Market Reports

Southern New Hampshire Posts Lowest Retail Vacancy Since 2008

by Taylor Williams December 27, 2017

Retail inventory in Southern New Hampshire totaled 29.8 million square feet in 2017, a modest decline of 59,400 square feet, or 0.2 percent, largely due to retail demolitions and conversions to non-retail space, including auto dealerships, office, and residential. Some former retailer spaces that have been demolished include the 17,800-square-foot Grenon Trading Co. in Bedford, the 10,700-square-foot New Hampshire Liquor & Wine Outlet in Salem, and the 8,400-square-foot Weathervane Restaurant in Salem. The big story in the market is the notable decline in vacancy. Several retailers absorbed large vacancies, reducing unoccupied space by more than 400,000 square feet, and cutting the vacancy rate from 10.5 percent in 2016 to the current level of 9.1 percent. Larger retailers who filled vacant space include Chunky’s Cinema in Manchester, which opened in a portion of the former Lowe’s store; Hobby Lobby in Nashua, filling a vacant Market Basket at Somerset Plaza; and Ocean State Job Lot in Seabrook, which opened in the former Walmart at Southgate Shopping Center. As a result of relatively stable inventory and considerable decline in vacancy, the region finished the year with positive net absorption of 352,400 square feet. There’s been no change in the top 10 largest regional …

December 27, 2017

Louisiana Market Reports Office Southeast Southeast Market Reports

New Orleans’ Suburban Class A Office Space Still Outperforms U.S. Average

by John Nelson December 25, 2017

The greater metropolitan New Orleans office market contains approximately 15 million square feet of office space segregated into five distinct submarkets. Two major submarkets, the Central Business District (CBD) and Metairie (a suburban market), represent 94 percent of the total square footage. The occupancy rates of Class A properties in these two markets are 87.7 percent and 88.7 percent, respectively. These rates are 1.56 percent lower and 3.01 percent higher than the respective downtown and suburban Class A office averages nationally. The overall vacancy is limited to a select group of buildings resulting in limited options for tenants seeking more than 25,000 square feet of contiguous space. The New Orleans economy typically runs counter cyclically to the rest of the nation. It has enjoyed relative immunity from the lingering effects of the 2008 financial crisis and the relatively stagnant national economy. Over the last several years occupancy rates have trended above national averages and rental rates have experienced modest growth. New Orleans’ office market is performing well, consistently outperforming most national averages and rarely lagging far behind others. This track record of success can be attributed to several different factors. Due to geographic constraints there are limited sites available for …

December 25, 2017

Market Reports Retail Texas Texas Market Reports

Minimal New Development Spurs Investment in San Antonio Retail

by Taylor Williams December 22, 2017

As the real estate world addresses the uncertain future of brick-and-mortar shopping, the market for retail investment in San Antonio remains strong. The recent bankruptcies of physical merchandisers such as Toy “R” Us, Radio Shack, Rue 21 and Payless Shoes — to name but a few — have proven that retailers must adapt their strategies to an ever-changing environment. In San Antonio, however, a historically low volume of new retail development and decreasing vacancy rates, combined with strong fundamentals, have attracted and secured more retail investors than ever before. San Antonio’s thriving economy is supported by steady job growth — 25,000 jobs have thus far been added in 2017, according to the City Employment Statistics survey. The Bureau of Labor Statistics put San Antonio’s unemployment rate at 3.7 percent as of August 2017, versus the national average of 4.5 percent. Often referred to as Military City, USA, San Antonio is home to Joint Base San Antonio, which includes Fort Sam Houston, Lackland Air Force Base and Randolph Air Force Base. These military installations alone employ roughly 90,000 people and have an estimated $27 billion impact on the local economy. These statistics, coupled with the market’s steady job and population growth, …

December 22, 2017

Industrial Market Reports New Hampshire Northeast Northeast Market Reports

Southern New Hampshire Industrial Overview

by Taylor Williams December 20, 2017

With a statewide unemployment rate of 2.7 percent, New Hampshire has one of the lowest unemployment rates in the nation, and is well below the national unemployment rate of 4.4 percent. The New Hampshire labor market has continued to tighten, with unemployment having dropped 0.2 percentage points since third quarter of last year. Employment gains have not been seen in two traditionally industrial sectors: trade, transportation & utilities or manufacturing. Employment in these sectors has remained relatively flat year-over-year, at -0.4 percent and 0.6 percent growth respectively. Year-to-date industrial absorption was pushed up to 623,485 square feet by continued positive absorption in the third quarter. The three largest submarkets — Nashua, Manchester, and Portsmouth —made up the majority of that absorption, while two of the smaller submarkets — Concord and Bedford — are the only ones experiencing negative year-to-date absorption. The largest new lease of the fourth quarter of 2017 was Bensonwood Woodworking’s lease of more than 100,000 square feet of space at 25 Production Avenue in Keene. The space will be used mainly for manufacturing purposes. On the capital markets front, the largest transaction of the quarter was the purchase of 55 and 85 Mechanic Street, a 119,000-square-foot multi-tenant …

December 20, 2017

Louisiana Market Reports Restaurant Retail Southeast Southeast Market Reports

Restaurants Prove to be New Orleans Retail Market’s Bread and Butter

by John Nelson December 18, 2017

Take a look at the current retail landscape, not only in New Orleans, but far beyond the Big Easy, and you will find this sector has changed drastically over the past decade. Some argue retail is dead, while others cling to the notion that every market goes through cycles, and this has been going on long before the dawn of any Tricentennial festivities. Somewhere between these two extremes is the confluence of trends, data, outliers, gossip and pontificating cries, that when carefully dissected, should provide the necessary context to obtain an understanding of the current retail market in New Orleans, as well as the opportunities that exist in the future. Make no mistake, retail in New Orleans is changing, but the restaurant sector is a bedrock, creating fresh concepts, diversifying the city’s food offering and strengthening the overall retail market. It’s futile to deny the impact technology has had on the overall retail market, and New Orleans is no exception. Retailers that derive a large portion of revenues from the sale of goods that can be purchased online are finding it difficult to compete due to the cost of operating a brick and mortar location. Of course, this is only …

December 18, 2017

Market Reports Multifamily Texas Texas Market Reports

Strong Demand Underserved in San Antonio Multifamily Market

by Taylor Williams December 15, 2017

San Antonio is one of the nation’s fastest-growing cities, with a booming, diversified economy that’s luring new businesses and young people at a rate that most other metro areas can only envy. Lacking Austin’s hipster cred, Dallas’ moneyed glamour and Houston’s perennial position at the epicenter of a global industry, San Antonio’s many strengths are often overlooked. While this lower profile hasn’t slowed growth in the Alamo City, it has left its expanding market for Class A apartments comparatively underserved. Led by education and health services, the San Antonio area’s economy added approximately 21,500 new jobs in 2016. This represents a 2.1 percent growth rate, a healthy pace for the San Antonio MSA, albeit a slight reduction from the 2.8 percent growth rate in 2015, according to the Federal Reserve Bank of Dallas. This steady expansion fueled a population boom that saw 47,906 new residents join the metro between July 2015 and July 2016. This 2 percent growth rate ranked San Antonio as the 10th fastest-growing MSA with a population greater than 1 million people, according to estimates by the U.S. Census Bureau. Millennials Lead the Way San Antonio isn’t just a leader in total population growth; it also ranks …

December 15, 2017

Market Reports Midwest Midwest Market Reports Multifamily Nebraska

Why Omaha Multifamily Market Is Golden for Investor Opportunities

by Kristin Harlow December 14, 2017

The national love affair with the multifamily sector may be starting to cool, but the Omaha market is just coming of age and heating up. “Overall, it was a strong third quarter, which was a nice surprise,”said Michael Cohen, CoStar Group director of advisory services, during his State of the Multifamily Market Third Quarter Review and Outlook on Nov. 1. “We’re still in the golden age for multifamily, but we’re seeing signs of a gradual slowdown in the apartment market.” Trendy new apartment towers and historic building conversions in downtown Omaha are all the rage — like most markets — but under the radar the entire Omaha metro is experiencing a significant boom in apartment development and sales. And why not? What’s not to like about Omaha? We are the non-threatening little brother of the Midwest that everyone likes, but never thought of in that way. But something has changed and Omaha is catching the attention of players that would have traditionally overlooked our strong fundamentals. Omaha has a diversified and stable economy fortified by nine Fortune 1000 companies, including Berkshire Hathaway, Union Pacific Railroad, Mutual of Omaha and TD Ameritrade, as well as a burgeoning innovation scene and a …

December 14, 2017

Connecticut Market Reports Northeast Northeast Market Reports Retail

Winners and Losers in Connecticut Retail

by Taylor Williams December 13, 2017

The retail market in Connecticut is alive and well. Sure it’s changing but what industry doesn’t experience change? There are numerous retail categories that continue to post healthy sales while also keeping their new store counts in a growth trajectory. Other categories will adapt to consumer trends and stay relevant in the world of brick and mortar. As we close 2017, we see that traditional shopping centers, especially grocery-anchored centers, are the solid performers in the sector. The “services” or “daily needs” category of retail continue to flock to these centers mainly because of consumer routine. The “services/daily needs” category includes health/fitness, traditional sit-down restaurants, quick-service restaurants, pharmacies, pet supply retailers, wireless communications, medical (walk-ins) and banking. Traditional neighborhood centers are becoming more conscious about merchandising with this specific category while trying to avoid deals with the more risky retail categories, such as off-priced apparel. The big-box power centers and the centers with large chunks of vacancy are another story, and there will be winners and losers. Geography plays a big role here and it’s not the dead-end road that some suggest. Over the past 18 months, my team’s exclusive leasing portfolio has had two Kmart closures in two separate …

December 13, 2017

Louisiana Market Reports Multifamily Southeast Southeast Market Reports

Multifamily Investors, Developers Find Hidden Opportunities in New Orleans

by John Nelson December 11, 2017

Sometimes there is a “herding” mentality in real estate investment activity, but markets that do not make the headlines of news stories or appear on the top market lists are the ones investors should focus on. New Orleans is one such market, and while it might not be on everyone’s radar, it has the fundamentals and dynamics that are attracting investors’ attention. With a total inventory of approximately 55,000 units, demand for multifamily acquisitions in New Orleans and the Gulf South region overall remains strong. Over the past 24 months, the market has experienced heightened demand from national, regional and foreign investors. The investment community is attracted to the stability of the market, as well as its significant barriers to entry. What is attracting investors to metro New Orleans are higher cash on cash returns and cap rates than what they are finding in larger metropolitan areas. Investors feel confident in their ability to realize rent growth, given the high cost of single-family housing and the significant geographic barriers to entry. Developable land is scarce and has given multifamily owners a franchise of sort since the ability to increase the supply is limited. As New Orleans prepares to celebrate its …

December 11, 2017

Market Reports Office Texas Texas Market Reports

Urban Renaissance: San Antonio Office Market Gains A New Identity

by Taylor Williams December 8, 2017

Regional investors have always described San Antonio as a steady market with desirable economic indicators. But with the impending delivery of a Class AA office tower and a growing tech presence, the city is on the brink of emerging as a national contender for commercial real estate investment. Historically, San Antonio has posted strong employment figures that have kept it firing on all cylinders and ready for business. The San Antonio-New Braunfels MSA has experienced seven straight years of job growth. The metro’s unemployment rate has dropped 10 basis points quarter-over-quarter to its current level of 3.7 percent, a figure that strongly outperforms the national average of 4.5 percent. By comparison, the MSA’s 10-year average unemployment rate was 5.5 percent and the nation’s 7 percent. As new investors analyze the San Antonio office market’s history, they should consider the similarities and differences between San Antonio and other major Texas metros. Assessing the last peak-and-valley metrics from 2007 through 2010 provides insight into how the market reacts to a changing economy. Vacancy Rate Stabilizes The vacancy rate for Class A office properties in San Antonio peaked in 2009 at 16.7 percent, while vacancy rates in Austin, Dallas-Fort Worth (DFW) and Houston …

December 8, 2017

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