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Siemens-Irving-Industrial
Company NewsIndustrialMarket ReportsTexasTexas Market Reports

Shifting Investment Patterns Prompt IPA’s Industrial Expansion in Texas

by Taylor Williams

By Taylor Williams The decision by Institutional Property Advisors (IPA), a division of Marcus & Millichap, to recently bring its investment sales services for the Dallas-Fort Worth (DFW) industrial market not only represents an opportunity to gain share of a booming market, but also to capitalize on a pronounced shift in buying patterns. COVID-19 has drastically accelerated demand for e-commerce services and industrial space on the leasing front. As investors that put new acquisitions on hold early in the pandemic regain their aggressiveness and as more capital sources diversify into the asset class, the line between requirements for institutional and private investors is growing blurrier. Ultimately, the shift in investment philosophy for industrial product in major markets boils down to private buyers targeting assets that have typically been considered institutional quality. This trend is a factor of several marketplace tendencies: the cautiousness with which institutional capital proceeds, the willingness of private investors to accept lower returns and the general mixing up of the Tier 1 industrial buyer pool. Like demand for industrial product from both tenants and the capital markets, the creeping of private buyers into the institutional space was taking place before the pandemic. But the overlap has become …

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KansasMarket ReportsMidwestMidwest Market ReportsMissouriMultifamilySingle-Family Rental

Kansas City Multifamily Market Poised for More Growth in 2021

by Kristin Harlow

By Gabe Tovar, John Duvall and Kyle Tucker of NorthMarq The Kansas City multifamily market has proved it is more than resilient in the face of adversity. Throughout 2020, the market ranked consistently in the top 10 of 30 markets tracked by Yardi. It logged higher occupancies and rent growth, all while welcoming a record level of new supply. That stellar performance is likely to attract even more capital to the market in 2021. The story dominating the Kansas City market in recent years has been its booming development pipeline. Despite shutdowns and delays caused by the pandemic, developers delivered nearly 5,900 new units in 2020. That volume represents a record-high growth rate of 4.1 percent added to Kansas City’s market-rate inventory, compared with an annual average rate of 2 to 3 percent throughout the past decade. Looking ahead, that supply wave has crested, and the pipeline is shifting to the suburbs. NorthMarq forecasts completions over the next two years to average closer to 4,000 units with 70 to 75 percent of those opening across the suburban submarkets. In recent years, between 40 and 50 percent of total deliveries were concentrated in the urban core, so while this data supports …

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Cinnamon-Ridge-Ontario-CA
CaliforniaMarket ReportsMultifamilyWesternWestern Market Reports

Inland Empire Multifamily Sales Volume Down, but Economics Stronger than Ever

by Jeff Shaw

By Cray Carlson, CBRE With 2020 coming to an end, we look back at a year of much uncertainty, confusion and unprecedented restrictions. Yet amidst all that, the Inland Empire multifamily market has been going steady, continuing to thrive in spite of some substantial drops in sales volumes. Total multifamily sales of eight units and larger in the Inland Empire were $2.5 billion in 2018 and $2.1 billion in 2019. That compares with only $1.09 billion in 2020, as of October. We expect total sales volumes in the area could ultimately show a reduction of up to 40 percent for the full year. So, how is the Inland Empire maintaining its title as one of the strongest apartment markets in the nation? Collections A recent housing and employment study examined the ability for renters to make their rent payments. The Inland Empire led the category of households caught up on those payments. Respondents also indicated a high confidence level in their ability to meet their future lease obligations. Among the 15 metros surveyed, the Inland Empire ranked second. Vacancy Rates Rent vacancies have decrease in the Inland Empire to as low as 3.7 percent as rent growth has risen 6.2 …

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District of ColumbiaIndustrialMarket ReportsSoutheastSoutheast Market Reports

D.C. Area’s Industrial Market Reports Strong Health Despite Pandemic

by John Nelson

Nearly three full quarters into the COVID-19 pandemic, no real estate asset class in the Washington, D.C., metro area has shown less macro-level distress than the industrial market. In fact, the industrial market may have actually benefited from the pandemic. Despite the immediate drop in demand and activity that resulted in the second quarter, the metro industrial market has bounced back and posted positive gains in both leasing activity and new construction. No other asset class can claim that in the D.C. area. Much of the industrial activity is centered in Northern Virginia, but Suburban Maryland has remained healthy as well. At the end of the third quarter, the overall vacancy rate for warehouse/logistics space, flex and service center industrial buildings stood at 6.2 percent. Unlike many industrial markets, the Washington, D.C., MSA is a service economy with more than 260 million square feet of space. Early industrial development around the Capital Beltway/Interstate 495 served to support an ever-growing population base driven by the federal government and its contractors. This, however, has changed in the past decade, with high-tech companies entering and dominating the market. Fueling D.C.’s healthy market is its high barrier to entry. Much of the development that …

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Broadstone-Watch-City-Waltham-Massachusetts
Market ReportsMassachusettsMultifamilyNortheastNortheast Market Reports

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

by Taylor Williams

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 …

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KansasMarket ReportsMidwestMidwest Market ReportsMissouri

Kansas City Industrial Market Slated to Continue Positive Momentum in 2021

by Kristin Harlow

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 …

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Market ReportsNevadaOfficeWesternWestern Market Reports

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

by Jeff Shaw

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 …

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Runnemede-Corporate-Center
IndustrialMarket ReportsNew JerseyNortheastNortheast Market Reports

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

by Taylor Williams

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 …

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District of ColumbiaMarket ReportsMultifamilySoutheastSoutheast Market Reports

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

by John Nelson

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 …

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TREB-Developer-Net-Buyer-Seller
Market ReportsTexasTexas Market Reports

Exclusive Survey: New Administration Worries Texas Real Estate Professionals

by Taylor Williams

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 …

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