Market Reports

Greenville’s Positive Economic Momentum is Catching the Eye of Retailers

by John Nelson May 29, 2017

The city of Greenville and the surrounding submarkets are exploding with growth. The once-sleepy textile town in the Upstate of South Carolina has now become a robust, diversified economy that is garnering interest from retailers that may have overlooked the market in the past. The change in the city of Greenville has not gone unnoticed; several publications and top ten lists have recognized Greenville for its thriving downtown. From the addition of Falls Park in 2004, an approximately 32-acre oasis in the West End of the city, to multiple mixed-use developments under construction, Greenville’s resurgence has brought new residents, new retail and new life to the region. Growth in the Greenville market has been largely driven by the addition of thousands of new jobs, a low cost of living and highly attractive lifestyle options. Greenville serves as the North American headquarters for BMW, Michelin and Hubbell Lighting, all of which have contributed to significant job growth in the region. As Greenville’s downtown has continued to draw national recognition, retailers have taken notice. In recent years, Greenville has attracted a multitude of national retailers new to the market. Hughes Development’s Project ONE kicked things off when it brought national retailers like …

May 29, 2017

Market Reports Retail Texas Texas Market Reports

Torrid Job, Population Growth to Fuel Fort Worth Retail in 2017

by Taylor Williams May 26, 2017

In DFW, retail real estate will experience its eighth consecutive year of performance gains as upward economic momentum strengthens consumption and bolsters the local retail sector. The national economy is operating at near full employment and the rate of job creation will start to slow, bringing two million new job opportunities to fruition in 2017. At least 100,000 of these jobs will be filled in DFW and these dynamics will affect retail property by driving up wage growth, increase rental rates and promote higher retail spending.” As a result, national retail sales are expected to increase 4 percent this year. In Fort Worth specifically, retail trade is one of largest employment sectors and accounts for more than 11 percent of all jobs. Dallas-Fort Worth is expected to see a fourth consecutive year of employers adding over 100,000 jobs as a number of large companies like Toyota, Liberty Mutual and many others expand their footprints in the metro. Advance PCS, Dean Foods, ExxonMobil, Kimberly-Clark, Neiman Marcus, Southwest Airlines and Texas Instruments are among the 21 Fortune 500 companies headquartered in the area. The relocation and expansion of these businesses will draw new residents to the area. Approximately 88,000 individuals are slated …

May 26, 2017

Industrial Market Reports Midwest Midwest Market Reports Ohio

Toledo’s Industrial Market Is in Need of Large-Format Speculative Construction

by Kristin Harlow May 25, 2017

A snapshot of Toledo’s industrial real estate market at the end of 2016 reveals a well-performing sector, maintaining the steady improvement recorded during the prior year. In fact, the vital signs of the property sector hit some of their best levels in a decade last year. By the end of the year, every key metric was up from midyear 2016 and year-end 2015. One bit of cloudiness trying to sneak in on the otherwise very sunny picture, however, is the limited supply of available space options. Demand clearly exists for additional space, but users are unable to find options that fit their needs. The dearth of adequate space alternatives is restraining potential transaction volume and, by extension, probable job growth. By Toledo standards, the market has been absorbing an impressive amount of space over the past several years. Overall, the 85 million-square-foot market absorbed 763,065 square feet in the second half of 2016. However, as strong as the absorption numbers have been, it is easy to speculate they would be much higher if more of the right kind and sizes of space existed in the market. There is a shortage among all building sizes, but the need is most acute …

May 25, 2017

Market Reports New York Northeast Northeast Market Reports Office

Cross-Border Investments Continue to Surge in Manhattan

by Camren Skelton May 24, 2017

As the U.S. economy passes through the third largest expansion cycle in the economic history, every sector in the economy has seen phenomenal growth over the last six to seven years. The growth in other industries has had a trickle-down effect on the real estate sector. U.S. real estate has seen rents surging and even surpassing the previous expansion cycle, as well as an increase in leasing and absorption activity and a record rise in the value of sales transactions. Manhattan has always been at the epicenter of this real estate growth. With the combination of developed market and investment-grade properties, Manhattan has regularly attracted the majority of foreign direct investment in the real estate sector throughout the country. Increased demand from TAMI (technology, advertising, media and information) and FIRE (finance, insurance and real estate) sector tenants have made these properties an attractive investment option for both the local institutional investors and foreign direct investment. The Manhattan commercial real estate market has seen a 33 percent (see footnote 1) increase in the transactions above $1,000 per square foot over the last seven years. These values are no longer limited to only trophy properties in Midtown but have spread across both Midtown …

May 24, 2017

California Market Reports Multifamily Western Western Market Reports

Opportunistic Buyers Still Enjoy the Multifamily Market

by Camren Skelton May 23, 2017

The Inland Empire multifamily market will retain its solid foundation of positivity this year as the economy again provides a healthy supply of new jobs and freshly formed households seek apartments to rent. The number of new multifamily units scheduled for delivery is a fraction of what it was last year, and this will place downward pressure on vacancy. Tightening vacancy will support another year of above-trend rent growth. Strong job growth in wholesale trade, government and transportation and warehousing positions has drawn many new employees to the Inland Empire in recent years. The number of 20- to 34-year-olds, who typically favor rental housing, has steadily increased. Growth in wholesale trade, government and warehousing will continue to attract Millennials in 2017, and the region’s employers are expected to add 27,500 new jobs overall. The Inland Empire’s employment boom has led to an increase in household formation, which has stimulated new multifamily construction. Developers fruitfully delivered 2,600 new units to the market in 2016. This exuberance, however, may well have been the peak for the current real estate cycle. This year, the projected number of apartment completions is just 500. This much more measured level of development will be quickly absorbed …

May 23, 2017

Market Reports Office Southeast Southeast Market Reports Tennessee

Memphis Office Market Proves That ‘Slow and Steady Wins the Race’

by John Nelson May 22, 2017

Memphis may be known for its industrial market, but there are several interesting stories unfolding in the Memphis office market as well. Investors, both local and national, have found opportunities in an office market that can relate to the phrase, “slow and steady wins the race.” The Memphis office market consists of just over 52 million square feet, with nearly 60 percent of that in the Downtown, East and 385 Corridor submarkets and more than 85 percent of the Class A space located in those same submarkets. The Memphis metro ended 2016 with overall vacancy rates of 10.5 percent. Those rates have remained in the 10.5 to 10.9 percent range for the last two years. Class A vacancy has been on a slow and steady decline, falling from 10.2 percent at the end of 2014 to 7.9 percent at the end of 2016, its lowest level in more than a decade. This has prompted Class B owners to make investments in their properties, like the $7 million capital investment by Clark Tower, located in the East Memphis submarket, to upgrade mechanical systems and common areas. Rates, too, have been relatively steady for the last decade. At $17.07 per square foot …

May 22, 2017

Market Reports Office Texas Texas Market Reports

Fort Worth Office Market Poised for Steady Growth in 2017

by Taylor Williams May 19, 2017

Despite waves of new development and rebounding oil prices, the Fort Worth office market hasn’t changed. It reflects the city’s lifestyle and attitude — stable and patient — and optimistic as to what the future holds. As businesses come and go and vacancy rates fluctuate, the Fort Worth office market views the long-term potential of its investments and confidently forges ahead. Go West Much of the new development we are seeing is southwest of downtown. The West Southwest submarket accounts for 62 percent of the construction begun or underway in 2016, with The Offices at Clearfork accounts for 330,000 of the 734,000 square feet built after 2016. The new vision for the master-planned, 270-acre Clearfork development includes 2,500 apartment units, two million square feet of office space, and 1.2 million square feet of retail space anchored by Nieman Marcus. Fort Worth’s CBD is adding its first new building since Sundance Square, which was built in 2014. The property at 640 Taylor St. will add 280,000 square feet and will be 51.5 percent leased upon completion. Its owner, Jetta Operating Co. Inc., and namesake, Frost National Bank, will occupy 140,000 square feet. Effects of Westward Migration The Offices at Clearfork and …

May 19, 2017

Indiana Market Reports Midwest Midwest Market Reports Office

Tech Jobs, Population Surge Give Indianapolis Office Market a Big Lift

by Kristin Harlow May 18, 2017

No matter where you turn in the Indianapolis metro area, there is one common thread — change. From Mile Square to Downtown Fishers to Main Street in Speedway to Fletcher Place, all are nearly unrecognizable from a few years ago, and they are just a sampling of central Indiana commercial districts that are transforming at a rapid pace. Restaurants, retail and mixed-use developments are a big part of this rapid evolution, but the ripple effects on office real estate are taking hold. Tech jobs are catalyst Downtown Indy Inc. estimates the population in the central business district (CBD) will double from 2010 to 2020. According to the Indy Partnership, approximately 60 percent of the market’s 11,100 new jobs in 2016 came from the information technology and logistics fields. The downtown office market, where a majority of these jobs are landing, is evolving as a result of this technology job growth. In the past few years, large blocks of vacancy have plagued the Indianapolis CBD, specifically in high-rise office towers. In mid-2016, the largest of those availabilities became an asset. San Francisco-based Salesforce.com signed a new lease to consolidate operations into nearly 250,000 square feet on 11 floors in the tallest …

May 18, 2017

Market Reports New York Northeast Northeast Market Reports Retail

Retailers Take Advantage of New Opportunities in Manhattan

by Camren Skelton May 17, 2017

The news is rife with stories regarding retail bankruptcies, store closures, challenges facing conventional shopping centers, and consolidations by department and specialty stores. Although not immune to some of these challenges, the Manhattan retail environment has enjoyed much activity during the second half of 2016 and the first part of 2017. To be sure, some submarkets and certain retail corridors have seen an increase in vacancies and a corresponding fall in asking rents. However, a number of new retailers have entered the market and certain strong retail brands have right-sized or repositioned themselves in the market. One high-profile shopping center opened its doors, and there is considerable retail development underway. It’s a big story but here are some highlights. Lower Manhattan There has been considerable focus on Lower Manhattan in the past several years, and this continues. On the grand scale, the opening in August 2016 of Westfield’s World Trade Center was the culmination of years in planning, constructing and leasing this $1.4 billion development. This multi-level project contains an assortment of national and international tenants, including fast fashion and better retail stores, such as Victoria’s Secret, Sephora, H&M, John Varvatos and London Jewelers. A 60,000-square-foot Eataly is the principal …

May 17, 2017

Industrial Market Reports Oregon Western Western Market Reports

The Industrial Market Grows Up

by Camren Skelton May 16, 2017

In many ways, Portland’s industrial market has experienced a dramatic shift over the past five years, emerging as a market to be reckoned with. Demand has exceeded supply for the past six years, pushing vacancy to a 25-year low and rents up 18 percent year-over-year. Industrial users have grown in size, and large users have grown in number. Developments are bigger and migrating further from the traditional industrial submarkets. Investors are keen on Portland assets and are willing to pay a premium for quality product with a solid tenant roster. Portland’s population grew by 8 percent from 2010 to 2015, ranking it among the top 20 of the 50 largest U.S. cities. This growth in metro-area population has propelled strong demand from large e-commerce and distribution companies as they expand into new locations to service our growing consumer base. In 2010, we saw 11 users lease or build spaces of 100,000 square feet or more, and our average size lease was 24,854 square feet. By 2016, our average-sized industrial lease had grown to 39,218 square feet, an increase of 57.8 percent. We also saw 18 users build or lease space greater than 100,000 square feet. Portland’s industrial market users are …

May 16, 2017

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