Market Reports

Multifamily Capital Chases Limited Supply in Northern New Jersey

by Alex Patton April 14, 2020

An abundance of capital continues to flow into Northern New Jersey’s multifamily market, with most investors completing 2019 as net buyers and major institutions looking to remain active in 2020. Over the past decade, domestic and foreign investors alike have diversified into the multifamily space in Northern New Jersey and nationwide. The result has been a highly competitive playing field with limited opportunities. And with more capital in the market than opportunities to place it, many larger funds are now looking to make portfolio acquisitions in order to divest large amounts of capital at once. Brian Whitmer, Cushman & Wakefield Excluding portfolio deals, transaction volume for multifamily investment in Northern New Jersey reached $1.6 billion in 2019, marking a 38 percent year-over-year increase, with 4,846 units sold across 27 transactions. This rise in deal volume can be attributed largely to the “Mack-Cali Effect.” The locally based REIT made two major 2019 purchases in Jersey City — SoHo Lofts ($264 million) and Liberty Towers ($409 million) — that accounted for 41 percent of the year’s individual transaction volume. Buyer Patterns While larger institutions and REITs like Mack-Cali are active in Northern New Jersey, private investors still dominate the regional market. This …

April 14, 2020

Alabama Market Reports Multifamily Southeast Southeast Market Reports

Birmingham’s Apartment Market Starts 2020 Hot, but Coronavirus Impact Looms

by Alex Tostado April 13, 2020

The Birmingham multifamily market demonstrated its evolving strength last year. Continued job growth and limited apartment inventory led to the area reporting its highest occupancy rate in 10 years (94.8 percent) and monthly effective rent advancing 1.8 percent annually to $984 by year-end. In the early months of 2020, we did not see any slowdown in terms of deal volume. Due to rising concerns around market volatility and ongoing impacts of the COVID-19 crisis, we are faced with uncertainty in terms of how the local Birmingham area, along with the rest of the country, will perform in the year ahead. It is difficult to predict market activity, but Birmingham has demonstrated positive trends worth noting. Catching investors’ eyes In recent years, the area’s employment growth and strong fundamentals have piqued investor interest. Out-of-state groups are increasingly venturing into Birmingham. This trend has led local developers to emphasize merchant-builds, actively constructing and redeveloping properties to fill this competitive demand. Off-market transactions have recently seen an increase in frequency as investors are able to be more aggressive on pricing, which is enhanced by this unprecedented interest rate environment. Across all asset classes, the Birmingham market has enticed investors with a variety of …

April 13, 2020

Market Reports Multifamily Texas Texas Market Reports

How Workforce Housing Owners in Texas Can Help Tenants Amid COVID-19 Crisis

by Taylor Williams April 10, 2020

Multifamily developers across the country know that these are unprecedented and uncertain times for nearly everyone due to COVID-19. Houstonians making up our workforce, which many consider “the essential class,” include professionals like teachers, police officers, nurses and firefighters who invest in other peoples’ betterment every day. These are the people who are working day in and day out to provide us with various fundamental needs during this time of mandated quarantine. Many of these individuals are tenants of workforce housing properties, and to the relief of developers, are most essential to the world right now. However, not all jobs can be kept, and with over 3 million people in the United States having lost their jobs in just a week’s time, necessary processes and procedures about how to work with residents who might be in a financial bind due to COVID-19 have become a requirement. In early March, developers including our firm began to work with both the National Apartment Association and the Houston Apartment Association for recommended guidelines to effectively help our tenants who need it most. Additionally, several landlords came together to better understand what other complexes are doing on the ground to best serve our residents. …

April 10, 2020

Industrial Market Reports Midwest Midwest Market Reports Ohio

Developers Flock to Columbus Industrial Market

by Kristin Harlow April 9, 2020

Columbus continues to be a powerhouse in the industrial market of the Midwest. Fueling this growth are its strategic logistics location as well as being the Ohio state capital and home to eight colleges and universities in central Ohio. Job creation in Columbus remains ahead of Ohio with employment expanding nearly 22 percent since 2010, twice the state’s rate of expansion. The region’s largest employers include The Ohio State University, OhioHealth, JP Morgan Chase and Nationwide Mutual Services. These companies employ nearly 100,000 in central Ohio. Columbus is also one of the hottest housing markets in the nation, with overall median sales prices increasing 7.6 percent over 2018 and sellers receiving, on average, 98.7 percent of the last list price at sale. Columbus has a greater access to the U.S. market within a 10-hour drive than any other major metropolitan area in the country. The area has access to 46 percent of the U.S. population within a 10-hour truck drive. This proximity continues to attract large corporations to the area, including Amazon, Facebook, Google and Walmart, who are all occupying new distribution and data centers in the region. The market’s industrial vacancy rate of 5 percent at the end of …

April 9, 2020

Alabama Market Reports Retail Southeast Southeast Market Reports

Birmingham Retail a Solid Bet Before COVID-19 Outbreak, and it Will Bounce Back

by Alex Tostado April 6, 2020

What a time to write an article on the state of the retail real estate market in Birmingham. A few short weeks ago this would have been a much easier task. The fundamentals of the Birmingham retail market are healthy and exciting despite the current health crisis and the fact that we have experienced very little population growth. I travel across the country regularly, and there is a national undercurrent about Birmingham that is exciting. Birmingham is spoken about nationally as a city with great food and quality of life, which are the types of things always said about a city prior to it hitting a tipping point. We expect that consumer behavior is going to be different coming out of the pandemic, and that the way retail and restaurant businesses operate will continue to adapt to that consumer behavior. Traditional developments Traditional shopping centers continue to be strong regional draws, with tenant mixes focusing on local and national brands. Lee Branch is one of the most successful in Birmingham. The Dick’s Sporting Goods and Golf Galaxy side-by-side concept opened in February at Lee Branch and is the first of its kind in the state. Discount retail, although not new, …

April 6, 2020

Industrial Market Reports Texas Texas Market Reports

Houston Industrial Developers Covet Infill Sites

by Taylor Williams March 31, 2020

The growth of large distribution facilities for e-commerce users and third-party logistics providers (3PLs) symbolizes the evolution of Houston’s industrial market. Consequently, developers are leaping into action to secure well-located infill sites that are squarely in the pathways of natural population growth, the rise of new industries and infrastructural upgrades. According to data from office and industrial brokerage firm Lee & Associates, there was roughly 18 million square feet of distribution space under construction throughout the Houston area at the end of 2019. This figure represents a 20 percent increase above the previous high of 15 million square feet in 2015, the approximate time at which the price of oil — the longtime foundation of Houston’s economy — began to tumble. The sheer size and number of these projects has catapulted Houston into the No. 3 spot nationally for industrial product under construction behind Dallas-Fort Worth (DFW) and California’s Inland Empire, according to the latest data from CoStar Group. CoStar notes that there is roughly 27 million square feet of industrial space across all sub-types of industrial product under construction throughout Houston. The market also took the bronze medal for new deliveries in 2019. Older, smaller industrial properties that were …

March 31, 2020

Industrial Market Reports South Carolina Southeast Southeast Market Reports

Upstate’s Infrastructure, Workforce Set Table for Future Industrial Expansion

by Alex Tostado March 30, 2020

In 2019, the Greenville-Spartanburg industrial market added an unprecedented 33 buildings encompassing 10 million square feet of inventory, bringing the total market size to approximately 211 million square feet. Despite record-breaking new deliveries, absorption has kept pace at 9.6 million square feet the same year. This market is preparing for future growth with delivery of available buildings and land sites, as well as investment in infrastructure and the overall workforce. With the increased supply of Class A speculative space, the market has seen numerous company expansions and relocations away from its Class B product type. New, modern space provides the efficiencies and amenities companies desire (i.e. above 32-foot clear heights). In order to service customers’ consumption preferences, companies are making capital investments into automated processes that allow them to stay competitive in a rapidly changing supply chain. One of the earliest signs of momentum in 2020 was the announcement of South Greenville Enterprise Park and its first user investment, Vermeer. South Greenville Enterprise Park is the first industrial park to deliver to the Greenville market in 10 years. Primary investment has been focused on the S.C. Highway 101 and S.C. Highway 290 corridors due to demand drivers such as BMW …

March 30, 2020

Market Reports Mixed-Use Texas Texas Market Reports

Placemaking, Integration Define Mixed-Use Projects in Texas

by Taylor Williams March 27, 2020

Development trends in commercial real estate are beholden to the whims of consumer behavior. When it comes to mixed-use in the 21st century, successful projects deliver a high-quality experience that centers on a sense of social belonging and connection — for living, working and playing alike. “In today’s experiential economy, demographic changes and shifts in consumer values and preferences across generations are converging on the desire for social connection,” says Brian Cramer, senior vice president and head of the Dallas office of mixed-use developer Newland Communities. “People crave experiences and connections, which is why mixed-use environments will become even more important in community development.” Bob Schultz, the developer of Mid Main, a mixed-use destination in Houston’s Midtown neighborhood, echoes Cramer’s position on man’s inherently social nature as a driver of growth in the mixed-use space. “Our experience is that these various populations are willing to live with each other as never before,” says Schultz. “Demographics of those who live in urban areas cross over in terms of age and economic differences in ways that are either comfortable or virtually unnoticed by the different populations. In other words, people who like to live, work and play in areas with density value …

March 27, 2020

Market Reports Midwest Midwest Market Reports Minnesota Multifamily

How Can Minnesota Apartment Developers Access Capital While Minimizing Risk? Structured Finance

by Kristin Harlow March 26, 2020

The Twin Cities of Minneapolis and St. Paul continue to be a very attractive marketplace for multifamily investing due to an average vacancy across the metro of 3.1 percent, as well as average 2019 rent growth of 5.8 percent, according to a recent report issued by Marquette Advisors. The Twin Cities currently has nearly 30,000 multifamily units in the development pipeline that are expected to be delivered between 2020 and 2022. With all of this development activity and an abundance of local and regional banks in the area, the Twin Cities continues to be a very well-banked market, particularly with regard to apartment construction. Local and regional banks are all very active. In addition, national banks are eager to invest in the healthy, consistent Twin Cities multifamily market. But despite capital being relatively plentiful and accessible, local, regional and national developers are exploring more efficient ways to capitalize on the abundance of development activity. They also pursue ways to stretch their own equity through a variety of financing alternatives. Developers may be tapped out with their current banking relationships, or as projects get larger and more expensive, desired loan sizes may drift higher than their banks’ lending limits. Lenders and …

March 26, 2020

Market Reports Multifamily Texas Texas Market Reports

Fort Worth Rises on Multifamily Investors’ Radars

by Taylor Williams March 24, 2020

The U.S. economy’s continued expansion, combined with the migration of people from high-tax states in the Northeast and California, bodes well for multifamily real estate investment in metros across the Southeast and Texas. Many cities in the so-called “Sun Belt” will continue to experience strong demand for apartments thanks to the low cost of living and new jobs stemming from corporate investment across the region. The Fort Worth market has been a beneficiary of all of these dynamics, and there are a plethora of compelling reasons why multifamily investors are eager to invest in the Panther City. Population Boom Fort Worth’s population has seen considerable expansion over the past decade, serving as a catalyst for Texas to become a leader in this key fundamental. U.S. Census Bureau data shows that from 2010 to 2018, Texas led the nation in population growth with over 3.5 million new residents, 1 million of which moved to the DFW area between 2010 and 2019. Just this past year alone, Texas continued to be a national leader in population growth, with Tarrant County coming in at No. 3 for total new out-of-state residents, according to the Texas Association of Realtors®. In terms of how this …

March 24, 2020

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