Market Reports

Why New Multifamily Construction Is Accelerating in Metro Milwaukee

by Kristin Harlow November 2, 2017

The Milwaukee multifamily sector is plowing forward on a number of different fronts. Development activity is continuing its impressive run with a series of high-rise towers in various stages of construction or planning. Popular neighborhoods such as Walker’s Point, Bayview and the East Side are filling in with low- and mid-rise projects, many of which feature a mixed-use component. From an investment standpoint, multifamily is still the sector du jour, with a widening investor pool of both local and out-of-state buyers. Leading the charge on the development front is Northwestern Mutual’s 7Seventy7, which is currently under construction in downtown Milwaukee with an anticipated opening in summer 2018. The 34-story complex will feature 322 apartments, ground-floor commercial and 1,400 parking spaces, many of which will service employees at the company’s recently completed 1.1 million-square-foot headquarters located only one block away. Other major projects yet to break ground but slated to reshape the skyline in the coming years include: • The Couture — Barrett Lo Visionary Development is planning to build a 44-story tower with 300-plus units, retail and parking across the street from the planned Lakefront Gateway Plaza, which will connect the area between the Milwaukee Art Museum and the Summerfest …

November 2, 2017

Market Reports Multifamily New Jersey Northeast Northeast Market Reports

New Jersey Multifamily Demand Keeps Pace With Stepped-Up Supply

by Taylor Williams November 1, 2017

With 4,900 new rental units coming on line this year in Northern New Jersey, inquiring minds are asking whether demand here is keeping pace with supply. The short answer is “yes.” New multifamily inventory continues to lease up, especially along the Hudson River Gold Coast, with performance meeting and exceeding developer expectations market-wide. Rental rates for Class A apartment product in Northern New Jersey have increased 3 percent year over year, registering at $2,369 at the midway point of 2017, according to Reis. Vacancy had been trending down since mid-2016, with a slight tick up in the second quarter of 2017, currently resting at 5.2 percent due to the delivery of 1,600 units in the last three months. Compare this to a $1,336 average rent and 4.4 percent vacancy rate nationwide, and New Jersey’s sustained appeal to investors and developers is unquestionable. However, multifamily investment sales to date in 2017 have been fairly measured — with fewer opportunities coming onto the market. For sales in excess of $10 million through August 2017, the volume has totaled $1.07 billion with the number of units sold totaling 4,708 (down 12 percent and 43 percent respectively compared to the same time in 2016) …

November 1, 2017

Kentucky Market Reports Retail Southeast Southeast Market Reports

Louisville Experiences New Retail Development Across the Metro Area

by John Nelson October 30, 2017

Louisville’s evolving retail market has presented a mix of new development and infill redevelopment opportunities that have created a substantial amount of activity in targeted areas. While rents and absorption activity have fluctuated, several of these new developments have proven that well-designed, experiential retail projects can still gain traction and create the buzz necessary for successful brick-and-mortar retail. No project in Louisville encapsulates this more than the Whiskey Row project that is taking place downtown in the central business district (CBD). It has been several years since retail development or retailers have ventured downtown, but this new project has created the level of excitement that has attracted national retailers. The driving force behind Whiskey Row is the tourism industry centered around Louisville’s well-known bourbon scene. The $30 million mixed-use project will be a redevelopment of former distilleries, with the developer preserving and restoring the historic facades, while building out world-class retail, restaurant and office space in the existing structures. The entire project will consist of 24,000 square feet of retail. With new distilleries and restaurants opening around the mixed-use development, retailers have been drawn by the foot traffic that will undoubtedly be delivered by tourists traveling to Louisville for the …

October 30, 2017

Market Reports Office Texas Texas Market Reports

How Will XTO’s Move Impact Fort Worth’s Office Market?

by Taylor Williams October 27, 2017

The recent announcement that XTO Energy Inc., a division of energy giant ExxonMobil, will be moving 1,600 jobs to Houston was not the best news for Fort Worth. The move, which will occur in waves between 2018 and 2020, will reduce downtown’s private workforce by 3 percent over the next few years and lead to several of the company’s CBD properties hitting the market for sale. Broader economic implications notwithstanding, many tenants, landlords and city officials are wondering what impact XTO’s move will have, not only on the office market, but also on the downtown area’s commercial real estate market. However, any worries that the move would drastically upset the downtown market’s equilibrium appear to be misplaced. Most office sectors, especially the CBD’s Class A market and the suburban market that includes the West 7th and West/Southwest Fort Worth areas — should see minimal impact. It is even possible that most of the Class B market in the CBD will remain unaffected, as demand for re-development or from existing office users may consume much of XTO’s spaces. To understand how this move could affect downtown Fort Worth, it helps to look at the bigger picture. The current CBD office inventory …

October 27, 2017

Industrial Market Reports Midwest Midwest Market Reports Ohio

Strategic Location, Strong Labor Force Boost Columbus Industrial Market

by Kristin Harlow October 26, 2017

The Columbus industrial market continues to thrive as a hot center for logistics, warehousing and manufacturing. Its strategic location within a one-day truck drive of 50 percent of the U.S. population and one-third of the Canadian population is an important part of this success. Other contributing factors to this success include a strong Midwestern work ethic, low cost of real estate, low taxes, low wages and minimal union activity. With a total population of about 2 million in metro Columbus, central Ohio has 86,000 employees in the manufacturing industry and 80,000 employees in logistics at 4,100 logistics companies. Positive vital signs Central Ohio’s 273-million-square-foot industrial real estate market continues to expand with nearly 5.7 million square feet of new construction in 2017. Year to date, there has been 1.3 million square feet of positive net absorption and vacancy is 4.6 percent, down from 5.1 percent as of year-end 2016. Net absorption totaled 9 million square feet in 2016. Effective rental rates in central Ohio range from $2 to $3.75 per square foot net for larger warehouse and manufacturing spaces. Operating expenses run from 35 cents to $1.25 per square foot. Sales prices will range from $10 to $45 per square …

October 26, 2017

Market Reports New Jersey Northeast Northeast Market Reports Office

Northern New Jersey Shows Strength in Office Construction and Redevelopment

by Taylor Williams October 25, 2017

Despite a slow start to the year, the Northern New Jersey office market decreased vacancy to 20.2 percent as we moved from fourth quarter 2016 into 2017. More than 750,000 square feet of office space is expected to be absorbed in the market to drop the vacancy rate 20 basis points. New deliveries in Morris and Essex Counties, including a 200,000-square-foot office for UPS in Parsippany, are leading the way. Moreover, landlords and investors alike are upgrading and investing in larger redevelopment projects throughout the state which has increased leasing activity. In response to healthier market conditions, owners have also increased rents for office space, which caused higher vacancy rates at the beginning of the year. The average asking rent is anticipated to climb to $27.59 per square foot this year, outpacing the 2 percent rise in office rents posted in 2016. In first quarter, the Hudson Waterfront saw an increase of 3.6 percent per square foot. Hudson Waterfront The main trends in Jersey City and Hoboken are driven by the large populations of millennials in and around surrounding areas. Millennials account for 27.2 percent of the population in Hudson County. In the last 12 months, investors — particularly New …

October 25, 2017

Market Reports Retail Southeast Southeast Market Reports Virginia

New Grocers, Redevelopments Invigorate Richmond’s Retail Market

by John Nelson October 23, 2017

The Richmond retail market continues to be strong. Overall vacancy rates are slightly higher than usual, hovering around 7 percent with negative absorption, due to all types of new products coming online in the first half of 2017. The market is adding millennials at double the pace of any other generation and has been recently named in multiple media outlets as one of the top living destinations for millennials nationwide. With this influx, multifamily development in Richmond is robust, which in turn is attracting all types of urban retail and chef-driven restaurants. The most popular submarkets for new urban retail are the Central Business District, Shockoe Bottom and the white-hot Scott’s Addition, with many developers taking advantage of Richmond’s Historic Tax Credit program. Richmond’s famous grocery wars continue with major players jockeying for the best positions. Kroger has historically positioned themselves well in the market with 18 stores, many of which have gone through recent expansions to the Marketplace concept. It recently scrapped plans for the development of two new relocation positions in Mechanicsville and Colonial Heights. The most recent grocery news has been Martin’s Food Markets exiting and Publix entering the market. Martin’s peaked at 19 stores, most of …

October 23, 2017

Healthcare Market Reports Texas Texas Market Reports

Options Abound as El Paso Healthcare Real Estate Market Expands

by Taylor Williams October 20, 2017

Healthcare facilities have become a mainstream investment asset class for private and institutional investors over the last decade. Healthcare assets with strong credit tenancy and on-campus locations are now fetching record pricing. Pressure from consumers, federal and state legislation and fiscal responsibility are driving changes in the delivery of healthcare services. Significant consolidation is occurring in the form of acquisitions and affiliations. The most visible and tangible change to the consumer has been the proliferation of urgent care facilities. Other drivers of healthcare facility construction include hospital operators pushing for their brands and facilities to be more convenient to the consumer. Increased focus on preventative care and consumers’ desire for quick and convenient access to services near work or home plays a role as well. These trends are relevant and visible in the 2017 El Paso healthcare market. Population Growth Leads Historically, El Paso ranks among the nation’s fastest-growing metropolitan areas, averaging decade-over-decade growth of 21 percent from 1960 to 2010. The MSA, composed of El Paso County and the more recently added Hudspeth County, is projected to hit nearly 883,000 residents by 2019. In 2014, when El Paso data was combined with data from sister city Ciudad Juárez and …

October 20, 2017

Market Reports Midwest Midwest Market Reports Office Ohio

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

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