Thursday, April 17, 2025
Read the Digital Magazines Subscribe to the Magazines
Subscribe

Market Reports

270-Billerica-Road-Chelmsford-Massachusetts
IndustrialMarket ReportsNortheastNortheast Market Reports

Northeast Industrial Owners Find Creative Ways to Grow Supply

by Taylor Williams

By Taylor Williams So much for “survive ’til ’25.” Until a couple months ago, industrial owners in the markets of New Jersey and Eastern Pennsylvania had good reason to believe that 2025 would be a year in which ground-up development got back on track. And in those markets, which are defined by their density and sticky tenant demand, new supply is rarely a bad thing. According to the latest data available from Colliers, industrial vacancy rates in Philadelphia County, Southern New Jersey and the Lehigh Valley all rose in the fourth quarter by anywhere from 80 to 150 basis points. The regionwide vacancy rate stood at roughly 7 percent at the end of 2024, up from 6 percent in the fourth quarter of 2023.  The Colliers report also noted that while more than 6 million square feet of predominantly speculative product came on line in the first quarter of 2025, subsequent deliveries were forecast to decline by 40 to 50 percent in each ensuing quarter, “signaling a slowdown in supply for the remainder of the year.”  Demand in the region remains healthy but has undoubtedly moderated from record levels that prevailed several years ago, according to Scott Mertz, SIOR, president …

Continue Reading
FacebookTwitterLinkedinEmail
AlabamaMarket ReportsOfficeSoutheastSoutheast Market Reports

Birmingham’s Office Market: Steady, Resilient and Ready for What’s Next

by John Nelson

Birmingham’s office market is holding its own with overall market occupancy at 82.6 percent as of fourth-quarter 2024. We saw a slower second half of the year, but that is to be expected during a presidential election year when companies often hit pause on significant real estate decisions.  During the fourth quarter, Birmingham’s multi-tenant office market recorded negative absorption of 67,739 square feet, but that was a notable improvement from the negative 268,061 square feet recorded the previous quarter.  Leasing activity for the quarter came in at 180,849 square feet, bringing the year-to-date total to just over 562,000 square feet — about 22 percent below the previous year’s pace. While definitely a slowdown, this performance is nothing out of step with the broader national trends. Signs of positive momentum The good news? Since the start of 2025, activity has picked up across the board. Tenants are back in the market touring space and rethinking their long-term office needs. Some are expanding, some are rightsizing to space that better fits how they work today and others are updating their office protocols to bring employees back in more regularly — all of which is driving movement in the market.  In addition, several …

Continue Reading
FacebookTwitterLinkedinEmail
IllinoisMarket ReportsMidwestMidwest Market ReportsOffice

Chicago Office Market: the Trophy Spillover Effect

by Kristin Harlow

By Steven Bauer, Colliers The office towers that define Chicago’s landscape have unique histories and personalities, but not all are created equal in the eyes of the tenant. Buildings seeing the highest demand, classified even higher than Class A, are “trophy buildings” — buildings with high-quality finishes, newer and more efficient construction, and are often amenity rich with exclusive lounges, rooftop decks, fitness centers and private bars.  It’s especially important in today’s market to distinguish between the two distinct building categories because while Chicago’s real estate market is a vibrant and complex one, there is more to the story than what you see in the headlines. While the overall vacancy rate in the Loop remains at a historic high above 25 percent, trophy space vacancy is under 10 percent, and demand continues to be robust.  The story of flight to quality and flight to trophy assets has been told repeatedly since the COVID pandemic — complete with statistics that back the trend up. In the fourth quarter of 2024 alone, owners of trophy class buildings finalized anchor tenant renewals with Mayer Brown and PwC, both of whom kept roughly the same square footage as they had previously leased. With the …

Continue Reading
FacebookTwitterLinkedinEmail
LYV-Broadway-Carrollton
Market ReportsRetailTexasTexas Market Reports

Texas Case Study: Retail Research, Municipal Partnership Drive Successful Placemaking, Urban Vibrancy

by Taylor Williams

By Jonathan Brown of JHP Architecture/Urban Design The essence of a thriving city lies in its diversity.  Dynamic urban landscapes can achieve this effect by offering a robust mix of uses that cater to a wide range of people, keeping their streets and buildings lively and vibrant throughout the day and into the night.  City administrators, architects and master planners have long sought the alchemical mixture for this success. However, zoning codes for various municipalities can often read like complex recipes: A cup of residential here, a few ounces of retail there, a pinch of municipal infrastructure all around, a dash of hidden parking and a sprinkling of community open space to really tie the flavors together! Successful placemaking is not simply the sum composition of all its parts; it requires thoughtful integration and balance. With today’s housing shortages, multifamily developments make sense, but integrating retail uses within those projects is challenging.  This is despite the fact that many comprehensive plans and zoning codes mandate specific retail quotas, which may not be easily supported by the economics.   Creating vibrant, engaging spaces requires more than just ticking boxes in the zoning code. Stakeholders want to avoid ending up with a …

Continue Reading
FacebookTwitterLinkedinEmail
AlabamaMarket ReportsRestaurantRetailSoutheastSoutheast Market Reports

Birmingham Retail Market: Stability Amid Changing Dynamics

by John Nelson

Birmingham’s retail market continues to demonstrate resilience despite national economic challenges. With a vacancy rate of 3.8 percent — slightly below the national average of 4.1 percent — and rental rates holding steady at $13.13 per square foot, the city remains an attractive destination for both investors and tenants.  However, rising interest rates have slowed development and softened transaction volumes, reshaping the investment landscape. Macroeconomic trends  The intersection of economic pressures and shifting consumer habits is redefining Birmingham’s retail landscape. Across the nation, big-box retailer bankruptcies have contributed to negative net absorption of 346,200 square feet over the past year, and Birmingham has felt similar effects. The closure of Conn’s HomePlus, among other retailers, has contributed to this contraction. Despite these challenges, suburban retail demand remains robust. Homewood, Hoover and Alabaster are experiencing continued growth, and Crestwood Festival Shopping Center has added new tenants like Fun City Adventure and Armor Gym occupying 100,000 square feet. These trends highlight the increasing popularity of experiential retail, as consumers gravitate toward destinations that offer more than just traditional shopping. Development slows New retail construction has slowed significantly, with only 130,000 square feet delivered in the past year — well below historical averages. However, …

Continue Reading
FacebookTwitterLinkedinEmail
IllinoisMarket ReportsMidwestMidwest Market ReportsMixed-Use

Urban Revitalization Is Chicago’s Legacy — and its Future

by Kristin Harlow

By Trina Sandschafer, AIA, Project Management Advisors Adaptation and reinvention are core parts of what makes American cities great, and Chicago is a prime example. Whether rebuilding, reimagining space for modern usage or creating new neighborhoods from formerly empty lots, the city has become known for its unique ability to bring new energy and life to formerly underutilized areas. Chicago knows how to reimagine the built environment and is leading the way with several transformative development strategies.  Adaptive reuse: A well-tested Chicago tactic Chicago’s long history of adaptive reuse began with the pioneering residential loft developers. In the wake of nationwide manufacturing declines, these enterprising developers saw opportunity in the city’s largely vacant warehouses and manufacturing buildings. The success of these early loft conversions encouraged further reimagining of Chicago’s aging industrial and office stock into condominiums, apartments, offices, entertainment venues and hospitality spaces, which continue to this day.  Now, adaptive reuse strategies are helping to increase the supply of housing and restore economic viability to communities dealing with the lingering impact of the pandemic on local businesses. Converting legacy structures to new and better uses is more environmentally sustainable and can be more cost-effective than demolishing older buildings and starting …

Continue Reading
FacebookTwitterLinkedinEmail
The-Knox-Dallas
Market ReportsOfficeTexasTexas Market Reports

Tenants’ Flight to Quality Remains Entrenched Across Texas Office Markets

by Taylor Williams

The “flight to quality” trend has been ensconced in the embattled office sector for much of the post-pandemic era, and it’s showing little sign of slowing in the major markets of Texas.   With overall tenant demand depressed in the aftermath of COVID-19, opportunities existed in droves for office users to upgrade their spaces and move into buildings with desirable amenities and vibrant surrounding neighborhoods. In doing so, these companies sought to incentivize their employees to come back to the office. Simultaneously, owners that invested in wellness features and activation programs for their properties sought to gain a leg up on the competition — and make tough conversations with lenders a bit more palatable. Whether or not those initiatives worked as intended undoubtedly varies greatly from company to company and owner to owner. But after multiple years of stagnant occupancy and rent growth, the targeting of seemingly superior buildings and locations has come to represent more than just opportunistic decision-making by tenants. It’s a movement that has created visible delineation among winning and losing submarkets, a strategy that embodies basic financial prudence and perhaps a necessary evil — assuming that office usage is finally starting to rebound in a meaningful …

Continue Reading
FacebookTwitterLinkedinEmail
AlabamaIndustrialMarket ReportsSoutheastSoutheast Market Reports

‘Clouds Are Clearing’ for Next Step of Birmingham’s Industrial Market

by John Nelson

The Birmingham industrial market is poised for an increase in absorption as the apex of higher interest rates seem to be settling down, not to mention the post-election certainty that now favors business expansion. Corporate America is waking up and the clouds are clearing.   For the past 24 months, the competitive set of investor-controlled warehouse space has been sitting on about 2 million square feet of inventory. About 550,000 square feet of that is still unleased speculative space in three different projects delivered at the back-end of the post-COVID development wave that did see about 700,000 square feet of absorption of new spec space before the music metaphorically stopped.  Then came the 2023/2024 wave of the “new spec space,” a byproduct of the mentioned interest rates and COVID over-correction. Several second-generation spaces are now being marketed as companies vacated or downsized for various reasons. For example, discount retailer Dollar General is vacating an entire 307,000-square-foot warehouse.  Broader, there have been two major announcements in Central Alabama for the closure of distribution centers, both as a result of retailers’ bankruptcies. JoAnn Fabric’s 700,000-square-foot distribution facility in Opelika at I-85 is now on the market as is the 1.2 million-square-foot former …

Continue Reading
FacebookTwitterLinkedinEmail
IndianaMarket ReportsMidwestMidwest Market ReportsMultifamily

Indianapolis Apartment Market Shows Promising Signs of Stabilization

by Kristin Harlow

By Chris Bruzas, Berkadia After a particularly challenging and unpredictable 2024, marked by continued interest rate volatility and a persistent bid-ask spread differential that contributed to low transaction volume, the Indianapolis apartment market is showing promising signs of stabilization as we move into 2025.  Yardi Matrix data highlights Indianapolis’ resilience, posting 2.7 percent year-over-year rent growth in November. This performance is especially noteworthy as it surpasses several popular Sun Belt markets, which have experienced declines, dipping into negative territory. The outlook for 2025 appears more balanced, with new supply moderating to approximately 3,500 units from 2024’s record-breaking 6,500+ deliveries. This timing aligns well with the market’s strong population growth, as Indianapolis expects to welcome 22,200 new residents in 2025, significantly exceeding the historical average of 12,800 annual net movers. Key factors of the population’s growth are due to the presence of reputable universities and colleges, such as Indiana University-Purdue University Indianapolis (IUPUI). Compared with other major metropolitan areas, Indianapolis offers a relatively low cost of living, making it an attractive destination for those looking to maximize their quality of life without the high expenses associated with larger cities. The region’s economic fundamentals remain strong, anchored by transformative projects including Eli …

Continue Reading
FacebookTwitterLinkedinEmail
Austin-Retail-Mixed-Use-Panel
Conference CoverageMarket ReportsRetailTexasTexas Market Reports

InterFace Panel: Retail, Restaurant Operators Targeting Austin MSA Must Temper Expectations

by Taylor Williams

By Taylor Williams AUSTIN, TEXAS — On the surface, Austin has everything that expanding retail and restaurant operators could possibly want: youth, density, culture, high-paying jobs. Yet when these users begin scouting and diving into the state capital’s retail real estate market, they often find that entering or expanding there is much easier said than done. Skyrocketing home prices, increased vehicular congestion and limited infrastructure outside the urban core are just the most visible ways in which Austin has been somewhat victimized by its own torrid growth over the past 10 to 15 years. And each of those variables factors into retail site selection and contributes to the challenges of adding new retail and restaurant space to the market. Editor’s note: InterFace Conference Group, a division of France Media Inc., produces networking and educational conferences for commercial real estate executives. To sign up for email announcements about specific events, visit www.interfaceconferencegroup.com/subscribe. Simply put, if there are no rooftops, roads, parking spaces and utilities, there can be no new retail development. Such is the story in some of Austin’s more remote suburbs, though few doubt that those preliminary requirements for retail growth will eventually be delivered. But there is also the issue of raw …

Continue Reading
FacebookTwitterLinkedinEmail
Newer Posts
Older Posts