In 2017, the multifamily investment sales market in New York City followed the trends seen within the broader market with sales volumes dropping while property values were mixed. The year ended on a high note with regard to contract execution activity, which bodes well for sales volume in 2018. This year, we expect volumes to rise while values bottom out and start to climb by the end of the year as positive movements in fundamentals start to exert upward pressure on property values. With regard to the number of properties sold, there were 1,215 apartment buildings sold last year, down 19 percent from the 1,507 that were sold in 2016. The elevator building sector, which we differentiate from walk-up buildings as a separate asset class, performed better with 235 sales, down 14 percent from the 273 elevator buildings that were sold in 2016. In the walk-up sector, there were 980 sales, down 21 percent from the 1,234 walk-up buildings that were sold in 2016. If we compare the Manhattan submarket to the outer boroughs, we see that activity in the outer boroughs held up much better than in Manhattan. In the outer boroughs, elevator building sales dropped by 13 percent …
The positive momentum for the Memphis industrial market continues. For the previous three years, the market has had positive absorption every quarter. This momentum continued through 2017, where we saw an annual net gain of 6.6 million square feet of positive absorption. Memphis has not seen this type of multi-year, record-breaking performance since the early 2000s. Achieving year-over-year absorption volume at this level proves Memphis can continue to attract both new developers and investors. Given ideal geographical positioning, Memphis is known as America’s Distribution Center, boasting unparalleled expertise in distribution and logistics. The Memphis International Airport houses the second-busiest cargo airport in the world. Companies recognize that the Memphis MSA offers reliable, cost-effective distribution, with the ability to reach 70 percent of the U.S. population within 24 hours. Moreover, Memphis is one of only three cities with five Class I Rail Systems, and has the fifth-largest inland port, as well as 10 major trucking companies utilizing Interstates 40 and 55. It’s no wonder that FedEx World Hub makes Memphis its home, and UPS chose it to house a major hub. Southeast Submarket The Memphis market continues to see nearly all of its growth to the southeast into Fayette County, Tennessee, …
Seaports are often considered the economic engines of the markets they occupy. So when a port is increasing its business and handling more product, that growth is usually accompanied by a spike in industrial development in the surrounding metro areas. Such is the case in Texas, a state where port activity encompasses more than 1.5 million jobs and $360 billion in economic impact, according to the Texas Ports Association. The organization also states that the value of product passing through Texas ports currently represents approximately 25 percent of the gross domestic product (GDP) of Texas and 6.4 percent of GDP for the United States. Overall volumes of maritime commerce are also on the rise following the completion of the Panama Canal expansion, a $5.4 billion project that wrapped in 2016. Ships and their cargoes are getting larger while the logistics of distribution are calling for faster delivery. Times are changing, and Texas ports are changing with them. The passing of the Water Resources and Development Act in 2016 has cleared the way for major improvements and expansion projects to occur on America’s rivers and harbors. And while industrial development is on the rise at and around the Ports of Beaumont, …
Cincinnati’s Over-the-Rhine (OTR) neighborhood has come a long way since it served as the location for gritty scenes in movie director Steven Soderbergh’s 2000 film Traffic. Gone are the 500 vacant buildings and 700 vacant lots. The disadvantage of having the highest crime rate in the city is no more. Thanks to efforts by prominent Cincinnati companies such as Kroger Co. and Procter & Gamble, as well as the Cincinnati Center City Development Corp. (3CDC), efforts to revive the historic neighborhood have exceeded expectations. Located just north of downtown Cincinnati, OTR is one of the largest urban historic districts in the United States and is known for its abundance of architecturally significant buildings and homes. The area has a rich cultural scene due to its proximity to the Art Academy of Cincinnati, the Cincinnati Symphony Orchestra, the Cincinnati Opera, the School for Creative and Performing Arts, Memorial Hall and other artistic points of interest. OTR was named one of the top 15 “cool streets” in Cushman & Wakefield’s Cool Streets of North America report. A new breed of urban, experiential and independent mid-market retailers catering to millennial consumers has led to the rise of 100 Cool Streets across the United …
It is a simple formula: No metropolitan region can achieve extended economic growth without a healthy job market that is sustainable over the long-term. The greater Baltimore region has been able to accomplish just that — especially over the past two years, starting when a new governor was installed in Maryland. The State of Maryland’s rallying cry “We’re open for business” is putting its money where its mouth is with the generation of more than 135,000 new jobs since the start of 2015, and the state unemployment rate dipping to 3.8 percent, which makes it substantially lower than the national average of 4.4 percent. As an official with the Maryland Department of Commerce so accurately stated at our company’s year-end market update, Baltimore is known for having three famous birds: the Ravens, Orioles and — with all the construction underway — cranes. Momentum has been achieved with the continued distancing of the state’s previous “business unfriendly” reputation, the influx of institutional money targeting the region, its immediate proximity to the Nation’s Capital, a highly educated labor base and a diverse business economy led by the medical, high-technology and educational institution sectors. And, the most telling barometer of all is where …
As the retail sector continues to adapt and evolve to meet consumer demand for e-commerce and next-day or same-day delivery, industrial real estate will hold its place in 2018 as the top-ranked property sector. The property type has held this title for the past four years, according to the annual Emerging Trends in Real Estate study, conducted by PwC and the Urban Land Institute. The growth of e-commerce has been so rapid that the demand for industrial warehouse space has far outpaced supply in most markets for years. However, Emerging Trends also indicates that supply and demand began to come into balance in 2017 and will continue to do so in 2018. That balance gives users the opportunity to pay for industrial spaces that better suits their needs, as new buildings with increased technology and other amenities are popping up in prime areas. The growth of e-commerce has also created new demand for properties that were previously considered Class B and C industrial buildings, particularly those located along the “last mile” to consumers in urban areas. Basic Stats & Trends Current demand for industrial real estate in San Antonio is highly diverse. According to the latest report from REOC San …
Exciting times are in store for the senior living industry. A massive generation of baby boomers is entering the golden years of retirement and beyond, driving a wave of demand for seniors housing. The U.S. Census Bureau estimates 78 million baby boomers were born between 1946 and 1964. The youngest boomers are 54 this year and the oldest are 72, so we are just eclipsing the front end of the wave. In 2029, just 11 years from now, all baby boomers will be at least 65 years old, with the vast majority beyond age 65. This group will represent 20 percent of the U.S. population, and that is when the wave may start to resemble a tsunami. Strength in numbers Demographers agree that circumstances are favorable for growth in the seniors housing market, and the real estate industry is responding. In the Twin Cities, market conditions are balanced with an adequate supply of seniors housing to handle the first groups of seniors moving in. At this time, we observe that the greatest demand is for independent living versus assisted living, memory care or skilled nursing. Overbuilding has not been an issue in the Twin Cities and most of the Midwest …
In its 2018 Emerging Trends in Real Estate survey, Urban Land Institute (ULI) named Nashville the No. 9 U.S. market to watch. Factors contributing to Nashville’s appearance as a top 10 market in ULI’s report for the past three years include a re-emergent downtown, strong population growth, market attractiveness to millennials and a low cost of living. These factors — along with game-changing urban retail developments and the creativity of its culinary scene — have elevated Nashville’s retail market over the last few years. As in its 2015 and 2016 reports, ULI once again refers to Nashville as an “18-hour city.” A defining element of an 18-hour city is a vibrant urban core with entertainment and dining attractions bustling between 7 a.m. and 2 a.m., well beyond the traditional business hours of 8 a.m. to 5 p.m. Downtown Nashville is a hotspot for retail development, as the area continues to draw record-breaking numbers of crowds from tourists and locals alike to events, restaurants and conventions. From the Predators’ historic run in the 2017 Stanley Cup Finals to the 46th annual CMA Music Festival that brought $57.7 million in direct visitor spending to the nightly concerts at Ryman Auditorium, downtown is …
There’s no question that the San Antonio multifamily market has had the reputation of being the steady tortoise in a race against the more nimble Texas hares of Houston, Dallas and Austin. We all know how the fable ends — the hare, confident of an easy win, takes a nap while the tortoise secures victory. Could 2018 be the year that our “slow and steady” hero finds its place at the top of the Texas market performance? As it stands, the Alamo City is enjoying an apartment occupancy rate of 92.1 percent, which is flat on a year-over-year basis. But given the amount of new supply that entered the market in 2017 — a cycle-high 7,230 units — that’s a remarkable number. We ended 2017 with an average rent of $1.14 per square foot, which is flat compared to third-quarter figures, but that number still represents 3.64 percent growth from the $1.10 average from the fourth quarter of 2016. So what does it mean for the market’s immediate future? The San Antonio construction pipeline continues to be a focal point and as things progressed, there have been some surprises. While 2017 marked the cyclical peak for deliveries, and there has …
The retail sector in metro Minneapolis continues to adapt to changing consumer preferences, fast-moving economic opportunities and new state laws. Over the course of 2017, the retail real estate market showed positive growth in every category. Absorption of 1.4 million square feet surpassed the 1.3 million square feet of deliveries, according to CoStar Group. The rising cost of construction, low vacancy rate (3.1 percent) and increasing rental rates are creating new barriers to entry for retail businesses. The aforementioned factors, along with a newfound confidence in the rising economy, are causing landlords of all magnitude to become more selective with the quality of tenants they accept. Landlords will continue to become more reserved with regard to the tenant allowances they provide for new tenants. We have seen retail giants such as Walmart and Target add new services that emphasize both value and convenience and bring shoppers back for quick fill-in trips. Minneapolis-based Target Corp. announced the public rollout of its Target Restock program, a next-day delivery service for household essentials that is designed to compete with Amazon’s Prime Pantry. After being beta-tested by its employees, the program is currently only available in about nine markets, but plans are to slowly …