Market Reports

Texas Flirts With Oversupply of Self-Storage

by Taylor Williams September 8, 2017

Speaking to a panel of real estate professionals in the 1980s on the dangers of overbuilding during a period of economic expansion, Dallas real estate magnate Trammell Crow offered lenders in the crowd a simple proposition: “If you stop lending, I’ll stop developing.” Thirty-one years later, the nature of that relationship has manifested in the Texas self-storage market. After minimal delivery of self-storage properties in 2012 and 2013, development began to surge in 2014. The Texas Self Storage Association (TSSA) estimates that there are now roughly 6,500 facilities statewide, and local sources concur that unit growth from 2014 to the present has been somewhere in the neighborhood of 350 new facilities per year. This development boom has occurred in the face of rising land prices, high property taxes and a constricting pool of skilled labor that has driven up construction costs. Overall economic growth is contributing to the concern as well. Lenders are still lending, thus developers are still developing, betting that the pent-up demand for self-storage properties in Texas still has some gas left in the tank. The bullish perspective on self-storage appears to go beyond the Lone Star State. Tennessee-based hotel data and research firm STR, which has …

September 8, 2017

Illinois Market Reports Midwest Midwest Market Reports Multifamily

The Middle Ground: The Next Great Opportunity for Chicago Multifamily

by Kristin Harlow September 7, 2017

Like other metros, Chicago is in the midst of an apartment boom where the hum of multifamily construction has become commonplace. In fact, approximately 8,000 new rental units are slated to deliver by the end of next year, according to Appraisal Research Counselors. Nearly 4,000 units are expected to deliver in 2019. The majority of this multifamily construction is concentrated on Class A rental high-rises. SixForty (640 N. Wells St.) by JDL Development and 8 E. Huron by CA Ventures — both of which The Habitat Co. will be managing — aim to meet the demand of those looking to be closer to the influx of new businesses moving downtown, as well as an urban lifestyle with robust dining and entertainment options. Like its metro counterparts, Chicago has become a city of renters. According to Harvard University’s Joint Center for Housing Studies, the U.S. homeownership rate hovered at just 64 percent at the start of 2017, following 12 years of decline, while the number of renters continued its upswing. In the past five years, an average of 1 million new renter households were formed every year, per the National Multifamily Housing Council. Indeed, these have been good years for those …

September 7, 2017

Market Reports North Carolina Office Southeast Southeast Market Reports

Charlotte’s Ballantyne Office Submarket Shows No Signs of Slowing Down

by John Nelson September 4, 2017

The housing market remains hot in Charlotte with sustained growth in both sales activity and sales price. Affordable prices, a strong market and robust salaries are driving first-time buyers to take the plunge and purchase their first home and there’s no better place to live in Charlotte than in the 28277 zip code, otherwise known as Ballantyne. The Ballantyne area is nationally known for not only a place to work with more than 5 million square feet of Class A office space, but also a desirable place to live with housing opportunities ranging from $145,000 to over $4 million. The 28277 zip code has top-rated schools, an abundance of restaurant and shopping options, private and public golf courses, and the area’s only Four-Star recognized hotel, spa and restaurant. The office sector remains hot with continued employment growth attributing to falling vacancy rates, new construction and rising rents. Charlotte has an overall vacancy rate of 10.4 percent and the overall weighted average asking rent for Class A space in Charlotte is $25.98 per square foot. There is currently over 2.3 million square feet of office product under construction in Charlotte and close to 7 million square feet planned or proposed. The …

September 4, 2017

Industrial Market Reports Texas Texas Market Reports

Baluarte Bridge Heightens Role of Agriculture In Texas’ RGV Industrial Sector

by Taylor Williams September 1, 2017

The need for storage and distribution space for the variety of fruits and vegetables imported from Mexico has long been a driver of industrial demand in the Rio Grande Valley (RGV). Overall industrial occupancy is on the rise throughout the region — about 92 percent in the Greater McAllen Area — and the role of agriculture is becoming a major part of it. The agriculture industry has fueled rapid growth in the RGV city of Pharr and continues to bolster its economic prosperity today. As a global agricultural powerhouse, Pharr is home to a variety of thriving businesses in the agriculture industry. The Pharr-Reynosa International Bridge represents the sixth-largest land (in the United States and currently processes more than $30 billion in international trade on an annual basis. The most influential element behind this uptick has not been agrarian, financial or demographic, but rather infrastructural and on the Mexico side of the region. The Baluarte Bicentennial Bridge, a 3,700-foot cable-stayed bridge completed in late 2013, provides direct access from the Pacific coast city of Mazatlan to the inland metro area of Durango. From Durango, product can be transported directly to the Mexico border city of Reynosa, which has a thriving …

September 1, 2017

Market Reports Multifamily North Carolina Southeast Southeast Market Reports

Regional Job Growth Reinvigorates Charlotte’s Multifamily Market

by John Nelson August 28, 2017

The Charlotte economy has created jobs at a faster rate than the national average throughout this cycle. With 34,900 new jobs over the last 12 months and more than 110,000 over the last three years, the regional job market has created a new demand for the luxury multifamily inventory throughout infill and select suburban submarkets. Four of the MSA’s top five employers — Wells Fargo, Bank of America, Carolinas HealthCare System and Novant Health — each have a combined 1,000-plus job openings in Charlotte, while AXA, Red Ventures, Dimensional Fund Advisors and CompuCom have begun major expansions across the metro area. This has created a need for additional multifamily inventory, which has expanded by 7,700 units over the last 12 months, while absorption was just shy of 7,000. The modest downtick in occupancy was more than offset by a 4 percent same-store rent growth (30 basis points higher than the five-year trailing average of 3.7 percent). Two marquee high-rise projects are nearing completion in the central business district’s Third Ward: Greystar’s Ascent and Childress Klein’s Museum Tower. The early returns show unprecedented per square foot rents for the metro area. In most infill locations, developers are offering one month free …

August 28, 2017

Market Reports Multifamily Texas Texas Market Reports

Texas’ RGV Multifamily Market Attracts More Diverse Pool of Buyers

by Taylor Williams August 25, 2017

These days, first-time investors in the Rio Grande Valley (RGV) multifamily market are in for a bit of education. Misconceptions about the RGV are common due to the market’s actual proximity to the Mexican border and lack of proximity to other major metros, as well as the Trump administration’s dicey relationship with our neighbor to the south. In reality, the area is an attractive, stand-alone market filled with growth potential. Education, healthcare, retail, international trade, agriculture, oil & gas, port activity — the RGV has it all. Hidalgo and Cameron counties make up the fifth- and ninth-largest MSAs in Texas with a combined population in excess of 1.2 million. As a result, numerous investors from larger Texas MSAs, as well as out-of-state investors, are targeting multifamily opportunities in the RGV. ARA Newmark is currently marketing an 84-unit asset at a high-density intersection in the South Texas market. This metro is awash with high-end retail, healthcare and single-family developments and is thus attracting residents from a variety of backgrounds. Within the first two weeks of marketing, the asset drew six preemptive offers from a diverse buyer base that included two out-of-state buyers. The volume of retail growth in the Rio Grande Valley in recent …

August 25, 2017

Market Reports Midwest Midwest Market Reports Missouri Office

Dramatic Rise in Tech Jobs Propels Growth in St. Louis Office Market

by Kristin Harlow August 24, 2017

Rapid growth in the tech sector is dramatically impacting the St. Louis office market. The city boasted an increase of 6,220 high-tech jobs during the last four years, over 2,000 of which were generated in the past year alone. Given the total number of tech jobs in St. Louis is 57,300, this amounts to a healthy growth rate of 10.9 percent. From well-known companies like Square Inc., Yurbuds and Answers.com to newer ones such as LockerDome, Aisle411 Inc. and MediBeacon Inc., the St. Louis region is a growing hot spot for innovative, new and expanding companies. These companies include leaders in the areas of plant and life sciences as well as financial services, information technology, advanced manufacturing and even rapidly growing pet care industries. Significant healthcare and biotechnology institutions in the region include Pfizer, Donald Danforth Plant Science Center, Solae Co. and Sigma-Aldrich. As capital injections slow in the coastal markets, St. Louis’ startup scene is thriving, attracting talent, new companies and investors from across the globe. According to Forbes, the city was named the fastest-growing metropolis for startups in 2016. Analytical website fivethirtyeight.com reaffirmed St. Louis’ increased appetite for startups, attributing the uptick in part to a combination of …

August 24, 2017

California Market Reports Multifamily Western Western Market Reports

Apartment Values Continue to Climb in Orange County

by Camren Skelton August 22, 2017

Orange County’s well-diversified and growing economy, coupled with its high quality of life, attract residents nationally and internationally to the region. Prohibitive home pricing also intensifies the high barrier to home ownership, further supporting overall apartment fundamentals in the Orange County market. Developers are targeting urban centers where they can transform the areas with Class A rentals. Anaheim’s Platinum Triangle, the Disney Resort, Convention Center Complex and surrounding area are undergoing an infusion of more than $5 billion that is redefining the area as a highly urbanized residential, entertainment and business hub. A similar transformation is happening at the Irvine Business Complex (IBC). In addition to these clusters, about 19,000 units are scheduled to come online over the next few years, particularly in the Class A product category. Rents in Orange County rose 4.8 percent year-over-year through January, outpacing the 4.6 percent national growth rate. Renter demand remains elevated, fueled by a rapidly expanding economy and population gains. Large companies and startups alike are drawn to the market’s highly educated workforce as nearly 25 percent of residents have at least a bachelor’s degree. This reinforces the foundation for the multifamily sector’s rent growth in both “renter by necessity” (students/young professionals/blue-collar/subsidized …

August 22, 2017

Industrial Market Reports North Carolina Southeast Southeast Market Reports

Charlotte Industrial Market’s Absorption, Rent Growth Spur Optimism

by John Nelson August 21, 2017

The industrial market in Charlotte is healthy, with trends pointing to another solid year of net absorption and rent growth. The market continues to attract institutional capital, as cap rates hover slightly below 6 percent for Class A product in the metro’s primary submarkets. Charlotte’s job growth continues to drive population migration into the market. More than 37,000 new jobs have been added in the past 12 months, dropping the unemployment rate from 5.2 percent to 4.9 percent. North Carolina has a young, educated workforce and boasts 53 universities and colleges. The state is nationally recognized for its labor climate. Major employers span the gamut of the business world, from financial and energy stalwarts such as Bank of America and Wells Fargo, Duke Energy and Siemen’s Energy Inc., to more industrial players such as Daimler Trucks North America, Lowe’s, FedEx and Snyder’s-Lance Inc. Charlotte is a logistically sound market, with the city’s airport ranking as the eighth busiest in the U.S., according to the Federal Aviation Administration. A relatively new intermodal rail facility and continued investment in road infrastructure projects are also helping to foster an optimistic environment. The HB2 legislation, which proved a major obstacle to attracting new companies …

August 21, 2017

Market Reports Retail Texas Texas Market Reports

Demand for Freestanding Emergency Rooms, Cold Storage Facilities Surges in Texas’ RGV

by Taylor Williams August 18, 2017

South Texas is in the midst of a growth spurt in the commercial real estate industry. Within the area’s retail sector, demand for freestanding emergency rooms and cold storage facilities is growing rapidly. Though atypical, requests for such spaces are becoming increasingly common in the Rio Grande Valley (RGV). An estimated 1.3 million people call the RGV home. Both Hidalgo and Cameron counties are equipped with multiple hospitals to meet the healthcare needs of residents. There are three freestanding emergency rooms in Hidalgo County and two in Cameron County, with several more currently in the pipeline. Three of the larger healthcare providers within the RGV — Doctor’s Hospital at Renaissance in Edinburg (the largest hospital in the area), South Texas Health System, which has five hospitals in cities McAllen and Edinburg and HCA Hospital in McAllen — all have plenty of emergency rooms to cover the cities they serve. Between Harlingen and Brownsville, both the longstanding Valley Baptist Health System and the newer Harlingen Medical Center have plenty of emergency rooms to handle residents’ healthcare needs. Despite having this many established players in the market, new operators of healthcare real estate like Neighbors Health System, which owns and operates Neighbors …

August 18, 2017

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