The Phoenix office market ended the third quarter in a very strong position. Increasing momentum in the sector should continue into 2015. Healthier economic conditions, including a growing GDP and higher employment, are translating into increased market activity and confidence. The biggest take-away from Phoenix’s rebounding office sector is new office development, with several high-profile construction projects underway in the East Valley. Tower cranes dot the horizon along Tempe Town Lake in downtown Tempe. The largest project, State Farm’s Marina Heights, is under construction on its first phase, which includes two mid-rises totaling more than 1 million square feet. Additional phases will bring the project to more than 2 million square feet, making it the largest office project in Arizona. Hayden Ferry Lakeside III is under construction with a 10-story, 250,000-square-foot building on the lake. This is the third and final phase of this office project. Arizona State University has also jumped into the mix by announcing a huge 330-acre development on the south side of Tempe Town Lake. It is expected to incorporate athletic, commercial and residential projects at full build-out that will be utilized as a funding source for ASU Athletics. USA Place, a $400-million-plus development in downtown, …
The Jacksonville multifamily market can lay claim to being the healthiest in Florida, not because of blockbuster demand or rapid construction, but because steady growth has kept it from overheating. The pace of construction and absorption should sustain the market for at least the next six months to a year. With an unemployment rate at 5.8 percent in September, it’s clear that the metro market has bounced back from the recession, boosting demand for housing. GE announced that same month they would be opening a new plant, adding 500 jobs. Additionally, Forbes ranks the city sixth nationally in its list of best cities for tech jobs, just ahead of Silicon Valley. Unlike other regions of the state that attract retirees and foreigners, Jacksonville is drawing young professionals and recent college graduates who are well-matched to small-scale multifamily projects. These single, well-educated and childless individuals tend to be renters. And because of their sophisticated tastes, they are driving the creation of live-work-play communities that resemble well-established submarkets like Brickell in Miami and along Magnolia Avenue in Orlando. Residents who want to be close to entertainment districts are moving into the Southside submarket, which is close to downtown and the St. John’s …
In the third quarter of 2014, the Oklahoma City multifamily market recorded 11 transactions totaling 1,537 units for a sales volume of $82.4 million. This is an average price per unit of $53,625. The third quarter experienced a significantly higher sales volume than the first quarter of 2014, increasing 305 percent. The total sales volume for 2014 overall has reached $182.7 million, which is 33 percent lower than the same time period in 2013, when the total sales volume was just over $272 million. However, the total units sold was down only 11 percent compared to last year, which indicates the quality of assets trading is lower than those properties trading in 2013. For example, in the first three quarters of 2013, just over $215 million in Class A properties were sold, compared to just over $37 million in 2014. This is an 83 percent decrease in total volume of Class A properties and caused the total multifamily average price per unit to drop by 24 percent. This is not an indication of values declining. In fact, the opposite is true. Properties that are being fully marketed and that are providing access to as many buyers as possible are fetching …
The nickname for Indianapolis, “Naptown,” is quickly fading in the rearview mirror as the city receives an increasing amount of recognition as one of the best places to live and work in America. Thanks to a unique combination of Hoosier hospitality, pro-business environment and amenities such as the Cultural Trail, Indianapolis has been named “One of the best new boom towns in the U.S.” by Forbes magazine and the “No. 3 Downtown in the U.S.” by Livability.com. With $1 billion in new projects on the horizon, it’s no surprise that downtown Indianapolis is making headlines. Indygo’s $37 million Downtown Transit Center, in close proximity to the Cultural Trail and Bike Hub, will serve pedestrians, cyclists and bus riders. A $26 million investment in a new Science and Engineering Lab at Indiana University-Purdue University Indianapolis will continue to encourage life sciences and technology careers. Plans also are in the works to revamp downtown’s iconic Monument Circle with space for events, an ice skating rink, sidewalk cafes and more. On the residential front, investments in excess of $400 million over the past five years have resulted in new housing for 4,000 additional residents. Downtown Residential Boom According to public/private partnership Downtown Indy, …
The Phoenix industrial market is definitely following national trends in terms of recovery. Since 2010, U.S. industrial markets have seen rising demand trends with supply additions that have not kept pace. Demand for newer, Class A industrial space, as well as for use-specific space, is outpacing supply and encouraging more build-to-suit and speculative development activity across markets. Developers have shown discipline so far, however, as the amount of new supply added to the market since 2010 is well below the levels seen during previous expansionary periods. These trends are manifesting themselves in a variety of ways in Metro Phoenix. First, it’s clear that demand is definitely up. The industrial market has seen significant activity over the past several quarters. Leases for spaces between 20,000 and 200,000 square feet have totaled more than 10.5 million square feet since January 2013. Deals of this size have totaled more than 1.4 million square feet of absorption this year alone. This is important to note because the overall health of the Metro Phoenix industrial market has historically been supported by midsized users. This size range shows no signs of slowing as we round out 2014 and head into 2015. In fact, we know of …
There was a time when retail in the District of Columbia was tired and unimaginative, but today things are changing. Today, D.C. competes with some of this country’s greatest retail cities. No longer do “food by the pound” cafes dominate fast casual lunch options, or tired steak houses fill the nights. A young generation of award winning chefs — the likes of Mike Isabella, Cedric Maupillier and Aaron Silverman — are driving a new culinary scene, which in turn is helping to boost retail growth across our city. Silverman’s Rose’s Luxury across from the Marine Barracks on Capitol Hill was just named 2014 best new restaurant in the country by Bon Appetit. With a population of less than 700,000, D.C. is still a relatively small city, but it doesn’t act like it. It is the focus of the nation’s — and the world’s — political eye. It is also blessed with a stable economy and the recent influx of a younger generation who seek to put their stamp on it. We are no longer just a government town. International corporations like Hilton, Marriott, Choice, and Host Hotels have chosen this market for their headquarters. Discovery and Travel channels have staked …
Greater Waco’s economy is on a roll. Positioned halfway between Dallas and Austin, Waco is a prime destination for companies and individuals that want access to large metro areas without the hassles of traffic, expensive real estate and labor shortages. With newly completed facilities, such as Baylor University’s McLane Stadium and major downtown redevelopment projects, Waco is hitting the radar for new development opportunities. September 2014 marked 26 months of positive economic growth for the area, with 6.2 percent growth in the third quarter of 2014 alone. Major players, including Baylor, have played a tremendous role in elevating the status of Waco as a dominant player in the Central Texas region. Just as Texas has seen significant growth since 2008, so too has Waco. One major contributor to Waco’s economic success has been employment growth. Employers are creating new jobs in the area, with 1,500 more positions now in place, 108,200 compared to 106,700 in September 2013. Construction, manufacturing, healthcare, hospitality and logistics remain strong drivers for the economy. The result is a community with a 5 percent unemployment rate and residents with more disposable income. Retail Developers Step Up Spending was up 5.1 percent through the first nine months …
The Boston apartment market ranked among the nation’s top cities for revenue growth throughout much of 2013 and 2014. Apartment developers took note of the region’s strong revenue performances and construction levels ramped up, reaching over 7,000 units during the past four quarters. Construction has remained elevated and supply volumes have increased, but not outpacing demand of more than 8,000 units per year. The new luxury apartments provide a lifestyle that is very attractive and, in many cases, comparable to condominium living for would-be buyers who are now renting when faced with few options for buying the limited supply of new condominiums. Luxury apartments offer an excellent alternative and a lifestyle experience that is more akin to condo living than what previous rental buildings offered. Boston has needed new rental inventory for some time now, given that 60 percent of the existing apartment inventory was built prior to 1980. Many of the new luxury buildings feature condo-style finishes, state-of-the-art amenities and services, windows that open, high ceilings, and updated systems. These new buildings also offer a greater variety of floor plans that better address the needs of millennials and professionals who are flocking to downtown Boston for jobs and social …
Home to nearly 850,000 people and rapidly growing, the City of San Francisco is packed into a little less than 47 square miles. Having long been known as one of the primary financial, tech and cultural hubs of the United States, San Francisco is a place where many people want to be. Business is booming, companies are competing for employees, and the city is as culturally vibrant as ever. It seems like every week there is another article about San Francisco topping another a “best of” list. Supply, Demand, Rent Control Every city endures growing pains during times of economic expansion – new construction, rising rents and home prices – not to mention added stress to the local public infrastructure. The supply of housing in San Francisco remains relatively static for various reasons, with strict building and zoning regulations, a comparatively fixed supply of buildable land and the added complications surrounding the development of real estate in a densely populated, coastal city. On the flipside, demand for housing, which most consider a necessity, is highly inelastic. This is due to the average per-capita income for San Francisco residents, which is about 80 percent higher than the average per-capita of the …
The Washington, D.C. metro multifamily housing sector has continued to demonstrate resiliency and recovery in the midst of the clamor in the media over the last year, which has caused many to believe otherwise. Multifamily has enjoyed declining rental vacancy levels the last three of four years ending in 2013, and only nominal increases during 2014, according to Reis. The eagerness of developers to capitalize on the absorption and flowing capital markets of the D.C. multifamily market has left some speculators concerned that the established strength of the fundamentals will be eroded by oversupply and ultimately lead to flat or negative rent growth and high vacancy rates. While 2014 has come with a stream of new developments hitting the D.C. metro, absorption remains steady and in some cases outperforming expectations. New product has been consumed as quickly as new developments are delivered. The D.C. metro market absorption is on track to exceed its record of units absorbed in a year, which was reached in 2010, already absorbing 4,904 out of the 6,516 units delivered year-to-date, according to Reis. This continued strength of the multifamily market is further evidenced by higher levels of demand for Class A luxury units, as shown …