The retail market study examines inventory, vacancy, and rental rates in the Capital Region market, comprised of the Susquehanna River’s East Shore and West Shore sub-markets. The study includes 76 shopping centers that are larger than 20,000 SF, with categories based on the International Council of Shopping Center’s (ICSC) classifications. Overall vacancy levels in the Greater Harrisburg retail market increased to 7.12%. This represents an increase of .15% since our 2007 survey. With the national economy in a recession, the Central Pennsylvania market has remained stable only showing slight effects of the economic downturn. A slowdown in the leasing activity has increased the overall vacancy rates. Most tenants are exhibiting a wait-and-see approach and are taking more time to make decisions. A majority of tenants with upcoming lease expirations are exercising renewal options or closing underperforming locations.

WEST SHORE
Rental rates on the West shore averaged $15.50 per square foot. This is an increase of 9.54% from 2007. The west shore has shown the greatest positive progress relative to vacancy with a drop from 9.35% to 8.84%. The region’s newest retail development, Silver Spring Square, has reached occupancy of 97% from its completion in late 2007. This development was the main catalyst in the strong rental rate increase for the West Shore retail market.

EAST SHORE
Rental rates on the east shore also increased to an average $16.44 per square foot. This represents an increase of 4.25% from 2007. Unlike the West Shore retail market, the overall vacancy rate for the East Shore increased from 5.08% to 5.65%. The newest East Shore development of the High Point Shopping Center slowly filled its remaining vacancy over this past year to a current occupancy of 97%.

SUMMARY
In 2008 we have experienced a market shake up. The anticipated slow down in national retail expansion and development is expected to continue into the 3rd quarter of 2009. Most proposed commercial construction projects have been postponed due to softened financial markets. Landmark Commercial Realty, Inc.’s objective is to track vacancy in existing centers to better understand the retailing gaps in the Central PA Market. Our Retail Market Study is updated on an annual basis.

For an expanded market analysis or to obtain a market survey of available properties and space, please contact:

Drew R. Bobincheck
Commercial - Investment & Leasing
(717) 731-1990 ext. 3006
(717) 877-4233 mobile
dbobincheck@landmarkcr.com

Richard H. Moore
Industrial/Commercial - Sales & Leasing
(717) 731-1990 ext. 3005
(717) 497-6777 mobile
rmoore@landmarkcr.com