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 …
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, …
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 …
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 …
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 …
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 …
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 …
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, …
Long-time El Paso residents frequently hear people talking about the good things happening in our city. To be sure, El Paso is an enigma and a contradiction — a big small town with its own identity. Cultural, economic, social and ethnic differences are comfortably accommodated in a “mi casa es tu casa” openness. Contrary to our “wild west” reputation, El Paso ranks as one of America’s safest cities by size. The closest major city to El Paso is Ciudad Juarez, a city of 1.5 million people just across the Rio Grande River in the Mexican state of Chihuahua. The economies of the two cities are inextricably linked and create a major trade area on the southern U.S. border with Mexico. Roughly 30 percent of El Paso’s retail sales come from Mexican shoppers who also access educational institutions, medical services and professional services on the U.S. side. American and multinational manufacturers employ more than 200,000 people in Juarez and rely on El Paso’s transportation and trade infrastructure. The expansion of both trade and interdiction at the border has generated thousands of new federal agency jobs paying wages above the city’s median incomes. Apartment development and ownership in El Paso are dominated …
The St. Louis industrial market has enjoyed robust growth in recent years in part because of a growing economy, the rise of e-commerce and 3PL activity, favorable tax incentives and abatement packages and a movement to quality from existing users. With a population of 37.5 million in a 300-mile radius and over 96 million in a 500-mile radius, St. Louis is a distribution force to be reckoned with. Over the past five years, vacancy has dropped from 9 percent to 4.1 percent as of the second quarter of 2017. This number, paired with asking lease rates rising 9 percent during that same time frame, illustrate the health of the market. With more than 2.7 million square feet of space absorbed already this year, the 4.2 million square feet currently under construction will be absorbed quickly. Low vacancies have spurred the need for speculative space, which has increased at a rate not seen before in this market. Recent ongoing or completed projects include a 548,850-square-foot space at Aviator Business Park, 158,000 square feet at Fenton Logistics Park and two 100,000-square-foot buildings at Hazelwood Logistics Center. Having spec product on the market places St. Louis on the radars of users that require …