Market Reports

— Scott Hintze and Marti Weinstein of Diversified Partners Commercial Real Estate — Phoenix’s retail development market is seeing a surge in optimism as the city benefits from a growing economy and a shift in political leadership. With the new administration coming into power, the outlook for the Phoenix retail market has become increasingly positive, promising a wave of new projects and investment opportunities in the coming years. The city’s rapid population growth, expanding infrastructure and bustling job market have positioned Phoenix as one of the most attractive cities in the U.S. for retail development. The new administration has brought a renewed focus on urban development, job creation and business-friendly policies, which is expected to help stimulate both demand for retail spaces and the construction of new commercial properties. Government support, including incentives for developers and tax breaks for businesses, is anticipated to foster a thriving retail sector that will benefit both local residents and national retailers looking to expand into the area. Several projects we have been working on have seen unprecedented demand from tenants. We recently completed a 25,000-square-foot building across from Gilbert Mercy Hospital that includes a two-story Starbucks, the first in the market. In addition to …

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The secret is getting out about Apex, a western suburb of Raleigh that also lies 20 miles south of Chapel Hill. In 2018, Realtor.com ranked the city as the No. 1 fastest growing suburb in the United States. This was aided by the master planning of local homebuilder/developer ExperienceOne Homes, which debuted its large-scale Sweetwater residential development in 2016. The allure of Apex didn’t stop there as the local schools within the Wake County Public School System have long been considered top-notch. As more and more families moved to the once-sleepy town, the need for community-serving retail became apparent. And not just any sprawling shopping center would suffice. Retail Strategies of N.C. Inc., on behalf of development partner The Kalikow Group, a multifamily and mixed-use development firm based in Westbury, New York, and the aforementioned ExperienceOne, set out to create a sense of place that would resemble village towns in Northeast states such as Maine and Massachusetts. What all of these hamlets have in common is they are built up over decades around a town center, thus the idea of Sweetwater Town Center was established. East Side The “hard part” was essentially in the rearview mirror as ExperienceOne had already …

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By Brian Lyss and Joshua Allen, CBRE St. Louis is typical of Midwest markets in that most of its office product continues to age. In fact, 73 percent of existing office supply in St. Louis was constructed before the 1990s. In a post-pandemic environment, users are seeking out amenity-rich prime space. Out of 53 million square feet of office product in St. Louis, 2.6 million square feet is considered “prime” in nature. Prime assets are the newest assets in St. Louis, located in walkable urban areas with an abundance of amenities. In early 2021, during the early stages of the pandemic, prime office availability (21.7 percent) was on par with non-prime (20.5 percent) as the market became increasingly concerned about the future of office use. Over the past 36 months, this surplus of available office has quickly turned into a shortage of prime assets. There has been virtually no new office construction in St. Louis, hitting the lowest levels on record. This fact guarantees that prime office space will remain tight until we see new construction begin to come out of the ground. Even if new construction does commence, the construction and lending environment is such that rates are anticipated …

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— By Brett Polachek of Newmark — Phoenix’s multifamily market experienced dynamic shifts in 2024, driven by strong population growth, economic expansion and single-family cost of ownership. Phoenix remains a top relocation destination, with a population growth rate of 1.8 percent (+85,000 residents), nearly double the national average of 0.98 percent. This influx is supported by the addition of more than 52,000 jobs from October 2023 to October 2024. Phoenix also has the fifth healthiest rent-to-income ratio among 30 major U.S. markets that we sampled. Demand for multifamily housing reached record levels, with 14,528 units absorbed annually, marking the strongest performance since 1994. The supply experienced an annual increase of 6.4 percent as 19,835 units delivered last year. The far West Valley submarkets of Avondale, Goodyear and West Glendale led supply growth, adding 6,100 units to their inventory. The market showed resilience despite this historic supply wave. Occupancy rose 1 percent year over year to 93.7 percent, while Class B units clocked in a 94 percent occupancy rate. This was followed by Class A at 93.8 percent and Class C at 93.2 percent. These figures remain slightly below pre-pandemic levels, but they reflect a strong recovery trajectory. Asking rents in …

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For all Top 50 NMHC third-party management firms, the subject of managing rising operating costs is a topic that has come to be front and center in many recent client conversations.  “As 2025 budget discussions were taking center stage toward the end of 2024, our clients increasingly highlighted the issues of rising operating costs,” says Lisa Narducci-Nix, director of business development at Drucker + Falk.  “This trend”, she adds, “underscores our need for strategic planning and cost management to navigate the continued challenges ahead.”  The multifamily sector is facing unprecedented headwinds as operating costs continue to rise, driven by factors ranging from inflation and labor shortages to increased insurance premiums and energy expenses. As a result, multifamily operators are working to find ways to maintain profitability while providing quality living spaces for their residents.  “In this challenging environment, it is clear to us that adapting to these rising costs will require a multifaceted approach — one that blends innovation, strategic marketing, operational efficiency and technological adoption,” says Narducci-Nix. Challenges of rising costs Across its 11-state footprint spanning over 42,000 units, Drucker + Falk has seen operating costs for many of its managed assets surge in recent years. The supply chain …

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By Mike Stromberg, Opus Kansas City made the list of emerging industrial markets back in 2016, and over the last nine years has more than proven itself to be a viable, profitable and competitive environment for development.  Many rightly attribute the market’s continued growth to its central location within the U.S. as well as its transportation infrastructure, which includes the city’s location on the largest navigable inland waterway, at the cross-section of three interstate highways and in the middle of cross-country rail corridors running from Canada to Mexico and from coast to coast. These are unquestionably appealing features for businesses that want and need to quickly distribute products and access customers. Other qualities often lauded include a strong skilled labor pool with an estimated 2.4 million people — nearly 23 percent between the ages of 18 to 34 — living within a 50-mile radius of the city; a cost of living up to 14 percent lower than the national average; a historically low unemployment rate; and increasing wages above the national average.  What really puts Kansas City on the map for developers, though, is how the state of Missouri has created a pro-business environment that leverages and advances these strengths. …

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By Taylor Williams According to the results of Texas Real Estate Business’ annual reader forecast survey, to many commercial brokers and owners in Texas, the change of power in the White House is very much a good thing.  In the survey, respondents across a wide range of commercial jobs, practices and asset classes shared expectations for 2025 across an even wider range of topics. But as is usually the case every fourth December, it was the results of the presidential election that generated the most insight and feedback from participants. Like the man himself, the commentary on Donald Trump was often polarizing, but it’s a welcome respite from years of focusing on inflation and interest rates. Across two separate surveys, 45 brokers and owners/developers answered, via free-response format, the same question of how Trump’s re-election would impact the industry in the short run. Though in their entirety, responses ran the gamut from effusive to disheartened and everything in between — with many respondents unsurprisingly opting to remain anonymous — the overall resulting feeling is clearly one of optimism.  During his first term as president, Trump, a major commercial developer himself, routinely pressured the Federal Reserve to lower interest rates, which …

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This year, multifamily housing starts nationally are on pace to hit their lowest levels since 2014, a period marked by the national economy’s gradual recovery from the Great Financial Crisis. Year to date, multifamily deliveries have exceeded starts by 218,500 units, creating a substantial shortfall that signals a significantly reduced apartment supply by 2026.  The same trend is taking effect in Raleigh-Durham, where completions exceeded starts by 4,935 units. This is a key consideration for most apartment investment strategies today, explaining why many buyers are willing to accept Year 1 challenges such as softness or negative leverage. As the current supply wave peaks in the Triangle, the future pipeline of multifamily construction is shaping up quite different. Of the identified units that are scheduled for delivery in 2024, nearly 42 percent of units have been delivered as of this writing. Of the approximately 18,600 apartments currently under construction across the Triangle, 13,343 of those are expected to be delivered by the end of third-quarter 2025, with a majority in Central and Southeast Raleigh.  However, new activity has slowed significantly — inventory growth by 2027 is projected to drop by more than 85 percent, plummeting to a 3.6 percent rate compared …

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— By Giovanna Abraham, Market Intelligence Analyst, Avison Young — The Las Vegas office market continues to defy broader national trends, maintaining resilience and attracting attention for its stability and growth. While many U.S. cities struggle with rising office vacancies, Las Vegas stands out for its comparatively low vacancy rate, steady rent growth and positive return-to-office trends. Despite recent increases in vacancy, Las Vegas remains well below national averages, with a vacancy rate of 15.2 percent in the third quarter — 850 basis points lower than the national availability rate of 23.7 percent. This performance reflects the unique dynamics shaping the Las Vegas office market, including a steadily growing population and the city’s appeal as a business-friendly destination. Low Vacancy Rates and a Stable MarketOffice vacancy has gradually increased over the past six quarters, but Las Vegas has also experienced a much slower rise than many larger metropolitan markets. This measured growth has allowed the city to remain competitive, with vacancies rebounding to pre-pandemic levels by late 2021 and holding steady through first-quarter 2023. After brief upticks in the first half of 2024, the vacancy rate declined again by third-quarter 2024, dropping from 15.9 percent to 15.2 percent. This resilience …

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By Maya Khan, managing director, CBIZ Between the pandemic and the advent of hybrid work, it’s been a challenging stretch for the New York City office market. But savvy investors see skies clearing as interest rates come down and more employers call workers back to the office. The stabilizing market also offers new opportunities for office-to-residential conversions, thanks to recently enacted state and city incentives. In fact, office buildings sold for such purposes accounted for 50 percent of all development sales in Manhattan in the first half of 2024, according to data from Ariel Property Advisors. In what follows, we’ll take a deeper dive into those trends and look at how some New York real estate leaders who spoke at CBIZ’s “Manhattan to Main Street” panel are taking advantage of the current environment. The event, held in the fall of 2024, focused on the more than $2 trillion in commercial real estate debt that is set to mature before 2028 and broader economic factors influencing the New York real estate market; it drew 85 attendees from the local real estate community. Opportunity on the Upswing It’s no secret that the Big Apple’s office sector has taken a beating in the …

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