Market Reports

New York City Retail Opportunity Never Better, Nor as Challenging

by David Cohen September 12, 2018

2018 is a compelling time to be in retail real estate, especially in New York. Sure, rents are probably still too high, but the vacancy rate keeps pressure on landlords and developers. There is no doubt Amazon will continue to disrupt and dominate, but reports of retail’s demise have been greatly exaggerated. The lower rents and vacancies are creating opportunity for retailers who can adapt to the factors driving consumers’ shopping habits. Perhaps more importantly, many of the city’s most desirable retail corridors such as Fifth Avenue and SoHo were historically difficult to come by, regardless of a tenant’s ability to pay. Now, opportunity beckons. The latest census data indicates New York City is growing and that the trend will continue as people seek urban environments to live, work and play. Futurists predict urban population growth to continue throughout the century. But it isn’t just residents and workers flocking to the Big Apple. More than 60 million tourists visited the city in 2017 and even more are projected to visit in 2018. Recent technological advancements have changed many aspects of human behavior, from the way we interact with one another to how we get around and how we purchase products. …

September 12, 2018

Market Reports Nevada Retail Western Western Market Reports

Vegas’ Retail Market Supports Economy Beyond Gaming, Hospitality

by Taylor Williams September 11, 2018

There is a lot of buzz in the Las Vegas market a full 10 years after the Great Recession. Much of this buzz surrounds sports with the new Golden Knights hockey team; the Las Vegas Lights professional United Soccer League team; Las Vegas Aces WNBA team; and the NFL Raiders team. The new Raiders stadium is under construction now and is widely considered the most talked-about major development happening in Vegas. In a city that offers unmatched access to world-class gaming, shopping, tradeshows and conventions, the NFL coming to town creates yet another reason for people to visit Las Vegas. As you can imagine, many retailers and investors are trying to position themselves to take advantage of this entry. The overall vacancy rate for retail in the Las Vegas metro area was 8.7 percent. Rents for new developments range from $2.50 per square foot, triple-net to $4 per square foot, triple-net. Existing neighborhood centers, power centers and strip centers average $1.75 per square foot to $2.25 per square foot. Anchor and mid-box leases average $0.75 per square foot to $1.25 per square foot for both gross and triple-net-structured leases. Ground lease and build-to-suit are averaging $120,000 to $225,000 in annual …

September 11, 2018

Market Reports Maryland Multifamily Southeast Southeast Market Reports

Baltimore’s Multifamily Market is Growing at an Unprecedented Rate

by John Nelson September 10, 2018

For years, others have considered Baltimore a second-tier market on the Interstate 95 Corridor, lacking the excitement that cities like Philadelphia and Washington, D.C., offer. Not so any more. Baltimore has evolved into a top-tier housing market that is nationally recognized by the investment community. No longer a collection of relics from the “rust belt” banking town that it was decades ago, Baltimore is now a mosaic of adaptive reuses and a hot-bed for tech jobs. The Charm City is an incubator for creativity and entrepreneurship that sprouts from the world-renowned medical and educational institutions such as Johns Hop-kins and the University of Maryland Baltimore. As a result, net absorption for new multifamily units in 2017 surpassed city records and continues to grow at unprecedented rates. There are many factors that contribute to strong levels of demand in a market, such as job growth, affordability and developers creating attractive space targeting all demographics. Baltimore’s evolving job market continues its rapid expansion, driven primarily by “eds and meds.” The sector experienced 19 percent growth over the 10-year average and expand-ed 2.5 percent in 2017. Residents speciﬁcally target areas where they can live, work and play, and with an expanding job market, …

September 10, 2018

Market Reports Office Texas Texas Market Reports

Class A Office Buildings in North Texas Evolve With New Tech

by Taylor Williams September 7, 2018

Over the last decade, Dallas-Fort Worth (DFW) has been consistently recognized as one of the fastest-growing metropolitan areas in the nation, and there are no immediate signs that the growth is stagnating. Particularly in the last several years, DFW has experienced a wave of corporate relocations and expansions from a wide variety of industries. This activity has brought an assortment of valuable economic opportunities to the metroplex, resulting in a robust construction pipeline. This new product is focused on meeting the strong demand for highly amenitized, future-proofed Class A office space and embracing the high-tech connectivity that helps guard against obsolescence. Fortune 500 and other prominent companies continue to eye DFW as a top location. These users expect buildings to include not only standard amenities like fitness centers and conference rooms, but also access to the latest technology and seamless connectivity. How We Got Here In the 1980s, a major commercial construction boom in North Texas set the benchmark for Class A office buildings, which were traditionally developed without modern technology in mind. Buildings such as The Crescent, Bank of America Plaza and Fountain Place were the gold standard for office properties and served as benchmarks for quality for much …

September 7, 2018

Industrial Market Reports Midwest Midwest Market Reports Missouri

Economic Incentives Fuel Industrial Development in St. Louis Market

by Kristin Harlow September 6, 2018

It has been a banner year thus far for the St. Louis industrial market with yet another milestone achieved. Mid-year absorption totaled 2.5 million square feet of space, a number more closely suited for the entire year versus the halfway point. Fueled by continued absorption, the market has more than 5 million square feet of space under construction with vacancy of approximately 4.9 percent. The continued success is no surprise. But economic incentives, often overlooked and underappreciated, are the unsung heroes behind each industrial development around town. Gaining knowledge Economic incentives have been a prerequisite in attracting or retaining businesses like Amazon, World Wide Technologies and Best Buy. But they do not just benefit large corporations; local and regional users are able to enjoy new Class A real estate in these developments as well. Why? Incentives help bridge the gap for the developer and the user to account for being in a low-rent, high-construction cost market, which is not a great recipe for new development. Yes, St. Louis boasts some of the lowest asking rents in the Midwest, currently averaging $4.70 per square foot for available industrial space. One would think that businesses would flock here because of the low …

September 6, 2018

Market Reports New York Northeast Northeast Market Reports Office

Office Market Picking Up the Pace in Manhattan

by David Cohen September 5, 2018

After a sluggish start to the year, the Manhattan office market has experienced a strong rebound. In the second quarter, more than 10 million square feet of space was leased, the highest quarterly total since 2014, pushing year-to-date leasing activity to just over 17 million square feet. At mid-year 2018, there were 17 new leases exceeding 100,000 square feet and 35 new leases of more than 50,000 square feet. Although the economy has been at a peak for an unusually long time, the Manhattan office market has reached new highs. This presents an interesting exception to the norm, where real estate typically lags the economy, and it is good news for the market. Market Drivers While demand has come from a variety of sectors, the most recent top occupiers have come from the FIRE (financial services, insurance, and real estate), TAMI (technology, advertising, media and information), law firm and coworking sectors. Early in the year, the FIRE sector dominated large-block transactions. Examples include JPMorgan Chase’s 420,000-square-foot lease at the newly renovated 390 Madison Ave., and Bank of America Corp.’s 343,000-square-foot lease at 1100 Avenue of the Americas and 127,000-square-foot lease at 1114 Avenue of the Americas. This level of expansion …

September 5, 2018

Market Reports New Mexico Office Western Western Market Reports

Albuquerque’s Office Market Sees Positive Absorption, New Construction

by Taylor Williams September 4, 2018

New Mexico’s office market has held steady along with the rest of the country throughout 2017. New development in areas outside of metro Albuquerque, like the Facebook development in Los Lunas, is attracting retail- and service-related businesses. While it remains to be seen what this means to the general commercial real estate industry, it is encouraging to see increases in activity in areas where there had been little to no growth in recent years. Albuquerque, the heart of New Mexico’s office market, saw positive absorption start to increase from the past two quarters. The market is seeing organic tenant movement and, more importantly, there has been a swelling interest in Albuquerque metro areas from out-of-state companies looking for a Mountain Time Zone location that is economically attractive. Co-working spaces have gained in momentum with several cropping up since the end of 2016. New co-working spaces include Gravitate, which has expanded into two new locations near FreeRange and the new Tramway Plaza. We expect this trend to continue as the state focuses on investing in entrepreneurs and startup companies. New construction is expected to increase the overall Class A inventory over the course of 2018 and 2019. Compared to many other …

September 4, 2018

Market Reports Retail Texas Texas Market Reports

Out-of-State Investors Eye Surging Dallas Retail Market

by Taylor Williams August 31, 2018

The Dallas retail market has been on a historic run over the last five years. Dallas is attracting significant attention from foreign and domestic retail investors alike for several reasons. Cap rates continue to compress, big box spaces are experiencing steady absorption, occupancy is at an all-time high of 94.6 percent, unemployment is at a historic low of 3.7 percent, population growth is holding steady and residential development remains robust. The Dallas-Fort Worth (DFW) MSA recently ranked second in the Americas for real estate investor interest, according to a recent poll conducted by CBRE. In particular, there has been a strong increase in demand for retail properties from California buyers. Many of these investors are used to paying 4 to 5 percent cap rates. So when these California buyers have the opportunity to invest in a market showing stronger signs of growth than their local regions, they jump at the chance. According to CoStar Group, over the last 18 months, the average cap rate for a Dallas retail asset purchased by a California buyer was 6.1 percent. In contrast, the average for a Texas-based buyer was 7 percent. This statistic clearly shows that private retail investors based in California are …

August 31, 2018

Industrial Market Reports New York Northeast Northeast 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

Newer Posts

Older Posts