Grocer Announcements Continue as Retail Market Diversifies

Research & Forecast Report GREENVILLE, SC RETAIL Q3 2015 Grocer Announcements Continue as Retail Market Diversifies Jessica Rahal Research Coordinator South Carolina Key Takeaways > > The vacancy rate for the Greenville, SC retail market remained flat through the third quarter of 2015 despite significant interest from grocers and national retailers. Market Indicators Relative to prior period Q3 2015 Q4 2015* VACANCY NET ABSORPTION > > New retailers announce plans to enter the market. Existing retailers grow footprints. > > Grocers continue to announce new stores as the region s population grows. CONSTRUCTION RENTAL RATE Note: Construction is the change in Under Construction. *Projected > > Redevelopment and new construction activity gains momentum. > > Asking rental rates are increasing as construction costs rise. Market Conditions Greenville, South Carolina s attractive demographics allow for a wide range of retailers to succeed in the market. New retailers continue to enter to the market, oftentimes opening their first South Carolina location. Redevelopment of older centers and new construction activity is gaining momentum as developers strive to meet retailers growing demand for quality space. Visibility and high traffic counts are key factors driving retail site selection, and developers are looking for ways to offer new space at appealing locations. Average Asking Rental Rates Upstate SC Retail Space $4.37 $5.13 $7.75 $8.45 $11.62 $12.33 Verdae Development has begun work at its planned Laurens Road redevelopment. The former Sam s Club and Best Buy locations were recently demolished to make way for construction. Plans include the development of more than 100 acres on Laurens Road between Verdae Boulevard and Woodruff Road. Approximately 30 acres will be redeveloped into retail space with the remaining 70 acres consisting of residential and public green space. The project sits at a highly visible location and is expected to receive positive attention from retailers. Anchor Jr Anchor Shop Space Q4-14 Q3-15

Downtown has welcomed various new restaurants, bars and clothing stores over the past year following several residential developments. As the downtown residential population continues to grow, the submarket will likely see new retail development. A small shopping center is being redeveloped at Church Street and University Ridge. The center sits across the street from South Ridge, a new 350-unit apartment complex, and offers 6,429 square feet of retail space. Despite several leases and user-focused construction activity, the vacancy rate remained flat through the third quarter of 2015, which ended with a vacancy rate of 12.6%. Asking rental rates for new retail space are on the rise as construction costs increase. At the end of the third quarter of 2015, asking rental rates for shop space averaged $12.33 PSF NNN. Significant demand from retailers is evidenced by the recent investment sale of a grocery-anchored shopping center. Pelham Place, a 57,158 square-foot shopping center was recently acquired for $5.8 million. The center, located at 3093 South Highway 14 in Greenville, is home to a 38,003 square-foot vacant, but leased, grocery space. Grocer Interest Remains Strong Shoppers will soon have more options when buying groceries as grocers continue to show interest in the market. Grocers planning to enter or expand within the market include Lowes Foods, Harris Teeter, Walmart Neighborhood Market, The Fresh Market, Aldi and Lidl. > > Lowes Foods recently began construction on its first Upstate location at Suber and Hammett Bridge Roads. > > Construction is underway at the Lewis Plaza redevelopment, which will be anchored by Harris Teeter s new two-story, 53,000 square-foot grocery store. This will be the first Harris Teeter in the area following the grocer s departure several years ago. > > Walmart Neighborhood Market is expanding its footprint. A new store recently opened at Cedar Springs in Spartanburg. The 42,000 square-foot store will anchor a new 55,000 square-foot center. Additionally, construction is underway on a new store in Simpsonville at 1401 West Georgia Road. The store is expected to open in early 2016. > > The Fresh Market recently opened a new 24,000 square-foot store at 1601 Woodruff Road. > > Aldi plans to open two new stores in late October. The stores will be located at 100 Chalmers Road in Greenville and 1050 West Wade Hampton Boulevard in Greer. > > Publix is relocating to a new location in Simpsonville. The grocer will occupy space at Fairview and Harrison Bridge Roads, where Hobby Lobby will also be located. Several grocer closures over the past few years have left big box space vacant at highly-desirable, high traffic count intersections. The vacant spaces have the potential for redevelopment to attract new grocers. Recent Announcements Population growth in the Upstate region is driving the demand for retail services from grocery stores to restaurants and outdoor sporting goods stores. Several retailers made the headlines during the third quarter. > > South Carolina s first Cheesecake Factory restaurant is opening in Greenville at a Haywood Mall outparcel. > > Panera Bread will be moving into a new outparcel restaurant space at Haywood Mall. > > The former K-Mart at Wade Hampton Boulevard is now fully leased. Roses occupied the remaining approximately 35,000 square feet at the center. > > CVS is now open at Augusta Road and Faris Road. The 15,000 square-foot pharmacy sits at the site of a former strip center. The shopping center across the street recently underwent renovations and is home to AT&T and Marco s Pizza. > > Michael Kors is opening a new 2,052 square-foot store in Haywood Mall in November. > > A new Hardee s restaurant occupies the site of a former car lot at Pelham Road and E. North Street. > > Chicken Salad Chick will be opening its third Greenville location along Woodruff Road. > > Barre3 joined the region s roster of fitness centers and is open at 3014-A August Street in Greenville. Lewis Plaza Rendering Source: Upstate Business Journal The Fresh Market at 1601 Woodruff Road Source: CoStar 2 South Carolina Research & Forecast Report Q3 2015 Greenville Retail Colliers International

Q3 2015 Retail Market Summary Statistics Greenville, SC ANCHOR SPACE (GREATER THAN 25,000 SF) JR. ANCHOR SPACE (10,000-25,000 SF) SHOP SPACE (LESS THAN 10,000 SF) MARKET BUILDINGS INVENTORY VACANCY RATE (%) Belton/Honea Path 5 260,281 11.0% 0-0 - 28,700 $4.97 Boiling Springs 8 605,386 32.2% 129,000 $4.00 0-66,152 $8.77 Cherrydale/TR 5 453,054 17.4% 0-30,100-48,835 $12.00 Clemson Boulevard 12 977,172 15.3% 118,749-0 - 31,072 $8.86 Clemson Pendleton 7 380,437 21.7% 34,928-21,253 $7.00 26,370 $9.72 Downtown 3 169,726 1.7% 0-0 - 2,841 - Duncan/Lyman 4 219,302 26.9% 44,000-0 - 15,023 $10.00 Easley 4 541,859 11.4% 39,000-0 - 22,800 $11.00 East Side 12 990,248 20.5% 128,076-15,600-59,421 $12.96 East Spartanburg 13 1,061,468 19.0% 34,928-37,655-128,698 $8.47 Greer 9 729,617 9.3% 0-21,290 $10.00 46,754 $13.13 Haywood/Pleasantburg 16 1,420,009 13.3% 78,059-43,478 $11.50 67,809 $15.58 Highway 81 3 175,362 9.0% 0-0 - 15,850 $7.57 Inman/Lyman 4 222,836 27.1% 34,928-17,500 $6.25 7,920 $8.95 Mauldin 6 410,608 2.4% 0-0 - 9,764 $13.49 Oconee 8 741,796 4.8% 0-22,400 $5.00 13,250 $10.59 Pelham Road 7 312,856 17.6% 38,083-0 - 16,890 $13.03 Pickens/Liberty 4 204,720 4.2% 0-0 - 8,680 $12.00 Powdersville 1 141,000 0.0% 0-0 - 0 - Simpsonville 10 697,345 3.6% 0-0 - 24,824 $14.35 South Side 4 159,418 2.8% 0-0 - 4,500 $7.00 West Anderson 17 728,508 22.6% 64,396 $8.00 59,193 $7.52 41,240 $10.76 West Spartanburg 16 1,521,963 12.9% 63,657 $4.50 74,872-57,943 $14.54 White Horse Road/Berea 10 777,987 10.4% 48,510 $4.75 0-32,265 $8.82 Woodruff Moore 3 145,400 0.0% 0-0 - 0 - Woodruff Road 32 2,112,629 2.5% 0-11,000 $20.00 41,762 $35.00 Market Total 223 16,160,987 12.6% 856,314 $5.13 354,341 $8.45 819,363 $12.33 Gross Retail Sales Gross retail sales in the Greenville-Anderson-Mauldin, SC MSA were down slightly over the previous year as of July 2015, but up 9.4% from July 2012. Sales totaled $1.8 billion in July 2015. The greatest amount of retail sales come from Greenville County where gross retail sales were $1.1 billion in July 2015, accounting for 61.8% of the MSA s total sales. The City of Greer ended its 2015 fiscal year with a total gross retail sales volume in excess of $1 billion, a 93% gain since the pre-recession 2008 level. Recent store opening such as Kohls are contributing to increased sales in the city. Market Outlook Greenville s retail market is poised for continued success and improvement as job creation and population growth continues. The market will likely see grocers opening new stores. Interest from national retailers will remain. Downtown developments will increase as the residential population grows and demand for retail services increase. Rental rates will climb as vacancy declines and construction costs continue to rise. Greenville-Anderson-Mauldin SC Gross Retail Sales ($) July 2015 $1.8 billion total sales Greenville MSA +9.4% since July 2012 +2.6% since July 2011 Source: South Carolina Department of Revenue Greenville County $1.1 billion -11.2% since July 2014 +14.9% since July 2012 City of Greer Fiscal year 2015 gross retail sales totaled $1 billion 3 South Carolina Research & Forecast Report Q3 2015 Greenville Retail Colliers International

Around the State Retail development is on the rise throughout South Carolina with grocery stores and sporting goods retailers anchoring larger developments. As employment and population growth continue, the state will attract national tenants to the market. Mixed-use developments are gaining popularity in both the suburbs and downtown submarkets. Summerville Marketplace Shopping Center Charleston, South Carolina Charleston s retail market continues to be influenced by a growing tourism and residential population. > > Nordstrom Rack recently opened its first Charleston store at Bowman Place, the former K-Mart redevelopment, in Mt. Pleasant. > > Earth Fare is now open to customers at Summerville Marketplace Shopping Center, formerly called Horizon Square. Petco is also open at the center. Other tenants will include Dunkin Donuts, Mattress Pro, Crust Pizza, Tijuana Flats and Lee Nails, which all expect to be open in November. > > BJ s Wholesale Club recently announced plans for a new store in Summerville. The 87,000 square-foot store is planned for a site near the Summerville exit off Interstate 26. Construction could begin in December 2015 with completion late in 2016. Killian s Crossing Site Plan Columbia, South Carolina Columbia has experienced significant development activity in recent quarters, both anchored and non-anchored projects. Downtown Columbia continues to attract restaurants, fitness centers, health spas and clothing boutiques. > > Kroger Marketplace, the first in South Carolina, is under construction at Killian s Crossing in Northeast Columbia. Other tenants joining Kroger at the lifestyle center include Chick-fil-a, Applebee s, McDonald s and Panda Express. The development will offer multifamily and single family residential units, and hotel space, along with retail space and outparcels. > > Construction is complete at Rosewood Crossing, the former K-Mart redevelopment, in the downtown submarket. The 98,000 square-foot center is home to national tenants Marshalls, Michaels and PetSmart. > > A growing downtown residential population is driving retail development in the submarket. Grill Marks recently opened at the City Market redevelopment. Construction is nearing completion on Newk s Eatery at the development. Construction is underway across the street at West End Alley, which will be home to Tin Lizzy s Cantina and City Bar and Fondue, among others. City Market Redevelopment For more statewide commercial real estate news check out our market reports at: www.colliers.com/southcarolina/insights 4 South Carolina Research & Forecast Report Q3 2015 Greenville Retail Colliers International

502 offices in 67 countries on 6 continents United States: 140 Canada: 31 Latin America: 24 Asia Pacific: 199 EMEA: 108 $2.3 billion in annual revenue 1.7 billion square feet under management 16,300 professionals and staff FOR MORE INFORMATION: Liz H. McCary Director of Marketing South Carolina +1 803 401 4269 Liz.McCary@colliers.com Jessica D. Rahal, CPRC Research Coordinator South Carolina +1 803 401 4264 Jessica.Rahal@colliers.com GREENVILLE RETAIL PROFESSIONALS: Frank Hammond, CCIM, CPM Senior Principal +1 864 527 5451 Frank.Hammond@colliers.com Lyn Tyner Principal & Brokerage Associate +1 864 527 5431 Lyn.Tyner@colliers.com Nick Reinhardt Brokerage Associate +1 864 527 5432 Nick.Reinhardt@colliers.com Scott Burgess Brokerage Associate +1 864 527 5434 Scott.Burgess@colliers.com Colliers International Greenville 55 E. Camperdown Way, Suite 200 Greenville, South Carolina USA +1 864 297 4950 About Colliers International Colliers International is a global leader in commercial real estate services, with more than 16,300 professionals operating out of 502 offices in 67 countries. A subsidiary of FirstService Corporation, Colliers International delivers a full range of services to real estate occupiers, owners and investors worldwide, including global corporate solutions, brokerage, property and asset management, hotel investment sales and consulting, valuation, consulting and appraisal services, mortgage banking and insightful research. Colliers International has been recognized and ranked by the International Association of Outsourcing Professionals Global Outsourcing 100 for 10 consecutive years, more than any other real estate services firm. colliers.com Copyright 2015 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.