Market Reports

Milwaukee Market Displays Strong Fundamentals Despite Retailer Struggles

by Kristin Harlow July 19, 2018

Like many other Midwestern markets, Milwaukee is experiencing a mixed bag in retail. While headlines have been dominated primarily by closures, there has also been an abundance of new activity in the market. While it’s taken its hits, the retail market has fought back and retail vacancy has actually decreased slightly to 4.4 percent in the first quarter, according to CoStar Group. Rents are edging up and Class A space is difficult to find. The inventory of Class B and C space is more robust. Due to low demand, landlords are not enjoying much negotiating leverage. Market turbulence On the surface, multiple big box closings that have occurred in metro Milwaukee this year paint a gloomy picture of the retail marketplace. Grocery, wholesale, apparel, toys, restaurants and other categories of retailers have closed fairly rapidly. These include Pick ‘n Save (Kroger) in Cudahy, Sendik’s in West Milwaukee, Sam’s Club in West Allis, Toys ‘R’ Us and Babies ‘R’ Us in Brookfield and iPic Theater at Bayshore Town Center in Glendale. Another ominous cloud is the Bon-Ton bankruptcy and the closure of seven area Boston Store locations, including the company’s clearance center and furniture gallery in metro Milwaukee. Compound that with …

July 19, 2018

Market Reports Northeast Northeast Market Reports Retail Rhode Island

Providence Retail Presents Signs of a Strengthening Economy

by David Cohen July 18, 2018

The Rhode Island retail market has seen a considerable level of activity over the last year that presents promising signs of a strengthening economy and an improving property market. Generally speaking, each submarket has seen positive absorption of retail space, with the new concepts entering the market for the first time, as well as existing operators further expanding their footprints and market share. From street retail to lifestyle and big-box centers, each class has seen significant activity that represents a much healthier retail climate than popular opinion and media reporting might suggest. Some specific transactions are worth noting. Garden City Center in Cranston continues to outperform as the dominant outdoor shopping destination in the greater Providence market. This past year, The Wilder Companies built an approximately 29,800-square-foot addition at Garden City, which allowed them to bring Boston favorites Legal C Bar and Tavern in the Square to town. These are the first Rhode Island locations for both operators, which points to the strength of the local Rhode Island economy as well as the faith tenants have in the long-term viability of the best retail projects. Wilder was also able to bring The Simple Greek, Anthony’s Coal Fired Pizza, Z Gallerie …

July 18, 2018

Colorado Market Reports Office Western Western Market Reports

Denver’s Dynamic Office Market Changes Face of Downtown

by Taylor Williams July 17, 2018

Denver’s office market has been riding a wave of expansion, entering its ninth straight year of growth, with net absorption totaling 186,826 square feet in the first quarter of 2018. While vacancy ticked up — ending at 15.9 percent, up from 15.1 percent in the prior quarter and from 14.6 percent one year ago — it is expected to fall over the next several quarters as tenants continue to absorb space in both new and existing buildings. The Denver office market’s impressive expansion has lasted 33 consecutive quarters, resulting in a total of 9.7 million square feet of absorption, 7.4 million square feet of new deliveries and a 409-basis-point plunge in vacancy. The majority of the 9.7 million square feet absorbed between the first quarter of 2010 and the first quarter of 2018 occurred in three key submarkets. This included the Southeast Suburban (SES), Downtown and Northwest (NW) markets, which recorded 3.3 million, 2.9 million and 1.3 million square feet of absorption, respectively. The Downtown market ended the quarter with absorption of 214,317 square feet, and Class A median asking rates were up 39.5 percent from year-end 2009 to $39.76 per square foot. Asking rates in some of the newest …

July 17, 2018

Georgia Market Reports Property Type Retail Southeast Southeast Market Reports

Tech, Film Industries Help Atlanta Sustain Retail Growth Intown and in Suburbs

by John Nelson July 16, 2018

“How long will Atlanta’s retail boom last?” That is the multibillion-dollar question everyone in the market is asking themselves. Nobody knows for sure, although there are many valid reasons to think that Atlanta will sustain its growth through 2018 and beyond. The state of Georgia has placed a strong emphasis on drawing technology companies to the state, and Atlanta’s tech boom has catapulted the city to the front of the race for Amazon’s $5 billion HQ2 project. The city already boasts the world’s busiest airport, which makes it easy for any company to relocate here because they can directly connect to anywhere in the world. Most recently, Facebook announced it will build a sprawling data center campus at Stanton Springs, about 40 miles east of Atlanta, and NCR Corp. recently opened its new headquarters campus in Midtown. The emerging tech community includes startup hubs such as Atlanta Tech Village, Switchyards Downtown Club, the upcoming Coda project at Tech Square and Advanced Technology Development Center, an affiliate of Georgia Tech. With elite local colleges like Georgia Tech, Emory University and the state’s flagship school, the University of Georgia, about 60 miles east in Athens rapidly producing new graduates, the city is …

July 16, 2018

Industrial Market Reports Texas Texas Market Reports

Building Size Matters in Amarillo Industrial Market

by Taylor Williams July 13, 2018

Amarillo’s industrial market is truly a tale of two sectors, as some form of that expression goes, and the key number is 50,000 square feet. The occupancy rate for industrial properties in the sub-50,000-square-foot range in Amarillo remains very high, with few properties of this size sitting on the market for extended amounts of time. With such high occupancy rates, several new developments have recently sprung up. Those with both large footprints and divisible floor plans to meet the needs of smaller tenants tend to be most successful in terms of leasing velocity. In addition, developers of this product type are seeing its success and gravitating to Amarillo with spec projects. This sector of the industrial market should remain profitable for developers unless construction costs increase at a greater pace than rents can justify. The lull lies in existing properties that measure more than 50,000 square feet. In a smaller market like Amarillo, properties of this size sitting empty can be an ominous sign, and a few in particular have really come to symbolize concerns about sales of assets of this magnitude. Such properties include a 140,208-square-foot manufacturing facility previously occupied by chemicals manufacturer Techspray; a 115,000-square-foot facility formerly occupied …

July 13, 2018

Market Reports Michigan Midwest Midwest Market Reports Multifamily Office

The Hunt for Yield Returns to Detroit and Its Suburbs

by Kristin Harlow July 12, 2018

In 2008, the credit crisis had gripped the world and in particular, the Midwest. Lenders, whether CMBS or life insurance companies, had put large “X’s” through Michigan on their maps. And Detroit? South of 8 Mile, you couldn’t get a deal done. Enter entrepreneur businessman Dan Gilbert. Inspired by an intern spurning his then Livonia-based Quicken Loans for a more urban, walkable environment in Chicago, Gilbert made the bold decision to move his entire operation to downtown Detroit. Now in 2018, Ford, GM and Chrysler (and various suppliers) are humming, resulting in a decade-low statewide unemployment rate of 4.8 percent. The central business district (CBD) and Midtown Detroit multifamily occupancy rates are at 95 percent, with office just a touch under that, according to CoStar Group. And in downtown Detroit, which many in the metro area once regarded as a quasi-War Zone, vacant buildings are selling for millions of dollars and millennials in yoga pants dot the streets. Detroit’s resurgence since 2008 has earned it the nickname of “America’s Great Comeback City,” with no better metaphor than Ford Motor Co. recently buying one of the world’s great eyesores, Michigan Central Station, the former train station. However, the city’s renaissance is …

July 12, 2018

Market Reports Michigan Midwest Midwest Market Reports Multifamily Single-Family Rental

Positive Economic, Demographic Trends Fuel Detroit’s Apartment Rental Market

by Kristin Harlow July 12, 2018

Throughout metro Detroit, employment and population gains are bolstering apartment demand. Following the creation of 40,200 jobs one year ago, employers in the metro area added 22,200 people to payrolls during the past four quarters. The hiring brought the unemployment rate to 4.5 percent in March, down 10 basis points year over year. The tighter rate may make it more difficult for some employers to find qualified workers to fill openings. During the past 12 months, the hospitality sector led hiring with 8,200 additional workers. New hotel openings contributed to the increase. Sustained job growth has helped to boost the metro population by nearly 11,700 people and 6,600 households over the past year. Many of these residents are opting to rent, as rising home prices place homeownership beyond the reach of more households. During the past five years, the median price of a single-family home has soared 68 percent to $177,053 as of March. Highly amenitized homes or properties in desired areas such as downtown Detroit, Troy or Royal Oak, have much higher median prices, making renting a more affordable option in numerous areas of the region. Construction concentrations Multifamily construction is gaining traction in the suburbs. Completions in the …

July 12, 2018

California Industrial Market Reports Western Western Market Reports

The Inland Empire: A Premier Southern California Industrial Market

by Taylor Williams July 10, 2018

The Inland Empire continues to be one of the most dynamic industrial real estate markets in the country from both a user and investor perspective. Rent growth remains exceptionally strong, boasting a growth rate of more than 50 percent in the past five years, with a 10.1 percent increase in 2017. Although current average asking rents are at record highs, they remain at a 40 percent discount when compared to the neighboring infill markets of Los Angeles and Orange County, indicating ample room for further growth. Vacancy remains unchanged at 3.7 percent, despite 20 million square feet of deliveries last year, a testament to the market’s unrivaled user demand. Leasing momentum continues to outpace supply, particularly for recently constructed distribution space. This is demonstrated by the 46 percent pre-lease rate for deliveries greater than 1 million square feet last year. The Inland Empire’s proximity to world-class transportation infrastructure, combined with a relatively large supply of recently delivered distribution facilities, creates a highly optimistic future outlook when considering the projected exponential growth of e-commerce. The Inland Empire’s e-commerce primacy of location as it relates to underlying market fundamentals are attracting best-in-class domestic and global capital. This is creating a hyper-competitive buyer …

July 10, 2018

Market Reports Northeast Northeast Market Reports Office Rhode Island

Rhode Island’s Office Sector No Longer Tenant’s Market

by David Cohen July 9, 2018

The office sector in Rhode Island’s commercial real estate market has seen a strong carryover and positive momentum from 2017, into 2018, which we continue to enjoy today. The market has seen positive absorption in most areas and with little speculative development on the horizon, lease rates are being affected accordingly. It’s safe to say, it is no longer a Tenant’s market. In Providence, vacancy rates are hovering in the 12 percent range, down from 16.5 percent just a few years ago. Recent projects include the redevelopment of South Street Landing, a $230 million dollar renovation of the former Narragansett Electric power station which is now home to the URI/CCRI Nursing School as well as some of the administrative offices of Brown University. Just a block away, construction is underway for the 191,000-square-foot Providence Innovation Center. This will be occupied by the Brown University School of Professional Studies, Johnson & Johnson and the Cambridge Innovation Center. The redevelopment of 75 Fountain Street, a 160,000-square-foot building, once fully occupied by the Providence Journal, has also enjoyed positive absorption. The redevelopment by Nordblom Company and Cornish Associates has attracted companies such as Tufts Healthcare, GE Digital and Virgin Pulse to join the Providence …

July 9, 2018

Georgia Industrial Market Reports Property Type Southeast Southeast Market Reports

Booming Atlanta Industrial Market Continues Surge Thanks to E-Commerce

by John Nelson July 9, 2018

Atlanta is the logistics hub and economic engine of the Southeast, which is the fastest growing region in the country. Its 700 million square feet of industrial space makes it the fifth largest logistics market in the United States. Traditionally, population and job growth are key drivers of industrial demand, and Atlanta has had strong growth in each. The metro added 78,000 people in 2017, or nearly 214 new residents every day, which is reminiscent of the solid population growth of the 1990s when Atlanta averaged nearly 100,000 new residents every year. Additionally, Atlanta has had solid job growth, growing 2.5 percent last year, second only to Dallas/Fort Worth among the 12 largest metro areas in the U.S. E-commerce has caused a surge in demand for industrial space that has benefitted the Atlanta industrial market. Online retail sales now make up over 9 percent of total retail sales, according to the U.S. Census Bureau, up from 5 percent in 2012. A recent report from Cushman & Wakefield stated that while e-commerce accounted for just 5 percent of leases in 2013, it now commands over 20 percent of all warehouse leasing. As Amazon and others ramp up delivery times from two-day …

July 9, 2018

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