Market Reports

Tourism Industry Has Orlando Retail Market Firing on All Cylinders

by John Nelson October 19, 2015

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 …

October 19, 2015

Market Reports Midwest Midwest Market Reports Retail Wisconsin

Variety of Retail Construction Ramps Up Across Greater Milwaukee

by Christina Cannon October 15, 2015

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 …

October 15, 2015

Market Reports New York Northeast Northeast Market Reports Retail

New York City: Retail Riding High Again

by Jaime Lackey October 14, 2015

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 …

October 14, 2015

California Market Reports Retail Western Western Market Reports

Retail Rents on the Rise in Los Angeles

by Nellie Day October 13, 2015

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 …

October 13, 2015

Market Reports Maryland Retail Southeast Southeast Market Reports

Baltimore City’s Retail Market Remains Hot, But Watch Out for the Suburbs

by John Nelson October 12, 2015

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 …

October 12, 2015

Industrial Market Reports Multifamily Office Retail Texas Texas Market Reports

Port, Diverse Economy Drive Growth in Corpus Christi Real Estate Market

by Haisten Willis October 9, 2015

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. …

October 9, 2015

Indiana Industrial Market Reports Midwest Midwest Market Reports

Online Retail Sales Spur Growth in Central Indiana’s Industrial Market

by Christina Cannon October 8, 2015

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 …

October 8, 2015

Market Reports Maryland Office Southeast Southeast Market Reports

Shifting Blocks of Space, Apartment Conversions Help Shape Baltimore’s Office Market

by John Nelson October 5, 2015

Three major storylines are playing out in Baltimore, the northern part of the one-two city punch that combines for more than 9 million people and forms the fourth-largest metropolitan region of the country. These three sub-plots each contribute to the larger vernacular of the Charm City story. The activity in the office sector is occurring against the backdrop of a robust warehouse/industrial market, as national companies are recognizing the attractiveness of the Port of Baltimore and access to the Eastern Seaboard. Baltimore is also enjoying the healthiest retail environments seen in years, highlighted by the construction of new large-scale shopping centers to service Millennials and empty-nesters moving downtown. 1. Shifting Blocks of Space Two separate 200,000-square-foot blocks of prime office space are moving to the now-under-construction Harbor Point overlooking Baltimore’s Inner Harbor, the development centerpiece of the Constellation Energy Group merger with Exelon Corp. Upon completion, the former industrial brownfield site will feature more than 1.6 million square feet of commercial office space. Add in a separate 200,000-square-foot move by the Baltimore headquarters of M&T Bank from 25 S. Charles St. (with sources indicating the company may back-fill the space themselves) and you have pretty large shoes to fill in …

October 5, 2015

Market Reports Western Market Reports

Multifamily Investors are Sitting Pretty in San Diego

by Nellie Day September 29, 2015

It is a great time to be a multifamily owner in San Diego. Vacancies are at the low rate of 4.1 percent for the county, while rent growth is at its highest level since 2011. Cap rates and interest rates are still at record lows, and we are slowly seeing an increase in inventory as owners realize values are higher than ever. We will soon see a rise in interest rates, and can expect a reduction in values as the cash-on-cash returns are reduced. For every 100 basis points of increase in rates, we may see up to a 6.7 percent reduction in value. Rental market performance, according to the San Diego County Apartment Association, has weighted averages in San Diego up to: $974: Studios $1,301: one-bedroom $1,609: two -bedrooms $1,943: three -bedrooms South Bay has the highest vacancies at 5.1 percent, while North County has the lowest at 3.1 percent. Chase, one of the largest lenders in San Diego, is expecting rent growth of 35 percent over the next five years. This news is encouraging as the market has been flat in San Diego for years. There were 139 apartment buildings with 50 units or less that sold in …

September 29, 2015

Market Reports Maryland Multifamily Southeast Southeast Market Reports

Baltimore’s Resurgence as a City Supports Burgeoning Apartment Market

by John Nelson September 28, 2015

The transformation of downtown Baltimore into a contemporary world-class city began nearly two decades ago, but over the past few years it has irrefutably evolved into a true 24/7 city and a top-tier housing market that is nationally recognized by the investment community. An influx of commercial investment drove job growth, which inevitably boosted downtown Baltimore’s daytime population. But what is remarkable is how many of these individuals also decided to become city residents. The number of degree-holding young people living in downtown Baltimore increased by 92 percent between 2000 and 2010, exceeding the pace of 20-something magnet cities like New York and Boston. Whether it was the chicken or the egg, this new group of residents favored a rental urban lifestyle, and downtown Baltimore delivered nearly 4,700 new apartments between 2000 and 2010. Ambitious developers John Paterakis and Michael S. Beatty paved the way in the late 1990s with the development of Harbor East, which congregates upscale retailers, Class A office space and luxury rental apartments. Its immediate success filled a niche in the market and spurred growth in other communities around the Inner Harbor, including the Ritz-Carlton. As this wave of development continued throughout the 2000s, slowly but …

September 28, 2015

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