Market Reports

Building Momentum: How Public-Private Partnership Revitalized Downtown Topeka, Kansas

by Kristin Harlow May 21, 2020

The city of Topeka has built significant momentum in the five years since its downtown revitalization. Capital investment and strategic planning at the city’s center had a reverberating effect across town, from the expansion of vocational-technical training to the growth of Kanza Fire Commerce Park. Public-private partnership The year 2015 was pivotal with a $9.4 million public-private investment in infrastructure and amenities along Kansas Avenue, the main downtown thoroughfare. The city invested $5.8 million in roadway, sewer and streetscape infrastructure. Meanwhile, private businesses sponsored pocket parks with statues, benches and fountains. The Downtown Topeka Foundation brought another $4 million in private funding to the effort through its “Imagine Downtown” capital campaign. Since that day, local investors like AIM Strategies LLC have purchased more than 25 buildings on the avenue for gradual restoration into thriving businesses like Iron Rail Brewing, Cyrus Hotel and The Pennant restaurant, bowling alley and vintage arcade. Popular annual festivals and parades expect to see even more traffic after the unveiling of the next phase of major downtown investment. Evergy Plaza With 30-foot digital screens and the 50-foot CapFed On 7th Stage, Evergy Plaza was developed as a hub for community and a catalyst for business. The …

May 21, 2020

Market Reports Office Texas Texas Market Reports

For Texas Office Owners, Understanding Best Operating Practices Is Critical Post-COVID-19

by Taylor Williams May 19, 2020

By Cody Payne, senior vice president, Colliers International. As strong job growth over the past decade has brought more and more investors to Texas, many of these buyers have looked to office product due to the appealing going-in returns that the property type offers. In addition, many cross-product owners look at office investing to make higher returns outside of their current portfolios. As buyers look toward the office market, there are many factors that need to be considered before making an informed decision. Along with these basic considerations, the impacts of COVID-19 on real estate investing are also important to understand when looking at an office deal. The Dallas-Fort Worth (DFW) market in particular has experienced an influx of cross-product buyers from other asset types such as retail, multifamily and self-storage during this cycle. The higher rate of return is the primary catalyst behind their motivation to purchase office investments. All asset classes are different and so are their opportunities, whether immediate or long-term. Understanding what sets office apart from other types of commercial investments is key to a successful operating strategy. Hidden Costs of Ownership One important factor to consider when buying office properties is that there are many …

May 19, 2020

Market Reports Nevada Office Western Western Market Reports

Reno Office Market Capitalizes on Relocations from Places Like California

by Jeff Shaw May 18, 2020

By Scott Shanks, principal, Dickson Commercial Group The Reno/Sparks office market is in a unique position: caught in the throes of a rapidly expanding commercial marketplace and aided by an ever-increasing population base. The most vibrant commercial real estate sectors in our area are industrial and multifamily, and they have been for decades. The office market is also seeing new companies, new developers and new buildings. For the first time in many years, we will see a true speculative office development begin construction this summer. McKenzie Properties will be going vertical with its Skypointe development. Tolles Development Company is in the middle of completing its Rancharrah project, which contains 64,000 square feet of retail space and 36,000 square feet of office space. Last, but certainly not least, Reno Land Inc. and its partner Lyon Living have started the first phase of their Park Lane development, a 46-acre, master-planned development that will include office, retail and multifamily. This new development shows the Reno/Sparks area is on the move, and fast. The area provides for a quality of life that is difficult to find when combining Lake Tahoe, the Sierra Nevada mountains and the Truckee River, which bifurcates the city. In comparison …

May 18, 2020

Florida Industrial Market Reports Southeast Southeast Market Reports

Miami-Dade County’s Industrial Market Sees Healthy Activity Amid COVID-19 Headwinds

by John Nelson May 18, 2020

The Miami-Dade industrial market saw a prolific year in 2019, followed by a healthy, yet slower first quarter in 2020. PortMiami’s record-shattering fiscal year 2019, with cargo operations posting 1.1 million twenty-foot equivalent units (TEUs) and cruise passengers totaling a world’s best 6.8 million passenger total, correlated with the robust warehouse and distribution demand the market experienced throughout 2019. There was a 9 percent uptick in South Florida industrial investment sales, and developers delivered 5.6 million square feet of product to Miami-Dade County. Industrial completions in 2019 exceeded the all-time high set in 2018, and the local inventory expanded by nearly 3 percent. In first-quarter 2020, as the coronavirus pandemic began to unfold and cause widespread global challenges, the flow of cargo continued to meet essential needs from medical supplies to food, while all cruise lines voluntarily ceased sailings. In addition, after a strong start to the year, COVID-19 caused construction to pause and dimmed demand from space users that service hard-hit industries such as tourism and brick-and-mortar retail. The unprecedented boost in e-commerce, grocery, and medical supply distribution currently drives the industrial sector. Leasing remains solid despite roadblocks Overall industrial vacancy in Miami-Dade is at 4.33 percent, up from …

May 18, 2020

Industrial Market Reports Midwest Midwest Market Reports Wisconsin

Metro Milwaukee Industrial Market Poised to Remain Strong

by Kristin Harlow May 14, 2020

The southeastern Wisconsin industrial real estate market had a banner year in 2019 and remains strong. According to Catalyst, the industrial market in southeastern Wisconsin had a vacancy rate of approximately 4 percent at the end of 2019 and that rate has moved down slightly to 3.9 percent during the first quarter of 2020. This rate is well below the historical vacancy rate in southeastern Wisconsin, which averages between 7 and 9 percent. Several submarkets are significantly lower than the southeastern Wisconsin average: Racine, where the massive Foxconn project is underway, has a 3.8 percent vacancy rate; the large Waukesha submarket, which has nearly 83 million square feet of inventory, has a vacancy rate of 1.9 percent; and the Sheboygan submarket, which has about 27 million square feet of industrial space, has an astonishing 0.1 percent vacancy rate. These extraordinarily low vacancy rates suggest that demand for industrial space in southeastern Wisconsin remains very robust and that, particularly in certain submarkets, supply has not been able to keep up with demand. While lease rates have remained fairly steady throughout the last year, upward pressure on such rates continues to build. Nevertheless, there are some signs of the market taking a …

May 14, 2020

California Market Reports Office Western Western Market Reports

The Changing Face of the Inland Empire Office Market

by Jeff Shaw May 11, 2020

An hour east of downtown Los Angeles, the Inland Empire office market contains about 25 million square feet of office product in San Bernardino and Riverside counties. This market has undergone tremendous growth over 10 years, and a more diverse stable of occupiers has moved in since the area was decimated by the housing crisis of 2007. At times overlooked, the Inland Empire’s office market is more than just the low-cost alternative to Southern California’s LA and Orange counties. With a sector vacancy rate of just 9 percent (lower than neighboring submarkets) the Inland Empire’s economic engine is supporting one of the fastest job growth areas in the country over the past decade, boasting an unemployment rate of only 3.6 percent. The fourth quarter of 2019 witnessed the first speculative general office building development in more than eight years. Average asking rates have also increased to $2.05 per square foot, the highest level since 2009. With sustained positive absorption and continued rising rental rates, this area has shifted to become a landlord market over the past couple years and, with this, concessions will continue to evaporate. Education and health services, government, and professional and business services have all seen recent …

May 11, 2020

Kansas Market Reports Midwest Midwest Market Reports Mixed-Use

Wichita’s Downtown Revitalization Serves as Catalyst for New Projects

by Kristin Harlow May 7, 2020

Wichita has been experiencing a strong downtown revitalization that has brought construction of new and redeveloped office, retail and mixed-use projects throughout its urban core over the past few years. Two years ago, companies began relocating downtown as shifting workplace demographics incorporated close proximity, “live, work, play” amenities in order to grow their businesses as well as attract and retain talent. Today’s businesses are seeking modern Class A finishes within Wichita’s center where these types of environments exist or will be available in the near future as developments continue. Downtown revitalization In the early 2000s, downtown Wichita lost many of its office users to more suburban office developments on the east and west edges of the city, leaving high vacancy rates and rendering many downtown office buildings functionally obsolete. Now this trend has reversed after the Wichita Downtown Development Corp. put together a comprehensive master plan to revitalize the urban core. Developers purchased key catalytic sites and repurposed them into economic drivers for downtown as shifting demographics brought about the need for businesses to attract and retain top talent with both onsite and walkable amenities. As new office projects downtown are beginning construction and being completed, the idea of relocating …

May 7, 2020

Industrial Market Reports Nevada Western Western Market Reports

Reno’s Industrial Market Remains In Demand

by Jeff Shaw May 6, 2020

Reno’s industrial real estate market has kept a jaw-dropping pace over the winter months. The fourth quarter of 2019 saw record-setting gross absorption numbers for any quarter at 3.34 million square feet with 10 transactions above 100,000 square feet. This amount of activity so late in 2019 typically suggests a slow start to the new year. However, activity seems to have picked up steam, as many users are considering new growth in Reno/Sparks. As a whole, 2019 was a fruitful year for industrial real estate. The market continues to draw attention for its West Coast distribution fundamentals and pro-business environment from tenants, developers and investors. Developers constructed 3.5 million square feet of industrial product, split almost equally between speculative and build-to-suit construction. About 17 million square feet of our 90-million-square-foot market changed hands at market-low cap rates to industrial investment groups. This included many groups that were new to the market, as well as several existing groups doubling down in Northern Nevada. Inventory remains the primary concern for tenants and developers as we come into 2020. With some minor caveats, new construction is getting absorbed as quickly as it is brought to the market. Given the strong start to 2020, …

May 6, 2020

Georgia Market Reports Restaurant Retail Southeast Southeast Market Reports

Landlords, Retailers in Metro Atlanta Impacted by COVID-19 Seek Middle Ground in Lease Negotiations

by John Nelson May 6, 2020

The financial impact the COVID-19 economic shutdown is having on tenants and landlords is a difficult mix of immediate drastic reduction (or elimination) of revenue, along with little or no ability to forecast when the end will come. This combination of severity and unclear duration makes finding potential win-win compromises a real challenge for tenants and landlords in the metro Atlanta area. While deal pipelines across the industry have ground to a halt, companies, teams and individuals are using this sudden influx of time as an opportunity to take up important tasks that, while not producing revenue, will set up future opportunities. They are catching up on conversations, expanding their networks, engaging with social media, doing industry research, continuing their professional educations and learning new skills. Landlords, on the other hand, are having to take this challenge head on and are testing the waters with solutions like pause agreements, rent deferrals (in many cases, equivalent term is added at the end of these leases) and other creative ways to provide relief to their tenants while not endangering their own interests or those of their lenders. There’s no certainty that these issues won’t have to be addressed again, periodically, as the …

May 6, 2020

New Jersey Northeast Northeast Market Reports Office

Office Developers Renovate, Repurpose Outdated Assets in Northern New Jersey

by Alex Patton April 28, 2020

From start-ups seeking flex space to major corporations that are expanding or relocating an entire office, finding a modern office space in the northern New Jersey commercial market is always a challenge. Barbara Gross, Sheldon Gross Realty Overall, it’s a very mature environment, with many older structures and corporate parks lining the highways, and with limited new development. As an example of the resultant complexities, let’s look back to the 1980s and ’90s, when the Route 280 corridor (primarily in western Essex County) was bustling. Office parks had few vacancies, and rental rates were among the highest in the state. Until relatively recently, only a few companies owned the majority of these buildings, thereby “controlling” who went where and at what rental rate. But over time, these owners have been selling the individual buildings in parks to a variety of new owners, resulting in a more competitive marketplace. It’s refreshing to see the new owners investing in renovations and adding new amenities. However, responding to a younger generation coming to or returning home to New Jersey and demanding greener, 24/7 communities, developers are demolishing some of those older office buildings and parks. Projects are before planning boards now that would …

April 28, 2020

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