Market Reports

E-Commerce Industry Solves Logistics with Air Cargo in New York City

by David Cohen August 29, 2018

As the e-commerce industry continues to grow and evolve, demand for industrial warehouse product located in dense urban areas situated with access to transit infrastructure, particularly air transit, has grown. The industrial sector has been experiencing multiple years of record rent growth, both locally in New York City and nationally, with average asking rents reaching nearly $30 per square foot in western Brooklyn and parts of Queens. This rapid rise in rents is driving property values higher and generating robust investor demand for this asset class. By way of example, the newly constructed FedEx warehouse in Maspeth, Queens recently sold for nearly $750 per square foot. Simultaneously, we are seeing the evolution and realignment of the supply chain to match a changing retail landscape. E-commerce sales have caused a 300 percent increase in the demand for logistics and distribution spaces, as opposed to traditional brick-and-mortar retail locations. The impact of e-commerce will only continue to accelerate, and the need for new industrial product will grow along with it. For every $1 billion increase in e-commerce sales, an additional 1 million square feet of distribution space will be required. And it’s not solely e-commerce companies that are starting to think about …

August 29, 2018

Industrial Market Reports New Mexico Western Western Market Reports

Albuquerque’s Industrial Market Sees Strong Absorption From Warehouse, Manufacturing Users

by Taylor Williams August 28, 2018

The metro Albuquerque industrial market reported more than 39 million square feet of total industrial space as of year-end 2017. The two largest categories of occupied space were warehouse/distribution (12.5 million square feet with 5.5 percent vacancy) and manufacturing (12.55 million square feet with 3.5 percent vacancy). The overall market vacancy rate at the end of 2017 was 5.7 percent for all industrial uses in buildings with more than 10,000 square feet. New Mexico added about 11,000 non-agricultural jobs from February 2017 through February 2018. The Albuquerque MSA added 5,800 jobs — a 1.5 percent increase — over this period, or more than half of the new jobs added in New Mexico. Albuquerque’s unemployment rate was 5 percent as of February, which is a notable improvement over the 6.2 percent unemployment rate in February 2017. During this period, the private service-providing industries grew by 3,100 jobs, or 1.2 percent, while the goods-producing industries (warehouse and manufacturing users) added 2,300 jobs, representing a gain of 6.2 percent. Albuquerque’s industrial market experienced positive net absorption of more than 261,000 square feet during the fourth quarter of 2017. This was the highest net absorption since the fourth quarter of 2015, and the second-highest …

August 28, 2018

District of Columbia Industrial Market Reports Southeast Southeast Market Reports

Land Constraints, Demand from Big Data Spur Rent Growth in D.C. Industrial Market

by John Nelson August 27, 2018

The 195 million-square-foot Washington, D.C., metropolitan industrial market features various sectors and centers of demand across the region. The overall market has been extremely healthy, with unique forces impacting the area’s primary regions of Northern Virginia, Suburban Maryland and Washington, D.C. The overall metro market expanded between first-quarter 2017 and first-quarter 2018. Net absorption in the period was 1.7 million square feet, albeit a significant slowdown from the previous 12-month cycle (4.2 million square feet). After falling significantly during the past five years, vacancy remained relatively flat in first-quarter 2018 and settled at 6.8 percent, a 10-basis-point drop year-over-year. A lack of available space limited opportunities for occupancy gains but allowed owners to increase asking rents. The average asking rent rose sharply to $10.04 per square foot, up from $9.58 per square foot one year earlier. Of the 1.9 million square feet of new supply under construction, 1.3 million square feet was in Northern Virginia’s less constrained but in-demand Loudoun County. Overall new supply was 55 percent preleased at the end of the first quarter. The Washington metro industrial market inside the Interstate 495 Beltway contrasts in many ways to the market outside the Beltway. The most significant difference is …

August 27, 2018

Industrial Market Reports Texas Texas Market Reports

Building Boom Forces Dallas Industrial Developers to Mix it Up

by Taylor Williams August 24, 2018

As industrial development ramps up across the country in an effort to keep pace with demand, developers are eyeing Dallas-Fort Worth (DFW) for new projects, forcing existing players to get more creative with their site selections and design elements. The DFW metroplex has experienced millions of square feet of industrial development over the past year. The market currently has more than 27.9 million square feet of space under construction. If DFW continues to expand at this pace, year-over-year industrial growth will outpace that of 2017. As infill sites become more scarce, developers revisit land that was once looked over for previous projects. Some of these sites include closed landfills, shuttered golf courses and tracts that may have had unusual hurdles such as drainage, utility or environmental issues. Going South Of all the submarkets that comprise the metroplex, South Dallas enjoys the largest share of development. Over 7 million square feet of product is currently under construction in this submarket, which may puzzle those familiar with the area, as it has historically been less attractive to smaller, more regional tenants. Location is partly to blame for this pattern. South Dallas can be quite a drive for local business owners. In addition, …

August 24, 2018

Market Reports Midwest Midwest Market Reports Office Ohio

Cleveland Office Market Is on Very Solid Ground

by Kristin Harlow August 23, 2018

U.S. economic growth in 2018 is expected to be the strongest in three years. The steady momentum in the Cleveland office market fully supports this forecast. Overall vacancy rates in the Cleveland metro area align with national trends in the range of 12 to 14 percent, rental rates are increasing modestly with averages in the low $20s per square foot and the market for Class A office space continues to be very tight. Tenant improvement allowances offered by landlords are rising faster than rents in a competitive leasing environment, ranging from $20 to $60 per square foot. Larger, multi-floor blocks of quality space are becoming especially difficult to come by in both the central business district (CBD) as well as the suburbs, making new office construction projects more viable than in the past. Attraction, retention When it comes to attracting the best and brightest workforce, office occupiers are seeking vibrant, walkable locations, rich with amenities and character. Building owners and developers in the Cleveland CBD continue to introduce office conversion projects that bring more apartments downtown, helping in turn to strengthen the office market. The K&D Group is currently converting a portion of the iconic 52-story Terminal Tower to …

August 23, 2018

Market Reports New Mexico Retail Western Western Market Reports

New Mexico’s Retail Market Gives Steady Performance

by Taylor Williams August 21, 2018

The New Mexico commercial real estate market continues to be a safe play for owners and developers in the Southwest. Albuquerque, which contains 50 percent of the state’s population, continues to drive the market with more than 80 percent of the commercial real estate transactions. A moderate supply-demand imbalance currently exists. This imbalance will allow vacant real estate to be matched up with occupier requirements relatively quickly, taking the vacancy rate lower or continuing to place upward pressure on the need for new construction. The New Mexico market, like many others, has experienced little to no development on the periphery of the city. Instead, owners and occupiers remain focused on the core areas of the market where density can be increased for a more efficient use of retail or office space. Albuquerque’s tech sector is also picking up momentum through the organic growth of existing companies and a large push from the University of New Mexico in partnership with the business community. New Mexico has one of the highest per capita concentrations of doctorate degrees in the U.S. The vacancy rate for retail space sits at 12.5 percent as of the first quarter of 2018. The outlook will be trending …

August 21, 2018

Market Reports North Carolina Office Southeast Southeast Market Reports

Charlotte Companies Getting in on Amenities Arms Race to Attract Top Office Users

by John Nelson August 20, 2018

Companies looking to attract and retain talent are now offering top amenities, a modern office space and a healthy work environment with a sense of community. Employees are a company’s most vital asset, and firms are willing to pay a higher rate for office space if it provides a place that employees want to work. One of the trends this year in commercial office space is enhancing the work environment. According to a recent Pew Research Center analysis, millennials have become the largest generation in the U.S. workforce. To attract today’s workers, office users must offer an overabundance of amenities. Companies are now providing gaming lounges that include video games, foosball, air hockey and darts. They are also offering napping rooms, coffee shops with baristas and even onsite bars with wine and craft beer on tap. This type of atmosphere enhances employee interaction and provides the employee a place to relax while at work. Technology allows employees to be more efficient, but it will never replace the connection that happens with face-to-face conversations. Companies are looking to create an atmosphere where employees can collaborate throughout the workday, which in turn has a positive effect on worker productivity. The key to …

August 20, 2018

Industrial Market Reports Self-Storage Texas Texas Market Reports

Oversupply, Taxes Choke Self-Storage Growth

by Taylor Williams August 17, 2018

Self-storage properties have had a pretty good run in Texas over the last several years. Surging population growth has brought more material possessions into the state, boosting absorption of existing space. In addition, ample land for development has enabled builders to bring self-storage — a submarket-specific business — to new, underserved communities. The investment side of the business has flourished as well. A capital-rich environment has sustained a healthy pace of development and price escalation has kept cap rates low, incentivizing many owners to market their properties for sale. The building boom is still running hot. According to Tennessee-based research firm STR, as of June 2018, there were more than 300 self-storage facilities in the development pipeline in Texas. In the 12 months leading up to that point, 72 new facilities totaling almost 7 million square feet came on line. In addition, about 130 new properties are slated to open by June 2019, adding more than 9 million square feet, or 5.7 percent of the existing inventory. And those figures only encompass the seven biggest markets in Texas. According to The Houston Chronicle, the Dallas, Houston, Austin and San Antonio markets all feature about 8 square feet of storage space …

August 17, 2018

Industrial Market Reports Midwest Midwest Market Reports Ohio

Cleveland Industrial Market Embraces New Projects

by Kristin Harlow August 16, 2018

The industrial real estate market in Cleveland has a long and storied history. The region’s market powered much of the overall growth in the early 20th century and, at that time, propelled Cleveland to the nation’s sixth largest city. The market transitioned to automotive production, which reached its peak in the 1960 and 1970s. Nearly half a million people were employed in the automotive sector during these decades, in plants operated by Ford, Chrysler and Chevrolet, or at the thousands of third-party companies that supplied everything from wire harnesses to pumps and steel. Over the next half century, the market has again transitioned and while domestic automotive production is still a critical component, advances in technology coupled with a gradual but consistent decrease in the number of vehicles actually being built has resulted in considerably fewer people being employed in the auto industry. Current estimates are around 120,000 jobs. A terrific example of this transition is the former Chrysler stamping plant in the Cleveland suburb of Twinsburg. It opened in 1956 and quickly became a critical part of the auto giant’s production cycle, processing and stamping over 25,000 tons of steel annually. At its peak, the plant employed over 5,000, …

August 16, 2018

Facebook-Data-Center-Los-Lunas-New-Mexico

Market Reports Multifamily New Mexico Western Western Market Reports

New Companies Bring Larger Needs for Multifamily Housing to Albuquerque

by Taylor Williams August 14, 2018

Albuquerque is a hidden gem. It isn’t a huge market when compared to places like Seattle, Austin or Denver, but that doesn’t mean there isn’t room for growth and development. The Urban Land Institute predicts Albuquerque’s development will trail other metros with stronger economies in 2018. But there are positive trends and developments for Albuquerque and the surrounding areas, which can make us competitive. A new Facebook data center was built in Los Lunas, a 30-minute drive from Albuquerque. This has created new jobs for the Los Lunas and Albuquerque areas. Anywhere from 800 to 1,000 workers go through the data center every day, and 80 percent of them are from New Mexico. The center will have a $2 billion impact on the state and metro areas, leading to more jobs and opportunities for the region. Albuquerque will also take part in the “Facebook Community Boost Program.” The program helps the community by offering free workshops, business training and networking to boost careers. More companies like Facebook can be recruited to New Mexico as long as we make the area business-friendly and retain talent so everyone can succeed. With more jobs and opportunity, there will be an immediate need for …

August 14, 2018

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