81,533,252
Total SF
46,747 4,159,711 527,987 369,328 5,103,773
2Q 2011
4.5% 7.9% 5.6% 2.5% 6.5%
3Q 2010
2.7% 7.6% 6.5% 2.6% 6.3%
Net Absorption
(5,349) 83,656 192,060 119,552 389,919
Deliveries
0 37,788 0 0 37,788
Under Const SF
0 110,262 0 0 110,262
Quoted Rates
$24.10 $21.00 $27.17 $23.97
West

West U.S. - Pacific cont.
San Francisco CA
Specialty Centers Shopping Centers Power Centers Malls All Non-Freestanding Retail Existing Inventory # Blds 7 281 5 6 299 Total GLA 1,569,736 9,682,309 1,893,475 5,190,245 18,335,765 Vacancy 3Q 2011 Direct SF 69,928 488,453 63,493 126,317 748,191 Total SF 75,128 493,453 63,493 126,317 758,391 Vac % 4.8% 5.1% 3.4% 2.4% 4.1% Historical Vacancy 2Q 2011 4.9% 5.3% 3.6% 0.9% 3.8% 3Q 2010 5.4% 5.1% 3.8% 0.5% 4.1% Net Absorption 10,110 (16,209) 4,980 (97,092) (98,211) Deliveries 6,000 0 0 0 6,000 Under Const SF 0 0 0 0 0 Quoted Rates $83.20 $26.75 $31.69 $30.00
San Jose/ South Bay CA


2 762 9 12 785

8,298 1,969,577 535,320 206,361 2,719,556

1.5% 7.0% 13.2% 1.8% 6.2%
Total GLA
547,707 29,982,098 4,049,821 11,619,106 46,198,732
Total SF
8,298 2,108,341 535,320 206,361 2,858,320
2Q 2011
2.1% 7.6% 12.6% 1.7% 8.6%
3Q 2010
1.2% 6.9% 15.8% 3.2% 8.2%
Net Absorption
(2,598) 125,379 (38,151) 4,067 88,697
Deliveries
0 151,448 0 0 151,448
Under Const SF
0 51,000 0 0 51,000
Quoted Rates
$23.45 $25.24 $18.73 $34.01
Santa Barbara CA

0 165 2 3 170

0 0 511,547 68,748 38,105 618,400

0.0% 7.8% 6.7% 2.5% 6.8%
Total GLA
Total SF
0 548,568 68,748 38,105 655,421
3Q 2010
0.0% 6.5% 6.1% 0.7% 6.1%
Net Absorption
0 1,307 (10,080) (28,648) (37,421)
Deliveries
0 0 0 0 0
Under Const SF
0 0 0 0 0
Quoted Rates
N/A $19.79 $24.00 $51.93
0.0% 7.8% 7.2% 2.5% 6.9%
7,045,677 959,167 1,524,422 9,529,266
Seattle WA

5 1,339 15 22 1,381

39,069 5,601,471 250,092 744,572 6,635,204

3.3% 10.0% 4.4% 4.3% 8.3%
Total GLA
1,166,730 56,871,165 5,695,126 17,538,648 81,271,669
Total SF
39,069 5,705,843 250,092 755,539 6,750,543
2Q 2011
5.4% 10.3% 4.5% 4.9% 8.7%
3Q 2010
3.7% 9.9% 6.0% 5.0% 8.4%
Net Absorption
(6,537) 297,548 65,732 99,586 456,329
Deliveries
0 28,450 0 0 28,450
Under Const SF
0 66,354 0 0 66,354
Quoted Rates
$14.38 $17.98 $18.52 $26.35

Exspansion Notes
The following are just a few of the expansion plans of the retailers and restaurant chains that we are tracking in the marketplace. This data has been culled from a wide variety of sources, ranging from published reports to SEC filings to market gossip or confirmed plans shared with us directly by retailers. While we believe that this information is reliable, we make no guarantee as to the accuracy of this data.
Apparel
Accessorize opened only two stores this year, but the London-based chain has announced a goal of reaching 100 units by 2015. We expect 2012 openings to surpass the 20-unit mark. Anthropologie will close 2011 with at least 15 new stores. Our sources tell us to expect a similar growth rate for the coming year. Even while parent company The Gap is planning on closing 100 stores or more in the coming months, they are continuing to grow their active womens sportswear concept, Athleta. Athleta should close 2011 with about ten new stores. We expect growth levels to surpass this in 2012we anticipate at least 15 units. Bebes has plans to add a total of 11 new stores in its current fiscal year, which ends in June 2012. Body Central is looking to open as many as 40 new stores in 2012. Casual Male will open about 14 more new stores before the end of the year, most of which will be their new Destination XL concept. The chain wants to be opening between 75 and 100 new locations annually by 2013, which leaves the question as to how many units to expect next year. We expect as many as 40 new units as Casual Male ramps up growth of its new concept. Cato Corporations new accessories concept, Versone Accessories, is looking to open as many as 50 new stores over the next 18 months. Charlotte Russe will beef up growth in 2012 with as many as 20 new stores. Charming Charlies, an accessories concept that typically uses about 8,000 square feet, will close 2011 with at least ten new stores. We expect 2012 openings to approach 15 units or more. Charming Shoppes will close out 2011 with only five to seven new stores. We expect similar growth rates for 2012. Chicos will net 21 new units over the next six months. Citi Trends is yet another apparel chain that shrunk growth plans this year; having reduced expansion goals from 70 to 55 locations. We expect Citi Trends to continue to grow at a conservative pace next yearwe expect a minimum of 50 units. Davids Bridal is looking to open 10 new stores in 2012.
dELIA*s may open as many as 10 new stores in the next twelve months. Dots will close this year with about 25 new stores; next year they have budgeted for as many as 45 new stores. Express will close the year with about 25 new units. Look for the same in 2012 Five Below continues aggressive growth in the Midwest. In Chicago alone, the chain is planning on as many as 60 stores over the next five years. Five Below should close out 2011 with about 50 new units. We expect this number to increase to as many as 60 units in 2012. Fossil will close this year with about 70 new stores, mostly at outlet centers. The chain reportedly is looking to boost this number in 2012we expect as many as 85 new stores over the next twelve months. Foundry Big & Tall Supply Company is JC Penneys new mens concept. There are ten new stores already in the pipeline, with openings scheduled heading into early 2012. These stores use roughly 6,000 square feet of space. The Foundry has plans to open 300 new stores over the next five years. 2012 openings will likely top 75; with plans for 150 new stores by 2013. Francescas Collections plans to open as many as 75 new stores annually over the next couple of years. H&M is looking to close the year with as many as 265 new stores internationally. It opened 12 new stores in the U.S. this year. That number will likely exceed 15 next year. Its Fashion Metro should close the year with 21 new units. We expect this number to approach the 25-unit mark in 2012. Jos. A Banks should close this year with somewhere between 40 and 50 new stores, including its outlet concepts. We expect a similar growth rate in 2012. The Limited will close this year with 19 new stores. We expect the same growth rate in 2012. Mens Wearhouse should close 2011 with 20 to 25 new stores for the year. That being said, next year will see more remodels than new stores. New unit tallies for 2012 may not reach this years levels. Mens Wearhouse has announced a goal of 109 new units through 2017. Rue21 should close out the year having reached their goal of 100 new units. We expect next years growth levels to be slightly below this years, though this may change should the economy pick up momentum. Still, we are expecting somewhere in the neighborhood of 75 new units.

Steeles plans as many as 38 new stores next year; focusing growth primarily in the south central United States. Tillys will close 2011 with roughly 13 new stores and reportedly is planning to add around 20 units in 2012. Urban Outfitters will close this year with about 55 new stores, including a few locations for their new bridal concept, Bhldn. We expect at least 35 new units in 2012. Wet Seal may open between 25 and 30 new stores in the coming year.
Department Stores
JC Penney has shifted most of its growth to its new mens concept, The Foundry Big & Tall Supply Company. They opened two new department stores earlier this year, but we expect remodels to take centerstage in 2012 as the Plano, Texas-based retailer continues to look to upgrade its image and land in-store deals with more upscale retailers like Sephora. Kohls never slowed growth during the recession, capitalizing on market conditions to grow its discount department store concept, though usually in off-mall sites. The Wisconsin-based chain has plans to close 2011 with at least 40 new stores. Kohls is yet another chain shrinking its formatmoving from 90,000 to 65,000 square feet. Numbers have yet to be released yet for 2012, but we expect Kohls to likely match this years growth level. Macys has plans to open two department stores in New York, including one new location in the Bronx and one that will replace an existing store in Bay Shore. The chain also has plans for new department stores in Victorville (CA), Grendale (WI), Gurnee Mills (IL) and Salt Lake City. All of these locations will open in 2013. Macys will close the year with three new Bloomingdales Outlet stores and we expect a similar pace of growth for this concept in 2012. Nieman Marcus will open at least three of its discount concept, Last Call, in 2012 and plans to open at least one full service department store in Walnut Creek (CA). Though it closed its Downtown Indianapolis store this summer, Nordstrom has opened two new full service department stores (St. Louis and Nashville) over the past few months, even while it continues to aggressively expand its off-price concept, Nordstrom Rack. They should close the year with three new department stores and somewhere near 18 new Nordstrom Rack stores. Nordstrom is reportedly planning about 15 new Rack stores next year and as many as three more department stores. Saks OFF 5th concept continues to growit will likely add five new stores annually for the next couple of years. Sears remains in contraction mode, though the chain has announced plans for a new, smaller concept and a focus on internet sales as part of its turnaround plan. Still, we expect more closures ahead as Sears continues to post severe losses and remains one of the most challenged major retail chains in the marketplace. Target should close 2011 with a total of roughly 21 new stores. The chain is signing new deals for their smaller urban concept, CityTarget, which will take anywhere from 60,000 to 80,000 square feet as opposed to their typical footprint of 125,000 square feet or more. Deals have been inked for multiple stores in both Los Angeles and San Francisco, as well as for stores in Chicago, Seattle and a number of other markets. We expect at least 25 to 30 new stores over the next 18 months.
Automotive
Advance Auto Parts will open as many as 140 new stores before the close of 2011. The company will likely keep a similar pace next year; primarily focusing on the Eastern United States. AutoZone opened nearly 40 stores in the first half of the year. They will likely close the year with about 70 new units, well behind the 163 stores opened in 2010. The chain is shifting its expansion strategy to more ground leases and land purchaseswhich will slow development, so we expect somewhere in the neighborhood of 50 new locations in 2012, though 2013 numbers will likely increase substantially. OReilly Auto Parts hopes to close this year with as many as 170 new units. We expect them to open roughly the same number of stores in 2012. Pep Boys will close 2011 with as many as 55 new stores. Next year, the company has plans for as many as 75 service and tire centers (which average about 5,000 square feet in size) and as many as ten supercenters (which are usually 13,000 square feet in size).
Beauty Salons/Supply
Fantastic Sams will likely close out 2011 with just 40 new locations. We expect this number to increase in 2012 based on reports that the chains franchising efforts are up. We expect at least 60 units in the coming year. Great Clips should reach 160 new salons this year and has a goal of at least 170 new units next. Sport Clips is aiming for at least 120 new salons in 2012. Ulta will close this year with 61 new stores; we expect a similar pace of expansion in 2012.
Childrens Apparel/Childrens Specialty

The Disney Store is back under the Walt Disney Companys control and is also back in the marketplace with a smaller footprint (now about 4,500 square feet) and new growth plans. They will close this store with roughly 40 new stores globally, most situated in top malls.

Discounters & Dollar Stores
99 Cent Only Stores will close the year with about 16 new stores. The chain will likely keep the same growth rate for now, but is slated to boost its growth rate by 10% starting with fiscal year 2013. Big Lots has emerged as one of the biggest users of second generation big box space and they continue to expand aggressively. Big Lots should close out 2011 with at least 90 new stores. This number will likely remain the same, or decrease slightly, in 2012. BJs Wholesale Club may begin expanding westward now that it has been acquired by Leonard Green, but so far plans call for the chain to only open six new stores next yearthe same level of growth recorded this year. Bottom Dollar has plans to open 14 new stores in Ohio and Pennsylvania in 2012. Another non-mall discount department store player, Burlington Coat Factory, has been actively backfilling space left behind by players like Mervyns, Home Depot Expo Center, Walmart and K-Mart. BCF typically uses about 80,000 square feet of space and should close this year with as many as 25 new stores. We have also heard rumors that the chain may be looking into launching a smaller footprint concept, possibly pursuing former Borders sites, however, none of this chatter has yet proven to be true. Right now plans are calling for as many as 30 new stores in 2012 in Burlingtons traditional format. Costco will close the year with as many as 24 new stores. The chain is reportedly looking to open as many as 50 new stores in the next fiscal year. Dollar General expects to close this year with 625 new stores. The chain prefers to use a 9,000 square foot floorplate. Dollar Tree will close the year with about 335 new stores. They typically use between 8,000 and 12,000 square feet for their namesake concept, but are also growing the smaller Dollar Tree $1 Stop concept which can go as low as 4,500 square feet. We expect as many as 320 new stores in 2012. Family Dollar will end this year with about 200 new stores. The chain is planning on opening as many as 500 new stores in 2012, while likely closing as many as 100 underperforming locations. Family Dollar is looking for sites in the 7,000 to 9,000 square foot range. Famous Labels operates a number of brands; nearly all of which are growing. Between its namesake brand and $20 Below concept, Famous Labels will close this year with as many as 30 new units. Growth has been, more or less, evenly split between the two concepts. The chain reportedly currently has 60 stores where leases have been signed or that are already in development. We expect 2012 openings to reach the 40-unit level. Five & Dime General Store is looking to open as many as five new stores annually in tourism-heavy marketplaces. Freds is looking to add up to 25 new stores in 2012, mostly in the Southern United States. Gordmans opened seven stores this year; mostly in the Midwest and Southeast. We expect as many as ten new units in 2012. Ross will close the year with as many as 60 new Dress for Less stores and 20 dds Discounts stores. We expect a similar growth pace in 2012. Savers and its affiliate Value Village are looking to expand aggressively in the Midwest and East Coast in 2012. Between the two discount chains, they are looking to open at least 25 new stores next year. Their goal is to add at least 100 new units through 2015. Shopko is expanding its smaller format HomeTown stores. The typical Shopko footprint was 80,000 square feet. HomeTown uses about 35,000 square feet. So far (seven units), Shopko had been converting existing sites to the new format and subleasing the remaining space. Going forward they will be looking for new sites. We expect between five and ten new Midwest stores next year. Stage Stores operates under a number of banners, including Bealls, Burkes Outlets, Goodys, Palais Royale and Peebles. The chain may end this year with as many as 40 new units across all of its concepts. Affiliate Burkes and Beales Outlets are planning as many as 49 new stores for 2012. We expect to see as many as 20 more units across some of Stages other brands. Stein Mart will close this year with at least five new units. We expect as many as ten in 2012. TJX will close the year with roughly 115 new stores (including TJMaxx, Marshalls and HomeGoods stores). This is despite shuttering the AJ Wright concept and over 70 stores earlier this year. With AJ Wright out of the picture, many analysts believe that TJX will boost growth next year. We have yet to see any new growth plans, but are expecting as many as 125 new stores across all of TJXs banners in 2012.
Drug Stores/Convenience
7 Eleven continues aggressive growth both organically and via acquisition. This year alone, throughout the United States and Canada, it has been on a pace to add 500 stores. The chain has plans for as many as 500 stores in California, Oregon and Washington over the next five years. In New York City alone, 7 Eleven will open as many as 100 stores over the next five years. CVS will close 2011 with between 225 and 250 new stores. We expect a similar growth rate for 2012, though acquisitions could boost that total.

Rite Aid continues to struggle with credit issues and has been closing more units than it opens lately. This year it opened ten combo stores along with Save-A-Lot. Other than that, it closed about 50 locations. Look for the same pattern in 2012. Until Rite Aid emerges from its credit issues, the chain will be in consolidation mode. Walgreens is planning on boosting its unit count by about 200 drug stores in their upcoming fiscal year (which began in September). That being said, Walgreens has also aggressively expanded via acquisition in recent years. Though the drug store herd is thinned out, we still wouldnt rule out the possibility of Walgreens picking up a few smaller regional or local players as well.
Grocery
Aldi has added more than 280 new stores throughout the United States over the past three years. They will close 2011 with about 80 new locations. Typical Aldi footprints run about 17,000 square feet. The chain is increasingly looking west of the Mississippi and we expect as many as 95 new stores in 2012. Independent once again after engineering its own buyout from Supervalu, upscale grocer Bristol Farms is looking to expand by as many two units annually over the next couple of years. The California-based chain typically uses between 7,000 and 30,000 square feet in high profile urban locations. The Fresh Market, with its footprint of roughly 21,000 square feet, is growing. They will close with as many as 14 new units this year. It has plans for as many as 20 new stores in the next year or so. Grocery Outlet will finish 2011 with as many as 20 new stores. They will continue with the same rate of expansion in the Pacific states in 2012we expect them to close next year with as many as 25 new units, though if this chain were to go public (and we have heard rumors), their pace of expansion and geographic scope would likely expand significantly. Marsh is looking to open as many as ten new stores over the next 18 months. Natural Grocers will close 2011 with at least five new stores. We expect the Colorado-based chain to raise that level to seven or eight new units next year as they seek to grow in the Southwest and Midwest. Roundys closes out 2011 with three new stores in Illinois. We expect a similar level of Midwestern growth in 2012. Smart & Final Extra has plans for as many as ten new stores in 2012; all of which will be in Arizona, California or Nevada. Sprouts Farmers Market continues to grow organically (excuse the bad pun) and through acquisition. We expect growth in 2012 to accelerate with the chain likely adding somewhere in the neighborhood of 20 new units. Southern California regional player Stater Brothers began the year with the goal of adding as many as ten new stores over the next few years if the economy picks up. It hasnt. They wont. Growth totals are more likely to be one or two new stores annually for now. Sunflower Farmers Markets continues to grow aggressively in new markets. We expect as many as 20 new units in 2012. Supervalu has shifted all of their growth to their Save-ALot format. They expect to close 2011 with about 160 new stores. The chain wants to add 1,200 new stores nationally through the end of 2015. Save-A-Lot locations typically average 15,000 square feet in size. 2012 openings should total in the area of 80 to 90 units.
Electronics Stores/Computer Specialty

Apple closed the 2011 fiscal year (ending in September) with about 40 new stores. The chain will easily match that in 2012, though it is also boosting international growth. Best Buy is looking to cut at least 10% from its typical store sizes; looking in many cases to sublease spaces of anywhere from 5,000 to 10,000 square feet within existing big box locations. No clear pattern has emerged yet for sublease tenantsBest Buy will reportedly look at anyone from restaurant to grocery users. While the chain is scaling back its footprint from the 30,000 to 40,000 square foot range down to 25,000 to 30,000 square feet, it also recently announced plans to close all 11 of its European box stores. Best Buy is expanding on one front however. It has plans to boost its small (typically 3,000 square feet or less) Best Buy Mobile concept by as many as 800 units over the next couple of years. Best Buy Mobile will close 2011 with about 150 new stores. We expect this number to approach 200 in 2012. The electronics sector, with the exception of HHGregg, is in contraction mode. HHGregg will likely open as many as 45 new stores in 2012; all of which will be east of the Mississippi. Microsoft has continues to drag its feet on new retail stores; though we do expect them to pick up the pace in 2012. The chain reportedly wants to add at least 75 new stores over the next three years.
Footwear
Finish Line will close this year with just five to ten new stores, but reportedly is looking to return to growth next year. Numbers have not been released, but we expect a minimum of ten new stores in 2012. Red Wing Shoes is planning on opening as many as 125 new stores over the next five years; primarily in the Northeastern United States. Skechers will close out the year with about 30 new stores. We expect 30 to 35 new units in 2012.

Trader Joes had opened 15 stores by mid-year 2011, but is ramping up further growth. They are also looking at expanding beyond their typical 10,000 to 14,000 square foot floorplate in many markets. The chain is growing strong in the Central United States, having recently added multiple units in Texas and Kansas. Walmarts new 15,000 square foot Walmart Express format recently debuted in Arkansas and a handful of rural markets, but is poised for strong urban growth ahead. By the close of the year there may be 20 new stores open. Walmart is planning up to 120 large format stores, 10 Sams Clubs and as many as 30 small (Walmart Express) and medium (Walmart Neighborhood) format stores in fiscal 2012. For fiscal 2013, Walmart is planning as many as 135 large format stores, 15 Sams Clubs and as many as 150 small and medium format groceries. Whole Foods has leases for at least 61 future stores in place through 2014. We expect at least 20 new units in 2012. Winco is entering the Arizona market with plans for as many as five stores nearing the 100,000 square foot range. Winn Dixie is planning five new grocery stores next year. Kirklands will close 2011 with as many as 45 new stores and a net overall unit gain of about 20. We expect the chain to boost this total slightly next year, with a net gain of as many as 25 units in 2012. Lowes began the year with plans to open 22 new stores. They did, but then they also announced plans to close 20 stores in September. We dont expect growth from the home improvement giant in 2012. In fact, we expect Lowes to likely continue to close underperforming locations in the coming year. Mattress Firm is looking to expand by as many as 1,900 new locations over the next six years. The chain will close this year with approximately 100 new stores, but will accelerate growth in 2012. Orchard Supply Hardware (OSH) will close this year with just one new store and only has one currently planned for 2012. However, its recent spinoff from Sears and rumors of a planned IPO could change this in the months ahead. Pier 1 is returning to growth mode. The chain has plans for as many as 80 new stores over the next five years. They will close 2011 with about 12 new units. We expect 2012 openings to approach 20. Relax the Back currently has about 110 units but has a long-term goal of reaching 250 (over the next ten years). We expect as many as 20 new stores in 2012. Rent-A-Center and its subsidiary, ColorTyme, will close out this year with about 25 new locations throughout the United States. We expect as many as 30 new store openings in 2012. Select Comfort will close 2011 with about 20 new locations. We expect a similar pace of expansion for the coming year. Sleep Train operates a number of concepts, mostly in the West. Between all of its concepts, we expect a minimum of ten new units next year, though the chain does continue to grow through acquisition and this may slow organic growth. Sur La Table will open as many as 15 new stores in 2012; focusing on major markets like Atlanta, Boston, Chicago, New York and San Diego. Tuesday Morning expects to close 2011 with a net gain of at least ten new stores. The chain continues to look for new space, but also to close weaker stores. We expect a similar growth rate next year.
Home Improvement/Home Furnishings

Aarons is planning to open as many as 90 companyowned and 75 franchises during its fiscal year. Some of these will be via its new smaller concept HomeSmart, which uses between 4,000 and 6,000 square feet. Aarons typical footprint is 8,000 square feet. Ace Hardware had planned to open as many as 110 units this year; we think they will fall just short of that goal. Look for a minimum of 90 new stores in 2012. America Freight Furniture & Mattress will close 2011 with a total of 24 new stores and we expect new store opening in 2012 to approach 30 units. Bed Bath & Beyond opened 40 new stores last year. They will close this year with about 45 new stores. We expect them to open as many as 50 units in 2012. That being said, these openings also account for the chains buybuyBaby, Harmon Face Values and Christmas Tree Shop concepts. Over the past couple of years, BB&B namesake stores have typically accounted for about half of this growth, buybuyBaby has accounted for about 40% of this total, and the other two concepts were responsible for the rest. Cost Plus is returning to growth mode after spending most of the past five years closing underperformers. The chain may open as many as ten new units in 2012. Do It Best has averaged 50 to 80 new stores in each of the last few years. The chain is projecting 60 new stores in the coming year. HomeGoods, TJXs concept, should close 2011 with about 28 new locations. We expect this number to range between 30 and 35 in 2012.
Jewelry/Luxury Retailers
Ben Bridge Jewelers is the U.S. franchisee for Pandora Jewelry. Between its namesake concept and a new Pandora concept store it is launching, look to Ben Bridge to open as many as 15 new mall locations in 2012. Coach is planning for as many as 40 new stores in the coming year, about half of which will be their new mens store concept.

Kate Spade is planning on 30 new stores over the coming year. Kay Jewelers and its affiliate, Jared the Galleria of Jewelry, are planning on as many as 20 new stores between the two concepts in 2012. Tiffany continues to slowly expand its domestic presence; the chain will close the year with four new U.S. stores. We expect as many as five new units in 2012. Vera Bradley will open as many as 20 new locations over the next twelve months. surprised to see it shrink further. Numbers have not been released for next year, but we suspect growth levels will fall to as low as 15 new units.
Pet Stores/Supplies
Pet Food Express will close this year with five new stores. We expect as many as eight new units in 2012. Pet Supermarket will close this year with about 24 new units and plans to keep the same pace in 2012. PETCO has plans for as many as 50 units in the coming year. Petland will close this year with about 15 new units. Look for the same growth level in 2012. Petsense is currently budgeting for as many as 100 new stores over the next few years. They will close this year with as many as 50 new locations. We expect a minimum of 25 new units annually over the next couple of years. PetSmart has opened roughly 35 stores in the past year and should match that pace in 2012. Current plans call for as many as 50 new stores in 2012.
Media Retailers
Books-A-Million is one of the few retailers left in this category standing much less looking to grow. The chain had tried to acquire 30 former Borders sites at auction earlier this year but was rebuffed. Still, they are rapidly signing one off deals for some of these sites and have emerged as the largest userso farof former Borders sites. It remains unclear as to how many of these sites BAM will be able to land, but we would not be surprised to see this chain opening as many as 30 new stores over the next 18 months. The good news? GameStop will close 2011 with about 200 new openings. The bad news? GameStop will close 2011 with about 200 closings. Looking forward, it is hard to see this trend fading. Video game retailers have not suffered the same fate at the hands of streaming internet as record or bookstores, but the writing seems to be on the wall unless video game retailers can find a way to get ahead of the game. Used video game sales is one tactic boosting sales in the meantime.
Restaurants
Applebees will open at least 33 new franchised locations in 2012. Au Bon Pain will close out this year with about 20 new units. Look for similar growth in 2012. Beautiful Brands is on par to meet its goal of opening 74 restaurants this year across all of its brands. The chain is looking to ramp up growth in 2012we expect at least 85 new units next year. Bob Evans is focusing mostly on remodels; but may open as many as six new units in the coming year. Bojangles continues to grow its fast food chicken concept in the Southeast. But the chain is also looking to expand in the Midwest, Mid-Atlantic and Northeast in the coming year via franchise growth. We expect a minimum of 30 new units in the coming year, though this number could increase substantially depending upon the success of franchising initiatives. In Atlanta alone, Bojangles is planning 25 new units over the next five years. Brooklyn Water Bagel is former CNN talk show host Larry Kings concept. The chain is looking to grow on both coasts aggressively. They are hoping to have 400 units open or under development by 2016. Buffalo Wild Wings Grill & Bar may close 2011 with as many as 110 new restaurants. The chain now has about 775 units and has a goal of reaching 1,000 restaurants within the next two years. We expect even stronger growth in 2012, with as many as 125 new units coming online. Cheesecake Factory opened nine new restaurants this year. We expect five to seven new units in 2012.
Office Supplies
Office Depot has lowered its typical floorplate from 24,000 to 17,000 square feet and is also testing a 5,000 square foot format. We expect most of Office Depots capital expenditure budget to be spent this year on remodels, with growth taking a backseat. The chain should close 2011 with 12 new stores throughout North America, but also reportedly has about 100 leases coming up for renewal; we expect Office Depot to close more stores than it opens in 2012. If there is any growth, it will likely come from the new 5,000 square foot concept. OfficeMax also has about 100 leases coming up for renewal in 2012. The chain will finish this year with only one new store and 20 closures. We see the pace of closures accelerating in the coming year. Staples had entered 2011 with a goal of 40 new stores for both the U.S. and Canada, but will end the year with about half that number. The chain continues to drop the size of its superstores, especially as it continues to grow its online market share. They have dropped their 18,000 square foot template to 16,000 square feet and we would not be

Chick-fil-A should close this year with about 90 new restaurants, over 70 of which were standalone locations. Last year the chain opened 80 units. In 2012, we expect them to approach the century mark. Chipotle will close out 2011 with about 145 new stores between its namesake concept and their recently launched Asian fast casual concept, ShopHouse Southeast Asian Kitchen. Between the two concepts, we expect openings to increase in 2012. We expect as many as 160 new units next year. Churchs Chicken is looking to boost its franchise presence in the Midwest and Southern United States. Actual development deals and growth projections have not been released; but we expect a minimum of 25 new units in 2012. Cicis Pizza is aggressively expanding and has plans to add as many as 500 new restaurants over the next eight to ten years. Corner Bakery currently has 45 stores in development; most of which will be delivered over the next 18 months. Cousin Vinnys added two new Miami area pizza restaurants and ten new units in Ohio in 2011. We expect similar growth levels in 2012. The Cracker Barrel has maintained a pace of about 10 to 15 new units annually over the past few years and will likely keep this pace in 2012. Darden is planning on picking up expansion across all of its brands (including Olive Garden, Red Lobster, LongHorn Steakhouse, etc.). The chain has plans to add 500 restaurants across all of its brands over the next five years. Dave & Busters is planning on at least seven new locations through the close of 2012. Dennys is planning to open as many as 75 new stores in the coming year. Dickies BBQ Pit continues aggressive growththe chain has plans to add as many as 155 new units through the end of 2012. Doc Popcorn is a new small concept (just 160 square feet) looking to expand via franchisees by as many as 50 units in 2012. Dominos continues to focus on international growth; they will close this year with as many as 300 new pizza restaurants though most are overseas. Dunkin Donuts netted nearly 60 new stores during the third quarter alone. They chain has been aggressively looking to boost franchise growth in a number of existing and new markets. Many analysts believe that this current growth rate may double next year. Plans call for the chain to add between 200 and 250 units both this year and heading into 2012. East Coast Wings & Grill will close this year with about 10 new units. Expect the chain to open as many as 15 units in 2012; nearly all of which will be located in the Southeast United States. Einstein Noah should close out 2011 having reached its goal of 90 new units across all of its bagel concepts. We expect next years growth levels to be at, or slightly below, this years totals. Famous Daves is downsizing new locations from the 5,000 to 6,000 square foot range to about half this size. They are planning on adding a minimum of 70 new units through 2015, but this number only reflects current commitments and will surely grow. The chain reportedly would like to see a minimum of 100 new restaurants annually over the next few years. Firehouse Subs will have opened at least 80 new locations by New Years Eve, but the chain remains extremely opportunistic and may even surpass this number over the final six weeks of the year. The chain wants to grow to 2,000 units, up from its roughly 400-store count today. It has aggressively been signing franchise development deals with over 1,700 inked for delivery over the next ten years. We expect Firehouse to surpass the 100 new unit mark in 2012. Five Guys Burgers and Fries continues to grow at such a rate that we cant keep up with their unit counts. Our last tally was that they had opened 150 new units so far in 2011, but this number may be low. We expect as many as 200 new restaurants from them in 2012. Freebirds World Burrito continues to aggressively grow in Californiathey will close 2011 with 16 new units in the Golden State alone. We expect a similar growth pace for 2012. Genghis Grill closes 2011 with roughly 40 new units; we expect the chain to open as many as 45 new restaurants in 2012. Washington DC is one of their primary growth regionsthey plan on at least 15 new units there over the next three years. Haagen Dazs hopes to close the year having reached their goal of 25 new units. We expect this level to drop in 2012 with the chain likely delivering between 15 and 20 new stores. Huddle House has plans to open 17 new locations in the coming year. Hurricane Grill & Wings, which opened 15 new restaurants in 2010, will reach roughly 24 new units this year and should surpass that in 2012. We expect as many as 30 new restaurants in the coming year, mostly east of the Mississippi. IHOP is looking to open as many as 45 new units annually over the next three years.

Jack in the Box will close out 2011 with between 30 and 35 new restaurants and as many as 60 new Qdoba locations. We expect at least 20 new Jack in the Box restaurants in 2012. Qdoba will likely add at least 40 more units. Jacks Wayback Burgers continues aggressive expansion in the Eastern United States. The chain is looking to close out this year with 100 new units. Jamba Juice should close the year near its goal of 70 new stores for the year. We expect next years growth levels to be at, or slightly below, this years levels. Krispy Kreme should close out 2011 with about 25 total new units between company-owned and franchise expansion. The chain has announced its intention to open as many as 65 more company-owned locations over the next three years. Between these plans, and franchise growth, we expect as many as 40 new units to come online in 2012. Krystal plans on growing by as many as 380 units over the next five years. That being said, the chain will be focusing on franchisees for expansion so this number will be completely dependent upon the success of their franchise initiatives. We expect somewhere in the neighborhood of 50 new units in 2012. LongHorn Steakhouse is about to go into aggressive growth mode. Parent company Darden wants to grow the concept by as many as 450 units over the next decade. Marcos Pizza will close out this year with as many as 60 new restaurants. They have about 900 franchise agreements in the pipeline, though the timeline for these remains uncertain. That being said, we expect as many as 100 new units in 2012. McDonalds hopes to close 2011 with about 150 new domestic stores (the Golden Arches will also be adding over 1,100 new international units during this time frame). The chain continues to pursue an aggressive remodel plan, with plans to revamp as many as 600 locations before the end of the year. We expect as many as 170 new domestic units for 2012. Menchies wants to add as many as 40 new yogurt shops over the next few years. Mortons will close the year with one new steakhouse, but reportedly has plans to ramp up growth in 2012. Still, we would be surprised to see more than two or three new eateries next year. NakedPizza has signed more than 400 development deals with franchisees and hopes to add most of these over the next three years. They will close 2011 with as many as 40 new restaurants, but we see this number increasing substantially next year. We expect as many as 60 new units in 2012 across a range of markets. Pancheros Mexican Grill should close the year with ten new units. Look for similar growth in 2012. Panda Express is in hyper growth mode. The chain is planning on 950 new units through 2015. We expect somewhere in the neighborhood of 200 new restaurants in 2012, if not more. Papa Johns should end this year with as many as 100 new units across North America. This number will likely drop in 2012; we expect growth to be in the 50-unit range. That being said, Papa Johns does have over 270 units for which development deals have been signed with franchisees but 80% of these are slated for 2014 deliveries. Papa Murphys will have opened a total of about 100 new restaurants by the time this year ends. Plans call for as many as 150 units in 2012. P .F. Changs should close out 2011 with five new restaurants and eight additional Pei Wei locations. We expect 2012 growth levels to be roughly the same. Pizza Ranch wants to open 25 new restaurants annually over the next few years. Pluckers Wings Bar has opened three new restaurants in 2011, but is looking for aggressive growth in Texas over the coming year. We expect a minimum of five new units from this chain in 2012. Popeyes Fried Chicken should close this year with about 80 new domestic units, though the chain also continues to close underperformers. Popeyes is growing primarily via franchising and has stated it wants to aggressively boost growth. We expect as many as 100 new units in 2012, though this number will be dependent upon the success of parent company AFC Enterprises franchising efforts. Quaker Steak N Lube opened eight restaurants in 2011. The chain has development deals in place for at least 35 more units over the next five years. Quiznos should close out this year with about 100 new units, many of which will be situated within gas stations or convenience stores. With its new focus on expanding within those sites, we expect franchise efforts to pick up further in the months ahead. We anticipate a minimum of 125 new units for 2012. Red Mango will close this year with roughly 100 new units. It is unclear whether they will open this many yogurt shops in 2012it will depend largely on franchising efforts. We expect a minimum of 50 new units, though this number may increase. Red Robin is launching a new smaller-format fast casual concept to enter the burger wars. Plans currently call for as many as 15 new restaurants next year using a new smaller prototype in the 3,000 square foot range. Ruby Tuesday will focus its growth in 2012 on its new fast casual Mexican concept, Lime Fresh. The chain will open at least eight new restaurants in the coming year. They are also looking to grow their Marlin & Rays seafood concept. This will be done through a mix of re-branding existing Ruby Tuesdays locations and new openings.

Schlotzskys will close out this year with about 35 new sandwich shops. We expect as many as 45 in 2012. Shula Burgers is former Miami Dolphins coach Don Shulas venture into the fast casual burger wars. They are focusing initial growth in Florida, with the goal of having 100 units open or under development by 2016. Sir Pizza continues to grow in the south Florida marketplace; the chain will close this year with as many as 12 new restaurants. We expect at least six more units, if not more, in 2012. Smashburger, like Five Guys Burgers & Fries, is expanding at such a clip that we cant keep track. Back in May, we were aware of 463 development agreements in place. That number has since grown. They will close 2011 with something approaching 150 new restaurants. We expect as many as 200 in 2012 and even more in 2013. Sonic closes out 2011 with about 40 new drive-in restaurants. We expect growth levels for 2012 to be slightly below this years growth and are expecting roughly 30 new units. Starbucks is back in growth mode again. They will close this year with about 100 new domestic locations. The chain is planning at least 400 new locations throughout North America in 2012. About 200 of these will be in the United States. Their recent acquisition of Evolution Juice will mean that the Seattle-based coffee giant will be invading Jamba Juices territory in the coming year. Starbucks has yet to announce expansion plans for this new concept, but it could mean hundreds of stores as early as next year. Straw Hat Pizza has plans to grow by at least 70 units over the next two years. Subway should end this year with as many as 1,100 new units throughout North America. We expect similar growth in 2012. Texas Roadhouse should reach their goal of 20 new restaurants by the end of this year. We expect this total to increase in 2012. We expect at least 25 to 30 new restaurants in the next year. T.G.I. Fridays has plans to add as many as 182 new units over the next three years; mostly via franchisees. 2012 openings will account for a minimum of 20 new restaurants, though this number may grow depending on franchising success. Tim Hortons should close this year with as many as 90 new U.S. locations. The Canadian donut giant has plans to open as many as 300 new donut shops in the coming year, nearly all of which will be in the Midwest or Northeastern United States. Tropical Smoothie Caf will close the year with about 30 new units. Look for this franchise-driven chain to add about the same in 2012. Wahoos Fish Tacos is planning 100 new franchise units nationally over the next five years. Wendys will close out 2011 with about 65 new stores throughout North America. About 20 of these locations are company-owned. We expect an increased pace of growth next year. Which Wich will close out the year with 42 new units. We expect the Texas-based chain to boost growth levels in 2012 as it expands into new markets like Atlanta, Chicago, Cleveland, Omaha, Salt Lake City, San Francisco and Seattle. We expect as many as 50 new restaurants in 2012. White Castle plans on opening about a dozen stores annually throughout the Midwest over the next few years. Wingstop is budgeting for as many as 50 new restaurants annually for each of the next three years. In Baltimore alone, the chain has a deal for as many as 20 new units over the next decade. Wingstop is also planning on at least 20 units in south Florida over the next five years. WOW! Caf & Wingery has been rapidly expanding on college campuses (it opened more than 20 this year), but has only opened a few freestanding locations. We expect continued strong growth in 2012 with the chain likely exceeding 25 new units. Yogurtland has through 2015. plans to open 550 new stores
Specialty Retail/Crafts
Annas Linens will open just over 30 new stores by the close of 2011. We expect a similar level of growth in 2012. Edible Arrangements has plans to open as many as 150 new units. H&R Block is hoping to open as many as 100 new franchise locations over the next 18 months. Jo-Ann Fabrics will close out 2011 with about 60 new units. We see their growth levels increasing in 2012 thanks to their recent buyout from Leonard Green and infusion of cash. We expect between 65 and 70 new stores in 2012. Smile Brands is a dental chain that primarily locates within shopping centers. Their growth goal for 2011 was to reach 40 new units. We expect this number to increase to as many as 50 new dental offices in 2012. The UPS Store will close 2011 with about 100 new stores. This growth pace is expected to increase next year, with opportunities for growth coming from planned U.S. Postal service cutbacks and closures. This trend will likely also benefit FedEx Office. FedEx Office is on pace to close this year with about 15 new units. The Vitamin Shoppe will open 48 stores this fiscal year.

Sporting Goods
Academy Sports was recently acquired by private equity firm KKR. This firm has a strong history of growing retailers. Academy Sports will close this year with at least nine new stores and current plans call for about ten new units in 2012. However, in light of the recent acquisition, we would not be surprised at all if this number increased substantially going forward. Bass Pro Shops will close this year with two of its new megastores. The chain has begun development on sites in Memphis and Northern New Jersey, though it may not be until 2013 that either of these stores are delivered. Big 5 Sporting Goods will close 2011 with between 10 and 12 new stores. We expect a similar growth rate for 2012. Cabelas closes 2011 with five new stores. We expect three or four additional large format locations in 2012, but the chain is also experimenting with a smaller format store. We expect this new format to drive growth in the future, with at least five or six new stores next year. Dicks Sporting Goods has a long-term goal of reaching 900 units nationally. They will close out 2011 with about 35 new locations. Growth rates will increase in 2012we expect at least 40 new stores. Golf Galaxy will close the year with only three new stores; we expect a similar growth rate in 2012. Golfsmith is planning on as many as 14 new stores through the end of 2012. Hibbett Sports will close 2011 with over 50 new locations and is planning on accelerating its pace of growth next year. We expect as many as 55 new stores in 2012. Olympia Sports is planning on opening as many as 30 stores in 2012. REI should close out this year with about eight new stores. There are at least two already in the pipeline for early 2012 delivery; we expect this chain to open as many as ten new stores in the coming year. The Sports Authority will look to its smaller concept, S.A. Elite concept, for some of its growth in the coming year. These stores range from 10,000 to 15,000 square feet in size. Four stores are slated to open before the close of the year. We expect this number to at least double next year. That being said, the chain continues to grow its namesake brand. Sports Authority will close this year with between 15 and 20 new units. We expect growth in 2012 to surpass these levels, with as many as 25 new stores possibly coming online.
Source: Terranomics Research/Costar Group

Chainlinks 2012 National Retail Forecast-TRS

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ChainLinks Retail Advisors

U.S. National Retail Report 2012 Forecast

2012 Retail Forecast

2011 Holiday Sales Season Forecast

ChainLinks Research Director 916.329.1558 gbrown@terranomics.com

ChainLinks President 650.931.2220 mkircher@terranomics.com

Chainlinks Retail Advisors

U.S. National Retail Report

The Death of Black Friday

Chainlinks Retail Advisors

U.S. National Retail Report

Retailer Demand Survey

2012 Retail Forecast

Chainlinks Retail Advisors

U.S. National Retail Report

* 1 = Lowest retail demand, 10 = Highest retail demand

Chainlinks Retail Advisors

U.S. National Retail Report

Inventory Total GLA

Vacancy 3Q 2011 Direct SF

Third Quarter 2011 Statistical Recap

Specialty Center Update

Chainlinks Retail Advisors

U.S. National Retail Report

Inventory Total GLA

Vacancy 3Q 2011 Direct SF

Power Centers Update

Community, Neighborhood & Strip Update

Chainlinks Retail Advisors

U.S. National Retail Report

Inventory Total GLA

Vacancy 3Q 2011 Direct SF

Chainlinks Retail Advisors

U.S. National Retail Report

Inventory Total GLA

Vacancy 3Q 2011 Direct SF

Inventory Total GLA

Vacancy 3Q 2011 Direct SF

Chainlinks Retail Advisors

U.S. National Retail Report

Northeast U.S. - Middle Atlantic

Existing Inventory # Blds

Vacancy 3Q 2011 Direct SF

Historical Vacancy Vac % 2Q 2011

0.0% 3.5% 1.9% 7.5% 3.3%

Northern New Jersey

Existing Inventory # Blds

Vacancy 3Q 2011 Direct SF

Historical Vacancy Vac %

Existing Inventory # Blds

Vacancy 3Q 2011 Direct SF

Historical Vacancy Vac %

Net Absorption 0 398,755 (17,914) (27,488) 353,353

Deliveries 0 6,800 0 124,829 131,629

Under Const SF 0 150,000 0 8,500 158,500

Quoted Rates N/A $11.29 $15.46 $15.80

Chainlinks Retail Advisors

U.S. National Retail Report

Existing Inventory # Blds

Vacancy 3Q 2011 Direct SF

Historical Vacancy Vac %

Existing Inventory # Blds

Vacancy 3Q 2011 Direct SF