Boosted by healthy employment growth, demand for apartments in Las Vegas metro area surged in 2014. Local employment grew 2.7 percent, outpacing the 2.1 percent national gain last year as metro-wide apartment vacancy plunged 110 basis points to 6.8 percent. Employers added 22,900 jobs to payrolls in 2014, as nine of the 11 job sectors hired, indicating broad-based economic resiliency and supporting demand across all classes of apartments. Apartment operators particularly benefited from outsized expansion in the trade, transportation and utilities, and the leisure and hospitality sectors, where a combined 7,400 jobs were created. Mass hiring in the Downtown Summerlin mixed-use development, The LINQ and Zappos.com significantly contributed to growth in these segments. The greatest rate of increase, a 10.5 percent gain, occurred in the construction industry, as 4,200 workers were hired. The effects of hiring were felt in the apartment rental market as 3,790 units were absorbed in 2014, up from 1,990 units absorbed during the preceding year. Absorption outpaced deliveries, underpinning the sharp drop in vacancy. Operators moved to take advantage of demand by advancing monthly asking rents 3.1 percent marketwide to $837 per month, the greatest annual increase since 2006. At the same time, operators scaled back …
When it comes to grading commercial office space, there is no doubt that location is still king — and other factors such as price, architecture, functionality and amenities all take a back seat to the property’s location. Since we assign buildings letter grades (A and B), let’s take a look at what these letter combinations mean and the relationship of quality to location. In these scenarios, the first letter describes the building’s class (A or B) and the second letter represents the desirability of its location (A or B). The A/A designation refers to Class A buildings in Class A locations. It’s no surprise that this is the first category of office space absorbed when a market heats up and leasing volume intensifies. During this stage of the cycle, rental rates to inch upward, and more importantly, lease renewal terms tighten as landlords sense a shift toward the middle. For Memphis, Tenn., the total vacancy for Class A space in the East Memphis submarket decreased from 2.9 percent during third quarter 2014 to 2 percent in fourth quarter 2014. Almost 24,000 square feet of Class A office space in the East submarket was leased during fourth quarter 2014, and this …
Throughout the economic recovery, real estate has been investors’ preferred asset class in the Cincinnati region and across the United States. Although the Federal Reserve is likely to raise short-term interest rates in June or September, demand for commercial real estate is expected to remain strong as long as the recovering economy continues to create new demand for commercial space. According to Real Capital Analytics, 2014 finally saw total U.S. sales volume and property prices (at the aggregate level) reach pre-recession levels. In fact, Real Capital Analytics reports that excluding portfolio sales, activity was higher in 2014 than in 2007. Investment Sales Surge Metro Cincinnati’s property and portfolio sales in 2014 totaled more than $2.3 billion across all major real estate sectors, a 53 percent increase over 2013. It was, by far, the strongest year for investment activity in recent memory, with significant increases across all property types. For the second straight year, retail sales transactions led the way locally among all property types. Retail sales volume in 2014 exceeded $600 million, $370 million of which occurred in the fourth quarter. Office property and portfolio sales in Cincinnati totaled nearly $580 million in 2014. This figure was a 162 percent …
Young professionals are flocking to Boston to find higher-paying jobs generated by fruitful healthcare and technology industries. Pharmaceutical companies like GE Healthcare, Amgen and Novartis AG are expanding in Boston and Cambridge. In addition, professional, business services, education, and health services sectors have all surpassed pre-recession employment. In 2015, companies in Boston are projected to create 43,000 new jobs, which is a 1.7 percent annual increase. The increased pace of hiring will support household formation and elevate the area’s housing demand. The Greater Boston region is experiencing one of its largest residential building booms in recent history. Most of the area’s proposed and under-construction residences are apartments and many of them are on the luxury end, including the Ink Block and Troy Boston on the South End, and the Zinc in East Cambridge. Multifamily inventory will expand 1.6 percent this year, resulting in a total delivery of 7,250 new units. Many potential homeowners will choose renting over buying as more and more potential homebuyers prefer short commute times and the lifestyle that renting offers — a growing trend across many of the country’s major metros. Nationwide, apartments outperformed expectations for 2014. The national vacancy rate dipped as low as 4.2 …
The Las Vegas office market continues to recover and stabilize, capping off 2014 with the 12th consecutive quarter of positive net absorption. Initially slow to recover following the recession, the area’s rebound has recently quickened. The market has an unemployment rate of 7.1 percent, with 2014 being the first year since 2008 to see a rate below 8 percent. Office-related jobs represented 20 percent of the workforce, second only to hospitality, proving the office market is an important part of the area’s growth and vitality. Class A office space along the I-215 Beltway currently shows strong activity. Las Vegas is home to two suburbs that historically were among the fastest-growing communities in the nation: Green Valley in the southeast and Summerlin in the west. Initially built as a means to connect the populations of these communities, the Beltway now extends around the city, connecting to I-15 in the northern valley. Notable recent developments along the Beltway include Krausz Companies’ and WGH Partners’ Gramercy, a mixed-use office, retail and multifamily project in the southwest that added 175,000 square feet of Class A office space in the third quarter of 2014, and The Howard Hughes Corporation’s Downtown Summerlin, a mixed-use project that …
By the numbers, 2014 was a pretty good year for the Memphis retail market. With over seven million square feet of rentable retail space, the overall vacancy rate decreased roughly one percent since the end of 2013 while rental rates were relatively flat. Not bad. Not great either. It is important to note, however, that Memphis retail is not classified into A, B and C properties like their office and industrial counterparts, so we don’t often get an accurate snapshot of the market’s product availability. The truth is that Memphis is simply running out of space – desirable Class A space, that is. Because of this lack of available product, new construction is once again on the rise, as is redevelopment of existing structures within the city’s urban core. The good news doesn’t stop there. The willingness of local government entities to support development progress has proven to be instrumental to some very key wins for the Memphis MSA. This January, Tanger Outlets, a major player in the outlet mall industry, confirmed that it would partner with Poag Shopping Centers to develop a 310,000-square-foot outlet center in Southaven, Mississippi. Southaven and DeSoto County officials approved a $15 million tax increment …
In stark contrast to past years when motorists would fly through Waco on I-35 wondering if anything was happening in this town, the dramatic Twin Signature Bridges across the Brazos River now sit majestically with the backdrop of Baylor University’s brand-new, $325 million McLane Stadium. However, it has become abundantly clear that the stadium is not the only big thing happening in Waco. Anyone who has driven the stretch of I-35 that passes through Waco in the past 24 months has undoubtedly noticed quite a bit of new construction, demolition and site clearing for even more commercial construction. Leading the way is the dramatic increase of national restaurants and retailers that have made their presence known to everyone who used to drive right through, but who now stop, eat and shop in Waco. A primary catalyst of this rise in retail activity has been the release of property along I-35 formerly owned by the Waco Independent School District (ISD). “We witnessed a surge in demand for retail sites along the I-35 Corridor in 2013,” says Jim Peevey, CCIM, a local broker with Central Texas Commercial. “My partner, Andy Sheehy, and I represented Waco ISD in selling three surplus properties on …
Memphis has acquired many nicknames since its establishment in 1819: Blues City, Birthplace of Rock ‘N Roll, and Bluff City just to name a few. However, one name that has managed to work its way to the top of the list in recent years is America’s Distribution Center. Metropolitan Memphis, located in the southeast corner of Tennessee, northwest Mississippi and eastern Arkansas, contains approximately 4,598 square miles and is inhabited by approximately 1.3 million people. As one of the few MSAs to include three states, the Memphis region plays an integral role as the cornerstone of the Mid-South area. With a central location and rich transportation infrastructure, Memphis transformed into the regional and national distribution and logistics hub. Memphis’ transportation infrastructure is comprised of the four Rs: runway, rail, river, and road. Memphis International Airport was named the largest air-cargo airport in the United States for 18 consecutive years. It is now tied for first in the world with Hong Kong International Airport. Memphis is one of only three cities in the US that has five of the seven Class I railroads: Union Pacific/Southern Pacific, Burlington Northern Santa Fe (BNSF), CSX Corp., Norfolk Southern and Canadian National Railroad (CN). The …
The commercial real estate market in the Tyler metropolitan area experienced one of its best years in 2014. Led by the retail sector, a number of new leases and sales brought a bevy of businesses to the market. The city of Tyler has a population of around 100,000, while the metro area contains 222,000. Tyler is the retail and medical center of northeast Texas, with a trade area population of 415,000. The city experienced strong population growth of 15.8 percent from 2000 to 2010. The Tyler economy is fueled by the medical sector, which accounts for 20 percent of all employment. Trinity Mother Frances hospital employs 4,000; East Texas Medical Center accounts for over 3,200 jobs; and the University of Texas Health Center at Tyler has total employment of 865. Because of the outstanding medical facilities in the city, patients from a 14-county area come to Tyler for medical care. Another strong driver for the local economy is the existence of higher education opportunities. The University of Texas at Tyler continues its strong growth, boasting a total enrollment of more than 6,400, while Tyler Junior College serves 35,000 students. Both of these schools are expanding. UT Tyler’s engineering school has …
It is great to be in Las Vegas and witness the city’s strong recovery from the economic lows of a few years ago. Exciting projects like the $500-million LINQ entertainment and retail promenade, the 1.6-million-square-foot Downtown Summerlin lifestyle center and the market’s first IKEA, now under development, are filling the region with promise. Las Vegas added more than 25,000 jobs between 2013 and 2014, a 3.3 percent increase, representing the third highest growth rate in the country during that time. As opposed to the previous economic boom that was largely driven by construction growth, the job growth in this recovery has been evenly spread across several sectors like general services (retail), professional/business, education, healthcare and leisure/travel. Las Vegas also hit a milestone in 2014 when it reached a record-setting 41.1 million visitors for the year. Those visitors included 5.2 million conventioneers, the highest total since 2008. As the Las Vegas economy continues to expand, retail is leading the pack with taxable sales that have already increased an astounding 29.4 percent from the recession low, including an 8.1 percent year-over-year increase in the past 12 months. Total taxable spending in the region is near its highest levels in history, reaching $36.2 …