Market Reports

Downtown Nashville Retail Booms Across Three Major Mixed-Use Developments

by Alex Tostado April 15, 2019

With a staggering number of tower cranes at work every day, Nashville has delivered a record number of multifamily units, office space and hotel rooms in the past several years. Even with all this development and with tourists flocking to downtown seemingly every week of the year, one category has lagged: new retail downtown. To provide a snapshot of growth in downtown Nashville, the number of residential units downtown has grown from 3,700 in 2010 to 11,800 today. Hotel room rates since 2008 have virtually doubled, and we currently have 1.6 million square feet of office space under construction. But even with all this explosive growth, retail development downtown has lagged. Many would wonder why, and there are a number of reasons. Historically, many developers have seen downtown Nashville as an afterthought to include ground-level retail in their projects. Because of this, small amounts of retail were metered onto the market. This retail space was geographically spread out over a number of developments across downtown. This did not lead to a rich consumer experience, because consumers strongly prefer finding retail options in a concentrated environment. Another challenge to building great retail has been the limited scale of individual projects. But …

April 15, 2019

Market Reports Multifamily Texas Texas Market Reports

Austin Multifamily Market’s New Focus: Workforce Housing

by Taylor Williams April 12, 2019

As demand for housing increases with Austin’s growing population, all eyes are on the multifamily housing market. But with rents rising as well, pressure on the already-sparse affordable housing stock is more intense than ever. Traditionally, affordable housing has served as a resource for low-income residents, those who earn at or below 60 percent of the area median income (AMI). Providing affordable housing has become a major priority for Austin’s city council and developers during this cycle. But a growing concern involves the segment of the population caught in the middle: those who may not qualify to live in traditional affordable housing properties, but for whom market-rate apartment prices are getting uncomfortably high. The solution? Workforce housing. Rapid Residential Growth Average rent is increasing faster in Austin than in any other major metropolitan city in Texas. This activity is pushing workers out of housing they could afford in areas that are convenient for them and forcing many into long commutes from unfamiliar neighborhoods. According to industry data, in 2018, rents in Austin rose by 4.4 percent, in contrast to 3.8 percent in Fort Worth, 3.5 percent in San Antonio and 2.7 percent in Dallas. And the squeeze on lower-income residents …

April 12, 2019

Industrial Market Reports Midwest Midwest Market Reports Ohio

Population Growth, Strategic Location Fuel Columbus Industrial Activity

by Kristin Harlow April 11, 2019

Fueled by continued population growth that has made Columbus the 14th-largest city in America and its strategic location in the U.S. Interstate system, the Columbus industrial market has been on a multi-year run in terms of new inventory and positive net absorption. Given the fact that drivers are able to reach approximately 50 percent of American households and 30 percent of Canadians within a one-day drive of the city, we see no end in sight for these market trends. That one-day drive statistic has made Columbus one of the country’s leading e-commerce distribution markets. Also, according to a recent ranking by Realtor.com, the metropolitan area is the only large northern city to grow its population by more than 10 percent from 2010 to 2017. The company also reported that Columbus was the fourth-hottest housing market based on the number of hits each listing receives and time on the market. Further, the central Ohio region’s business-friendly environment encourages developers to build in designated areas, and it is working. At the close of the fourth quarter last year, 5.7 million square feet of new industrial product was under construction. The overall vacancy rate for the Columbus industrial market was 4.8 percent, which …

April 11, 2019

Market Reports Multifamily New Jersey Northeast Northeast Market Reports

Multifamily Demand Stays Strong in Northern New Jersey

by David Cohen April 10, 2019

Rising costs of  homeownership and the lack of SALT deductions on federal income tax returns will help maintain the strong demand for apartments in Northern New Jersey. We are seeing an increase in construction activity as municipalities settle their affordable housing lawsuits with developers and long-awaited projects, especially those located along major public transportation hubs, are completed. In Jersey City and Hoboken, these new projects are placing upward pressure on Class A vacancy as they take time to lease. We see an increase in more concessions being offered, which will dampen the appreciation of monthly rates. This could impact the upgraded Class B buildings, which find themselves battling for renters with recent finished projects and more affordable options that can be found inland. In areas west of the Gold Coast, we see continued higher occupancy rates with many landlords reporting well under 30 day turnover rates, unless major renovations are needed. Outside of Hudson County, the overall vacancy factor trends between 2 and 3 percent allowing for increased revenue, according to research from Marcus & Millichap. Landlords in strict rent control markets are faced with the decision of either renovating to increase rents via capital improvement programs or take advantage …

April 10, 2019

Industrial Market Reports New Jersey Northeast Northeast Market Reports

Port-Driven Industrial Demand Remains Strong in New Jersey

by David Cohen April 10, 2019

The strength of the New Jersey industrial market continues to evidence itself through consistent demand, rising rental rates and record low vacancy rates across the region. Much of the recent success has been the result of e-commerce growth and expansion among distribution and light manufacturing businesses looking to tap into the market’s port, air cargo, and major transportation networks. While developers have been working to bring new inventory to the market, the new space is being absorbed quickly, leaving tenants with limited options for space. The New Jersey industrial market has seen significant demand for the past 20 quarters and a steady, often rapid, rate of absorption. The market saw 13.6 million square feet of absorption in 2018, according to research from Avison Young. The epitome of this market expansion trend and the most obvious to investors is the activity along the New Jersey Turnpike, from Exit 8A where the market was at a staggering 1 percent vacancy rate at the end of 2018 up to the Exit 10 Edison Market, where rents may soon reach $9 per square foot net. Notable Deals A little farther north into the Carteret /Avenel and Linden/Elizabeth markets much of the activity is focused …

April 10, 2019

Industrial Market Reports Texas Texas Market Reports

No Slowdown in Demand for Industrial Space

by Taylor Williams April 9, 2019

The combined forces of population growth, increased online shopping and demand for last-mile fulfillment centers are driving development of and investment in industrial assets in major markets. Natural population growth translates to more aggregate demand and consumption of goods and services. The rise of e-commerce has guaranteed that a growing percentage of those products will be ordered online and delivered to end users within a few days, hence the need for more fulfillment and distribution facilities near major population centers. The metropolitan statistical areas (MSAs) of Dallas-Fort Worth (DFW) and Houston are home to a combined 13 million or so people and counting. Both MSAs have seen major upticks in industrial development over the last several years while also posting record absorption numbers. And despite some vast differences between the industries and users driving demand in DFW and Houston, both markets reflect how sweeping changes in consumer behavior have elevated the fundamentals of their industrial real estate inventories. Regardless how different their economies are, demand for space in both markets should remain robust in 2019. By The Numbers According to CoStar Group, DFW posted positive net absorption of approximately 20 million square feet in 2018, a year in which inventory …

April 9, 2019

Market Reports Office Southeast Southeast Market Reports Tennessee

Corporate Relocations, Coworking Concepts Reshape Nashville’s Office Market

by Alex Tostado April 8, 2019

The Nashville office market continues to have positive momentum coming into 2019, following three years of record-setting leasing that brought several big name corporate tenants to the market — plus a recent surprise announcement that Amazon will soon be adding 5,000 employees to Nashville’s central business district (CBD) within the Nashville Yards development. The bulk of the activity is concentrated in CBD Class A office space, as tenants focus on real estate decisions that emphasize recruiting and employee retention. This trend mirrors activity occurring in many major markets across the country. Companies continue to seek the coveted urban work-live-play environments designed to attract the millennial population. Avison Young research shows that the CBD recorded 255,330 square feet of positive net absorption at year-end 2018. Among the large companies that signed notable leases in the urban core in 2018 are Philips, AllianceBernstein and Asurion, which is adding 400 tech employees and consolidating several locations into a new 550,000-square-foot headquarters at 11th Avenue North and Church Street in the Gulch. Construction is scheduled to begin this year on that headquarters, with completion slated by the end of 2021. Nashville’s strong business climate and robust office leasing activity have caught the attention of …

April 8, 2019

Market Reports Restaurant Retail Texas Texas Market Reports

Originality, Variety Define Success in Austin’s Restaurant Scene

by Taylor Williams April 5, 2019

Austin’s retail and restaurant market is rapidly becoming one of the hippest and most dynamic scenes in the country, as new concepts are flocking to the state capital in lockstep with its remarkable job and population growth. The push by both new and established retailers and restaurants to grab a piece of the Austin pie has driven the city’s retail occupancy rate to roughly 93 percent. Annual rent growth has exceeded 10 percent at Class A properties in submarkets such as the Central Business District (CBD) and East Austin. But while demand for retail and restaurant space in Austin’s urban core is at an all-time high, so too are rates of turnover among these users. A Gentrified Market The driving factors behind these trends are fairly straightforward. Buoyed by the still-surging job growth in the tech industry, the median age of Austin’s population is getting lower, currently sitting at about 34 years. Many of these residents have high-paying jobs, are new to the city and are eager to take advantage of its thriving food, beverage and entertainment options. The gentrification of some of Austin’s historic neighborhoods is well underway and expected to continue in the near future as tech giants …

April 5, 2019

Affordable Housing Market Reports Midwest Midwest Market Reports Multifamily Ohio

The Columbus Way: Collaboration Is Key to Delivering Affordable Housing

by Kristin Harlow April 4, 2019

Columbus, Ohio’s exploding population growth and strong economy are reflected in a red-hot housing market. Each weekend, open house signs dominate intersection corners. It is hard to miss big splashy billboards announcing new market-rate apartment complexes along our major I-70 and I-71 corridors. Last spring, Realtor.com named Columbus as the fourth-hottest housing market in the country. The bad news is our housing supply is not keeping up with demand. In fact, the Building Industry Association of Central Ohio notes that by 2050, when we’ll have a predicted 500,000 new jobs and 1 million new residents, a general housing shortfall of 43 percent will occur if we continue on our current building rate of 8,000 new units per year. We need 14,000 units for all incomes per year to keep up. Affordable housing gap An affordable housing crisis runs even deeper. Columbus’ booming housing market widens the gap for residents seeking affordable, safe and decent homes. Low- and moderate-income working families desperately need greater access to affordable housing near our city’s job centers. Service jobs abound in and around the city core, but most of our urban neighborhoods are quickly gentrifying, and rents have spiked due to their appeal to higher …

April 4, 2019

Market Reports Massachusetts Northeast Northeast Market Reports Retail

Entertainment, Grocery Sectors Expand in Greater Boston Retail Market

by David Cohen April 3, 2019

The greater Boston retail market experienced a substantial rise in the vacancy rate to 9.5 percent through June 2018, reflecting an 11.3 percent increase in unoccupied space, compared to a level of 8.6 percent in 2017. At the same time, total inventory ended the year at 196 million square feet, a gain of 1 percent, nearly the same square footage as the increase in vacant space. This resulted in a nominal negative absorption rate of only 21,900 square feet. A considerable number of large format store closings and chain liquidations were responsible for the disappointing outcome, which could have been even worse without a significant number of retail conversions to non-retail space cushioning the impact. The retailer gaining the most retail space in the region was Wegmans, adding a two-level store at Natick Mall and a second unit at the redeveloped Meadow Glen in Medford. In second place was 7-Eleven, completing its brand conversion from Tedeschi Food Shops, which it acquired in 2015. Market Basket rounded out the top three, adding new stores in Lynn and Fall River. By number of new units, 7-Eleven added 68, the most of any retailer. Metro PCS was a distant second, adding 16 stores …

April 3, 2019

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