Portland’s retail market is supported by steady employment gains that are luring new residents. Employers have created almost 23,800 jobs over the past 12 months, while the metro added nearly 27,400 people. This is a population growth rate that is nearly double that of the U.S. Household income also advanced at a faster clip than most of the country. Portland’s median household income jumped 5.3 percent over the past year. This is well above the national level of 3.6 percent, providing residents with more discretionary spending power. Retail sales have surged 5.8 percent year over year as a result, which is significantly higher than the U.S. rate of change. These growth trends are expected to continue through 2019, boosting the retail sector. The need for retail space may be escalating, but construction remains measured. This has funneled expanding retailers into the dwindling supply of existing space as vacancy tightens. Developers added 319,000 square feet year over year in March, slightly lower than the 327,200 square feet 12 months earlier. Deliveries will remain sparse as builders have less than 300,000 square feet under construction. Much of the new supply is ground-level space in mixed-use office or apartment projects in walkable, urban …
Houston’s multifamily market has endured battles from all fronts in recent years: the oil slump, hurricanes, flooding, overbuilding in select submarkets, sluggish rent growth of late and lavish concessions to new renters that have been mainstays during this period. But the market now appears to be moving in the right direction with a sense of normalcy. From late 2014, when the oil downturn began, through the price bottoming in early 2016, Houston’s energy economy consistently made headlines across the nation’s publications. Each article claimed that at lower oil prices, the city’s over-reliance on energy would shut off job creation and growth. Yet this period also provided an opportunity to illuminate the incredible diversity within the greater Houston economy. Up until the oil downturn, the city’s diversity had been theoretical and unproven; now, along with the city’s resilience, it is indelible. Expanded activity at Port Houston, particularly in terms of manufacturing, in addition to plastics and petrochemicals, has propelled Houston’s job growth. The same applies to the market’s emerging role as a logistics hub and the expansion of the Texas Medical Center and regional healthcare providers, as well as strong growth in financial services and construction sectors. All told, the metro …
The population in the Greater Portland metro grew by more than 80,000 between 2016 and 2019, while the total number of all housing units permitted was 31,538, according to the Census Bureau. This ongoing housing shortage both inside and outside Portland city limits is expected to keep property values and rents growing as demand continues to outpace supply for the foreseeable future. Since 2015, there has been an increase in the vacancy rate as thousands of new apartments have been added and absorbed. Rent and other concessions that grew during 2018 have decreased in close-in Portland, East Vancouver and Oregon City. They have increased, however, in neighborhoods where new units were delivered. After experiencing flat rents two years ago, rent increases averaged 3.7 percent between April 2018 and 2019, according to the Multifamily NW Apartment Report. Portland saw an overall transaction volume increase with a total of 38 institutional transactions in 2018. Properties valued at less than $10 million experienced only a slight increase in transactions between 2017 and 2018. Oregon also became the first to adopt statewide rent control on Feb. 28, 2019. Rent increases are capped at 7 percent plus inflation annually. No-cause evictions are limited. The Portland …
Over the past decade, Cincinnati has successfully positioned itself as a formidable Midwestern city, hungry for growth and innovation. Whether you’re a startup or a Fortune 500 company, the city (and its surrounding suburbs) can provide an attractive backdrop. The Cincinnati office market largely reflects this momentum. Demand in some areas has slowed, but the office market remains steady. In fact, the office market has experienced a flurry of activity in 2019 and is awash in new lease transactions and announcements of proposed new development. The first quarter of 2019 recorded a 1 percent drop in the entire market vacancy to 14.2 percent, according to Colliers International. The central business district (CBD)’s 12.2 percent vacancy is expected to drop another percentage point, as several pending leases are soon to be announced. I-71 North dominates The most active area is the I-71 North submarket, where five lease transactions came to fruition. Eversana leased 78,000 square feet at 8990 Duke Blvd., filling the former Express Scripts building just months after it went vacant. Worldpay took down 50,000 square feet at 8845 Governor’s Hill Drive across the street from its headquarters. Smith/Halleman Partners, the owner of the multi-building Governors Pointe, attracted Resurgent Capital …
The investment markets for office, industrial and flex properties in Westchester and Fairfield counties have seen significant activity over the last 12 months. Both debt and equity capital have been flowing into the urban and suburban areas of the counties, demonstrating that these submarkets are viable alternatives to New York City. This year has witnessed one of the largest transactions to ever take place in Westchester and Fairfield counties since we have been recording statistics. This past spring, HFF sold a portfolio of 52 industrial flex assets in multiple parks in both Westchester and Fairfield counties for $488 million, or $167 per square foot. The demand was very strong for these industrial assets, and the buyer pool spanned from private groups to some of the largest money managers in the world. In addition, cap rates are in the 4.25 to 4.85 percent range for more traditional industrial product. Cap pricing is absolutely on track to surpass $200 per square foot, as there is a lack of available land for development and institutional funds’ continue to display an insatiable appetite for the product type. Consequently, these kinds of deals continue to dominate the conversations and market activity. Office Market Interest …
With higher costs of land and construction, increased demand for walkable environments and more acceptance of structured parking, mixed-use is finally becoming the norm rather than the exception as the backdrop for new retail development in metro Houston. Developers of all types recognize that quality retail enhances the value of all surrounding real estate. Apartment and office developers are utilizing retail areas as additional amenities to differentiate themselves from their competition. Selecting the appropriate retailers for highly visible spaces in these developments is extremely important, as those users become strongly representative of the overall project. Project Examples Regent Square, a 24-acre development from GID, spans four blocks, with Allen Parkway, West Dallas and Dunlavy defining the perimeter of the project. GID is currently building apartments on one of these blocks to include 50,000 square feet of retail on the first floor and three large freestanding restaurant pads. JLL has been hired to handle leasing of the project. MetroNational has gained control of the 200,000-square-foot former Sears building at Memorial City Mall and 13,620-square-foot adjoining garage. Trademark has been hired to assist in the redevelopment of the property. Zadok Jewelers announced a new mixed-use development on 1.6 acres at 1801 Post …
8West. Star Metals. Coda. These are the some of the names of Atlanta’s biggest office developments and the city’s largest undertakings. Measuring more than 1 million square feet of Class A office space between them, Midtown Atlanta’s skyscraper scene is about to be drastically altered. The gravity of these major mixed-use properties, along with the allure of top talent at nearby universities like Georgia Tech, gives the Midtown submarket an increase in both developer activity and price-per-square-foot rates. The Midtown/Perishing Point Class A office space average is $35 per square foot, higher than the Atlanta-area average of $29.79 per square foot. However, buildings like Star Metals and Coda are not designed with just any tenant in mind. Speculative developments in the Atlanta market have come to a standing halt as most offices in the region are now built to fit a specific company’s needs, rather than spaces built with the hope the right tenant will come along. Most larger new developments are either a build-to-suit for a specific tenant or are anchored by a tenant that is taking up the majority of the space. Additionally, with lower required returns from REITs and the private sector, finding capital is not nearly …
The Los Angeles office market ended the first quarter with the average asking rent steady over the prior quarter. However, at $3.20 per square foot, the average asking rent remains the highest level on record, up 4.2 percent over the first quarter of 2018 and 15 percent above the prior peak reached in 2008. While the vacancy rate this quarter increased 30 basis points over the prior quarter, it is down 10 basis points from Q1 2018 at 10.6 percent. This is about where it was pre-recession in 2004. This rise in vacancy was the result of several large move-outs, including about 200,000 square feet in the South Bay and 50,000 square feet in the Central office markets. Leasing volume fell to 5.8 million square feet, down 19.6 percent from the prior quarter and 7.9 percent from Q1 2018. The rate of job growth is having some impact on the office market. Los Angeles County remains near full employment with the unemployment rate at 4.6 percent, one of the lowest rates on record. The Los Angeles County Economic Development Corporation (LAEDC) notes the county added 59,000 jobs in 2018. The latest LAEDC jobs forecast points to a strong and steady …
Main Street isn’t dead. It’s being refreshed, rebranded and reimagined. Creating a compelling experience in today’s retail environment is a critical element to being successful. Property owners are working hard to make their retail sites attractive and relevant. This includes placing emphasis on curb appeal and redeveloping spaces that may previously have been occupied by big box tenants. Many landlords are turning larger vacancies into multiple spaces to accommodate junior anchors and smaller tenants at as retailers are rightsizing and working to maximize efficiencies. At the same time, landlords are replacing building façades and updating landscaping, parking areas and lighting to enhance visual appeal. Main Street in Westport, Connecticut, represents a prime example of this retail renaissance. This area is in the midst of a complete reboot. Over the past year or so, the talk of the town was that the storefronts along Westport’s commercial corridor are not as lively as they had been in the past. But appearances can be deceiving, and perception isn’t always reality. The truth is that Westport’s retail scene is very much alive and is being revived with new and fresher brands. New Players We’re seeing brands like Sundance, an apparel catalog company created by …
One fact is very clear as we assess the retail landscape and take note of the variety of retail activities taking place: food and beverage (F&B) and dining out continue to reshape consumer trends. These trends are heavily influencing retail activities throughout the region, especially in the Downtown Los Angeles submarket. The market continues to show great activity in F&B as landlords look to absorb vacancies with more food uses by creating unique dining experiences and take-out options for today’s consumer. This new demand has been the catalyst for the increase in commissary kitchens and restaurateurs leasing spaces for delivery models that cater to the growing, app-based delivery services. CBRE’s latest report, the Food in Demand Series, highlights the momentum of F&B. This extends to fast-casual dining, prepared dining options offered in grocery stores, and as stand-alone offerings in mixed-use settings, such as residential, creative office and hospitality projects. Per the report, consumer spending in restaurants amongst Millennials, Generation X and Baby Boomers has outpaced spending on grocery items. This is a significant shift for consumers. For this reason, we will likely see landlords maintain a focus on F&B as a means to bring value to their assets and create …