Market Reports

Greater Portland Retail Bucks National Trend with Decreasing Vacancy

by Jaime Lackey July 20, 2016

The retail sector in Southern Maine’s commercial real estate market remained strong through year-end 2015 with all signs indicating continued improvement through 2016. While the national average retail vacancy rate increased to 12.6 percent in 2015, the retail vacancy dropped to 3.6 percent in Greater Portland, according to Malone Commercial Brokers’ annual retail survey. Greater Portland is a major market in Southern Maine consisting of 6.46 million square feet of retail space. 2015 marked the sixth consecutive year of declining vacancy rates in the market since its 10-year high of 10.8 percent in 2009. Meanwhile, the national retail vacancy rate rose in 2015 over year prior, marking the first vacancy increase in five years and nearly matching the 2011 national vacancy rate of 12.9 percent. Heading into the third quarter of 2016, Southern Maine’s retail sector remains extremely healthy. Short-term forecasts for Portland predict continued absorption of existing space, new retail construction, and strong market competition. Significant Developments and Redevelopments Thompson’s Point, Portland — Represented by Drew Sigfridson of CBRE / The Boulos Company, this 29-acre redevelopment offers up to 220,000 square feet of retail, office, hospitality, and recreational space off of Interstate 295. Final renovations of the 34,000-square-foot Brick …

July 20, 2016

Market Reports Multifamily Texas Texas Market Reports

Oil Prices Cause Dip in Multifamily Market, But Value-Add Opportunities Remain Strong

by Haisten Willis July 15, 2016

Although Houston’s local economy is not exclusively dependent on oil and gas, re-energizing this sector will be key to a multifamily rebound in the area. Since the downturn in oil prices over the last two years, Houston’s multifamily market has been one of the most impacted victims of the area’s economic slowdown. Oil and gas is estimated to represent about one-fifth of Houston’s economy. This does not include construction and other new development that depends on the oil and gas industry. The Houston market’s annual rent growth rate is well below the national average of 4.1 percent, according to Axiometrics’ Houston-area Market Performance Survey. From the fourth quarter of 2015 to the first quarter of 2016, the annual growth rate in Houston’s multifamily sector was only 0.8 percent. The annual effective rent growth in the area is forecast to be 2.4 percent in 2017 and is expected to average 3.6 percent from 2018 to 2020. According to the Bureau of Labor Statistics, job growth in the Houston metro area was 0.3 percent in April 2016, reflecting 10,000 jobs added during the preceding 12-month period. The metro job growth figure was below the national number of 1.9 percent. Limited Demand On …

July 15, 2016

Market Reports Michigan Midwest Midwest Market Reports Retail

Creativity is Driving Force Behind Keeping Metro Detroit Retail Market Fresh

by Christina Cannon July 14, 2016

To get a sense of what is happening in Southeast Michigan retail these days, the place to start looking is the past. It’s interesting and important to recognize that the seeds of many of the retail trends manifesting themselves today were planted years ago. Fortunately, the overall retail marketplace in Southeast Michigan remains generally strong. The marketplace may change over time, but one constant that remains unaltered is that quality rises to the top. Thoughtfully designed and developed retail projects in favorable locations have always done well — and that has remained the case through recessionary ups and downs and the whims of a consumer base that can be quick to change. Rethinking e-commerce Today, one of the most discussed topics of conversation for any retailer is the competitive pressure of the online and mobile marketplace. The convenience of virtual transactions, the rise of Internet powers like Amazon, and an increasingly tech-savvy population of shoppers who are comfortable and confident shopping online for a wider variety of goods and services has prompted the vast majority of brick-and-mortar retailers to work hard to carve out their own space in the digital marketplace. Online and mobile growth has had less of a …

July 14, 2016

Market Reports Northeast Northeast Market Reports Office Pennsylvania

The Lehigh Valley Office Sector Welcomes New Tenants and New Developments

by Jaime Lackey July 13, 2016

The Lehigh Valley has seen no shortage of success stories in recent months when it comes to the region’s office sector. The third-largest metropolitan area in Pennsylvania, the Lehigh Valley is located 60 miles north of Philadelphia and 90 miles west of New York City. The region consists of 62 municipalities within Lehigh and Northampton counties, including the cities of Allentown, Bethlehem, and Easton. Last year, Guardian Life Insurance, one of the nation’s largest mutual life providers, announced it would establish a three-story corporate office building in Hanover Township, Northampton County. That 281,680-square-foot facility is expected to be completed by late 2016 and will house 1,500 employees. In March, Paychex Inc., a provider of payroll, human resources, retirement, and insurance services, announced it will undertake a $1.3 million expansion of its facility in South Whitehall Township, Lehigh County. That project will nearly double the company’s square footage and will create 100 new jobs. Many economic factors have contributed to the growth in Lehigh Valley’s office sector. These include its central location, well-developed transportation infrastructure, availability of suitable office space, high relative broadband rank, access to markets, and strong workforce. All these factors led Atlanta-based Garner Economics to identify high-value business …

July 13, 2016

Georgia Industrial Market Reports Southeast Southeast Market Reports

Atlanta’s Industrial Market Passes a New Milestone, Again

by John Nelson July 11, 2016

It looks like 2016 is carrying on where 2015 left off. During 2014 and 2015, Atlanta set record after record for activity, positive net absorption and new construction; and the first quarter of 2016 didn’t disappoint. Activity during the first quarter of 2016 was over 13.5 million square feet, which contributed to a four-quarter total of 59.3 million square feet — the highest four-quarter total for activity ever seen in the Atlanta industrial market. We also witnessed the 16th consecutive quarter of positive net absorption with 3.1 million square feet of space absorbed during the quarter. Added to the last three quarters, net absorption totaled 16.5 million square feet of positive net absorption. Even with a large industrial inventory of 642 million square feet, that’s a significant achievement. Demand for warehouse and distribution space is fueled by Atlanta’s continued economic growth and employment. Unemployment in the Atlanta metro area is 6.1 percent and down from 6.3 percent that we reported last October (U.S. Bureau of Labor Statistics). Although construction slowed during the fourth quarter of 2015 with only 1.5 million square feet launched, it was only a short lull. New construction moved forward again for the first quarter of 2016 …

July 11, 2016

Industrial Market Reports Northeast Northeast Market Reports Pennsylvania

Lehigh Valley’s Industrial Sector Sees Increasing Rents and Spec Construction

by Jaime Lackey July 7, 2016

With increasing rental rates, strong investor demand for core product and record levels of speculative construction, spirits are high in the Lehigh Valley with regard to industrial real estate opportunities. The record volume of product deliveries the past two years underscores the strong industrial demand in the Lehigh Valley. Vacancy has dropped from 15.9 percent in the first quarter of 2009 to a record-low 4.9 percent at the end of 2015, according to CoStar. The average net industrial rental rate jumped 11.1 percent during the past 18 months, an even more impressive figure when compared against the 10-year average of 1.65 percent rental rate growth in Lehigh Valley for modern distribution buildings. After many years of flat rental growth, year-end 2015 industrial leases were completed in the $4.75- to $4.95-per-square-foot range in the Allentown-Bethlehem-Easton, Pennsylvania MSA. In 2016, expect a modest increase in rental rates as the delivery of new construction across the northeastern Pennsylvania region will slow growth and push vacancy rates higher. Leasing activity has been broadly distributed along the regional I-78 and I-81/I-80 corridors. Within the valley, industrial growth has occurred primarily along the main interchanges of I-78, U.S. 22 and Route 33. In the past 12 …

July 7, 2016

Industrial Kansas Market Reports Midwest Midwest Market Reports Missouri Uncategorized

Industrial Developers Shift into High Gear in Metro Kansas City

by Christina Cannon July 6, 2016

Kansas City’s industrial market is experiencing an incredible construction boom that is both market-driven and not limited to just one area or particular deal. In the past two years, multiple, diverse industries and tenant categories have shown interest in a variety of options around the area. The buildings going up and the tenants filling them cannot be pigeonholed into any single, narrow category. It’s encouraging that the entire market is doing well, not just one particular segment or submarket. The success of the market is widespread across the region. New buildings have gone up in Johnson County, Jackson County and Wyandotte County in the past few years. Projects also are moving forward in Platte County, up by Kansas City International Airport, and also in Executive and Northland Park. Additionally, Kansas City is providing options to companies of all sizes, from giant, bulk users to smaller users seeking the features associated with new development. New buildings such as Westlink Industrial Park in Johnson County and Kaw Point in Wyandotte County have offered tenants looking for 50,000 to 100,000 square feet the opportunity to access the amenities and features of modern construction that are associated with new bulk development. Both of those …

July 6, 2016

Alabama Market Reports Retail Southeast Southeast Market Reports

New Publix, Apartment Projects in Downtown Birmingham Spur on Retail Growth

by John Nelson July 4, 2016

The real estate market in downtown Birmingham has followed the “chicken and egg” trend. Over the last few years, over a dozen multifamily projects have been announced, but the major hurdle is proving the demand as people moving downtown have wanted a downtown grocer. While some multifamily developers decided to proceed with construction, others waited on the sidelines hoping a grocer would announce a new downtown location. On the other hand, major grocers put off locating in downtown Birmingham due to the lack of people living in the general area. Problem solved when construction started last year on a new 30,000-square-foot Publix with a full-service pharmacy in downtown Birmingham. Developers Scott Bryant and Dick Schmalz announced that the Publix will anchor a new multi-story, mixed-used development. Publix considered a store in downtown Birmingham in 2007 and again in 2009 before finally deciding to bring a store downtown now. The development of the Parkside District with Railroad Park and Regions Field, along with existing and planned apartment projects in the area, contributed to the timing. With the addition of Publix, several other multifamily projects are well underway or completed, such as the 228-unit LIV Parkside, 332 total units next to Regions …

July 4, 2016

Market Reports Midwest Midwest Market Reports Missouri Office Uncategorized

New Headquarters Construction Drives Office Growth Along Highway 40

by Christina Cannon June 30, 2016

The office market in Chesterfield, a suburb of St. Louis, has undergone tremendous growth in the past two years. In particular, the I-64/Highway 40 corridor within the West St. Louis County submarket has experienced a flurry of activity highlighted by the construction of several corporate headquarters as well as expansions. The corridor, which stretches from Clayton to Chesterfield, boasts a highly visible central location, proximity to high-end housing that appeals to corporate executives, newer buildings that bode well for future resale or leasing, and convenient interstate access. With a Class A vacancy rate of only 7.6 percent, the West St. Louis County submarket is experiencing a shortage of available blocks of office space of 50,000 square feet or more. Corporations desiring to locate along the prestigious corridor are relocating from older Class B space to existing or build-to-suit Class A properties. In fact, new construction during the last two years added 774,000 square feet of office space to this submarket, of which all but 50,000 square feet was already committed upon delivery. Less than 50,000 square feet was considered speculative. Magnet for headquarters RaboAgrifinance will relocate its corporate headquarters from Creve Coeur Pointe to the new Delmar Gardens III at …

June 30, 2016

Market Reports New Jersey Northeast Northeast Market Reports Office

Pharmaceutical Sector Dominates Suburban New Jersey Relocation Activity

by Jaime Lackey June 29, 2016

By many measures, 2015 was Northern New Jersey’s best year for its office market in quite some time. Tenants leased 11.7 million square feet, the strongest annual activity since 2003. Business confidence improved and companies showed a growing willingness to invest in their workforce and workplace. The number of larger leases dropped off a bit in 2015, though, as many of the largest space searches were fulfilled and fewer quality space options remained in some of the most sought after areas. Tenants have no shortage of options in much of Morris County and Newark, but steady leasing in Metropark and Jersey City’s waterfront has pushed availability below 15 percent. Smaller and mid-sized tenants can still find space in these locations, but there are far fewer big blocks of quality space remaining. There were fewer larger leases in 2015, but tenants were very mobile: relocations outnumbered renewals by two to one with 12 firms opting to move and six renewing. An analysis of larger leases (deals over 40,000 square feet) signed since 2009 shows that larger tenants renewed slightly less than 50 percent of the time (81 firms moved and 75 renewed). From a supply perspective, market conditions have been ideal …

June 29, 2016

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