Top trends in Texas retail 2016

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ICSC Texas Retail Forecast – January 25, 2016 Top Trends in Texas Retail

Transcript of Top trends in Texas retail 2016

Page 1: Top trends in Texas retail 2016

ICSC Texas Retail Forecast – January 25, 2016

Top Trends in Texas Retail

Page 2: Top trends in Texas retail 2016

Top Trends in Texas Retail

Texas is a state of mind. Texas is an obsession.

Above all else, Texas is a nation in every sense

of the word.- John Steinbeck“

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Top Trends in Texas Retail

The economy of Texas is roughly the

same as all of Scandinavia, including

Sweden, Norway and Denmark combined.

If it were a nation, it would have the 11th largest GDP.

Source: 2014 GDP Estimates,

U.S. Bureau of Economic Analysis

and International Monetary Fund

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Agenda: Top Trends in Texas Retail

Wealth Disparity Drives Retail Growth

Generations Spend Differently

Rise of the Foodie Nation

Trends Impacting Texas Retail

Texas is Number One for Retail Development

Around the State: Dallas, Houston, Austin and San Antonio

Top Reasons to Invest in Texas

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$650,074

$605,228

$729,980

$600,089

$344,162

$323,402

$98,057

$98,084

$161,050

$136,445

$95,657

$95,879

$9,465

$10,688

$18,264

$19,397

$14,024

$11,544

2013

2010

2007

2001

1992

1983Lower Middle Upper

Wealth Gains

Wealth Disparity Drives Retail Growth

Only upper-income families have had wealth gains in recent decades

Median Net Worth of Families by Income Tier (Dollars)

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3.44.2 3.6 3.6 4.1 4.4 5.0 4.5

6.2 6.6

0.

1.8

3.5

5.3

7.

1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013

Wealth Gaps

Wealth Disparity Drives Retail Growth

The 62 richest people in the world have as much wealth as the

poorest half of the world’s population*

Wealth gap between middle- and upper-income families is widest

on record: 6.6 times greaterSource: OxFam America

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BOOMERS MILLENNIALS

Average Online Spend

$650 $429

Buying Priority

Necessities

e.g., InsuranceTravel and Apparel

Product Research

Newspapers,

Magazines, PC’sSmartphones, PC’s

Influencers

Advertising, Sales

Representatives

Word-of-Mouth,

3rd Party Reviews

Baby Boomers

75 million born from 1946 to 1964;

50% of workforce today

Baby Boomers and Millennials

Generations Spend Differently

Millennials

80 million born 1980’s to 2000’s;

50% of workforce by 2020

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Source: Forrester Research

Shoppers under 25 have been spending

less on consumer goods since the 1970’s,

but spending 7 times more on education.

33% of online

consumers over 65

state “Technology is

important to me.”

Boom in the tech savvy

senior market.

Households over 65

have experienced

a 30% gain in

purchasing power

since 1973.

Generations Spend Differently

Boomers are Big Spenders

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Amazon Dominates Online Sales

Source: Macquarie Research

Online Retailers

Amazon made 26% of all U.S. web sales in 2015, up from 16% four years ago

Amazon accounts for 24% of all new retail sales growth in 2015 and 51% of all

online sales growth

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Growth in Restaurant Concepts

Rise of the Foodie Nation

Projected restaurant

sales for Texas in 2015

totaled $44.5 billion.

As of 2013, there were

41,678 restaurants

in Texas.

Restaurants like Five Guys

Burgers and Fries and

Chipotle are expanding

aggressively in Texas.

Top Retail Categories

with Expansion Plans

that Include Texas

(U.S. Openings – 12 Months)

5,859Fast Food

4,100Food or Beverage Specialty

2,205Restaurant (Family)

1,841Variety Store

1,619Restaurant (with Liquor)

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New Residents Flocking to Texas

Retail Follows Rooftops

MARKET 2015 NET MIGRATION

San Antonio 24,600

Austin 41,500

Dallas 57,600

Houston 72,600

Sources: Moody’s; PPR

Honolulu

San Francisco

Los Angeles

San Diego

Las Vegas

Phoenix

Dallas

HoustonTampa

Miami

Fort Lauderdale

Palm Beach

Orlando

Atlanta

Charlotte

Chicago

DC

New York

Boston

Seattle

Austin

Raleigh

San Antonio

0% - 1%

1.1% - 2%

Over 2%

Color –

Job growth key

Size –

Population growth key

0.8%

2.7%

Philadelphia

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Some Retailers Will Take Their Vitamin C

Contraction, Consolidation, Closure

At least 10 struggling retailers have announced over 1,500 closings through 2017

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Sources: JLL Research, Bloomberg.

Let’s do the time warp…to 2003’s oil prices

Declining Oil Prices

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WTI Crude Price

Brent Crude Price

Crude Oil Price per Barrel

Sources: Bloomberg. Updated 5 January 2016

Declining Oil Prices

Oil price declines hit producers and financial markets but help consumers

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Retail Property Clock

Major Texas markets in rising and

peaking quadrants at the end of 2015.

Texas Retail Still Rising

Peaking

Market

Falling

Market

Rising

Market

Bottoming

MarketUnited States, San Antonio

Dallas, Houston

Austin

Source: JLL Research, Q4 2015

JLL’s Property Clock indicates where each market sits within its real estate cycle.

Markets generally move clockwise around the clock. Geographies on the left side of the

clock are generally landlord-favorable, while markets on the right side of the clock

are typically tenant-favorable. Indicators include: Rental Rates, Occupancy, etc.

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4 Trends Impacting Texas Retail

1. Energy

2. Healthcare

3. Business-Friendly Environment

4. Education

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Energy Prices Will Have Limited Impact on the State as a Whole

4 Trends Impacting Texas Retail

Source: Federal Reserve Bank of Dallas

Texas added 11,100 jobs in November and 19,500 in October

Texas unemployment rate at 4.6% is well below the U.S. average of 5%

Houston lost professional and business services jobs in November, but added jobs

in education and health services

Dallas-Fort Worth created jobs at a 3% annual rate in November

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Texas is a Leader in Health Innovation

4 Trends Impacting Texas Retail

Source: Moody's Eoconomy.com, Dallas Regional Chamber

Dallas healthcare employment grew by 5.1%

in the past year; Health Services makes up

10% of the DFW metro employment

Rebuilt Parkland Memorial Hospital

completed in 2015

UT Southwestern Medical Center’s William P.

Clements Jr. University Hospital built in 2014

Medical tourists come to DFW for high-tech

procedures

San Antonio and Houston will also continue

to see Healthcare industry growth

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Business-Friendly Environment

4 Trends Impacting Texas Retail

Texas ranks #2 on CNBC's “Top States for Business

2015”

Ranked #1 for Infrastructure, #2 for Economy and #6 for

Access to Capital

One of only 7 states with no personal income tax

RANK STATE

1 Minnesota

2 Texas

3 Utah

4 Colorado

5 Georgia

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Education Attracts Spending and Grows Income

4 Trends Impacting Texas Retail

Sources: *UnivSearch.com. **Council of Public University Presidents and Chancellors, FY2013 Economic Impact Analysis.

With 506 colleges and universities, Texas ranks

fourth in the nation*

Texas colleges and universities create $143.9 billion

in added state income**

Out-of-state students spend $1.3 billion annually on

goods, services and accommodations**

Out-of-state visitors to college games and other

events spend $278.2 million annually**

STATECOLLEGES AND

UNIVERSITIES

California 1,246

New York 633

Pennsylvania 544

Texas 506

Florida 439

Illinois 392

Ohio 386

Michigan 302

Massachusetts 261

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Top Development Markets

Texas is Number One for Retail Development

Texas7,949,419 SF

1

New York6,302,608 SF

2

California6,272,180 SF

3

Florida5,927,502 SF

4

North Carolina2,868,870 SF

6

New Jersey3,389,018 SF

5

Illinois2,799,376 SF

7

Virginia2,662,838 SF

8

Ohio2,070,378 SF

9

Maryland2,070,378 SF

10

#1

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Retail Construction by Asset Type

2015 Construction

by Retail Type (SF)United States Texas New York California Florida New Jersey

General Retail 37,056,999 3,440,418 3,908,904 3,069,224 3,417,400 517,805

Community Center 5,497,475 781,772 163,785 563,507 199,509 371,213

Lifestyle Center 4,359,466 55,000 675,000 960,560 344,409 15,828

Neighborhood Center 7,336,667 919,506 175,000 903,293 337,774 314,632

Outlet Center 1,795,901 0 0 0 350,000 12,000

Power Center 4,125,874 1,504,361 0 253,143 53,908 10,500

Regional Mall 2,667,428 138,550 1,335,000 0 505,000 0

Strip Center 2,653,186 836,512 44,919 196,453 307,512 78,040

Super Regional Mall 3,131,831 273,300 0 326,000 103,990 2,069,000

Theme/Festival Center 393,000 0 0 0 308,000 0

Grand Total 69,017,827 7,949,419 6,302,608 6,272,180 5,927,502 3,389,018

Texas is Number One for Retail Development

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Destination Texas

Direct travel spending in Texas was $70.6 billion in 2014, an increase of 4.7% over the

previous year

More than half of spending came from out-of-state travelers

Top origin markets for Texas visitors include Mexico, Canada, the United Kingdom,

Germany, Brazil, Australia, Japan and China

MARKET2014 TRAVEL SPENDING

($ MILLIONS)

Dallas 1,246

Houston 633

Austin 544

San Antonio 506

Texas hotels collected $9.7 billion in revenues in 2014,

an increase of 9.7% over the previous year

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Around the State – Dallas

Home of Brinker International, AT&T, The Container Store, JC Penney, Michaels Stores,

Neiman Marcus and Pizza Hut

Legacy West (240 acres, $2B cost) in Plano will house JP Morgan, Toyota, Liberty Mutual &

FedEx campuses; Plans include Legacy West Urban Village with 355,000 SF retail, plus offices

and apartments

Richardson’s CityLine (186 acres, $1.5B) is home to State Farm campus, and a future

Raytheon; When complete it will house 6M SF of office, 300,000 SF of retail, plus apartments

and hotels

Mixed-use Victory Park in Uptown already has

165,000 SF of retail, with 80,000 more

planned; 8-screen Cinépolis theater in lower

floors of residential tower to open 2017

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Around the State – Houston

Home of Pappa's Restaurants, Joe’s Crab Shack, Landry’s (Morton’s, Chart House…etc.),

Romano’s Macaroni Grill, Charming Charlie's, Francescas, Stage Stores (Palais Royal,

Bealls) and Academy Sports

Simon’s Galleria Mall is fourth largest in the U.S.; With 26M visitors annually, about 60 cents

of each dollar spent comes from outside Houston

River Oaks District, a 252,000 SF luxury lifestyle center was built in 2015; Tenants include

iPic Theater, Harry Winston, Tom Ford, Hermes of Paris and Dior

Grocery war heating up: Kroger and HEB each to open one new store monthly in 2016; Aldi,

Trader Joes, Sprouts and Walmart are also in the fight

Kirby Collection (Thor Equities) with 25-story luxury

residential, 13-story Class A boutique office and

65,000 SF of high-end fashion and restaurant retail

is slated to deliver end of 2017

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Around the State – Austin

Austin is a natural fit for hometown retailers like Whole Foods, Alamo Drafthouse Cinema

and Golfsmith

The Domain rivals downtown for office and retail, among highest rents in the market;

Nordstrom opens this fall in Phase 3 of the mixed-use project

Downtown Austin is a hotbed of development: 7 office, 5 hotel, 5 mixed-use and 3

residential projects are under construction

The Seaholm Powerplant mixed-use redevelopment will include office space, a Trader

Joe’s, local retail and condos; 48,363 SF of retail in all

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Around the State – San Antonio

Sources: *CVent, 2014; **SA Economic Impact 2013 Study

Home of classic Texas chains HEB Grocery, Whataburger and Taco Cabana

Ranked 4th in the nation among convention destinations for total number of meeting hotels;

2nd in Texas, after Houston;** Overall economic impact of visitors to the city is $13.4B/Year**

Hemisfair Park area is slated for up to 750,000 SF of mixed-use redevelopment on the site

where the 1968 World’s Fair was once held

Boutique Hotel Emma is the latest addition to the hip Pearl; The Pearl is a renovated 22-acre

industrial complex which once housed the Pearl Brewing Company.

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Top Reasons to Invest in Texas

Tort Reform,

Right to Work State,

No State Income Tax,

No Barrier to Entry,

Which Leads to Low Cost of Housing.

- Steven D. Alvis

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Top Trends in Texas Retail

“Patience and perseverance have a magical

effect before which difficulties disappear and

obstacles vanish.- John Quincy Adams

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Trust our retailntelligence.

© 2016 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof. 01/21/2016

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