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IndustrialMarket ReportsMidwestMidwest Market Reports

A Developer’s Guide to Midwest Industrial Hot Spots

by Kristin Harlow

Developers identify industrial hot spots as areas with low vacancy rates that justify speculative construction. These centrally located sites offer convenient highway access and proximity to a wide labor pool.  In the Midwest, examples of industrial development hot spots where demand has remained strong include Chicago, Minneapolis, Columbus and Louisville, according to Steve Schnur, chief operating officer with Chicago-based CRG. He cites these markets because of their affordability, business-friendly environment and robust logistics infrastructure. These areas tend to keep a healthy supply-demand balance, he adds. Luckily for those whose livelihood is tied to the industrial property type, 2025 is expected to bring a return to pre-pandemic demand drivers, according to CBRE’s “U.S. Real Estate Market Outlook 2025.” The brokerage firm states that industrial occupiers will focus on longer-term strategies to improve warehouse efficiency, ensure supply chain resiliency and meet the needs of an evolving consumer base.  At the beginning of this year, CRG inked a lease with States Manufacturing for 503,440 square feet at The Cubes at French Lake in metro Minneapolis. The 1 million-square-foot facility, completed in 2024, marked the largest speculative industrial project ever developed in the state, according to the developer.  On the other end of the …

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Texas-Affordable-Workforce-Housing-Brokerage-Panel
Affordable HousingConference CoverageMarket ReportsMultifamilyTexasTexas Market Reports

InterFace Panel: Texas Affordable Housing Sales Volume Should Rebound Marginally in 2025

by Taylor Williams

By Taylor Williams DALLAS — As is the case for many commercial asset classes and markets in 2025, there is an expectation of elevated deal volume for investment sales of affordable housing properties in Texas. But brokers in that space caution that the rebound will likely be marginal and is not necessarily indicative of ideal market conditions taking hold. A quintet of panelists broke down this notion and others at the InterFace Texas Affordable & Workforce Housing conference on Feb. 13 at the Westin Galleria Dallas hotel. Mary Ann Bennett, senior managing director at BBG Real Estate Services, moderated the discussion on investment sales activity. Editor’s note: InterFace Conference Group, a division of France Media Inc., produces networking and educational conferences for commercial real estate executives. To sign up for email announcements about specific events, visit www.interfaceconferencegroup.com/subscribe. Panelist Michael Furrow, senior vice president of affordable housing at commercial finance firm BWE, took the audience of 200-plus back in time to illustrate just how quiet the past two years had been. He did so by providing statistics on affordable housing sales for Dallas-Fort Worth (DFW) between 2021 — when multifamily rents and sales prices were peaking across the board — and 2024, when they …

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ArizonaMarket ReportsOfficeWesternWestern Market Reports

Phoenix Office Balances Rising Vacancies, Emerging Opportunities

by John Nelson

— Dave Carder, Senior Vice President, Kidder Mathews — The state of Phoenix’s office market is not easily summed up with a catchy headline or a few brief bullet points. Along with most large metropolitan areas across the country, Phoenix has struggled with lower demand, rising vacancies and a shift toward hybrid workweeks. However, several emerging trends are creating positive shifts in the market that should be noted as we look to 2025 and beyond. The average vacancy rate of the Phoenix office market over the past decade was 18.5 percent. That includes a low of 13.9 percent in 2019 and a high of 24.8 percent in 2024. Gross leasing absorption averaged nearly 7 million square feet annually, with a high of nearly 7.9 million square feet in 2019 and a low of 5.5 million square feet last year.  Net leasing absorption showed a similar pattern, peaking at 3.1 million square feet in 2019 and declining to negative 2.2 million square feet in 2024. These trends point to 2019 being the market’s best-performing pre-pandemic year across all three metrics.  Despite 2024’s gross leasing absorption (5.5 million square feet) being close to the 10-year average, the significant rise in vacancy and …

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CaliforniaMarket ReportsOfficeWesternWestern Market Reports

Suburban Residential Appeal Fuels Office Demand in Orange County

by John Nelson

— By Sebastian Bernt and Erick Parulan of Avison Young — The Orange County office market continues to show resilience, particularly compared to urban centers like Downtown Los Angeles. Its suburban environment, coupled with higher office utilization rates, has made it an attractive option for businesses adapting to evolving workplace strategies. As a result, leasing activity has remained steady with availability stabilizing and tenant demand holding firm. Total leasing volume reached 1.6 million square feet in the fourth quarter of 2024, bringing the annual total to 7.8 million square feet. Notable transactions included Willow Laboratories, which signed a 63,440-square-foot lease at 121 Theory Drive in Irvine, and Acrisure, which secured 59,409 square feet at 611 Anton Blvd in Costa Mesa. While leasing slowed slightly in the fourth quarter, demand for modern, amenity-rich office spaces remained strong as companies continued implementing return-to-office strategies. This demand has pushed average asking lease rates to $35.05 per square foot, reflecting a broader shift toward high-quality, collaborative work environments that prioritize employee engagement and workplace experience. Orange County’s growing residential appeal has further fueled office demand as young professionals and families increasingly opt for a suburban lifestyle. As a result, companies are prioritizing locations with …

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Market ReportsMarylandOfficeSoutheastSoutheast Market Reports

Green Shoots Are Emerging for Baltimore’s Office Market

by John Nelson

The national office market continues to face headwinds in the wake of the COVID-19 pandemic, and Baltimore is no exception. Shifting tenant preferences and the city’s evolving economic landscape have created challenges, with rising vacancy rates in some submarkets. However, recent trends suggest that Baltimore’s office sector is stabilizing, with positive momentum in key areas. Changing office landscape For decades, Baltimore’s office market was defined by two primary submarkets: the traditional central business district (CBD) that is centered around Charles, Saint Paul/Light and Baltimore streets, and the Inner Harbor. The CBD was home to corporate giants such as Alex. Brown & Sons (now part of Deutsche Bank), USF&G (now part of St Paul Insurance), T. Rowe Price and Maryland National Bank (now part of Bank of America). In the 1980s, the Inner Harbor emerged as a national model for waterfront redevelopment, attracting major tenants and commanding some of the city’s highest occupancy rates. The early 2000s saw another shift with the rise of Harbor East and later Harbor Point, both of which drew high-end office tenants and further pulled demand toward the waterfront. More recently, Baltimore Peninsula has emerged as the next major office and mixed-use submarket.  Historically, vacancies created …

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The-Gin-Mill-Arlington
Market ReportsMultifamilyTexasTexas Market Reports

DFW Multifamily Market Defies Economic Headwinds — Here’s Why Smart Investors Are Paying Attention

by Taylor Williams

By Joe Lutz, managing director at Leon Multifamily Group Market uncertainty has many real estate investors hesitating. Rising costs, high interest rates and shifting supply-demand dynamics add to the caution. Yet Dallas-Fort Worth (DFW) remains a powerhouse in multifamily development, driven by strong demand and solid market fundamentals. For those willing to act, the opportunities are hard to ignore. Investor caution is evident, with a “stay alive through ’25” mentality  reflecting economic pressures. Transaction volumes have dropped to historic lows. Newmark Capital Research (NCR) reports that 2023 and 2024 saw the weakest activity since 2013, with sales down 30 percent compared to the pre-COVID era. For the first time since 2008, 2023 ended without the usual year-end sales uptick, and 2024 data suggests a similar trend. While some feared a market collapse, conditions haven’t reached Great Financial Crisis levels. The multifamily sector faces supply imbalances and growing debt pressures. Construction starts hit their lowest levels since 2013, while completions exceeded new starts by over 200,000 units — a gap unseen since the 1970s, according to data from NCR. The surge in 2023 completions resulted from post-COVID, low-interest-rate incentives, but now concerns over vacancies, concessions and stagnant rent growth linger. Debt …

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Market ReportsMichiganMidwestMidwest Market ReportsOffice

Detroit Office Market Balances History, Opportunity

by Kristin Harlow

By Andy Gutman, Farbman Group Detroit’s office market, like many other large cities across the Midwest, has experienced many shifts — specifically in the office sector. Despite the challenges Detroit has seen over the past few years, the city has also shown great resilience. As companies continue to reconsider and revise their office needs, and workspaces evolve, Detroit is well positioned to capitalize on office occupancy in 2025 thanks to its historical assets, as well as opportunities in the city that are ripe for redevelopment. Tech, transportation and tenacity One of the city’s strengths in the office sector is its potential to rebound faster than many other Midwest cities. Unlike other markets that are overbuilt with more pain coming in the form of downsizing, such as Chicago, Detroit has avoided oversupply and isn’t overburdened with soaring vacancy rates. The city’s office market vacancy rate has slowly declined over the last several quarters — a positive sign for the local market. Detroit has also benefitted from steady and incremental growth, particularly by incubation, innovation and technology-focused tenants. It’s these types of tenants who have assisted in revitalizing the city’s urban core. The market is also characterized by a higher proportion of …

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ArizonaMarket ReportsRetailWesternWestern Market Reports

Could Casa Grande Be the Next Tier II Retail Market in 2025 for Phoenix?

by John Nelson

— By John K. Jackson of Colliers Phoenix — Casa Grande, Ariz., stands at a pivotal juncture that could see it transition into a Tier II retail market this year. Phoenix’s Greater Metropolitan Area has been characterized by historically low retail vacancy rates, prompting retailers and developers to explore opportunities outside the urban core. Casa Grande’s strategic location less than 50 miles south of Phoenix Sky Harbor International Airport makes it well-positioned to capitalize on this migration. The Dynamics of Casa Grande’s Growth Casa Grande has experienced notable growth in recent years. It was the seventh fastest-growing U.S. city in 2021, experiencing a remarkable 24 percent population increase since 2016. This growth, paired with job creation across sectors, is attracting major employers, including Lucid, LG Energy Solution and Kohler. These three firms promise to collectively bring more than 6,400 jobs to the area. Such economic development lays a solid foundation for retail expansion. After all, a growing workforce typically leads to increased consumer demand.  The significant investments being made in the area further bolster Casa Grande’s potential as a retail hub. Lucid has recently expanded its manufacturing complex to 4 million square feet, with plans for additional land acquisition to support …

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CaliforniaMarket ReportsMixed-UseWestern

South Coast Metro: A Case Study in Urban Mixed-Use Development

by John Nelson

A notable shift in the way we live, work and play has occurred since the pandemic — one that emphasizes efficiency, multi-functionality and convenience. The result has been an increase in the demand and popularity of mixed-use developments. Developers love them for their efficiency. Investors love them for their diversity. And consumers love them for their ability to achieve said live-work-play trifecta all under one roof. Within Orange County, South Coast Metro stands out as an area that fosters this type of urban development, blending retail, multifamily, office and cultural assets in a way that fosters economic growth and community engagement. Adjacent to John Wayne Airport, this 2,500-acre district shows how strategic development can create a self-sustaining urban environment. A Retail Powerhouse with Expanding Opportunities South Coast Metro is arguably most known for being the home of South Coast Plaza. The West Coast’s largest luxury shopping destination saw record annual sales exceeding $2.3 billion in 2023. While luxury retail remains a major draw, the broader South Coast Metro caters to a diverse range of shopping experiences, which includes the boutique-driven OC Mix and SoBECA District, as well as major national retailers. This variety underscores a key trend in commercial real estate: …

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Market ReportsNorth CarolinaOfficeSoutheastSoutheast Market Reports

The Faucet Is Back On for Raleigh-Durham’s Office Market

by John Nelson

Raleigh-Durham’s office market entered the year on a positive note as 2024 ended strong. Vacancy was largely flat in the fourth quarter, net absorption neared 300,000 square feet and move-outs were sparse. After years of uncertainty and short-term renewals dominating the landscape, companies are now committing to longer leases. Clarity around business drivers, a growing labor pool and new market entrants are all contributing factors to this decisive turn. Firms are confidently making long-term real estate decisions, bringing lease terms back to the five- to 10-year range. While the vibrancy of the pre-pandemic era has not fully returned, data shows a steady recovery throughout 2024, and 2025 is poised to bring even stronger growth. In 2024, Raleigh-Durham welcomed several notable commitments from companies establishing a foothold in the market, like Jewelers Mutual, JTL and Amgen.  Leasing activity stayed strong through the fourth quarter, supporting the net absorption of nearly 160,000 square feet of office space over the course of the year. Rents have seen some downward corrections overall, but well-located, highly amenitized assets have retained rent stability. Recent recommitments from major companies like Nutanix and Hitachi highlight the area’s enduring appeal. Vacancy closed out December at 17.3 percent but was …

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