Market Reports

Cold Storage Demand Grows as Consumers Expect More From Their Grocers

by Kristin Harlow June 5, 2019

We all know that e-commerce has become a significant driver of the industrial market. It now fuels activity that moves beyond clothes and books to the food supply chain, and the associated complexities of meeting consumer demand for food preparation and delivery. Increasing numbers of consumers have shifted to buying prepackaged meals, shopping for organic foods or ordering groceries and meal kits online. This expansion is translating into significant demand for industrial warehouse and distribution space to accommodate the food industry. One sector of this robust market is facing challenges, however, as demand for cold storage warehouses has skyrocketed in recent years. These facilities are used to store fresh and organic produce and to create and distribute processed foods. Food businesses are typically looking for spaces near large population centers as they seek to tap into demand for last-mile delivery. The cold storage shortage is playing out in many markets across the country, but is particularly problematic in New Jersey due to a low vacancy rate and the construction challenges in this sector. Driving Location Decisions Food businesses are looking for spaces near their customer bases to reduce travel times, so they often choose infill locations. The scarcity of land …

June 5, 2019

Healthcare Market Reports Retail Texas Texas Market Reports

Healthcare Providers in Retail Settings Is A Win-Win-Win

by Taylor Williams June 4, 2019

With a solid healthcare provider as a tenant, everyone wins: Landlords realize draws in traffic to the property, while providers expand their services and reach more patients and consumers enjoy added convenience and generally lower medical costs. The practice of housing healthcare providers in retail locations has become commonplace across the United States. Changing dynamics in healthcare reform, technological advances, demographic shifts and consumer preferences drove this shift. JLL’s recent research report on retail and the new healthcare consumer provides some interesting insights into this growing trend. Provider, Patient Benefits Retail-based healthcare has emerged as an effective means of delivering quality, convenient treatment to millions of consumers, and is becoming a model for healthcare systems to consider when providing services to new and existing patient populations. For healthcare providers, retail locations offer better proximity to patients’ residences and facilities designed to accommodate a higher volume of patients per day. Providers have learned that a visit to the hospital or a medical office can create stress for patients before they even enter the building, so many retail healthcare facilities are designed with a “customer experience” mindset, improving the patient experience with familiarity and convenience. Healthcare consumers have been clear in conveying …

June 4, 2019

Industrial Market Reports North Carolina Southeast Southeast Market Reports

Charlotte’s Industrial Fundamentals Stay Strong in Face of New Supply Added

by Alex Tostado June 3, 2019

Charlotte’s industrial market continues to see strong momentum in early 2019, and with healthy rates of absorption and rental growth despite record levels of new development, it remains the preferred asset class in the Queen City among institutional investors. Industrial absorption totaled 5.2 million square feet in 2018, according to JLL research, making it the fourth consecutive year that the market has absorbed at least 4 million square feet. The demand for new space is driven in part by the growth of the Carolinas: North and South Carolina both ranked in the top 10 nationally for population growth over the past year, according to the U.S. Census Bureau, and Charlotte is well-situated geographically for distribution facilities that can cover both states. E-commerce, of course, has been another major driver of demand and development. During the fourth quarter, Amazon received construction permits for its fourth and largest distribution center in the Charlotte region, a 2.4-million-square-foot facility that will be located on 100 acres north of Charlotte Douglas International Airport. A separate 1.2 million-square-foot distribution facility for Amazon in nearby Kannapolis is expected to open this year. Industrial development continues to migrate to Charlotte’s surrounding counties, where land is more readily available …

June 3, 2019

Market Reports Retail Texas Texas Market Reports

The Shift to Local Identification in Retail Real Estate

by Taylor Williams May 31, 2019

In cities around the country, growing numbers of developers are prioritizing the inclusion of local and independent boutique retail tenants in centers with more recognizable national chains. At a time when the retail industry is undergoing some profound changes, it should not be surprising that we have seen a correspondingly significant shift in conventional wisdom about how to build a tenant roster. That shift is especially evident in adaptive reuse projects, and in retail and mixed-use developments located in more urban areas. Consequently, we have some great real estate in the country being occupied by largely unproven brands and businesses. These local or up-and-coming retailers may not have extensive backgrounds or long and proven sales histories, but they do have the exclusive, authentic feel that developers — and communities — are looking for. Projects like Heights Mercantile, a low-rise urban market district in Houston’s Heights neighborhood, are thriving through tenant rosters populated largely with chic and exclusive independent brands. Even the small handful of national names at Heights Mercantile — Lululemon Athletica, Warby Parker, Marine Layer Inc. — are either exclusive to the region or have the kind of “cool” factor consumers are drawn to. There are a number of …

May 31, 2019

Kansas Market Reports Midwest Midwest Market Reports Mixed-Use

Increased Development Brings New Life to Wichita’s Core

by Kristin Harlow May 30, 2019

Like many U.S. cities, Wichita’s downtown has experienced an unprecedented revitalization in recent years, with new development and the reimagining of older structures. Growth in the core is not slowing anytime soon if current projects under construction or on the drawing board are any indication. A number of projects, revolving around a new baseball stadium, are poised to inject new life into the historic Delano District. Plans for a new performing arts center are under discussion, and major mixed-use developments and public improvement projects along East Douglas Avenue are positioned to enhance the link between Delano and the city’s Old Town district. According to the organization Downtown Wichita, more than $1 billion has been invested in the urban core in the last 10 years, $631 million of which was private investment. The city center has retained a number of high-profile businesses after a decade of notable companies relocating to northeast suburban office locations. Project pipeline Following the recent addition of more than 800 apartment units in and around the central business district, commercial activity is on the upswing. The Spaghetti Works District, expected to be completed this fall, is a $23 million mixed-use development led by TGC Development Group and …

May 30, 2019

Market Reports Multifamily New York Northeast Northeast Market Reports

New York City Multifamily Market to Experience Reduced Supply in 2020

by Kristin Harlow May 29, 2019

As the second-largest city economy in the world, New York City continually retains its reputation as one of the most desirable locations for long-term real estate capital appreciation, both nationally and globally. In turn, increasing rent growth and decreasing vacancies have characterized the New York City multifamily market as the influx of supply in 2018 quickly gets absorbed. In the next 24 months, the city will see a dramatic reduction in the new supply of rentals, with current projections for 2019 to 2020 estimating 12,000 units to come on line. This figure represents a substantial decrease from the 20,680 units that were delivered in 2018. Of those 20,680 units, Queens and Brooklyn accounted for more than 50 percent of the new supply. Despite these deliveries, effective rent grew in 2018 by 2.9 percent in Manhattan, 2.2 percent in Brooklyn and 3 percent in Queens. Total multifamily sales volume in Manhattan for 2018 was $6.8 billion, an 83 percent increase from 2017’s total transaction volume of $3.7 billion. With 181 total transactions, properties that traded for more than $50 million made up 65 percent of the volume in 2018 across 22 trades. Similarly, sales in Brooklyn hit a record volume of …

May 29, 2019

Market Reports Retail Texas Texas Market Reports

Strong Metro Economies Drive Retail Market Growth in Texas

by Taylor Williams May 28, 2019

If you want to understand the state of Texas’ retail market as of the first quarter of 2019, just look at the numbers. In terms of jobs, Texas is on track to add 191,000 net new jobs this year, according to the Federal Reserve Bank of Dallas. Much of that growth will be in our major metro markets of Austin, Dallas-Fort Worth (DFW), Houston and San Antonio. In Austin, for example, unemployment stood at an extremely low 2.7 percent as of March 2019. DFW’s rate is a healthy 3.3 percent; Houston’s is 3.7 percent and San Antonio’s is 3.1 percent. All of these rates are considered strong. Population growth is a big driver of retail demand and in terms of this metric, all of our major Texas metros are national leaders. The country has only 11 cities with 1 million people or more within city limits. Three of those — Dallas, Houston and San Antonio — are in Texas. And by 2020, Austin is on track to be the fourth. This healthy job and population growth are big drivers for our retail markets. Plus, near-record-low development at a time of steady demand is driving expanding concepts to lease in existing …

May 28, 2019

Industrial Market Reports South Carolina Southeast Southeast Market Reports

Upstate South Carolina’s Industrial Evolution Sets Up Market as National Power

by Alex Tostado May 27, 2019

Thirty years ago, there were 33 operating textile mills in Spartanburg County, South Carolina. Today, there are scarcely a handful. The jobs and investments disappeared in the wake of regulatory change and international trade agreements. However, the infrastructure, location, existing workforce and entrepreneurial attitude of the area’s leadership saw this as a challenge to evolve. And evolve it did — using the substrate of the textile industry as a solid foundation. The well-trained and manufacturing-oriented workforce, coupled with the existing manufacturing support base (specialty machinery fabrication including maintenance and constituent chemical suppliers), were readily adaptable to new and recast job opportunities. This was the canvas on which the area’s evolution would be painted. Specialty equipment, manufacturing, fabrication, chemical production and other vestiges of the textile industry have remained demand drivers for the Upstate market. They have been reconfigured in the form of investment and expansion by Milliken & Co., Toray Carbon Fiber, General Electric and Keurig Green Mountain. The existing manufacturing-oriented workforce, with its previous experience and mindset, were a prime reason BMW selected Spartanburg County as the home for its first North America production facility. BMW’s Plant Spartanburg and its vast supplier and related support network have emerged as …

May 27, 2019

Market Reports Office Texas Texas Market Reports

Minimal New Development Keeps McAllen Office Market in Check

by Taylor Williams May 24, 2019

Development of new office space in the McAllen-Edinburg-Mission metro area rarely happens on a large scale. This ensures that the market remains steady, if unspectacular, assuming the fundamentals during both expansions and contractions do not change. According to CoStar Group, the metro’s office vacancy rate currently stands at 6 percent, while the average asking rent sits at $20.44 per square foot. Modest vacancy compression and rent growth are forecast for the coming years, with the vacancy and average asking rents expected to hit 4.2 percent and $21.30 per square foot, respectively, by 2023. Throughout the Rio Grande Valley (RGV) region as a whole, office market growth is largely confined to McAllen and Edinburg. There is one signature project — Rio Bank’s new corporate headquarters in McAllen — that will serve as a barometer of how well the market can large additions of quality space. According to local newspaper The Valley Morning Star, the 125,469-square-foot project carries a price tag of $20 million. Construction began in January 2018 and is slated to open either late this year or early in 2020, with the namesake tenant expected to occupy about a third of the space. Per local sources, the property, which is …

May 24, 2019

Kansas Market Reports Midwest Midwest Market Reports Mixed-Use

Momentum Grows in Topeka Via Holistic Economic Development Plan

by Kristin Harlow May 23, 2019

A renaissance is underway in Topeka, Kansas, with undeniable momentum as new commercial, industrial and residential developments emerge citywide. The year 2015 was pivotal with a $9.4 million public-private investment in infrastructure and amenities along Kansas Avenue downtown. Local investors have purchased more than 25 buildings on the avenue for gradual restoration into thriving businesses like Iron Rail Brewing, The Pennant, Cyrus Hotel and Kansas Avenue Lofts. The 45,000-square-foot Evergy Plaza is slated to open in March 2020 in the shadow of the Kansas Statehouse. A crowning jewel of downtown development, the plaza will feature a 50-foot performance stage, digital screen, programmable fountains, fireplaces and an ice skating rink during the winter. According to a recent market study, growth in the Capital City shows no signs of slowing down. St. Louis-based Development Strategies says downtown could support expansion over the next decade to include 900 new or rehabilitated housing units, 300,000 square feet of new or rehabilitated office space, 690,000 square feet of retail space and at least 200 more hotel rooms. “Investments downtown enhance quality of life and quality of place to help attract and retain a workforce that will take us into the next 15 to 20 years,” …

May 23, 2019

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