More apartments are being rented in Southern Connecticut, which is benefiting multifamily properties in the Fairfield County/New Haven region in several important ways. For New Haven, this means the return of rent growth. In Fairfield County, the added demand for rentals continues to support new development. An improved outlook for both markets has also positively influenced investment activity. In 2017, multifamily operators in the New Haven metropolitan area had one of their best years since the recession, thanks to improvements on multiple fronts. Appeal for apartments has generated the second-highest net absorption level so far this decade. Demand increased in the city itself, where Yale University and Yale New Haven Hospital offer numerous employment opportunities, as well as in the surrounding greater New Haven suburbs. Absorption of rental units surpassed that of deliveries by a multiple of three, facilitating a major drop in vacancy. The metro’s overall vacancy rate at the end of the first quarter was 4.7 percent, 270 basis points below where it was just two years ago. Equally important, healthier demand has also aided rent values. Monthly effective rates started to rise in 2017 after retreating in 2015 and 2016, with rent growth nearing 6 percent year over …
The Rhode Island retail market has seen a considerable level of activity over the last year that presents promising signs of a strengthening economy and an improving property market. Generally speaking, each submarket has seen positive absorption of retail space, with the new concepts entering the market for the first time, as well as existing operators further expanding their footprints and market share. From street retail to lifestyle and big-box centers, each class has seen significant activity that represents a much healthier retail climate than popular opinion and media reporting might suggest. Some specific transactions are worth noting. Garden City Center in Cranston continues to outperform as the dominant outdoor shopping destination in the greater Providence market. This past year, The Wilder Companies built an approximately 29,800-square-foot addition at Garden City, which allowed them to bring Boston favorites Legal C Bar and Tavern in the Square to town. These are the first Rhode Island locations for both operators, which points to the strength of the local Rhode Island economy as well as the faith tenants have in the long-term viability of the best retail projects. Wilder was also able to bring The Simple Greek, Anthony’s Coal Fired Pizza, Z Gallerie …
The office sector in Rhode Island’s commercial real estate market has seen a strong carryover and positive momentum from 2017, into 2018, which we continue to enjoy today. The market has seen positive absorption in most areas and with little speculative development on the horizon, lease rates are being affected accordingly. It’s safe to say, it is no longer a Tenant’s market. In Providence, vacancy rates are hovering in the 12 percent range, down from 16.5 percent just a few years ago. Recent projects include the redevelopment of South Street Landing, a $230 million dollar renovation of the former Narragansett Electric power station which is now home to the URI/CCRI Nursing School as well as some of the administrative offices of Brown University. Just a block away, construction is underway for the 191,000-square-foot Providence Innovation Center. This will be occupied by the Brown University School of Professional Studies, Johnson & Johnson and the Cambridge Innovation Center. The redevelopment of 75 Fountain Street, a 160,000-square-foot building, once fully occupied by the Providence Journal, has also enjoyed positive absorption. The redevelopment by Nordblom Company and Cornish Associates has attracted companies such as Tufts Healthcare, GE Digital and Virgin Pulse to join the Providence …
Pittsburgh was recently ranked among the “Top 100 Best Places to Live in 2018” by Livability.com, citing the region’s strong university presence, burgeoning craft beer industry and successful professional sports franchises as important factors. Home to more than 15 breweries and a variety of new restaurants garnering national critical acclaim, Pittsburgh has also added foodie town to its list of accolades. A mix of local ownership groups and national franchisees has been actively pursuing expansion opportunities and new concepts in the region. Among the most active are AMPD Group, a partnership that includes Local Bar + Kitchen, Steel Cactus and Social House 7, which has six new restaurants in the works in the coming months both in Pittsburgh and outside the region in Myrtle Beach, South Carolina. The owners behind a local gastropub, The Yard, are introducing a new concept call Stout Pub & Kitchen in the Airport Corridor submarket. This new concept will focus on a variety of cured and smoked meats coupled with local beers and spirits. The fifth location of The Yard, which specializes in craft beers and gourmet grilled cheese sandwiches, is under construction in the adjacent space. Full Menu of Food Options While full-service dining …
The Pittsburgh industrial market has historically been a relatively small property sector due to several limiting factors, including difficult topography, infrastructure constraints and Pittsburgh’s location between two major industrial markets (Columbus to the west and Pennsylvania’s Central Valley to the east). However, with the emergence of e-commerce fulfillment centers, the growth of the Pittsburgh economy and major infrastructure improvements, we are starting to see strong demand for well-located industrial properties in the region. The size of the industrial market for the greater Pittsburgh metro is 185 million square feet. of which, 23.6 million square feet is flex and 161.1 million square feet is warehouse. Flex vacancy rate is currently 9.4 percent with 98,000 square feet under construction while warehouse vacancy is 5.8 percent with 263,000 square feet under construction. Based upon the tight vacancy and limited new construction in the warehouse space, there is believed to be significant pent-up demand, particularly for Class A users requiring 250,000 to 500,000 square feet. Accordingly, there are a number of planned speculative projects in this size range in the Airport, Butler County and Beaver County submarkets breaking ground in 2018. Lenders in the region are also bullish on the strength of the Pittsburgh …
Real estate experts continue to keep a close eye on the Manhattan retail market in 2018. Having wrapped up 2017 with challenges and opportunities for landlords and tenants alike, it appears the biggest strides toward adjusting to new conditions are behind us, though further rent adjustments are never out of the mix. At year-end 2017, average asking rents across Manhattan’s 16 main retail corridors declined by 18.4 percent, compared to those from year-end 2016, while availabilities ticked up slightly. Leasing velocity was strong in 2017 with 2.6 million square feet of transactions closing during the year, posting a year-over-year increase of 8.2 percent. Food and beverage tenants dominated the market in terms of deal volume, inking 172 leases (the most in Manhattan) at year-end 2017, which encompassed nearly 556,000 square feet. The apparel industry also posted strong numbers in 2017, leasing 459,200 square feet of space across 91 deals. 2017 data shows that SoHo was the most active neighborhood in terms of square footage leased (approximately 227,000 square feet) and the number of closed deals (43). The neighborhood outpaced the runner up, Midtown West, by more than 60,000 square feet. After suffering from consistently high vacancy rates, SoHo is …
In 2017, the multifamily investment sales market in New York City followed the trends seen within the broader market with sales volumes dropping while property values were mixed. The year ended on a high note with regard to contract execution activity, which bodes well for sales volume in 2018. This year, we expect volumes to rise while values bottom out and start to climb by the end of the year as positive movements in fundamentals start to exert upward pressure on property values. With regard to the number of properties sold, there were 1,215 apartment buildings sold last year, down 19 percent from the 1,507 that were sold in 2016. The elevator building sector, which we differentiate from walk-up buildings as a separate asset class, performed better with 235 sales, down 14 percent from the 273 elevator buildings that were sold in 2016. In the walk-up sector, there were 980 sales, down 21 percent from the 1,234 walk-up buildings that were sold in 2016. If we compare the Manhattan submarket to the outer boroughs, we see that activity in the outer boroughs held up much better than in Manhattan. In the outer boroughs, elevator building sales dropped by 13 percent …
Simply put, Boston is — and will continue to be — a top destination for tenants and capital alike. With strong market fundamentals and key drivers (education, finance, healthcare, life sciences and technology), 2018 is likely to be another terrific year for the commercial real estate sector. Market Metrics Boston’s urban core comprises four major submarkets: Downtown, Back Bay, Seaport and Cambridge. Together, these submarkets total more than 96.1 million square feet of office and lab space. This sector of the market features a vacancy rate of approximately 8.8 percent, positive net absorption of more than 300,000 square feet in 2017, and rental rates that are on the rise. Boston’s urban office market is largely driven by the region’s high concentration of educational institutions, financial and professional services, healthcare, life sciences and, perhaps most important, technology. These industries excel in the Boston area due to its high concentration of knowledge workers and its spirit of innovation and entrepreneurship. Tenant In-Migration The biggest trend impacting Boston recently has been the large-scale relocations of tenants into the urban core — both from within and outside of the market. This is a trend that shows little signs of slowing down. • GE — …
From new mixed-use developments popping up in the skyline to the increase of small-format stores, 2017 saw robust growth in downtown Boston’s retail landscape. Specifically, stabilizing rental rates have led to an uptick in retail leasing activity, showing the strength of both traditional retail destinations such as Newbury Street, as well as new mixed-use developments like One Seaport Square. While the downtown retail market is poised to remain stable, 2018 will welcome new trends fueled by e-commerce and omnichannel retailers, new leasing models, shifting consumer shopping behaviors and the ongoing challenge to accommodate millennials’ evolving preferences and expectations. The Seaport’s Emergence as a Retail Destination Historically, Back Bay has served as Boston’s premier neighborhood for retail with Newbury Street as its crown jewel and nearby Prudential Center, Copley Place and Boylston, all within a few minutes’ walking radius from the famous street. While Back Bay will continue to be a hotspot in 2018, Boston’s Seaport neighborhood is breaking out as a retail destination to watch as it transitions into one of Boston’s premier work-live-play destinations. Most recently, retailers Bluemercury, Mr. Sid, TravisMathew, Filson, L.L. Bean, and Lululemon are finding the value in meeting Boston’s young professionals where they work, live and …
In Delaware’s largest city, Wilmington, it is a tenant’s market when it comes to office leasing. There is much activity and redevelopment to attract new tenants downtown. Rental rates hover around $18 to $21 per square foot for Class B office space and $23-plus for Class A office space. Vacancy for Wilmington and its suburbs combined has decreased to around 13 percent. In the past year, nearly vacant office buildings have garnered activity from new investors looking to purchase at lower price points, freeing up excess capital for renovations or redevelopment. Some office buildings are being redeveloped into residential apartments due to the demand of millennials and professionals who desire a “live-work-play” lifestyle in downtown Wilmington, and who wish to reside near the city’s Amtrak station to take advantage of the easy access to larger cities like Philadelphia, New York, and Baltimore. The Buccini/Pollin Group has been putting hundreds of millions into the construction or redevelopment of residential, office, and hotel, as well as sports and entertainment properties on Market Street and in the Riverfront area. The company recently acquired a 13-story building comprising the former DuPont headquarters and the Hotel DuPont, which will be converted into a mixed-use complex …