Finard & Company Report Shows Little Growth in Retail Space in Eastern Massachusetts.

Business Editors

BURLINGTON, Mass.--(BUSINESS WIRE)--Oct. 30, 2000

Less than one percent increase in retail space is lowest

growth rate in past three years in Eastern Massachusetts

retail space market

Finard & Company, LLC, one of the Northeast's leading commercial real estate companies, today announced the results of its annual report on the state of the retail real estate market in Eastern Massachusetts as of the first quarter 2000. The report indicates that the region's retail market showed a less than one percent growth rate over last year.

As of the first quarter of 2000, the retail real estate inventory in Eastern Massachusetts grew by 992,000 square feet, to a total of 124.4 million square feet. This is an increase in aggregate square footage of less than one percent from a year ago. Despite this lack of growth, vacancy rates also grew from 7 percent to 7.7 percent, a 10 percent increase from last year.

Finard & Company's Report states that vacant space for retailers increased over the year by 955,853 square feet to a total of 9,610,153 square feet for the region. The report cites changes in market conditions between the first quarter of 1999 and the first quarter of 2000 as responsible for this trend.

"Despite the strong economic environment this past year, we witnessed a continuation of significant retail chain failures and other store closings," said Bill Beckeman, a partner of Burlington, Mass.-based Finard & Company. "Competition remains fierce in virtually every retail category--and the Internet is starting to have a measurable impact, at least for certain types of merchandise, only heightening competitive pressures."

Included in the report is analysis of the last few years of activity and an examination of supply, vacancy, absorption and market condition by retail category and store size. The study market includes 174 cities and towns outside of Boston's urban core, representing nearly 3,400 square miles (42 percent of Mass. land area), and approximately 3.5 million people (56 percent of Mass. population).

The report draws from Finard & Company's proprietary GRIID retail database that maintains detailed information of virtually all retail properties located in Eastern Massachusetts, Southern New Hampshire, and the Greater Hartford area of Connecticut. In total, the database has information on more than 210 million square feet of retail space and 60,000 retail establishments--approximately 45 percent of all retail space in New England.

"The less than one percentage point increase in the vacancy rate in the region was due primarily to the closing of Caldors Department Stores and other prominent retailers such as Cherry & Webb and Boston Bed & Bath," said Mr. Beckeman. The report cites other notable retailers that closed stores in the region in the prior year, including Filenes Basement, Discovery Zone, and Home Quarters Warehouse. However, over 4 million square feet of vacant space, or almost half of last year's vacancy, was re-tenanted by new retailers during the year.

The report also cites the continued growth of professional services such as attorneys, accountants, insurance agencies, and mortgage brokers. "I found it striking that the aggregate amount of retail space occupied by almost every type of professional service firm increased in Eastern Massachusetts this past year," said Mr. Beckeman. "We also witnessed a similar phenomenon for health care providers such as doctors, dentists and physical therapists, as well as for personal image and grooming services including health clubs, manicuring salons, and skin treatment centers."

Other notable statistics and factors relating to the condition of the retail space market include:

--The 992,416 square foot increase in supply, coupled with the 955,853 square foot increase in vacancy, resulted in the absorption of 36,563 square feet, a less than 1 percent absorption rate. By comparison, absorption in 1998 was 4.6 million square feet and in 1997 was a negative 1.1 million square feet.

To receive a copy of this report, contact Jim Barrows at Finard & Company, [phone] or e-mail [e-mail].

With more than four decades of experience, Finard & Company is one of the Northeast's leading commercial real estate companies. Based in Burlington, Massachusetts, with regional offices in Hartford, Connecticut; Albany, New York; Burlington, Vermont; Portland, Maine; and other offices throughout the Northeast, Finard provides a wide range of real estate services to property owners, retailers and financial institutions. The company's current portfolio includes 9 million square feet or retail, office and industrial properties in eight states.