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

Hospitality Market Reports Northeast Northeast Market Reports Rhode Island

Rhode Island — The Land of Hotels, Schools and Medical Properties

by Kristin Harlow May 22, 2019

Thus far in 2019, much of the growth and development in Rhode Island has been focused on downtown Providence. Much of this has to do with the colleges and hospitals, as well as the residential component in general. But Rhode Island continues to develop hotels, especially in downtown, due in part simply to having a vibrant, in-demand city. Officials want to create the ability for Providence to compete for and attract top-tier conventions. Hotel Development Wave With 1,000-plus hotel rooms coming on line over the next 18 to 24 months, along with another 1,000 residential units of new and redeveloped housing, the long sought-after downtown Providence residential market seems to be here. Examples of this hotel development include the following: • Procaccianti Group’s 176 room Marriott Residence Inn at the Convention Center, coming in the second half of 2019; • First Bristol & Paolino Properties’ 120-room Homewood Suites Extended Stay, which opened in April; • Hotel Beatrice, 28-32 Kennedy Plaza, 48 rooms, under construction; • Best Western Glo Hotel, 322 Washington Street, 76 rooms, commission/board review approved; • Aloft hotel, Innovation Complex, 170 rooms, commission/board review approved; • Holiday Inn, 371 Pine Street, 91 rooms, commission/board review approved; • Hotel …

May 22, 2019

Market Reports Retail Texas Texas Market Reports

McAllen’s Retail Rents Hold Flat as Occupancy Reaches Record Mark

by Taylor Williams May 21, 2019

Despite the fact that demand for retail space in McAllen is at an all-time high, average asking rents are not rising at rates that preclude new users from entering and expanding within the market. According to the McAllen Chamber of Commerce, the retail occupancy rate currently stands at just under 95 percent. The user base is balanced between big box home furnishing and service tenants, neighborhood retailers providing essential services, entertainment concepts and both national and regional food and beverage users. As one might imagine in a market with 95 percent occupancy, there is considerable new development underway. And while rents, which currently max out at about $24 per square foot for new Class A product, have displayed a steady ascent, they also stand at levels that allow for both users and landlords to comfortably turn profits. Most retail real estate professionals in McAllen live in fear of being overbuilt. And indeed, there is new product of all varieties — freestanding, strip centers, power centers — coming out of the ground. A prominent example of new retail development lies in Shops at 29, a power center anchored by Dave & Buster’s and leased to other large-format users like Burlington and …

May 21, 2019

Industrial Market Reports Southeast Southeast Market Reports Tennessee

Strong 2018 Re-Establishes Memphis’ Status as ‘America’s Distribution Center’

by Alex Tostado May 20, 2019

Memphis continued its record-setting ways throughout 2018. Absorption was higher than 2017 by over 735,000 square feet for a total of 6.7 million square feet. Overall vacancy rates fell below 6 percent for the first time in recent history. As of Jan. 1, 2019, vacancy rates were at 5.8 percent. One would think this would come at the expense of rental rates, however, rental rates stayed constant at $2.77 per square foot until year-end. This represents a slight increase of 10 cents per square foot over 2017. With an industrial market exceeding 270 million square feet, it’s no wonder how Memphis got its name as “America’s Distribution Center.” Memphis International Airport is the second largest cargo airport in the world, home to 400 trucking companies, the third busiest trucking corridor (Interstate 40 to Little Rock), one of only four cities to be served by five long-haul Class 1 rail systems, the fourth largest inland port and the second largest stillwater port. Home to the FedEx World Hub, as well as UPS and USPS hubs all operating 24 hours a day, 365 days a week, Memphis provides the most cost-effective distribution and logistics operations in the country. While Memphis has been …

May 20, 2019

Market Reports Multifamily Texas Texas Market Reports

Strong Leasing, Low Deliveries to Define McAllen Multifamily Market in 2019

by Taylor Williams May 17, 2019

Relative to past cycles, the multifamily market of the McAllen-Edinburg-Mission metro area has seen a record number of new deliveries of Class A product over the last four years. The metro’s population has grown significantly during the current economic expansion. According to the U.S. Census Bureau, the population of the city of McAllen alone has increased by 9.5 percent over the past decade. Combined with a relatively low cost of living throughout the region, the market’s natural growth has prompted greater demand for multifamily product while also allowing more residents to gravitate to higher-quality housing. With demand rising over the last few years and developers adding record volumes of new supply in order to meet it, 2019 purports to be a year in which developers focus more on leasing up existing projects rather than greenlighting or breaking ground on new ones. To better understand the depth of supply additions to this market between over the last four years, consider fluctuations in the vacancy rate. Vacancy Movement In 2014, just before the building boom began, the market had a vacancy rate of 5.5 percent. At the peak of the construction cycle, which occurred in mid-2017, vacancy stood close to 14.5 percent. …

May 17, 2019

Terminal-Logistics-Center-Queens-New-York

Industrial Market Reports Northeast Northeast Market Reports

More Industrial Product Lands Near Airports

by Taylor Williams May 17, 2019

The U.S. industrial market has now recorded more than 240 million square feet of net absorption for four consecutive years, the strongest run on record, with an all-time high of 284.9 million square feet in 2018, according to Cushman & Wakefield. In New York City, the largest consumer market in the United States, the current industrial supply of approximately 170 million square feet remains heavily constrained, especially around the region’s transportation hubs. Nowhere is the demand for industrial product more apparent than in the area surrounding John F. Kennedy Airport in Queens, which handles more than 1.3 million tons of air freight every year, according to the Port Authority of New York and New Jersey. JFK is the second busiest air cargo airport on the East Coast behind Miami International Airport and just ahead of Newark International Airport. “There’s really not a lot of land near JFK,” says David Hercman, director of asset management at Long Island-based Milvado Property Group. “So, whatever supply is there is there.” Time-sensitive industrial users like freight forwarders, which organize shipments from manufacturers or producers overseas, need to be close to the airport in order to get products to the end user as quickly as …

May 17, 2019

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