Market Reports

Omaha’s Strong Multifamily Market Fundamentals Drive Investment Sales Activity

by Kristin Harlow November 12, 2020

By Jason Kinnison, NorthMarq The Omaha multifamily market’s occupancy, rents and new construction activity remain stable despite the economic uncertainty surrounding the COVID-19 pandemic. As a solid Midwestern market, Omaha’s apartment sector remains strong due to its healthy market fundamentals, including a strong employment base and a highly educated workforce. Omaha boasts an approximate 94.9 percent occupancy rate and consistently has a steady supply of roughly 1,500 new units delivered annually. New construction activity has historically been at an absorbable pace, however, there has been a slight lag in absorption recently, which has the potential to compress occupancy levels as well as asking rents. Multifamily rent collections remained strong in the second quarter, supported in part by the increased unemployment benefits offered to renters who lost jobs and the government-sponsored stimulus initiatives. Additionally, federal eviction bans were enacted. Omaha’s multifamily real estate property values continue rising and capitalization rates remain low. Over the last five to seven years, Omaha has experienced an increase in multifamily investment sales activity. Historically, the market has been controlled by local investors with a buy-and-hold mentality. However, as valuations have risen and activity has increased in investment sales, there has been a shift to more …

November 12, 2020

Market Reports Office Texas Texas Market Reports

Market Mystery: Why DFW Presents a Strong Case for Quick Recovery

by Taylor Williams November 10, 2020

By Nora Hogan, SIOR, principal at Transwestern The immediate future of the Dallas-Fort Worth (DFW) office leasing market is an enigma. Real estate professionals believe we are near the top of a V-shaped recovery curve. However, many tenants disagree and are being cautious about their office leasing decisions. Due to the pandemic, tenants became innovative in providing ways to service their customers. They have learned they can operate, survive and even excel under the current business environment, and thus are delaying their lease decisions. Tenants are learning which employees can work productively without the boundaries of the office. The million-dollar question is whether or not this partial work-from-home model is sustainable. Some employers think not, while others are betting that it has staying power and have placed either all or a portion of their office space on the sublease market. Today, sublease space in DFW represents 15 percent of the total vacant square footage. This percentage is higher than the volume of sublease space that the market posted during the dot-com recession of 2002. Currently the total sublease square footage is 9.5 million, which is almost identical to the December 2002 sublease inventory peak. The difference is that in 2002, …

November 10, 2020

Industrial Kentucky Market Reports Southeast Southeast Market Reports

Louisville’s Central Location, UPS Presence Make it a Lock for Industrial Users

by Alex Tostado November 9, 2020

Louisville is best known for the Kentucky Derby, the premier thoroughbred horse race that has occurred every year in the city since 1875. However, there is another continuous streak that is happening in Louisville, and that is 21 straight quarters of positive net absorption for industrial real estate as of second-quarter 2020. Louisville’s central location within the Southeast and Midwest, which gives area users the ability to reach two-thirds of the U.S. population within a one-day drive, is a major driver for industrial real estate. The UPS Worldport Hub in Louisville is its only “all-points” hub in the UPS network and provides warehouse and distribution businesses with the ability to process orders later and receive earlier deliveries. This is a tremendous benefit for e-commerce, pharmaceutical, laboratory and electronics companies, among many other industries. There is continual interest from West Coast companies seeking a central location to fulfill product as customer demand for shorter delivery times increases as part of the overall customer experience. UPS Supply Chain Solutions, the third-party, full-service fulfillment subsidiary of UPS, has a significant presence in Louisville. Many of the customers for which UPS Supply Chain provides fulfillment services are pharmaceutical-related businesses that require time-critical deliveries and …

November 9, 2020

Market Reports Midwest Midwest Market Reports Nebraska Office Retail

Key Leasing Considerations for Commercial Landlords in the Age of Coronavirus

by Kristin Harlow November 5, 2020

By Addison Fairchild, Baird Holm At its onset nearly nine months ago, the novel coronavirus forced federal, state and local leaders to consider measures necessary to prevent the virus’s inevitable spread. Those leaders imposed measures they calculated to balance minimizing the spread and harm of coronavirus to the national and local economies. Whether those measures were effective in achieving those goals is a question for another day. However, now that coronavirus is currently a part of daily life, businesses have been considering what measures they must take. Like political leaders, they must also consider balancing the potential liability they may face for the spread of the coronavirus or other illness, the harm to their patrons and clients, and the harm to their bottom lines. Commercial landlords are not exempt from considering the coronavirus or other pandemics in future leasing. It is unlikely a court would find a commercial landlord liable for the spread of a pandemic in their leased properties, except in rare circumstances. However, tenants may require landlords to provide upgrades to properties to ensure the safety of the leased premises. This article considers whether landlords may be liable for the spread of a pandemic in their leased premises. …

November 5, 2020

Market Reports Texas Texas Market Reports

Transforming San Antonio: Opportunities for Greener, Healthier Urban Development in Rising Cities

by Taylor Williams November 4, 2020

By Cameron Kraus, technical designer at Gensler The future of the city is in flux. Many of us have been and continue to work from home as a result of the COVID-19 pandemic altering our perceptions and expectations of what it means to live in an urban environment. According to insights from the Gensler Research Institute’s City Pulse Survey, which aims to capture people’s changing attitudes during this time, many people, particularly those with young families, may be growing tired of big city life. This is due in large part to ongoing affordability issues, but also to increasing concerns about health and wellness. The survey also found that nearly half of our respondents still want to live in an urban environment. Many said they want to leave high-density, high-cost cities for more affordable, smaller ones like San Antonio, as these cities still offer a broad range of amenities with a lower cost of living. Reintroducing The 20-Minute City As we examine our cities with fresh eyes, we have a unique opportunity to rethink how we define and connect our neighborhoods. Cities such as Barcelona, London and Paris are looking to create “20-minute cities,” a concept based on early 20th century …

November 4, 2020

Kentucky Market Reports Southeast Southeast Market Reports

Real Estate’s Holding Pattern is No Match for Louisville’s Top-Tier Potential

by Alex Tostado November 2, 2020

Much like the rest of the nation, both Louisville-area landlords and tenants are stalling while waiting for the ripple effects of the COVID-19 pandemic to become clear. The office market in Louisville has entered a holding pattern of sorts, while tenants evaluate their workspace needs in light of the major shift to remote work. Many are opting to wait and see what the market holds, a stark contrast to the steady development and leasing activity we saw in 2019. Now with investors taking a more long-term view of the market, larger portfolio sales are limited while everyone questions the future demand for office space. The most recent portfolio transfer was made by the New York-based Group RMC Corp. in its acquisition of a six-building, Class B office portfolio from locally based Ascent Properties for $44.5 million. The deal was traded at an 8.6 percent cap rate. However, don’t let the lull in activity fool you. The region’s office market is ripe with possibilities. While many local companies initially speculated about permanently adopting full-term remote work in the second quarter, they’re reconsidering as time goes on. Regional JLL research shows that 80 percent of businesses said most employees will eventually return …

November 2, 2020

Healthcare Life Sciences Market Reports Massachusetts Northeast Northeast Market Reports Office

Specialized Labor, Tenant Demand Fuel Growth of Boston’s Life Sciences Market

by Taylor Williams October 30, 2020

By Brendan Carroll, research director, Cushman & Wakefield Through the first three quarters of 2020, the Boston life sciences market is seeing record occupancy, a continuation of large new-building leases, stable rents at record levels, high levels of pre-committed new construction and an insatiable appetite for inventory in new submarket clusters. Cushman & Wakefield defines laboratory properties as facilities optimized for the physical scientific research of biotechnology products. COVID-19’s Impact Following a pause of leasing activity in the first quarter of 2020, lease negotiations for laboratory facilities resumed quickly in the second quarter, hitting a level that commercial office properties have still yet to see. While optimism quickly returned for the region’s office-using businesses, widespread execution of remote office-using job functions has proven to be more effective for many of these workforces than market leaders previously envisioned. The consensus among real estate observers suggests a long-term decrease in the percent of in-office workers for traditional office-using functions. However, the importance of the continued use of physical spaces for biotechnology research will not be affected, as this function cannot be accommodated through current and easily envisioned remote work practices. These are highly specialized jobs performed by employees with highly targeted skill …

October 30, 2020

Industrial Market Reports Texas Texas Market Reports

Industrial Growth Comes Full Circle in Texas-Arkansas Border Region

by Taylor Williams October 29, 2020

By Eric Voyles, executive vice president, TexAmericas Center Years before smartphones and decades before Zoom, community leaders along the Texas-Arkansas border decided to turn a shuttered military property into a regional economic driver. Now, with the boost of a technological revolution that makes it easier than ever to connect with companies worldwide, that venture is paying major dividends. Located in the Texarkana MSA, TexAmericas Center (TAC) is an industrial park with a unique twist — it’s run by a special purpose district of the State of Texas. That means it operates like a government, controlling its own zoning and permitting processes, but it also functions like a competitive real estate development company. This combination has been particularly attractive to relocating and expanding businesses over the years and continues to drive growth for the greater Texarkana economy. Companies considering relocation or expansion at TAC frequently comment on the variety of infrastructure updates made to the industrial park. They are also quick to appreciate an impressive transportation corridor that uses multiple state highways, interstates, air freight and rail lines to disperse from a central U.S. location. But what new companies don’t always realize just how deep the supply of skilled workers is, and …

October 29, 2020

Industrial Market Reports Southeast Southeast Market Reports Virginia

Richmond Industrial Market Maintains Strong Momentum Through Mid-Year

by Alex Tostado October 26, 2020

At the mid-year mark, industrial occupancy in the greater Richmond area remains strong, closing with an overall occupancy rate of 92 percent in the categories being tracked (Classes A and B, as well as select Class C vacant and investor-owned product with a minimum of 40,000 square feet). Class A occupancy decreased slightly to 95 percent at the end of the second quarter, down 100 basis points from 96 percent at the end of the first quarter. The largest addition to the vacant Class A inventory is a 226,000-square-foot former GSA facility in Chesterfield County. Class B occupancy experienced an increase to 92 percent, up from 90 percent at the end of the first quarter. CoStar Group reports overall industrial occupancy at 95 percent for product of all sizes, including investor-owned facilities but excluding flex space (minimum 50 percent office). Richmond’s strategic Mid-Atlantic location along Interstate 95 provides access to 55 percent of the nation’s consumers within two days’ delivery by truck. In addition to being the northernmost right to work state on the Eastern seaboard, Virginia has been ranked as the top state for business by CNBC. Richmond is located approximately 90 miles from the Port of Virginia in …

October 26, 2020

Industrial Market Reports Midwest Midwest Market Reports Missouri

Kansas City Is Key Location for Warehousing, Distribution

by Kristin Harlow October 22, 2020

By Ora Reynolds and Mike Bell, Hunt Midwest Kansas City industrial real estate is trending upward with no shortage of leasing activity. The city’s location in the heart of America, with 30 percent more interstate miles per capita running through it than any other city, offers efficiency and redundancy for global e-commerce and distribution operations. With over 270 million square feet of existing industrial space in both surface and underground business parks, ample land for new buildings, a skilled logistics workforce and robust power and fiber infrastructure, Kansas City is one of the preferred geographic locations for distribution centers and is poised for continued growth based on these strong fundamentals. The nation’s transition to online purchasing at an unprecedented pace has created ripples of change. The increase in e-commerce is driving demand for more distribution space at a rate of 1.25 million square feet for each $1 billion increase in online sales, and this demand puts an increasing pressure on the supply chain for resiliency. Americans are purchasing everything online, from food and essential supplies to clothing and gifts. In the second quarter of 2020, Americans increased their online purchasing by $211.5 billion, according to the U.S. Department of Commerce. …

October 22, 2020

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