A trend in retail activity in Western New York and the Finger Lakes Region over the past six to 12 months has been the announcement or arrival of a number of high-end or specialty retailers and restaurants. Although traditionally these retailers are more selective about the markets they enter, as they continue to grow nationally they have to expand the list of potential markets they will consider. Some of them find that the Buffalo and Rochester metropolitan areas are markets in which high-end or specialty retailers or restaurants can thrive, particularly when Upstate New York’s lower occupancy costs and lighter competition are sufficient to offset potentially lower unit volumes. Whole Foods’ much-anticipated Western New York debut will be this summer in the Northtown redevelopment project by W.S. Development in Amherst. Whole Foods has also signed a lease in Brighton, a suburb of Rochester, for a 50,000-square-foot store at Palazzo Plaza, a proposed 90,000-square-foot shopping center on Monroe Avenue at Interstate 590. The project, being developed by the Daniele Family Companies, is currently making its way through the entitlement process. In a sign of the renaissance in progress in both Downtown Buffalo and Downtown Rochester, the first-ever national brand polished steakhouse …
One might expect that the industrial real estate market is in rough shape in a state with a projected $1.7 billion state budget deficit, where the capital city (Hartford) has discussed bankruptcy, and where one of the most famous employers (General Electric) has moved out — not to mention the state’s high taxes and high wages. However, the industrial real estate market is one of the tightest I’ve seen in Connecticut in more than 31 years. Each region in the state is experiencing varied levels of success, but overall the industrial market is healthy, with dropping vacancy rates, increasing rental rates, and decreasing cap rates. The game changer is big box distribution and third-party logistics activity throughout the region. In a market where a 75,000-square-foot deal used to be major news, we have seen numerous leases and new construction deals over 200,000 square feet in the past two years. E-commerce activity includes Amazon (1.5 million square feet in Windsor), FedEx (550,000 square feet in Middletown), and UPS (239,000 square feet in Windsor). Other significant transactions include Trader Joe’s (750,000 square feet in Bloomfield), Mobis Parts America (291,000 square feet in South Windsor), Vistar NE (296,000 square feet in South Windsor), …
The latest CoStar Industrial Report for Providence reports that 2016 ended on a positive note on many fronts for the industrial real estate sector. The Providence industrial vacancy rate overall was down to 4.6 percent, a steady drop from 4.8 percent at the end of third quarter 2016, 5.3 percent at the end of second quarter 2016 and 6.4 percent at end of first quarter 2016. Flex projects showed a vacancy rate of 7.1 percent at end of fourth quarter 2016, a sharp drop from a rate that held largely steady for most of 2016 (11.4 percent for end of third quarter 2016, 11 percent at end of second and 11.5 percent at end of first quarter). For warehouse projects, the vacancy rate at the end of fourth quarter was just 4.4 percent, no change from end of third quarter, but down from 5 percent at end of second quarter and 6 percent at end of first quarter. It’s more good news for the state’s industrial outlook that the current administration has prioritized bringing businesses and jobs here. There’s evidence in the CoStar report to support that claim. Look at the third-largest lease signing of 2016. It was enacted by …
Pittsburgh retail can be summed up in three words: location, location, location — and the original definition of great real estate has never been more pronounced than it is today in the Pittsburgh retail market. According to some publications, retail and retailers appear to be struggling almost everywhere for many different reasons, including online sales, too many stores, market conditions and oversaturation of product. However, as of year-end 2016, CoStar indicated that the overall Pittsburgh retail market occupancy rate was 96.8 percent. Pittsburgh has natural barriers to entry for retail due to its topography, which includes numerous hills and valleys, making it often times impossible to build a “newer, bigger, better” retail property across the street. As a result, many developers have successfully repurposed older centers through adaptive reuse, converting them in keeping with the latest and greatest retail trends. Other older centers have successfully withstood the test of time, replacing outdated retail concepts with today’s current concepts at significantly lower costs than building a new center. Adaptive reuse of Pittsburgh retail started decades ago when the May Company relocated Kaufmann’s Department Stores from four freestanding locations into the dominant regional malls, leaving one- and two-story 200,000-square-foot boxes vacant. Local …
The Urban Land Institute (ULI) listed Pittsburgh among its top five markets to watch in the 2017 Emerging Trends in Real Estate report due to its low cost to do business; access to talent via four major universities; and its status as an emerging tech hub with the likes of Uber, Google, Facebook and most recently, Amazon, establishing regional research and development centers in the city. Citizens Bank announced that it would remain a tenant in 525 William Penn Place, where it occupies approximately 150,000 square feet, reporting that its management views Pittsburgh as a growth driver for the company. Ford Motor Company inked a $1 billion deal with Argo AI, a Pittsburgh start-up that focuses on artificial intelligence and robotics, to expand its research and development of self-driving cars. Ford now is surveying the Greater Downtown submarket for space to construct a 100,000-square-foot facility to hold the 200 employees it expects to hire over the next 24 months. Despite the region’s growing popularity as a tech hub, leasing activity in first quarter 2017 reported a 23.3 percent drop from the same period 2016, ending the quarter at just less than 600,000 square feet, while overall net absorption dropped an …
As the U.S. economy passes through the third largest expansion cycle in the economic history, every sector in the economy has seen phenomenal growth over the last six to seven years. The growth in other industries has had a trickle-down effect on the real estate sector. U.S. real estate has seen rents surging and even surpassing the previous expansion cycle, as well as an increase in leasing and absorption activity and a record rise in the value of sales transactions. Manhattan has always been at the epicenter of this real estate growth. With the combination of developed market and investment-grade properties, Manhattan has regularly attracted the majority of foreign direct investment in the real estate sector throughout the country. Increased demand from TAMI (technology, advertising, media and information) and FIRE (finance, insurance and real estate) sector tenants have made these properties an attractive investment option for both the local institutional investors and foreign direct investment. The Manhattan commercial real estate market has seen a 33 percent (see footnote 1) increase in the transactions above $1,000 per square foot over the last seven years. These values are no longer limited to only trophy properties in Midtown but have spread across both Midtown …
The news is rife with stories regarding retail bankruptcies, store closures, challenges facing conventional shopping centers, and consolidations by department and specialty stores. Although not immune to some of these challenges, the Manhattan retail environment has enjoyed much activity during the second half of 2016 and the first part of 2017. To be sure, some submarkets and certain retail corridors have seen an increase in vacancies and a corresponding fall in asking rents. However, a number of new retailers have entered the market and certain strong retail brands have right-sized or repositioned themselves in the market. One high-profile shopping center opened its doors, and there is considerable retail development underway. It’s a big story but here are some highlights. Lower Manhattan There has been considerable focus on Lower Manhattan in the past several years, and this continues. On the grand scale, the opening in August 2016 of Westfield’s World Trade Center was the culmination of years in planning, constructing and leasing this $1.4 billion development. This multi-level project contains an assortment of national and international tenants, including fast fashion and better retail stores, such as Victoria’s Secret, Sephora, H&M, John Varvatos and London Jewelers. A 60,000-square-foot Eataly is the principal …
With city-like, apartment-rental living back in vogue, New Jersey — from its urban centers to its suburban bedroom communities — is transitioning to more walkable, transit-focused neighborhoods. From Northern, Central and Southern Jersey’s green, well-manicured garden-apartment courtyards to the sleek Class A high-rises peppering Hudson County’s Gold Coast, multifamily living and investment are catalysts for sustained statewide economic and population growth. The groundwork for this trend — and the ensuing surge in construction expected to peak this year — was established a few years back with the emergence of a state-incentivized transit village designation program. While this movement started in 1999 as a means to revitalize transit-friendly communities through mixed-use development, municipal leaders have only begun to embrace and leverage this type of development and private investment long associated with urban centers. Today, New Jersey has 32 state-designated transit villages and a multitude of emerging transit centers. Early designees include Pleasantville (Atlantic County), Journal Square/Jersey City, Morristown, South Amboy, South Orange, Rahway, Cranford and Matawan. Most recently, they have been joined by relative newcomers like East Orange, Summit, Plainfield, Irvington, Park Ridge and Hackensack as well as budding hubs such as Harrison. One example of how multifamily investment is leveraging …
Business was brisk in 2016 for retail real estate brokers in Central and Northern New Jersey. As online shopping continued to impact which retailers fill brick and mortar spaces, several trends emerged at malls and along New Jersey’s highways. The shrinking list of retail categories in which customers prefer or need to visit a store in person includes quick-serve and sit-down restaurants. Chick-fil-A opened new stores in Woodbridge and Jersey City; Chipotle in Holmdel; and Habit Burger in Eatontown, West Windsor, River Edge and Parsippany. Also on the list are gas stations, coffee shops, and convenience stores, including Street Corner, WaWa, Tim Horton’s, Quick Check, and 7-Eleven, which have all recently opened new locations, are under construction or are planning to open new stores throughout the state. Creative and art businesses also draw customers to brick and mortar locations. One River School of Art & Design, currently open in Englewood, is opening a second location in Allendale, and plans a roll-out nationally including a strong look at the Bell Works project in Holmdel. This art school for kids and adults and other creative concepts, such as the paint and sip retailers, remain very strong. School of Rock is another creative …
Retail vacancy levels declined in 2012 and 2013 in Eastern Massachusetts following several years of rising vacancy rates during the Great Recession. But since 2013, vacancy rates have been on the rise as shopping habits continue to tilt toward online options. In 2016, retail inventory gained modestly, reaching 194.2 million square feet, an increase of 0.5 percent, although no major center opened during the year. The region added 488,800 square feet of vacant retail space, and the vacancy rate increased to 9 percent. Big box closings — notably Sam’s Club, JCPenney, and Kmart — and the departures of Citibank and City Sports, were the primary cause of increasing vacancy. Nonetheless, the region experienced positive absorption, netting 573,600 square feet. As reported in The KeyPoint Report: Eastern Massachusetts/Greater Boston, Boston and Cambridge ranked one and two in the list of top 10 towns by retail square footage. Abington tops the rankings for lowest vacancy rate. Eight of the top 10 towns with the highest vacancy rates are repeats from the previous year; new additions include Wrentham, site of the 135,000-square-foot Wrentham Crossing, which is vacant and currently for sale. The under-2,500-square-foot size classification remains the largest segment of the market, and …