Market Reports

United States’ 16th Largest City Continues Fast Growth Post-Recession

by Haisten Willis August 21, 2015

As the 16th largest city in the United States and one of the fastest growing metro markets, Fort Worth is consistently a hot market in Texas and hasn’t slowed down post-recession. The current retail market is showing a low vacancy rate of 6.5 percent along with increasing rental rates. Surprisingly, these rates have not slowed leasing activity. Instead, the combination of increasing rates and dwindling vacancies have spurred new development. In years past, Fort Worth has been seen as a secondary market to Dallas, but with its strong economy and high returns, the city is now able to stand on its own. Fort Worth is seeing a lot of capital being tossed around the market. With a strong economy and low operations costs, money is pouring in from all angles, including from out-of-state and international investors. California, New York and overseas investors are beginning to recognize the stability of the city and the potential for stronger returns, and are aggressively starting to pursue opportunities here. For example, Iowa-based Lockard Development is in the process of expanding its Walmart anchored Renaissance Square power center at Berry Street and Hwy 287 in East Fort Worth to include more national credit tenants. Lockard …

August 21, 2015

Market Reports Michigan Midwest Midwest Market Reports Multifamily Retail

Why Today’s Development Wave in Downtown Detroit Has Staying Power

by Jeff Shaw August 20, 2015

Detroit is in a state of transition. It’s a process that has been simmering for some time, but really began in earnest about five years ago. This article discusses some of the property types, developments and neighborhoods that continue to reshape downtown Detroit and offers some insight into what the city might look like in five to 10 years. Fueled by a strengthening economy, there is an air of excitement in the Motor City, and the development climate is increasingly vibrant. The nexus of development and redevelopment activity is occurring in the same places — Downtown, Midtown, New Center — that were at the core of the city’s renaissance a century ago. In some respects, today’s Detroit is reinventing itself in the same way. Residential leads the way The foundation of Detroit’s development resurgence is residential growth. People are continuing to move to Detroit to work and to live — a trend that has accelerated dramatically in the last few years with downtown apartment buildings reporting upwards of 98 percent occupancy. It’s a phenomenon that shows no real sign of slowing down. It’s also an important and natural first phase. With residential comes the corresponding demand for dining, retail and …

August 20, 2015

Market Reports Nevada Retail Western Western Market Reports

Las Vegas’ Retail Market Stabilizes

by Nellie Day August 18, 2015

The Las Vegas retail market is transitioning from recovery to stability. Based on CoStar’s second-quarter report, the overall vacancy rate was 9.9 percent, a slight decrease from the 10 percent experienced at the end of the second quarter of 2014. The decrease is impressive considering the 2 million square feet in net absorption that occurred during this same period. Rental rates have continued to average around $1.30 per square foot, per month for the past 2.5 years, although we are hearing about newer centers achieving impressive rate increases. There was 822,512 square feet of retail space under construction at the end of the second quarter of 2015. Ikea is the largest retail project currently under construction in Southern Nevada, which is expected to open next summer. The second largest project is Tivoli Village’s 117,516-square-foot expansion. Restoration Hardware also signed a lease this quarter for 77,000 square feet at Tivoli. It is expected to take up occupy during the first quarter of 2016. Though private investors dominate the market, we are seeing more institutional investors who are interested in acquiring newly stabilized product. Cap rates have continued to decline, averaging 6.53 percent for 2015, compared to a 2014 average of 6.99 …

August 18, 2015

Florida Market Reports Multifamily Southeast Southeast Market Reports

Strong Demand Proves the Best is Yet to Come for Miami’s Multifamily Market

by John Nelson August 17, 2015

Miami’s multifamily market now ranks among the country’s strongest overall performers (if not the strongest). The city attracts, and benefits from, numerous tourists, investors, financial institutions, real estate funds, retailers and tourists from countries around the globe. The demand for condominiums and apartment buildings in Miami seems insatiable with the investors competing for increasingly scant deals. In practical terms, that means hotel and office developers often lose out across asset classes to the “ever-on-fire” multifamily sector. There is every indication in the first quarter of 2015 that Miami’s multifamily market’s upward trend will continue. Debt and equity continue to stream into the Miami-Dade County apartment and condominium sector from both local sources and out-of-area buyers attracted to solid asset performance and robust housing demand generators. Continued employment and population growth have bolstered housing demand as the overall Miami economy strengthened in 2014. The Miami metropolitan area added more than 30,000 jobs last year, and based on figures from the Bureau of Labor Statistics, Miami-Dade County’s unemployment rate continued its downward trend to 5.4 percent in February 2015. According to the Florida Bureau of Economic and Business Research, South Florida’s population is expected to increase by approximately 29 percent between 2013 …

August 17, 2015

CSRT’s new 11-story corporate headquarters in downtown Cedar Rapids

Industrial Iowa Market Reports Midwest Midwest Market Reports Multifamily Office Retail

Cedar Rapids Rises to Commercial Real Estate Challenge Following Major Flood

by Jeff Shaw August 13, 2015

In the April 2014 edition of Heartland Real Estate Business, I pointed out that the recovery from the historic 2008 flood was nearing completion in Cedar Rapids, a city of approximately 129,000 residents. The last of the damaged city facilities, a recreation center in the Time Check neighborhood on the city’s northwest side, has been demolished. Taking its place will be a new 17,000-square-foot recreation center currently under construction. In July, the Cedar Rapids City Council approved the $600 million flood protection system alignment on both sides of the Cedar River; all the flood system funding plan is now in place, except for the federal appropriation of $78 million pending approval in Congress. Three sections of flood protection are complete or under construction. The National Civic League recognized this feat in 2014 when it named Cedar Rapids as a recipient of the All-America City Award, which recognizes communities that overcome citywide challenges and achieve uncommon results. (The National Civic League is a nonprofit organization that advocates for transparency, effectiveness, and openness in local government.) The city’s strong recovery following the devastating flood in 2008 is evident by the accolades it has received from a variety of media outlets and interest …

August 13, 2015

Connecticut Market Reports Multifamily Northeast Northeast Market Reports

Fairfield and New Haven See Growing Supply of Apartments

by Jaime Lackey August 12, 2015

In Fairfield and New Haven counties, growing rental housing demand will keep apartment vacancy tight throughout the year, despite a second consecutive year of elevated completions. Developers will complete 1,300 units this year, representing a minor drop from the number of apartments delivered last year. More than 700 of these new rentals will be in New Haven County. Another 1,500 rentals, mostly in Fairfield Country, were under construction in the first quarter of 2015, with deliveries slated for next year. Key projects for completion include the 160-unit College & Crown in the city of New Haven. College & Crown is a modern luxury rental in a vibrant community, boasting galleries, shopping, dining and recreational activities, within walking distance to Yale’s main campus and the Yale School of Medicine. New apartments will modernize apartment stock and mark an ongoing effort among developers to tap into unfulfilled demand for newer, amenity-laden rentals. In the first quarter of 2015, recently completed apartments in Fairfield and New Haven counties have been well absorbed. An increase of rental housing inventory may also play a meaningful role in continued growth of the local economy by making it easier for local employers to recruit workers to the …

August 12, 2015

Market Reports Western Market Reports

Las Vegas’ Office market Maintains Steady Course

by Nellie Day August 11, 2015

Although the Metropolitan Las Vegas office market has not experienced the robust recovery seen in other sectors, it has shown three years of moderately steady growth. With net absorption of 341,976 square feet through the second quarter of 2015, the area is experiencing the 14th consecutive quarter of positive net absorption, while the vacancy rate is at the lowest level since the first quarter of 2009. The steady improvement in the Las Vegas office market is largely attributed to the city’s economic rebound, particularly in employment. The Bureau of Labor Statistics pegged the unemployment rate for Las Vegas at 6.6 percent as of May 2015. It’s also the first month to see an unemployment rate below 7 percent in nearly seven years. Office-related employment represents about 28 percent of the total labor force, second to only hospitality employment, and has played a critical role in the area’s economic recovery. In addition to the buoying job market, housing has improved, contributing to the economic recovery. New home starts increased by 45 percent year-over-year in the first quarter of this year, according to Metrostudy, while the average asking home price increased by 12 percent in the same time period. Las Vegas has …

August 11, 2015

Florida Industrial Market Reports Southeast Southeast Market Reports

International Trade, Population Growth Allow Miami’s Industrial Market to Thrive

by John Nelson August 10, 2015

Miami, the “Gateway to Latin America and the Caribbean,” boasts one of the strongest industrial markets in the nation, with over 200 million square feet of industrial space serving one of the fastest-growing metropolitan areas in the United States. Stronger-than-average population and employment growth count among the region’s chief demand drivers, along with robust international trade, a booming housing market and a globally acclaimed tourism industry. South Florida’s population is expected to grow by 100,000 people annually over the next five years, while the region also has the fourth-highest job growth rate in the nation. As a result, demand for housing and consumer goods is rising, creating a very dynamic industrial development, leasing and sales environment. Significant and ongoing investment in South Florida’s seaports, airports and intermodal transportation infrastructure is giving investors and businesses confidence in the long-term growth of the region. On the infrastructure front, there is the highly publicized, $2 billion expansion of PortMiami, one of the busiest ports in the U.S. for container traffic. The project includes a deep dredge, the addition of several post-Panamax gantry cranes, an intermodal/freight rail linkage, and a new truck/freight tunnel. Once completed this year, PortMiami will be the only port south …

August 10, 2015

Industrial Market Reports Office Retail Texas Texas Market Reports

Dynamic, Fast Growth Comes to the Four-County Area of ‘Rio South Texas’

by Haisten Willis August 7, 2015

It’s safe to say that the Rio Grande Valley, now also referred to as Rio South Texas, is one of the most dynamic and fastest growing regions in the state. The four-county region at the southernmost tip of Texas bordering Mexico and hugging the Gulf of Mexico consists of Hidalgo, Cameron, Starr and Willacy counties. With nine ports of entry, five international airports, a first-class deep water port, a population of over 1.2 million and three interstates, it is easy to see why the Rio Grande Valley is one of the largest trade corridors in the world. Growth in all aspects, including retail, office, medical, education, industrial and housing, brought nearly $700 million in construction permits for all of 2014. Retail Sales tax revenue being sent back to the cities continues to increase at a healthy pace. Walmart’s opening of 12 new stores in the region affirms the positive growth and the confidence in the valley. The impact a Super Walmart has is evident with a city’s sales tax revenue. Two new stores in Donna and Elsa increased local sales tax revenue 14 percent and 57 percent, respectively. Retail sales in the region continue to rise, showing the strength of …

August 7, 2015

Market Reports Midwest Midwest Market Reports Mixed-Use Wisconsin

Proposed New Arena for Milwaukee Bucks Could Lead to Development Run

by Jeff Shaw August 6, 2015

An article highlighting the fortunes of the Milwaukee Bucks that appeared July 6 on CBSSports.com couldn’t be more accurate. “There’s something powerful and sustainable growing in Milwaukee, rising out of the weeds of small-market irrelevance and into a team you’re going to want to watch next season,” wrote Matt Moore who covers the NBA. Since New York hedge fund investors Wes Edens and Marc Lasry purchased the Bucks last year for $550 million, the team has been on the rise. Founded as an expansion team in 1968, the Bucks went from being the worst team in the league during the 2013-14 season to the sixth seed in the 2014-2015 playoffs. The new owners, along with former owner Herb Kohl, have committed $250 million for the construction of a new $500 million arena as a replacement for the team’s current home, BMO Harris Bradley Center, which opened in 1988. But if the new arena is not built by the 2017 season, Milwaukee could be left without an NBA team. Once complete, the entire development, which would sit on approximately 30 acres in the Park East corridor, could include up to 3 million square feet of office, entertainment, retail, residential and hotel …

August 6, 2015

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