Market Reports

Downtown Columbus Office Market Devises Solutions to Parking Shortage

by Kristin Harlow October 19, 2017

In today’s world, nearly every company is a technology company. That trend is changing the way we do business and interact with one another. Ted Anglyn, president of the Parking Property Advisors, summarizes how these changes are impacting space utilization, which in turn affects parking needs: The space per square foot per employee in newly leased office space decreased from a range of 300 to 350 square feet per person in 2005 to 150 to 200 square feet in 2010. Some of this space reduction is linked to the recession, but much of it is because of open office design and the predominance of electronic storage, which reduces the need for physical file storage. This change has the potential to increase the typical office parking ratios that range from three to four spaces per 1,000 square feet to five to six spaces per 1,000 square feet. This begs the question of how we, as commercial real estate experts, address this gap. Parking, access and location are not new issues, but they are still major factors in today’s real estate environment. Landlords and economic development directors are all striving to address the needs of business today while also looking to future …

October 19, 2017

Market Reports New Jersey Northeast Northeast Market Reports Retail

New Jersey Retail Market Gains Ground on Multiple Fronts

by Taylor Williams October 18, 2017

The New Jersey retail market continues to gain strength as landlords redevelop existing properties, successfully backfill formerly vacant supermarket and Sports Authority boxes, and even break ground on several major shopping centers. Green Leaf at Union, a new redevelopment scheduled to open this fall, will include 111,000 square feet of gross leasable area. Located on Route 22 and West Chestnut Street, the center will be anchored by Bob’s Discount Furniture and LA Fitness. Chimney Rock East and West in Bridgewater is also under construction. The new upscale center will add more than 200,000 square feet of gross leasable area to the Route 22 corridor. Tenants will include Whole Foods, The Container Store, Saks Off Fifth and Nordstrom Rack, as well as ULTA and European Wax Center, which were both represented by R.J. Brunelli & Co. (RJBCO). The District at Metuchen, a new 78,505-square-foot upscale neighborhood center, opened in downtown Metuchen on Route 27 and Middlesex Ave. It is anchored by Whole Foods, with a satellite tenant lineup that includes RJBCO clients Massage Envy and European Wax Center. The Route 35 corridor in Hazlet/Holmdel/Middletown has seen its ups and downs this past year. In Middletown, the WRDC-owned property formerly anchored by …

October 18, 2017

Market Reports Office Southeast Southeast Market Reports Virginia

Office Users Gravitate to Richmond CBD Following Surge in Out-of-Market Activity

by John Nelson October 16, 2017

Over the past 12 months, a surge in out-of-market activity has stabilized Richmond’s downtown office market, which had faced a seemingly insurmountable glut of space just last year. For years, Richmond’s Central Business District (CBD) struggled to retain tenants as many sought more affordable locations in the suburbs, while other tenants shed space as they optimized their footprints. However, with a steady flow of high-profile inbound operations into Richmond’s CBD, the momentum has since shifted and the re-urbanization trend, an established facet of many of the nation’s major markets, has now taken hold in Richmond. Out-of-Market Demand Swells After five consecutive quarters of securing a sizable new-to-market operation, the cumulative direct impact of this inflow climbed to over 300,000 square feet. This surge in inbound activity played a pivotal role in stabilizing the CBD, which captured 94 percent of these inbound operations. Much of this activity has been driven by the explosive 14.9 percent growth in Richmond’s millennial population from 2010 to 2015, per a recent study by the Urban Land Institute for Time magazine. According to the study, Richmond is the second fastest growing city for millennials in the country, only behind Hampton Roads. Similarly, Virginia shot up in …

October 16, 2017

Market Reports Office Texas Texas Market Reports

El Paso Office Market Seeing Strong Absorption Through 2017

by Taylor Williams October 13, 2017

The border economy of the United States and Mexico is complex and deeply intertwined, to say the least. As such, the sister cities of El Paso and Juarez should be viewed as one economy. The region ended 2016 on a high note. According to the Federal Reserve Bank of Dallas, El Paso’s total nonfarm employment rose 1.7 percent during the year, besting the state average of 1.6 percent. The city added more than 5,000 jobs, with strong gains in service-providing sectors offsetting losses in the manufacturing sector. Leisure and hospitality led the way, according to the Fed, adding more than 1,700 jobs. At the same time, employment in Juarez’s manufacturing sector was up 5.4 percent from the previous year for a projected total of 263,000 new jobs. The downtown El Paso office market currently totals about 3.2 million square feet across 65 buildings. It breaks down into about 1.1 million square feet of Class A space, 1.2 million square feet of Class B space and 900,000 square feet of Class C space. For years, vacancy in the city’s Central Business District hovered around 20 percent, with virtually no new construction. But lately, conditions have dramatically improved. According to CoStar Group, …

October 13, 2017

Market Reports Midwest Midwest Market Reports Minnesota Retail

Minneapolis Market Ready to Embrace Shifting Retail Trends

by Kristin Harlow October 12, 2017

The Minneapolis retail market ended the second quarter with a vacancy rate of 3.1 percent. The freestanding retail segment (buildings not contained within a shopping center) posted a vacancy rate of 1.8 percent. Over the past year, there has been a pattern of positive absorption in the market. The average quoted asking retail rental rate at the end of the second quarter was $13.94 per square foot. Comparably, a year ago this rate was $13.29 per square foot. Meanwhile, construction of retail properties has been on an upward climb. Within the past four quarters, 1.2 million square feet of retail space has been built, and there is an additional 892,910 square feet in progress, according to CoStar Group. Net absorption continues Retail net absorption was moderate in Minneapolis in the second quarter of 2017, totaling 484,120 square feet. That’s up from 135,536 square feet of positive absorption in the first quarter and 366,652 square feet in the fourth quarter of 2016. However, these figures are all down from the third quarter of 2016, when 638,183 square feet were positively absorbed in the market. Several tenants have moved out of large blocks of space in 2017. For example, Sears vacated 125,209 …

October 12, 2017

Industrial Market Reports Southeast Southeast Market Reports Virginia

Richmond Market Entering New Era of Industrial Development

by John Nelson October 9, 2017

At the mid-year mark, the Richmond industrial market has continued to strengthen, closing with an overall occupancy rate of 91 percent in the categories being tracked — Class A, B and C vacant and investor-owned product with a minimum of 40,000 square feet of total rentable building area (RBA). Class A occupancy decreased slightly from 96 percent at the end of the first quarter to 95 percent at the end of the second quarter, and Class B occupancy has remained steady at 92 percent. The year-to-date net absorption is in excess of 1.5 million square feet, in part due to lower reported vacancies in the Class C former tobacco storage complex located south of downtown Richmond. The inventory of quality, freestanding facilities available for owner/users to purchase remains in short supply, with central locations in even greater demand and experiencing a shorter shelf life. CoStar reports overall industrial occupancy at 95 percent for products of all sizes, including investor-owned facilities, but excluding flex space (minimum 50 percent office). Richmond’s strategic Mid-Atlantic location along Interstate 95 provides access to 55 percent of the nation’s consumers within two days delivery by truck. In addition to being the northernmost right-to-work state on the …

October 9, 2017

Industrial Market Reports Texas Texas Market Reports

Institutional Portfolio Trades Dominate El Paso Industrial Investment Activity

by Taylor Williams October 6, 2017

With an inventory of about 63 million square feet, El Paso’s industrial market has played a pivotal role in the business of commercial real estate for the past 10 years. During that stretch, portfolio trades have come to dominate industrial transactions in this market. For example, Dallas-based Stonelake Capital Partners recently added to its holdings by buying four buildings from 5 Star Real Estate in Vista Del Sol East totaling about 567,000 square feet. Stonelake had entered the market several years prior after buying 11 buildings totaling roughly 1 million square feet in Butterfield Trail Industrial Park from two separate entities, Louis Kennedy and Lincoln Properties. Other defining examples of trades include the activity of IndCore, a Blackstone company that began buying Industrial real estate in El Paso in 2010. The company purchased 1.2 million square feet of assets from Prologis; 1 million square feet of space from Northwestern Mutual Credit and 1.2 million square feet of product from UBS. In addition, Allstate foreclosed approximately 500,000 square feet of the KASCO portfolio in 2011, which was re-sold to Covington Capital in 2015. CIII Capital Partners absorbed eight buildings totaling 900,000 square feet from Titan Industrial in 2012. Soon after, CIII …

October 6, 2017

Indiana Market Reports Midwest Midwest Market Reports Retail

Northern Suburbs of Indianapolis See Vast Growth in Urban Core Development

by Kristin Harlow October 5, 2017

The northern suburbs of Indianapolis aren’t just following the latest trend of developing dense urban cores within suburban markets — they’re on the leading edge. In particular, Fishers and Carmel boast flourishing downtown environments that are walkable and bike-friendly. The idea is to develop a core urban area amid the suburban sprawl by creating activities and concepts that serve various community needs such as cool restaurants, shops, office and living space, evening events for adults, family activities and music and arts entertainment. It’s a lifestyle choice that more and more people prefer. While retail is struggling to regain balance in traditional environments, these mixed-use developments are resonating with their communities. Consumers are looking for experiential opportunities with multiple touch points, such as living, shopping, fitness, dining and entertainment options that integrate open green space. The suburbs of Indianapolis are responding to this trend. Grocery stores and medical facilities also are key to these types of developments, as residents desire the convenience of making one stop. Fishers blazes its own trail Fishers, located just northeast of Indianapolis in Hamilton County, officially became a city in 2015. The community elected a mayor with a strong vision. That vision included the urban core …

October 5, 2017

Market Reports New Jersey Northeast Northeast Market Reports Office Pennsylvania

Greater Philadelphia Office Fundamentals Reflect Continued Strength

by Taylor Williams October 4, 2017

The Greater Philadelphia office market is seeing a few exciting development projects and steady interest in investment opportunities. Southern New Jersey The office sector in Southern New Jersey has exhibited overall strong fundamentals, underpinned by increased new investments from outside of the Greater Philadelphia region and economic inflows to support local economic expansion. The U.S. economy continues to grow moderately and add jobs, with the national unemployment rate dropping to a 16-year low. These conditions are helping to generate demand that is reverberating throughout the real estate sector, especially for office space. Office leasing activity has been on an upswing in 2017. The overall tone is positive, and vacancy rates have been stable for the past few quarters, hovering just above 10 percent. The second quarter posted approximately 395,155 square feet of new leases and renewals. This is a 24 percent increase in activity from the first quarter and an incredible 58 percent increase compared to the second quarter a year ago. New leases represented approximately 43.4 percent of all deals for the quarter. Notable deals ranged from 5,000 to 31,000 square feet. The office investment and sales market is also showing increased activity. Buyers continue to take advantage of …

October 4, 2017

Florida Industrial Market Reports Southeast Southeast Market Reports

Orlando’s Industrial Market Finally Reaches Maturity as Demand Outstrips Supply

by John Nelson October 2, 2017

Orlando’s industrial market is coming into its own. As high-profile users such as Amazon, Samsung and Best Buy continue to enter the market, major brands are taking a fresh approach to Central Florida’s logistical advantages, and an increased number of national REITs are combing the area for any opportunity they can uncover. Despite an unprecedented boom of speculative industrial building, demand continues to outpace supply. In the industrial sphere, Orlando has become the juggernaut of Florida. This growth has been fueled by a number of overlapping factors. Tourism has always been a huge driver for Orlando’s industrial sector. Disney World remains North America’s most-visited theme park. The convention business is thriving and Port Canaveral is one of the top cruise industry ports in the world, attracting some of the largest ships. Now, the area’s tech industry is taking off as well. The $75 million, 100,000-square-foot manufacturing research center, BRIDG — just delivered in Osceola County — will be a catalyst for further growth in high-tech manufacturing and research. Add to this the second fastest rate of population growth in the nation, and the city once known primarily as Florida’s tourist mecca is primed for commercial expansion. On the national level, …

October 2, 2017

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