The total retail inventory in the Rochester market amounts to 62.5 million square feet. Over the past year, the market has seen an overall decrease in the vacancy rate. The vacancy rate went from 8.0 percent in first quarter 2015 to 7.9 percent in the current quarter. Overall net absorption was positive 182,160 square feet. The general retail sector of the market, which includes all freestanding retail buildings except those contained within a center, reported a vacancy of 4.3 percent at the end of the second quarter 2015. The general retail space in Rochester is 34.3 million square feet. Average rental rates are currently at $12.26 per square foot. The shopping center sector — which consists of 19 million square feet and comprises community centers, neighborhood centers and strip centers — posted 10.9 percent total vacancy and average asking rates of $10.28 in second quarter 2015. Power center space is currently reported to be nearly 4 million square feet with a vacancy rate of 7.5 percent, and a slight decrease in rental rates to $13.46 per square foot. Malls in the Rochester market consist of lifestyle centers, regional malls and super-regional malls. The vacancy rate was 21.2 percent at the …
New York City is booming. The local economy is the strongest it has ever been, with total employment numbers reaching all-time highs totaling over 4.2 million jobs through May 2015. This has led to a strong office market performance during the first six months of 2015, as office-using employment continues to grow, up 2.5 percent over the past 12 months. Demand for space continues to keep availability below 10 percent, and at 9.6 percent, Manhattan availability is down 50 basis points from last year. Despite minimal increases in Manhattan overall asking rents, up only 2.9 percent year-over-year through June, some submarkets are exceeding previous record-high asking rents from 2008. The demand from creative and tech tenants looking for space in Midtown South over the past few years has pushed asking rents up 19.1 percent above all-time highs. Downtown overall average asking rents have reached historical highs this year as well, and at $57.78 per square foot, rents are 10.3 percent higher than the previous highs in 2008. Most of this increase can be attributed to new construction at the World Trade Center site. Despite this, Midtown overall asking rents are still 5.3 percent off historical highs from 2008. Throughout Midtown, …
Santa Monica is Los Angeles County’s most stable beachside apartment rental location. The prices this market commands as the year progresses continue to surprise our brokerage team. No longer the sleepy beach town of old, we are seeing capitalization rates below 3 percent on 30- to 40-plus-year-old product with stringent, and at times almost suffocating, rent control laws. There have been multiple record-breaking transactions that have taken place in Santa Monica this year, including one mind-blowing apartment deal at 537 San Vicente Blvd. that sold for $16.1 million this past March. It was then sold to another party three months later for $19 million. The old adage about location rings true for Santa Monica as buyers consider future returns in this beachside enclave. The question right now on everyone’s mind is: how long can this last? It has been our opinion that this upward trend in pricing cannot last forever. It is inevitable that the Federal Reserve will raise interest rates soon. However, as rates rise, we will see a minimal effect on Santa Monica multifamily investment, as this “real -estate safe haven” makes investment even more desirable as stability is attractive to owners seeking long-term returns. Even though some …
Underpinned by a $50 billion tourism industry that drew a record-breaking 62.3 million visitors in 2014 in addition to strong job, population and residential growth, there is no question that Orlando’s retail real estate market is stronger than ever. According to 2014 U.S. census data, Orlando outpaced 99 of America’s 100 most populous MSAs in year-over-year population growth. The City Beautiful also recently ranked as the No. 1 U.S. city for job growth by Fortune Magazine following a 3.7 percent increase in its employment base in the same year. The Orlando retail market has also benefited heavily from healthy gains in the housing sector, powered by Central Florida’s tourism and construction industries, which stimulate economic development in the region. Orange County Property Appraiser, Rick Singh, reported that average home sale prices were up more than 10.5 percent in 2014, while residential construction rose 79 percent in the same period. With this type of growth, Orlando is experiencing strong consumer spending and an increase in demand for retail space. The Orlando region’s Index of Retail Activity rose 8.5 percent year-over-year in the second quarter of 2015, while the metro-wide retail vacancy rate decreased to 6.5 percent, down from 8.2 percent at …
Milwaukee is in the midst of a new construction boom in the retail sector, with three major projects currently underway and a fourth that was delivered in 2014 for a total of more than 1.1 million square feet of new space in the market. The majority of this space is being delivered fully leased. In many cases, these retailers are brand new tenants to the Milwaukee area. In the second quarter, overall vacancy ticked up 10 basis points to 10.2 percent. However, this was mainly due to store closures and consolidation in the Milwaukee market by retailers such as Office Depot, OfficeMax, Pick ’n Save, Sears and Kmart. But don’t be rattled by the uptick in vacancies. In reality, the market is incredibly active with new tenants entering the region and several expanding. Retailers recognize that there is ample room to compete for market share in Milwaukee and the surrounding area. Many of these new retailers will come on line in large ground-up projects now underway. Here are some of the notable projects: • In Menomonee Falls, a new Costco will open this fall and anchor a 300,000-square-foot development known as White Stone Station from Cobalt Partners LLC. • The …
Seven years after the worst recession this country has seen since the Great Depression, New York City is riding high again. Manhattan has emerged as a vital center for global retail activity where we continue to see dynamic growth — driven by its economic fundamentals, urban migration, and its cultural and lifestyle attractions. Gone are the days when suburban expansion sounded the death knell for high street retail. Since 2010, in the near-aftermath of the economic collapse and for the first time in decades, urban cores are growing at a faster rate than their suburban counterparts. Eighty percent of Americans now live in urban areas, and retailers and property owners in New York City and around the world are scrambling to adapt. Millennials represent 24 percent of the overall U.S. population and are leading this urban charge. They want to live close to work. They’re driven by technology — and they demand an omni-channel retail experience that integrates smartphone and tablet use with a personalized, service-oriented, in-store approach. And importantly, it’s estimated they will represent nearly 30 percent of U.S. retail spending — the total of which was $4.6 trillion this year — by 2020. Manhattan also continues to benefit …
The retail market in Los Angeles is demonstrating exponential growth. Rents are going up, cap rates are going down and occupancy is soaring. Naturally, as lease prices rise, so do sale prices. As such, it is becoming increasingly difficult for investors to find opportunities where substantial rent growth is possible. Tenant competition is also fierce, and landlords are benefitting from extremely high demand throughout the market. Competition Abounds It’s only natural that retailers are competing over space as occupancy rises. One trend that has emerged in Los Angeles is competition among not only direct competitors, but indirect competitors as well. For example, a small grocer might compete with a Ross Dress 4 Less for the same location. Fueling this competition is an increase in large national retailers seeking out smaller urban spaces in downtown areas. Target, for example, is opening a store in LA’s Koreatown on Vermont and 6th streets at the base of a high-rise apartment building. When national soft goods chains open in urban hubs, there will be an evolution of retail surrounding those stores. Smaller discount stores and mom-and-pop retailers will likely suffer, which will lead to vacancies that tend to open the doors for new specialty …
An apartment building boom is encouraging a consistent march of new residents to select sections of Baltimore City, and the construction of new retail venues to support this emerging audience has followed in lockstep. The last several years has seen the opening of stylish shopping centers featuring national anchor tenants such as Harris Teeter and Target, including The Shops at Canton Crossing, a 330,000-square-foot retail shopping center situated within the city’s east side, as well as McHenry Row, located in the Locust Point section of the city (next to Under Armour’s headquarters). Other notable retail developments underway in Baltimore City are the capital improvement and re-invention program at Harborplace; The Stadium Square, a $250 million mixed-use project situated near M&T Bank Stadium; the $25 million facelift being given to Lexington Market, a collection of 100 food vendors; the ongoing retail build-out of Harbor East (the recognized “place to be and be seen” spot of the city); and the initiation of construction on Harbor Point, the site of the new Exelon Corp. headquarters (the company merging with Constellation Energy). Baltimore County is Booming Owings Mills, Towson and White Marsh are the sites of four significant projects, several of which have been …
When people come to Corpus Christi, many of them expect to find a community that has been devastated by the downturn caused by the oversupply of cheap oil and gas. They expect a community with rising unemployment and vacant buildings. Based on the past, they would be correct. However, Corpus Christi and the Coastal Bend have been experiencing a major transformation of their economy, which is now much more diverse. This is partly because of the leadership, hard work and vision of its people, and partly because of good luck caused by the infrastructure that had been put in place by the Port of Corpus Christi. This infrastructure was at the right place at the right time. The Port of Corpus Christi has always been a driving force and major contributor to the economy of Corpus Christi. The port’s leaders knew that if they didn’t make some major changes, they would not remain competitive. The Port of Corpus Christi is the fifth largest port in the U.S. in total tonnage. However, because of the depth of the port channel and the height of the harbor bridge which crosses over the port, the newer, larger ships could not enter the port. …
Consumers’ desire for shopping convenience and lower prices is driving online retail sales up, accounting for 7.2 percent of total U.S. retail sales so far in 2015, according to the U.S. Census Bureau. And that percentage is expected to double by 2020. It’s no wonder that the popularity of online shopping also is spurring growth in the industrial segment of commercial real estate, particularly in central Indiana. Over the past three years, the growth of e-commerce has accounted for 55 percent of total industrial net absorption in the United States. In 2015 alone, e-commerce has been responsible for 31 percent of industrial net absorption year to date. During the current expansion, the Indianapolis industrial market ranks eighth among all U.S. industrial markets in terms of total net absorption, according to Cushman & Wakefield. In the second quarter of this year, net absorption for modern bulk space totaled 1.6 million square feet, more than any other industrial segment in the market. Since 2013, nearly 15 percent of industrial square footage leased in metro Indianapolis has been related to e-commerce. The FedEx Factor With a compound annual growth rate of 14 percent since 2008, e-commerce has driven retailers to establish dedicated dot-com …