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Midwest Market Reports

IowaMarket ReportsMidwestMidwest Market ReportsOffice

Des Moines Office Market Is on the Rebound

by Kristin Harlow

By Chris Curran and Mark Mills, R&R Realty Advisors Would you rather earn more money or have a more flexible work/life balance? Before the pandemic, many employees gave the latter as their answer. But the amount of money employees claimed they would forego wasn’t exactly peanuts. According to a pre-pandemic study by career site Joblist, the average employee was willing to give up around $10,000 per year to have better work/life balance.  Fast forward to the present day and employees continue to express this desire. The isolation felt by many when working from home has increased the blurriness of the line that separates work from life. In fact, a survey conducted by TELUS International found that isolated workers reported a nearly 80 percent increase in work-related stress and anxiety when working from home. Given these findings, perhaps it shouldn’t surprise anyone that three out of four office employees express a desire to return to in-person work. If there’s a silver lining to the unprecedented year we’ve been emerging from, it may be that employees and employers alike are coming to understand the value in providing a balance between work and personal time. And, when it comes to the office market …

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IowaMarket ReportsMidwestMidwest Market ReportsRetail

Greater Des Moines Retail Market Is on Track for Fast Recovery

by Kristin Harlow

By Christopher Stafford, Cushman & Wakefield The Greater Des Moines retail market continues to emerge from the pandemic and is quickly regaining its footing from the closures and challenges experienced by many retailers, restaurants and businesses alike. Despite a few setbacks, occupancy rates and rents have generally held steady.  Consumer spending is surging and according to a WalletHub study, Iowa’s COVID-19 recovery is the quickest in the nation, earning a total score of 75.25 out of a possible 100. The study compared all 50 states across three categories: COVID health; leisure and travel; and economy and labor market. Trends, observations A local real estate mogul recently made the analogy that the Des Moines retail market is currently much like a chessboard — lots of moving pieces and strategic repositioning by the current players. Greater Des Moines, like other Midwest cities, is experiencing a handful of post-pandemic retail trends that include: • Integrated retail approach (omnichannel): Bricks & mortar + online presence and ordering + apps + delivery/pickup. The presence of drive-thru and pickup services will shape the future of retail and are in high demand by restaurants and retailers. • Space transformation: Spaces once occupied by traditional retailers are now …

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IllinoisIndustrialMarket ReportsMidwestMidwest Market Reports

Chicago Industrial: Full Speed Ahead at End of Second Quarter

by Kristin Harlow

By Adam Haefner, Avison Young The Chicago industrial market continues to move at full speed at mid-year 2021, with strong tenant demand keeping vacancy around 6 percent, despite 64.7 million square feet of new construction added since 2018.  At this stage in the pandemic recovery, large corporate healthcare, retail, logistics and e-commerce businesses continue to drive much of the leasing activity, which totaled 27.5 million square feet near the mid-point of 2021. Companies such as Wayfair, which is building a 1.2 million-square-foot distribution facility in the I-55 Corridor, are joining the ranks of Walmart, Target, Amazon, Home Depot and others that are expanding their industrial space in the Chicago market to keep pace with soaring demand. There are also many small to mid-sized industrial businesses that are increasing their output and expanding their space after seeing slowdowns due to the pandemic. While the industrial sector is navigating some supply chain disruption and fluctuations in construction materials costs, those headwinds are not enough to slow market activity. Given the boost in consumer and business activity from the vaccine rollout and subsequent reduction in the state’s pandemic mitigation measures, demand for industrial space should be strong for the foreseeable future.  Avison Young …

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IllinoisMarket ReportsMidwestMidwest Market ReportsRetail

Chicago Market Experiences Surge in Retail Sales as COVID Restrictions Loosen

by Kristin Harlow

By Chris Irwin, Colliers International As we begin to lower our masks, breathe fresh air and see smiles on everyone’s faces, there are strong signs that better than pre-COVID retail activity in Chicago is here.  With the expanded vaccine rollout, a decrease in unemployment plus the added boost of stimulus checks, the surge in retail sales in the city and surrounding areas has been measurable. The demand for retail space increased in fourth-quarter 2020 and first-quarter 2021 significantly, with the first quarter recording a 650,000-square-foot increase in overall absorption, which pushed the trailing 12-month absorption back to positive territory — and its highest level since 2017. Increased leasing activity continued to drive new demand as net absorption totaled almost 1 million square feet in the first quarter. Vacancy in Chicago retail has flattened and currently is holding at 6.1 percent over the past year compared with a rate of 5.1 percent nationally. Leasing activity was driven by the expansion of essential retailers throughout the first quarter, similar to first-quarter activity levels registered in 2017, 2018 and 2019.  However, the most important step toward recovery happened June 11 when the State of Illinois moved its Coronavirus response from Phase 4 to …

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IndustrialKansasMarket ReportsMidwestMidwest Market ReportsOfficeRetail

Despite Pandemic, Wichita Market Experiences Significant Urban Development

by Kristin Harlow

By Tom Johnson, NAI Martens The overall Wichita economy is not out of the woods yet, but numerous factors point to a continuation of the recovery from both the Great Recession and the impact of the pandemic. Since the significant employment downturn during the second quarter of 2020, the Wichita metro area has markedly recovered but remains well below 2019 non-farm employment. The seesaw unemployment rate has now declined to just over 5 percent. All employment sectors are expected to increase from 3 to 6 percent in 2021 with retail, leisure and hospitality leading the way as restaurants and travel return to pre-pandemic levels. In the background of all the pandemic noise have been significant gains in urban development with over $1 billion of public and private sector investment since the recession. ● Residential has grown exponentially with 21 new and renovated properties representing 1,228 units with some of the highest rental rates in the city. ● With over 100 restaurants and local shops, retail has increased significantly, adding almost 500,000 square feet, a 39 percent  increase with more to come. ● Starting with the Ambassador Hotel renovation, the hospitality sector has added 375 rooms with another 95 rooms in …

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IndustrialMarket ReportsMidwestMidwest Market ReportsOfficeOhioRetail

Toledo, Ohio Market Shows Stability in Various Areas

by Kristin Harlow

By Harlan Reichle, Reichle Klein Group As the Toledo, Ohio, area’s retail market proved to be stable and solid in the second half of 2020 and the industrial market continued a remarkable stretch of high performance since the Great Recession, 2020 was a tough year for the office market. However, all three property types have yet to register any negative COVID impact in our latest survey results. Retail Toledo’s retail market proved to be quite stable and solid during the second half of 2020. Given the fraught last year along with the headlines and travails of retail stores, gyms and restaurants, the general public might find this result surprising, but it was clear to our retail leasing brokers since mid-summer 2020 that transaction activity was snapping back fairly quickly after the initial shock of the spring 2020 lockdowns. Our year-end 2020 market survey found overall market vacancy down from both the end of 2019 and mid-year 2020. The decline in anchor vacancy more than offset a small increase among inline spaces as the market absorbed 39,183 square feet of space in the last six months of the year. It is a nearly exact repeat of the market’s performance in the …

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IndustrialMarket ReportsMidwestMidwest Market ReportsWisconsin

South Central Wisconsin’s Economic Engine Continues to Set the Pace

by Kristin Harlow

By William Mears, Coldwell Banker Commercial McGuire Mears & Associates What a difference a decade makes. While some may characterize the evolution of the development and investment climate of the Janesville-Beloit, Wisconsin metropolitan statistical area (MSA) with a population of 160,120 as an extreme makeover, others will note the area has been South Central Wisconsin’s best kept secret. Case in point: the numbers speak for themselves, and local real estate and economic development officials are bullish on this location’s growth trajectory. For starters, the area’s logistical friendly environment, its value-add real estate and workforce assets and its seasoned development team provide the right ingredients to facilitate development opportunities. Since 2010, the Janesville-Beloit MSA has added more than 12 million square feet of commercial and industrial space. Recognized brands such as Amazon, Kerry Foods, Fairbanks Morse Defense, SHINE Medical Technologies and Prent Corp. represent a sampling of the area’s business community. These companies and their 3,500+ counterparts drive the area’s annual GDP figure, which is nearly $7 billion. Industrial and warehousing demands from end-users seeking to leverage critical supply chain inputs are continually impacting the county’s real estate market. As a result, industrial vacancy rates are hovering around 2 percent, and …

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Market ReportsMidwestMidwest Market ReportsOfficeWisconsin

Industrial Companies Drive Boom in Milwaukee Office Growth

by Kristin Harlow

By Andrew Jensen Jr., Cushman & Wakefield | Boerke Milwaukee was once known as a city of industries and beer, the hometown of Allen-Bradley (now Rockwell Automation), Briggs & Stratton, Harley-Davidson, Johnson Controls, Master Lock, Rexnord and, of course, the Miller, Pabst and Schlitz brewing juggernauts. Today, Milwaukee’s economy is more diversified, and its industrial companies are quieter and not as flashy. But the area’s industrial firms are still central to its success and are now driving the area’s office market. In and near Milwaukee’s central business district (CBD), major recent office deals, all involving industrial users, include: ● Milwaukee Tool, based in the suburb of Brookfield, will soon expand into Milwaukee with a $30 million redevelopment of a vacant five-story, 333,000-square-foot office building. Milwaukee Tool will employ up to 2,000 people there, the largest-ever influx of jobs to the CBD by a suburban-based firm. The City of Milwaukee is providing up to $20 million in financing for the project. ● Utilities and infrastructure contractor Michels Corp., based in the small Wisconsin town of Brownsville, chose a riverfront development site 60 miles away in Milwaukee for an office expansion after considering Chicago and New York City. The $100 million project, …

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IndustrialMarket ReportsMidwestMidwest Market ReportsNebraskaOfficeRetail

Solid Fundamentals Uphold Lincoln Real Estate Market

by Kristin Harlow

By Tom Graf, NAI FMA Realty Over the past decade, Lincoln has experienced sustained growth and earned a reputation as a place to be in the Midwest. Its low unemployment, stable economy, low cost of living, prospering tech scene as well as lifestyle and entertainment fitting of a big city with the feel of a small community has insulated Lincoln better than many cities of its size. Perhaps this is most compelling with the number of cranes spotted in the skies back in 2008 and again in 2020. Just as many cities were struggling, Lincoln built its way out of the Great Recession in 2008 and 2020 was no exception. Retail Throughout the economic uncertainty brought on by the COVID-19 pandemic, Lincoln’s retail landscape fared well with vacancy holding at 7.1 percent for the year in 2020. New construction was active throughout the market despite store closures and bankruptcies making the national headlines. For some opportunistic retailers, vacant spaces opened the door to take advantage of the market and negotiate better terms for new locations. Retailers thriving in today’s market are the “daily needs” retailers — grocery, home improvement and discount concepts. Some niche online businesses, which have grown through …

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IndustrialMarket ReportsMidwestMidwest Market ReportsNebraska

Omaha Industrial Activity Remains Strong, Particularly in Western Sarpy County

by Kristin Harlow

By John Dickerson, OMNE Partners Our Omaha-area industrial sector has come through the pandemic very well, compared with other commercial sectors. We have not had to work out many rent payment plans with tenants, and industrial users going out of business have been minimal. Omaha has survived and come out of 2020 well economically. Our unemployment rate is the second lowest in the country. Our cost of living has also been lower than most other major cities in the Midwest. This low cost of living carries over to real estate rental rates and operating costs. Leasing activity Industrial leasing has been quite good in Omaha for years. Our vacancy rates have been below 5 percent for a number of years and currently have been about 3.5 percent. By reviewing spaces for lease on Crexi, an internet marketing service, there are about 120 properties that I identified with space available with a total of over 3 million square feet for lease. Rental rates for industrial vary, of course, for typical reasons — age and condition of the property, location and how much a space/building might be finished in office or other special improvements. In Omaha, many flex buildings have users that …

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