Market Reports

Broadstone-Watch-City-Waltham-Massachusetts

Suburban Submarkets Will Lead Boston Multifamily Market’s Recovery in 2021

by Taylor Williams February 12, 2021

By Steve Callahan Jr., vice president of business development, Callahan Construction Managers Despite the turmoil caused by the COVID-19 pandemic, Boston has experienced significant job growth over the last 12 to 18 months in the life sciences, healthcare, technology and finance sectors. The health of these industries will require that employees in these fields have access to much needed, reasonably priced housing as companies continue to grow and build, creating more local jobs. Demand for rental housing over the past few years has been mostly driven by millennials who work in these fields. This trend is expected to continue as young professionals in these sectors no longer need to commute to the office by virtue of the pandemic forcing many companies to adopt work-from-home programs. In addition, these renters are seeking to upgrade to larger units with more modern amenities and access to outdoor spaces and activities. More than 7,100 units were delivered last year in the Boston area, only slightly less than the cyclical high of nearly 7,500 apartments added in 2018. However, most projects that were either started or delivered in 2020 were aimed at lifestyle renters in or near Boston’s city center. This could spell trouble for …

February 12, 2021

Kansas Market Reports Midwest Midwest Market Reports Missouri

Kansas City Industrial Market Slated to Continue Positive Momentum in 2021

by Kristin Harlow February 11, 2021

By David Zimmer, SIOR, Newmark Zimmer The industrial real estate market in the metropolitan Kansas City area ended 2020 on a high note. 2021 will pick up right where 2020 ended, with no outward or visible signs of a slowdown. New industrial construction is visible in every geographic sector of the metro area, with upwards of 2.5 million square feet of buildings under construction. Without exception, all these are high cube, modern distribution-type facilities intended to capture the ever-growing e-commerce, logistics and food and beverage sectors of the economy. With the one possible exception being the 880,000-square-foot office and distribution building for Urban Outfitters in Wyandotte County, all industrial construction underway is on a speculative basis with lease-up taking place before the buildings are placed into service. Development activity is being sponsored by both local development entities and regional and national developers who state that Kansas City’s geographical central location, coupled with a skilled workforce and extensive transportation infrastructure, are the primary reasons why Kansas City has attracted numerous companies to establish major distribution operations over the past decade. Investor appetite In addition to new development activities, the investor market for industrial properties has also reached record levels. In one …

February 11, 2021

Market Reports Nevada Office Western Western Market Reports

Sublease Space Stagnates, but 2021 Shows Promise for Las Vegas Office Market

by Jeff Shaw February 9, 2021

By Dan Palmeri, Senior Director, Tenant Advisory Group, Cushman & Wakefield As with most of the country, Las Vegas’ office market has been significantly impacted since COVID-19 restrictions started back in March. While many businesses have been allowed to operate at limited capacities, we’ve also seen many larger office users elect to work from home over the past nine months. This increase in work from home scenarios has naturally created a large increase in sublease availabilities in the market. Prior to March 17, 2020, we were tracking 24 subleases consisting of 555,000 square feet, with two of those spaces being 257,000 square feet and 61,000 square feet, or roughly 57 percent of the overall inventory. Since March, we’ve seen the number of availabilities increase to 70 with a total of more than 1.2 million square feet of space. This represents an increase of 118 percent. We’re tracking an additional 313,000 square feet of pending subleases that have yet to hit the market. This will bring the total to 78 options, with six of the availabilities being 50,000 square feet or larger. Large tenant activity was minimal over the past nine months. The most significant transaction was NYU Grossman School of …

February 9, 2021

Industrial Market Reports New Jersey Northeast Northeast Market Reports

Demand-Build-Repeat Cycle Characterizes Southern New Jersey Industrial Market

by Taylor Williams February 8, 2021

By Scott Mertz, SIOR, president, NAI Mertz The industrial sector has proven to be the only entity with innate immunity to the coronavirus. The onset of the virus has had nary an impact on the soaring demand, rising lease rates and rapid pace of new construction in the major industrial markets throughout the nation. If anything, the increased reliance on home delivery due to stay-at-home orders has only elevated the need for well-located warehouse space from e-commerce companies. That’s been the story in Southern New Jersey, where demand remains high and inventory is in short supply. The vacancy rate has dropped below 4.5 percent, and market rent has been on a steady ascent, standing at $6.55 per square foot at the end of 2020. With more players than open seats, it’s no surprise that developers are seeking to build on any viable plot of land in the region. Construction start activity reached a crescendo in the third quarter of 2020 with 4.2 million square feet entering development. All told, there is 7.1 million square feet of new construction on the way in Southern New Jersey. Many of these facilities will be delivered to market fully occupied. Over the past five …

February 8, 2021

District of Columbia Market Reports Multifamily Southeast Southeast Market Reports

D.C.’s Multifamily Market is Poised for a Quicker Than Average Bounce Back in 2021

by John Nelson February 8, 2021

Like many other markets across the country, the Washington, D.C., multifamily market was hit hard by the COVID-19 pandemic. Vacancy is up and asking rents are down. However, Washington’s unique renter class, made up heavily of students and young professionals, and the region’s main economic drivers will fuel a quick post-COVID-19 recovery. As we close out 2020, multifamily investors have reason to remain confident in a quick bounceback in 2021. Once the virus hit, many offices switched to a remote work environment, and many of the local universities switched to remote learning. We know that this fueled an exodus of renters from the city to their parents’ basements, to greener pastures in the suburbs or to areas with a lower cost of living. At one of our market-rate listings in a core neighborhood of Northwest D.C., property managers reported an immediate 10-basis-point increase in vacancies the day that George Washington University closed its campus for the fall 2020 semester. Entering the fourth quarter, the Washington MSA recorded the highest vacancy rate on record, breaking 6 percent for the first time, according to research from CoStar Group. Average asking rents are down approximately 3 percent this year, and the pain is …

February 8, 2021

Market Reports Texas Texas Market Reports

Exclusive Survey: New Administration Worries Texas Real Estate Professionals

by Taylor Williams February 5, 2021

By Taylor Williams At a time in which politics pervades nearly every facet of life and business, and in which ideological divides are wide and getting wider, commercial real estate professionals in Texas have some concerns about how the Democrats’ newfound control of two of the three branches of the federal government will impact business. President Joe Biden has been sworn into the nation’s highest public office, and Democrats now hold control of both houses of Congress following the Senate runoff elections in Georgia that flipped two seats from red to blue. That chamber consists of 50 members on each side of the aisle, with Vice President Kamala Harris representing the tie-breaking vote as head of the Senate. In conducting its three annual forecast surveys for brokers, developers/owners and lenders, Texas Real Estate Business received a multitude of opinions on how and to what extent the new political regime will impact deal volume and velocity. Respondents also weighed in on how the changing of the political guard will affect ancillary issues such as taxes, regulation and marketplace confidence. Unsurprisingly, out of all the brokers, developers and lenders who provided written responses on how the political landscape will affect commercial real …

February 5, 2021

Iowa Market Reports Midwest Midwest Market Reports Retail

Investors Shift Focus from Higher Returns to Stability, Proven Cash Flow

by Kristin Harlow February 4, 2021

By Tyler Dingel and Blake Bogenrief, CBRE | Hubbell Commercial COVID-19, and the immediate uncertainty that came with it, slowed investment activity in nearly all markets. The transactions that have closed since March, and those that will follow in the coming months, are changing. Investors and lenders alike are more thorough in upfront analysis, more selective in tenants, and overall, trending more conservative. The vision is now long-term oriented, and the spotlight is shining brightly on essential goods and services as well as investments with proven track records. Slow and steady is winning the race. Investor concerns Over the last 12 months, a common concern for real estate investors has been what the future holds for capital gains taxes. Many sellers are contemplating and opting to “take the hit” now as opposed to down the road when capital gains tax could be replaced by the ordinary income tax rate. In addition, the Biden Administration seeks to increase individual tax rates while the U.S. continues to deliver financial aid to the masses. Nearly nine months following the CARES Act, Congress agreed on a second, $908 billion stimulus package. Many expect that taxes will do one of two things in the future …

February 4, 2021

California Market Reports Retail Western Western Market Reports

Inland Empire Retail Market Poised for Resiliency in 2021

by Jeff Shaw February 2, 2021

While the Inland Empire economy was hit hard in 2020, we remain optimistic on the retail sector’s recovery over the coming 12 to 24 months. This market is a benefactor of COVID-19 in that more people than ever before are able to work remotely. This has triggered a migration from urban cores to more spacious and affordable housing in the newer residential communities of Riverside and San Bernardino counties. As the population is anticipated to expand here, retail will directly benefit as residents are more likely to have additional discretionary income to allocate to retail and restaurant venues. In particular, there are many high-growth submarkets to watch within the region. Some of our top areas include Eastvale, Jurupa Valley and Rialto, which have all experienced expansion despite the restrictions and challenges that COVID has created. They are seeing a significant amount of residential growth as they offer strong school districts, expansive parks, affordable housing, proximity to large employment bases and newer retail amenities. A young family demographic is moving to towns like these, and retail users have taken notice. This has resulted in large retail projects like Renaissance Marketplace in Rialto and the Station in Eastvale taking shape. Turning to …

February 2, 2021

Industrial Market Reports Midwest Midwest Market Reports Missouri

St. Louis Market Poised to Capitalize on Industrial Demand

by Kristin Harlow January 28, 2021

By Jake Corrigan, Sansone Group As we reflect on the tumultuous year of 2020 and the COVID-19 restrictions that decimated the retail real estate sector, those of us on the industrial side of the equation are breathing a sigh of relief. While there have been small pockets of industrial users and owners that have been adversely affected, the industrial market has remained strong as a sector. We anticipate this trend to continue. Statistics continue to show the conversion of the brick-and-mortar shopper to online is on the fast track. In the last 10 years, the meteoric shift to online shopping has increased from 7 percent in 2010 to just under 25 percent at the end of 2020, according to the U.S. Census Bureau. COVID-19 has forced the otherwise reluctant online shopper to shop for goods they had never thought to have delivered to their door. As a result, online retailers have dramatically improved web-based interfacing and ease of shopping. Active development These realities have supply chain experts, third-party logistics (3PL) companies, owner/users, and of course, mega online retailers clamoring for blocks of vacant space to house their inventories. Developers active in the St. Louis metropolitan statistical area (MSA) …

January 28, 2021

Hospitality Market Reports Nevada Retail Western Western Market Reports

Las Vegas Gaming: The Ugly, the Bad and the Good

by Jeff Shaw January 26, 2021

By Mike Mixer, Colliers International – Las Vegas At the beginning of 2020, Las Vegas was anything but ugly. Nevada’s economy was one of the fastest growing in the country. Unemployment was the lowest ever at 3.6 percent, while casinos reported three straight months of $1 billion in winnings. Then COVID came along and things got real ugly, real quick. The entire Las Vegas Strip was shut down, closed…on less than a day’s notice. The Las Vegas unemployment rate hit a staggering 34.2 percent. One out of three people in Las Vegas became unemployed in April 2020. Meanwhile, the last time the Strip was shut down was after the JFK assassination in 1963. The bad doesn’t look so bad compared to the ugly. As the year comes to a close, the Las Vegas Strip has reopened, but with fewer visitors. Low visitor demand hits hard in a city with more than 150,000 rooms. Las Vegas hotel occupancy has dropped from 90 percent down to 44 percent. Room rates have seen a milder drop this year, down only 6.77 percent (from $133 a night to $124 a night). The Las Vegas Gaming Market was also unlucky, especially without a robust convention …

January 26, 2021

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