Midwest Market Reports

Downtown Milwaukee Continues Its Hot Streak, but Will It Cool in 2016?

by Christina Cannon December 17, 2015

The long-held perception of the Milwaukee office market is that it mostly trades tenants between buildings with one landlord winning at the other’s expense, while the overall pie remains the same size. However, with cranes dotting the horizon, large blocks of vacant space quickly leasing up, a number of major new developments waiting to break ground, and the inflow of outside dollars into Milwaukee, the market has recently experienced some amazing deal velocity. This activity is expected to continue as we head into 2016. However, the office market could slow down due to the completion of several projects currently under construction. The greater Milwaukee office vacancy rate stood at 15.5 percent in the third quarter, down slightly from 15.6 percent in the third quarter of 2014. The vacancy rate in the central business district (CBD) dropped from 16.2 percent to 14.9 percent during the same period. Meanwhile, rental rates have increased slightly in both the overall market and the CBD. Cranes in the skies Construction on the Northwestern Mutual Tower and Commons began in late 2014 in downtown Milwaukee and is scheduled for completion in late 2017. A 32-story office tower will adjoin a two-block-long, three-story space known as The Commons. The new development …

December 17, 2015

Indiana Market Reports Midwest Midwest Market Reports Office Uncategorized

Office Development, Tenant Demand Heat Up in Northern Suburbs of Indianapolis

by Christina Cannon December 10, 2015

The office sector in the northern suburbs of Indianapolis shows clear signs of solid growth and stability with new construction and deeper tenant demand for space, particularly in the Class A segment. A number of factors contribute to this trend, including job growth, availability of land for housing and favorable demographics. Decision-makers live in the northern suburbs along with families, empty nesters and educated workers. Nearly 90 percent of all suburban office space in greater Indianapolis is located north of 71st Street in five key submarkets: North/Carmel, Keystone, Northwest, the Fishers/I-69 Corridor and Northeast/Castleton. Five I-465 interchanges define these five northern suburban office submarkets of Indianapolis, providing workers efficient access to 17.5 million square feet of office space. Through the third quarter of this year, overall occupancy in these five suburban submarkets stood at nearly 85 percent. The occupancy rate for Class A space was considerably higher at 89 percent. There are only seven blocks of contiguous office space 100,000 square feet or greater available in the suburbs and downtown — four of which are located in the northern suburbs. These spaces include 133,000 square feet at Two Concourse, 10194 Crosspoint Blvd.; 113,000 square feet at the former Charles Schwab …

December 10, 2015

Market Reports Michigan Midwest Midwest Market Reports Uncategorized

Downtown Traverse City Leads Commercial Real Estate Growth Spurt

by Christina Cannon November 18, 2015

Traverse City may be known as a small resort town on the shores of Lake Michigan, but each year it grows in popularity. And more commercial real estate players are taking notice. In the past year, Traverse City has been named one of the “Top 20 Best Small Towns in the U.S. to Visit” (Smithsonian); “One of the 50 Best Places to Live in America” (Men’s Journal); “One of the 10 Must See Cities in America” (Horizon Travel Magazine); “One of 10 U.S. Destinations on the Rise” (TripAdvisor); and “One of America’s 20 Most Romantic Towns” (Travel + Leisure). Tourism is on the rise as we become known as a region not only for cherries, but also for great restaurants, wineries, microbreweries, recreational trails for hiking and biking, skiing, festivals and a great place to live. With increasing notoriety comes pressure for development, and Traverse City is no exception. We have seen more development and projects in the pipeline in the past 12 months than we have seen since the height of the real estate boom 10 years ago. Tourists will be happy to note more hotel rooms in the downtown area as the new Hotel Indigo nears completion. The …

November 18, 2015

Market Reports Midwest Midwest Market Reports Missouri Office Uncategorized

Tight Office Conditions Lead to Much-Needed New Construction in St. Louis

by Christina Cannon November 12, 2015

Improving real estate fundamentals in the St. Louis office market are opening the floodgates to new construction that is greatly needed as large occupiers are finding limited, if any, existing available options. Over the past few years, the gap between rent for existing office properties and new properties was too great to justify construction. Until now, that is. The St. Louis employment base is finally reaching a pre-recession level with continued growth in the healthcare, information technology and engineering industries. The centrally located and more affluent residential areas — the West County and Clayton submarkets in particular — are experiencing higher occupancies and increasing rental rates. Clayton historically has been the best-performing submarket in St. Louis and still is today, while West County is situated near mid- to upper-level income workers. Development has and will continue to follow these highly sought after submarkets as they offer the metro area’s best real estate fundamentals and returns. Add to all of those factors a lack of new product in the past several years — plus a Class A vacancy rate of 10 percent — and you have an ideal climate for new construction. Pivotal project is catalyst The announcement that St. Louis-based …

November 12, 2015

Market Reports Michigan Midwest Midwest Market Reports Office

Resurgence of Downtown Grand Rapids Is Occurring on Many Fronts

by Christina Cannon October 22, 2015

Downtown Grand Rapids is booming with commercial real estate activity, and it’s coming from many directions. The combination of new residential units, restaurants, bars and a variety of entertainment options is leading people to not only live downtown, but also work and play downtown. Activity in the downtown office market — including office leases, new mixed-use construction and new retail — has increased over the last couple of years, and there is no sign of it slowing down. The overall office vacancy rate in the central business district (CBD) decreased from 9.4 percent in the first quarter to 8.25 percent in the second quarter. While Class A office space has performed well in recent quarters, there was a slight increase in the vacancy rate during the second quarter. As for Class B space, we observed a sizable decrease in the vacancy rate, from 10.1 percent in the first quarter to 8.5 percent in the second quarter. As a whole, the CBD office market experienced positive absorption of 74,293 square feet during the second quarter. Rental rates stabilized in the second quarter after increasing for the past several quarters. Meanwhile, some new construction and planned construction is hitting the market at …

October 22, 2015

Market Reports Midwest Midwest Market Reports Retail Wisconsin

Variety of Retail Construction Ramps Up Across Greater Milwaukee

by Christina Cannon October 15, 2015

Milwaukee is in the midst of a new construction boom in the retail sector, with three major projects currently underway and a fourth that was delivered in 2014 for a total of more than 1.1 million square feet of new space in the market. The majority of this space is being delivered fully leased. In many cases, these retailers are brand new tenants to the Milwaukee area. In the second quarter, overall vacancy ticked up 10 basis points to 10.2 percent. However, this was mainly due to store closures and consolidation in the Milwaukee market by retailers such as Office Depot, OfficeMax, Pick ’n Save, Sears and Kmart. But don’t be rattled by the uptick in vacancies. In reality, the market is incredibly active with new tenants entering the region and several expanding. Retailers recognize that there is ample room to compete for market share in Milwaukee and the surrounding area. Many of these new retailers will come on line in large ground-up projects now underway. Here are some of the notable projects: • In Menomonee Falls, a new Costco will open this fall and anchor a 300,000-square-foot development known as White Stone Station from Cobalt Partners LLC. • The …

October 15, 2015

Indiana Industrial Market Reports Midwest Midwest Market Reports

Online Retail Sales Spur Growth in Central Indiana’s Industrial Market

by Christina Cannon October 8, 2015

Consumers’ desire for shopping convenience and lower prices is driving online retail sales up, accounting for 7.2 percent of total U.S. retail sales so far in 2015, according to the U.S. Census Bureau. And that percentage is expected to double by 2020. It’s no wonder that the popularity of online shopping also is spurring growth in the industrial segment of commercial real estate, particularly in central Indiana. Over the past three years, the growth of e-commerce has accounted for 55 percent of total industrial net absorption in the United States. In 2015 alone, e-commerce has been responsible for 31 percent of industrial net absorption year to date. During the current expansion, the Indianapolis industrial market ranks eighth among all U.S. industrial markets in terms of total net absorption, according to Cushman & Wakefield. In the second quarter of this year, net absorption for modern bulk space totaled 1.6 million square feet, more than any other industrial segment in the market. Since 2013, nearly 15 percent of industrial square footage leased in metro Indianapolis has been related to e-commerce. The FedEx Factor With a compound annual growth rate of 14 percent since 2008, e-commerce has driven retailers to establish dedicated dot-com …

October 8, 2015

Market Reports Midwest Midwest Market Reports Missouri Multifamily

Renter Demand Exceeds Flood of New Apartments in Metro Kansas City

by Jeff Shaw September 17, 2015

Surging rental demand for apartments in metro Kansas City during the first six months of 2015 supported a sharp rise in real estate fundamentals following a lackluster second half of 2014. Renters absorbed 2,510 apartments during the first half of this year, surpassing the 1,810 apartments completed during the same period a year ago. With leasing activity exceeding deliveries so far this year, the overall vacancy rate fell 60 basis points to 5 percent by the end of June. The decline followed a spike in vacancy and negative absorption in the fourth quarter of 2014. The recent resurgence in leasing resulted in the vacancy rate in June matching the 5 percent rate one year ago. Supply-side pressure was most noticeable in the Class A apartment segment, which po sted an increase of 60 basis points in the vacancy rate year-over-year to reach 4.2 percent in June. Even with the increase, the vacancy rate was tightest among top-tier apartments, while Class C vacancy tightened 20 basis points during the same period to settle at 5.3 percent in June. A Landlord’s Market As a result of Kansas City’s apartment vacancy rate tightening during the first half of this year, operators were able …

September 17, 2015

Market Reports Midwest Midwest Market Reports Multifamily Ohio

Good Times Continue to Roll for Apartment Owners in Metro Cleveland

by Jeff Shaw September 10, 2015

Cleveland will host the Republican National Convention in July 2016. In response, hospitality firms have steadily expanded payrolls with the addition of 9,200 workers, the biggest relative gain among all employment sectors. The overall labor force will expand 1.6 percent this year, or by 16,500 new workers. Thousands of these newly employed workers are seeking rental housing, particularly in the urban core where housing prices are much higher than the metro average. In addition, the urban core’s transformation to a 24-hour city has created its own momentum. Demand Exceeds Supply High net absorption outpaced construction during the past four quarters, putting downward pressure on vacancy. Last year, average vacancy dropped 160 basis points as tenants absorbed more than 3,400 units. In the last 12-month period ending in June, nearly every Cleveland submarket posted a drop in vacancy. Net absorption is expected to end the year more than 40 percent higher, with vacancy projected to slide 50 basis points to 3.4 percent, one of the lowest levels in the country. Builders have responded by expanding the project pipeline. More than 1,700 rental units have already come on line during the past year. However, compared with almost any other major metro in the country, this is just a drop in the bucket. …

September 10, 2015

Industrial Market Reports Midwest Midwest Market Reports Missouri

E-Commerce Drives Demand for Modern Bulk Distribution Centers in Kansas City

by Jeff Shaw September 3, 2015

E-commerce and business-to-consumer companies could overtake the automotive industry when it comes to driving growth in Kansas City’s modern bulk distribution segment of the industrial market. Auto suppliers filled the first wave of new space in the Kansas City industrial market. But now that those needs have primarily been met, new industry sectors are needed to fill the second wave of development. E-commerce and business-to-consumer companies could be the dominant users. These companies are capitalizing on the fact that 85 percent of the U.S. population can be reached from Kansas City in a two-day truck drive, according to KC Smart Port, a nonprofit organization that works to attract freight-based companies to the Kansas City area. Through in-house transportation studies, KC Smart Port is coming to the conclusion that it strategically makes sense for the distribution centers of e-commerce companies to be located in Kansas City. Recommendations from UPS, FedEx and third-party consultants also help e-commerce companies — located on both the East and West coasts — make that decision. Business-to-consumer companies operating a one-, three- or five-building model find that Kansas City works well logistically as it is in the middle of the country. Inherent Advantages Locating in Kansas City allows …

September 3, 2015

Newer Posts

Older Posts