Market Reports

Entertainment Users in Texas Embrace Flexibility

by Taylor Williams February 7, 2020

Retail landlords want to fill space, especially given that large gluts of it have been returned to market as store closures have accelerated, a move that has coincided with entertainment users that want to expand their footprints. But the logistics of bringing entertainment concepts into retail spaces — particularly vacated junior or big box spaces — are very complicated. This holds particularly true for entertainment concepts that involve movies and bowling. Ceiling heights and column spacing, for example, prevent many spaces from being repurposed cost-effectively for entertainment uses like bowling alleys and theaters. In addition, lease terms for these deals are often based on traditional retail metrics like sales per square foot. According to Howard Samuels, president of California-based advisory and brokerage firm Samuels & Co., there is a strong disconnect between entertainment uses and conventional retail real estate that has yet to fully integrate experiential uses or “location-based entertainment (LBE).” “Entertainment retail as a backfiller of boxes is a misnomer,” says Samuels, whose firm specializes in entertainment transactions. “Those users typically don’t want fixed walls and need higher ceiling heights. Most location-based entertainment concepts are very challenging to design, develop, open and operate. These concepts have very specific criteria …

February 7, 2020

Indiana Industrial Market Reports Midwest Midwest Market Reports

Indianapolis Caps Off Record-Setting 2019 in Industrial Market

by Kristin Harlow February 6, 2020

The Indianapolis industrial market somehow heated up even more throughout 2019, setting several all-time records along the way and setting the table for another strong year in 2020. Landlords and tenants showed just how strong the market remained throughout 2019, with absorption across all industrial property types besting its previous record by nearly a third. A total of 11.4 million square feet was absorbed throughout the market in 2019. That blew away what was a record at the time — 8.9 million square feet absorbed in 2018. Tenants were active all throughout the market, with 17.3 million square feet of space leased over the course of the year. That’s up from just under 14 million square feet that had been leased in 2018. While all sectors of the market attracted plenty of attention, the southwest and northwest Indianapolis markets saw the most action, with 5.3 million square feet leased in the southwest, and another 5 million square feet leased in the northwest. The activity applied to both small and large tenants, with new projects all over the metro leasing up quickly. The city’s largest deal was a 933,000-square-foot lease to Energizer at Franklin Tech Park within a year of Sunbeam …

February 6, 2020

Market Reports New York Northeast Northeast Market Reports Retail

Savvy Retailers ‘Recalibrate’ in New York City

by Taylor Williams February 5, 2020

Manhattan has long been one of the most competitive retail markets in the country due to two characteristics of its population: an incredible density and high incomes among residents and workers. The Bureau of Labor Statistics reported that the average weekly wage of Manhattan’s private sector workforce was $3,153 in the first quarter of 2019, much higher than the national average of $1,184 per week. In addition to its residential base, tourism plays a strong role in Manhattan’s retail sales. Marketing agency NYC & Co. projects that New York City will host 67 million visitors this year, up from approximately 65 million in 2018. While these demographic factors have kept Manhattan’s brick-and-mortar retail market somewhat insulated from e-commerce and other factors affecting the industry, the borough has not been completely shielded from the woes affecting the retail industry. Pocket-sized technology offers immediate access to everything from groceries and apparel to cars and construction materials, forcing brick-and-mortar retailers to get creative with their shopping experiences in order to avoid closing stores. Manhattan remains a top-tier market that commands rents above the national average. But the net result of e-commerce and asking rents that don’t match operating costs is a shift in …

February 5, 2020

Market Reports Texas Texas Market Reports

Texas Forecast Survey: Party Keeps Rolling in 2020

by Taylor Williams February 4, 2020

Much like the broader U.S. economy, the commercial real estate markets of Texas continue to display strong fundamentals that should fuel another year of robust demand for space, elevated valuations of commercial properties and disciplined, yet confident lending for new development. So say the majority of commercial brokers, developers and owners who responded to Texas Real Estate Business’ ninth annual forecast survey. These professionals did acknowledge that uncertainty during presidential election years — particularly when the current president is facing impeachment proceedings — can undoubtedly rattle markets. Ultimately, however, industry professionals believe that the dual drivers of job and population growth, coupled with record levels of capital seeking placement in Texas markets, are strong enough to overcome geopolitical concerns such as the United States-China trade dispute and a stark partisan divide in Washington, D.C. “Job and population growth are both indicators and driving forces for resiliency, and behind the job and population growth are systemic organizational re-allocations of capital, mission-critical operations and human resources into the Texas markets,” says Aaron Johnson, director of capital markets in JLL’s Dallas office. Johnson adds that in Dallas, the arrivals of corporate giants like Toyota, Liberty Mutual and McKesson Corp. illustrate these companies’ belief …

February 4, 2020

Florida Market Reports Office Southeast Southeast Market Reports

Miami’s International Status Helps Sustain Office Development, Fundamentals

by Alex Tostado February 3, 2020

The surge of momentum happening in Miami’s office market is undeniable with the metro emerging as a new international hub for startups and regional companies alike. Fueled by a multilingual workforce and easy access to Latin America and the Caribbean, Miami’s status as an international gateway is drawing the attention of office landlords and investors from around the country, as well as a wide variety of office users. Investors like Starwood Capital, Appaloosa Management and Icahn Enterprises are leaving their traditional New York and New Jersey locations to come to Florida, one of just seven states that do not impose state income tax. Paired with favorable weather and a high quality of life, Miami is a desirable destination for businesses and its workforce. Entrepreneurial activity in the region is also helping to fuel the office market, as the number of foreign business owners who choose to relocate to Miami and set up shop continues to grow. Hot submarkets Miami’s Wynwood neighborhood has quickly earned the reputation as one of the city’s up-and-coming places to be. The district is poised to become the next 24/7 hotspot thanks to a healthy pipeline of residential development underway that will support office growth in …

February 3, 2020

California Market Reports Western Western Market Reports

The Creative Trend Continues in Orange County

by Taylor Williams February 1, 2020

Orange County continues to be a diverse marketplace for commercial real estate as we reflect back on 2019. Thanks to a growing and varied workforce made up of highly skilled and educated workers — with tech and life sciences at the forefront of transactions — the county’s economy remains strong. Looking ahead, Orange County’s local market is very resilient, despite the fact that economy leasing volume has slowed as tenants are focusing on space-efficient decisions. This market continues to remain stable thanks to a number of existing buildings that have been or are currently under renovation to meet the demand of companies that are branching out from traditional office space. A few of these repositioned properties include the Launch, the Met, 2722 Michelson Drive and the Press, which is currently under construction in Costa Mesa. Overall vacancy in the county has been 13.8 percent, while overall asking rental rates are $2.95 per square foot (full-service gross) with Class A rates sitting at $3.23 per square foot. Some submarkets are home to the majority of this activity, including the Airport area and South Orange County due to ideal geographic locations for businesses and new office development. Of course, fundamentals vary by …

February 1, 2020

California Market Reports Multifamily Western Western Market Reports

Orange County’s Multifamily Market Continues to Grow

by Taylor Williams January 31, 2020

Orange County’s multifamily housing market remained exceptionally strong throughout 2019. The average asking rent closed the quarter at $2,055 per unit, up 3.3 percent from the fourth quarter of 2018. This was the highest asking rent on record, up 34.5 percent from the prior peak reached in the third quarter of 2008. The Central submarket saw the largest year-over-year rental rate increase, with the asking rent there rising 3.8 percent to $1,920 per unit. This quarter, the Irvine submarket also saw its average asking rent adjust a bit, down 0.7 percent from the prior quarter to $2,446 per unit as existing inventory competed with new construction added to the market. However, the average rent in Irvine is up 3.2 percent from last year. Completed construction has pushed vacancy up. The total vacancy rate in Orange County this quarter registered 4.8 percent, up 30 basis points from the prior quarter, steady from the fourth quarter of 2018. Four significant projects totaling 2,567 units were completed this quarter. This includes Promenade at Irvine Spectrum with 1,781 units; SkyLoft, a 388-unit development in Irvine; the Charlie Orange County, a 228-unit complex in Santa Ana; and the Murphy, a 170-unit complex in Irvine. Annual …

January 31, 2020

Civic Market Reports Texas Texas Market Reports

Local Architect Uses Texas Civic Project to Exemplify Sustainability of Design

by Taylor Williams January 31, 2020

Tony Schmitz, vice president and senior project manager at Dallas-based Hoefer Wysocki, has been leading the architecture and design firm’s sustainability initiatives across all sectors. With an academic foundation in environmental design, Schmitz has most recently taken his green building and design expertise to Collin College, in McKinney, Texas. Sustainability features of the up-and-coming campus include improvements in the areas of water conservation, design strategies and efficient technologies. At Collin College, Schmitz has made strides in the area of resource use reduction, primarily for water. As our most precious natural resource, water usage has recently come under scrutiny in the city of Dallas, where the city council unanimously passed the 2019 Water Conservation Plan. All of Schmitz’s projects have achieved or surpassed their goal of 40 percent water reduction for the last five years. This figure has become a standard for Schmitz, with a goal to increase to 50 percent water reduction and 100 percent for non-potable water reduction. Schmitz, spoke to Texas Real Estate Business about the process of integrating sustainability into all facets of the building industry, as well as the larger role design plays in the construction of highly adaptable and efficient facilities. His edited responses are …

January 31, 2020

Market Reports Midwest Midwest Market Reports Missouri Office

Office Occupiers in Kansas City Face the Short-Term Cost Versus Long-Term Benefit Dilemma

by Kristin Harlow January 30, 2020

With Kansas City unemployment hovering at cyclical lows around 3.5 percent and the war for talent at an all-time high, companies must leverage their real estate to attract and retain top talent. At the height of the corporate office boom in the late 1990s and early 2000s, the average space per employee ranged from approximately 275 to more than 325 square feet. Today, that number has shrunk to 175 square feet per employee and some predictions see that number moving even closer to 100 square feet. These changes are driven by a recognition that companies are adopting better workplace strategies. These newer, more efficient spaces deliver a more engaging experience for employees and provide a stronger return on real estate costs for companies. There is no denying that these new spaces cost more on a per-square-foot basis. Cushman & Wakefield research reported that the weighted average asking rate for Class A space in the Kansas City market was $25.04 per square foot on a full-service basis in the third quarter of 2019. Yet the net asking rates for the buildings with this new class of product range anywhere from the high $20s to the high $30s. Occupancy costs for new …

January 30, 2020

Market Reports New Jersey Northeast Northeast Market Reports Retail

American Dream Ushers in Retail, Entertainment Growth in Northern New Jersey

by Taylor Williams January 29, 2020

Across the Hudson River, retailers and residents in Northern New Jersey benefit from lower rents and lower sales prices relative to Manhattan. In addition, mass transit lines that cross the river enable mixed-use destinations that offer dining and entertainment experiences, including the new American Dream project, to function as day-trip destinations for residents and tourists. “Northern New Jersey is still a strong tenant’s market,” says John Azarian, co-founder and CEO of New Jersey-based brokerage firm The Azarian Group. “Tenants are commanding and receiving substantial build-out and tenant improvement accommodations, with the strongest retail tenants being in the service, fitness and dining industries.” The retail vacancy rate in Northern New Jersey in the third quarter stood at 4.2 percent, unchanged from a year ago. During the same period, the asking rent rose 2.1 percent to $26.47 per square foot, according to Marcus & Millichap. The firm projects that 3.1 million square feet of new retail space will be delivered in Northern New Jersey by the end of 2019. Most of that new product will be housed at the American Dream entertainment and retail development in East Rutherford. In late October, Triple Five Group opened the first phase of its approximately $5 …

January 29, 2020

Newer Posts

Older Posts