Market Reports

Office Leasing Down in Pittsburgh, But Tech Sector is Growing

by Camren Skelton June 7, 2017

The Urban Land Institute (ULI) listed Pittsburgh among its top five markets to watch in the 2017 Emerging Trends in Real Estate report due to its low cost to do business; access to talent via four major universities; and its status as an emerging tech hub with the likes of Uber, Google, Facebook and most recently, Amazon, establishing regional research and development centers in the city. Citizens Bank announced that it would remain a tenant in 525 William Penn Place, where it occupies approximately 150,000 square feet, reporting that its management views Pittsburgh as a growth driver for the company. Ford Motor Company inked a $1 billion deal with Argo AI, a Pittsburgh start-up that focuses on artificial intelligence and robotics, to expand its research and development of self-driving cars. Ford now is surveying the Greater Downtown submarket for space to construct a 100,000-square-foot facility to hold the 200 employees it expects to hire over the next 24 months. Despite the region’s growing popularity as a tech hub, leasing activity in first quarter 2017 reported a 23.3 percent drop from the same period 2016, ending the quarter at just less than 600,000 square feet, while overall net absorption dropped an …

June 7, 2017

Market Reports Multifamily New Mexico Western Western Market Reports

Albuquerque Multifamily Prices Rise on Heels of Rental Rate Increases

by Camren Skelton June 6, 2017

The New Mexico multifamily market, more specifically Albuquerque, recorded an impressively strong 2016 with vacancies dropping below 5 percent. Asking rents have increased for three consecutive years, fueling the investment market both in volume and prices. Employment grew by 2,700 jobs in Albuquerque last year. More than 2,000 of those were added in the fourth quarter, making it the strongest employment growth quarter in more than four years. Mining, logging and construction led the way in job creation, growing their sectors by nearly 8 percent. Professional, business services and the hospitality sector also strengthened on the job front. This expansion drove demand for multifamily units, pushing vacancy downward. The vacancy rate in Albuquerque declined 60 basis points in 2016, following a 100 basis point drop in 2015. Rents dropped slightly in the fourth quarter, but year-end 2016 asking rents were up 4 percent over 2015 to an average of $776 per month. Rent growth in the area has averaged 2.7 percent per year since 2014. Developers stepped up to the plate in 2016, answering the demand for more units. The market received 675 new units with about 1,000 more currently under construction. One of the new highly anticipated projects is …

June 6, 2017

Market Reports Multifamily Texas Texas Market Reports

Fort Worth Multifamily Market: Boom Town for the Foreseeable Future

by Taylor Williams June 2, 2017

To many people, Dallas and Fort Worth are one and the same. But to local Texans, they are two distinctly different cities in which to work, live and play. And to investors, the fundamental strategies are drastically different. Many consider Fort Worth to be the region’s cultural center and the “cooler” place to live. In terms of job growth, both cities are booming and are magnets for young, talented professionals. With this job growth comes a burgeoning multifamily market with future potential that is sure to remain strong. Here’s why. Job growth in the region continues to outpace the national average by more than 50 percent, and the Dallas-Fort Worth metropolitan area is ranked among the highest-growth metro territories in the country. More than 100,000 jobs have been added over the past year, thanks in large part to major corporate relocations and expansions. Toyota and Liberty Mutual are examples of two major companies committed to growth in the local market. In addition, over the next five years, the demographic of 20- to 34-year-olds is projected to increase by close to 100,000 people – one of fastest rates in the country. These millennials typically prefer to rent and are less likely …

June 2, 2017

Kansas Market Reports Midwest Midwest Market Reports Retail

A Growing Number of National Retailers Have Wichita on Their Radar Screen

by Kristin Harlow June 1, 2017

The pace of retail construction remains brisk in Wichita with national retailers showing an increased interest in the market. In the first quarter, developers started construction on nine buildings totaling 112,961 square feet, reports brokerage firm NAI Martens. Completions during the first quarter totaled 117,300 square feet. Notable store openings included Sprouts Farmers Market at Central Avenue and Rock Road; Save-A-Lot grocery store at 1640 S. Broadway; Cavender’s western wear store in Greenwich Place at K-96 and Greenwich Road; Andy’s Frozen Custard at NewMarket Square along 21st Street; and a freestanding Starbucks at Wichita State University on the school’s innovation campus. In short, developers in Wichita appear to be making up for lost time. As a result of the Great Recession, the local economy shed 30,000 jobs between 2009 and 2011, many of them related to the aviation industry, according to the Wichita Metro Chamber of Commerce. Commercial real estate activity ground to a halt at that point. “Between 2008 and 2012 and maybe into 2014, we just didn’t have much development at all. There were some plans on the drawing boards, but nothing really reached fruition,” recalls Thomas Johnson, president of NAI Martens. But consumer confidence gradually began to …

June 1, 2017

Alabama Market Reports Retail Southeast Southeast Market Reports

Retail Activity Leads the Way in Birmingham’s Revitalization

by John Nelson May 30, 2017

The Birmingham retail market had an explosive 2016. Several large projects were announced or completed, while traditional indicators of market health also showed promising signs of growth. TopGolf will soon be coming to the Uptown District, while Regions Field, home of the Birmingham Barons minor league baseball team, continues to attract surrounding development. Breweries remain a mainstay in Birmingham’s social scene, and they have demonstrated a capability to revive entire neighborhoods. As the natural beauty of Alabama becomes more important to residents and newcomers, the Red Rock Trail System’s green space bicycle system, which encompasses over 200 miles of green space trails and over 600 miles of street-based paths connecting all corners of the Birmingham area, will continue to grow in importance and recognition. By the fourth quarter of 2016, retail vacancy had decreased to 5.4 percent, down from 6.1 percent at the beginning of 2016, while market rents for major submarkets held steady around $12.37 per square foot. Downtown Birmingham, which hasn’t been viewed as a major retail area for decades, is the site of resurgent interest and accompanying capital. Some of the revitalization is occurring due to a renewed interest in public greenspaces, such as the recently developed …

May 30, 2017

Market Reports Retail South Carolina Southeast Southeast 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

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