Purpose-built student housing has always been a dynamic market segment with unique challenges and opportunities. As an asset class, student housing fared well during the recent downturn, but the micro-market nature of these developments precludes too many generalizations. What makes a university a strong market for new student housing is in large part due to the dynamics at work in that specific university community. In addition, student housing being developed today reveals a trend toward high-end finishes and lavish amenities. Hyper-local Market On a national scale, the student housing market is large and growing. As the recession drove more people back to college, developers began adding new beds to campus communities across the nation. The swelling ranks of college enrollment, even as the job market declined, is one reason student housing continued to provide strong returns in a weak economy. But within a university community, there is a finite market for off-campus housing. For example, if a university has 20,000 students, one-third may live on-campus and one-third may commute or live in conventional housing. The other third — 6,500 students — in the market for off-campus housing likely represents the total market. If there were already 5,000 beds available, the …
Market Reports
While Southern New England gambles on casino development, shopping centers are the game of choice in Seacoast New Hampshire. DDR Corp., Waterstone Retail and New England Development have all chosen to invest in major new ventures in the sales tax-free state, and they are expanding their horizons for locations, retail tenants and customers. Supporting retail development, housing activity continues to be robust in Rockingham and Strafford counties. The latest Seacoast shopping center launch is Waterstone Retail’s Granite Ridge Marketplace, at exit 15 of the Spaulding Turnpike in Rochester, N.H. The development plans to capitalize on the Route 11 tourist corridor as well as the populations in the southern Lakes and northern Seacoast regions. (See sidebar below.) With Holiday Inn Express and multiple restaurants already in place, the Granite Ridge District shows great promise as a regional destination and attraction. Combining customers of the Lakes and Seacoast regions, Rochester is a hub of development activity. The Spaulding Turnpike expansion involved an investment of $135 million and has transformed the six Rochester exits. Rochester Crossing by The Wilder Companies (exit 13) is anchored by Lowe’s Home Improvement, Kohl’s and PetSmart, and features Buffalo Wild Wings, GameStop, and Sally Beauty Supply. IHOP Restaurant …
Southern California has one of today’s strongest retail markets in the nation. Orange County has fared particularly well recently, showing resilience to the tough economic period of the past six to seven years. According to CBRE research, the average per capita income in Orange County is 20 percent above the national average, while its unemployment rate stands at 5.8 percent. This is well below the State of California’s rate at 8 percent, and below the nation’s rate of 6.7 percent. The overall retail vacancy rate of 4.9 percent has reduced 50 basis points since the first quarter of 2013 and has shown three consecutive quarters of positive net absorption. While the overall retail numbers in Orange County are improving, certain fundamental changes in the personality of the market are evolving after the recession: E-commerce: Bricks-and-mortar stores in Orange County are responding to unprecedented levels of online sales. According to CBRE research, national online sales are up 185 percent over the past 10 years. They’re projected to grow between 10 percent and 14 percent annually through 2017. Many of the region’s retailers are actively enhancing their customer’s in-store shopping experience to create an environment that e-commerce is unable to offer. Customer …
Comprising approximately 155 million square feet of industrial space, the Baltimore industrial market continues to recover, albeit gradually, from the recession. Key drivers for the Baltimore metropolitan area include the Port of Baltimore, proximity to Washington, D.C., and direct accessibility to Interstate 95 and the major population centers along the Eastern seaboard. As of the end of the first quarter, the vacancy rate for the Baltimore industrial market was 9 percent, which is down from 13.3 percent at the depth of the recession. Vacant inventory has been gradually absorbed since the recession and market fundamentals continue to improve. Industrial product continues to be a favored asset class, and Baltimore is deemed to be a “core” market among private and public institutional investors. Rental Rates Warehouse rental rates throughout the Baltimore metropolitan market have increased from 2010 to 2014 as the local and national economy continues its slow recovery. Overall asking rates on a triple-net basis have increased approximately $1 per square foot since 2010 as the average asking rate for bulk industrial product was at $5.22 per square foot as of the first quarter of this year. As the vacancy rate has dropped in recent years, landlords have held firmer …
When we read or hear about economic recovery, whether it is regarding commercial real estate or a different sector of the economy, so often the perspectives and projections we hear are on a national, or even global, scale. Unfortunately, such analyses can result in a picture of the economy that seems like it was taken with a wide-angle lens. Typically, commercial real estate activity in larger cities will not be representative of tertiary markets like Springfield, Ill. The big picture can give a distorted view of the health of our local economy here in Springfield. Dr. Peter Linneman, chief economist for NAI Global, says that employment levels in America have recovered to nearly pre-recession levels and that many of the jobs created during the recovery have been semi-skilled jobs, rather than minimum-wage jobs. The jobs recovery is especially meaningful for the housing industry, and multifamily in particular. New home construction is expected to be on a gradual rise in Springfield during the next two to three years. Most everyone knows that small business is the main staple for job creation, yet government handouts and subsidies are funneled to the largest banks in America, and there the money sits instead of …
For Cincinnati residents and businesses, the ongoing revitalization of the city’s urban core is an exciting example of how the traditional live, work and play dynamic can set in motion a cycle of positive reinforcement whereby new housing spurs new commercial development, which in turn encourages additional residential growth. While the Queen City’s renewed civic connections and commercial synergies are making headlines and garnering justified attention, it is precisely this residential spark that has fanned the retail flame. Like so much development — and redevelopment — it is all about “chasing rooftops,” responding to demographic shifts and finding new ways to meet the needs of a changing urban populous. In today’s rapidly evolving Cincinnati market, those changes are evident, and the resulting development is literally and figuratively altering the Cincinnati cityscape. City Living Cincinnati’s recent urban residential development can be broken down into two categories: downtown development in and around the central business district (CBD), and the development in the first-ring communities just outside of that urban core. Both areas are seeing a great deal of high-end multifamily coming online. Typically, this new housing stock is amenity-driven and priced at a premium. The tight rental market for this product has …
Hawaii has been immersed in an economic recovery over the past two years. This recovery has exceeded the overall U.S. performance in regards to total employment growth and total personal income growth. These figures have grown in Hawaii by 2.2 percent and 3.4 percent, respectively. Such economic growth has spurred strong performance from retail centers, while healthy spending from domestic and international shoppers has advanced the retail recovery in Hawaii. According to the Hawaii Tourism Authority, total visitor expenditures for 2013 were a record high of $14.5 billion, a 2 percent increase over 2012. The total visitor arrivals increased 2.6 percent, to 8.2 million, exceeding the previous record of eight million in 2012. International tourism is a strong factor in Hawaii’s economy as well. According to the Office of Travel and Tourism, Honolulu ranks as the fourth-largest port for total overseas arrivals. Honolulu received almost two million non-domestic arrivals in 2012, not including those from Canada and Mexico. Not only is the level of overseas visitor arrivals placing Hawaii close to the top of the pack, but its growth has exceeded the U.S. (on a year-over-year growth basis) every quarter since 2011. International tourism arrivals to Hawaii have grown an …
With economic improvement and job gains returning the region to its pre-recession vitality, the Southern New Hampshire office sector through mid-year 2014 has enjoyed renewed momentum. The state has nearly regained all of its jobs lost during the downturn, resulting in an unemployment rate of 4.4 percent, which is well below the current national average of 6.3 percent. At the same time, the picture has changed a bit. The hard-hit financial services sector is rebounding, although slowly, while notable expansion in business services, technology, education and health services has translated to a surge in demand for office space among diverse industries. Over the past several months, Comcast leased 147,000 square feet in Hudson; Hospital Corporation of America leased 48,000 square feet in Salem; Anthem Health of New Hampshire took 46,000 square feet in Manchester; and Citizens Bank committed to 29,418 square feet in Manchester. In Bedford, Mass Mutual committed to 18,000 square feet while engineering firm Vanasse Hangen Brustlin took 19,000 square feet. This steady activity has led to improving fundamentals across the board. The overall office vacancy rate fell to 17.6 percent during the first quarter (compared to a long-term average of 18.6 percent and a recession–prompted high of …
Apartment development is currently the driving force in downtown Cleveland’s commercial real estate market, including the conversion of office buildings to residential use and the rehabilitation of existing apartment buildings. Downtown Cleveland’s population stands at more than 12,500, an 88 percent increase since 2000, according to a first-quarter market update from the Downtown Cleveland Alliance. As a result, apartment demand is unrelenting with many properties boasting a long waiting list. The renovated Ameritrust Building that includes “The 9” Apartments is one such development that has a significant waiting list.The strong tenant demand has driven Cleveland’s apartment vacancy to below 5 percent. Corporate Relocations In response to a growing number of young professionals seeking a downtown work/live/play environment, several corporations have relocated from the suburbs to downtown Cleveland. This trend is particularly evident among high-tech companies. The list of companies growing and expanding downtown includes Dakota Software, Dwellworks, National General Insurance, OnShift, BrandMuscle and BrownFlynn. Renewed growth and demand for an efficient workplace has led to the construction of Cleveland’s first multi-tenant office building in decades, the Ernst & Young Tower. Inquiries and occupancy at the Ernst & Young Tower have been so robust that the developer, Fairmount Properties, has broken …
The Downtown Seattle office leasing market continues to be led by growing tech firms, especially Amazon.com. Amazon recently signed leases for 5th & Bell (125,000 square feet), 635 Elliott (180,000 square feet) and Blanchard Plaza (125,000 square feet with the possibility to take down the entire 250,000-square-foot property). The online retailer is also moving forward with the development of three high-rise buildings totaling 3.3 million square feet. Amazon owns additional lots for more projects in the future as needed. Other tech firms, including Zulily, Twitter, Tableau Software, Nuance Communications, Avalara, Acucela and Simply Measured, are either opening new offices or expanding rapidly. Developers are responding to this demand by moving fast to bring new projects to market. These projects include Dexter Station, 400 Fairview, Hill7 and Troy Block, which are all under construction. Trammell Crow recently announced its 1007 Stewart project, while Holland Partners is developing buildings sites one through three at Westlake Steps, and Schnitzer’s ready to begin construction on its Urban Union development. These development sites are all located in the South Lake Union area in and around the Amazon projects. This addresses the demand seen from other tech firms that want to be near Amazon and the …