Though Atlanta has had a reputation as a boom-or-bust town for many years, it has struggled to maintain a thriving multifamily development business. However, an in-depth look at the current local trends shows a strengthening multifamily market, and with it, an evolution of many lower-cost neighborhoods into desirable development and residential sites. Now, the city is poised for a more sustainable future as demand for apartment housing inside the Perimeter continues to increase. Classic institutional developers are seeking to use this increasing demand as a platform to boost Atlanta to a new strata in line with New York, Boston and other metropolises such as Houston and Dallas. With no significant barriers to entry, active merchant buyers are taking advantage of Atlanta’s large developable land supply to support new high-density multifamily developments. Developers are working to stabilize the supply in response to the overwhelming demand; three- to five-year waves of building and development will help grow the market steadily. Amid the current five to 10 percent growth rate, some in-town projects are predicted to trade at higher levels than ever before. For example, 77 12th Street is widely expected to trade for more than $300,000 per unit — a robust figure …
Market Reports
Rhode Island’s economy continues to struggle with unemployment that is above the national average. As a result, it has been difficult to get new ground-up development projects started with only a few exceptions. In Johnston, Saletin Real Estate Group has completed construction on the first phase of Johnston Towne Center on Hartford Avenue. The 95,000-square-foot shopping center is anchored by a 40,000-square-foot Price-Rite grocery store. BankRI has also opened a new free-standing facility on the site. In order to make the development a reality, the mayor and town council worked with the developer and issued tax increment bond financing. The project is considered a major redevelopment victory for the town of Johnston, as the construction of Johnston Towne Center required the demolition of the former Stuart’s Plaza shopping center — which had been 100 percent vacant for many years, and had become an eyesore along Hartford Avenue, one of Johnston’s busiest streets. Johnston Towne Center serves as the second victory for the rejuvenation of Hartford Avenue. The former Shaw’s grocery store, which had been vacant for several years and shares the same traffic signal as Johnston Towne Center, is now fully leased to Ocean State Job Lot and Planet Fitness. …
The vital signs of Cincinnati’s industrial market are collectively the healthiest they’ve been since 2007, including vacancy, absorption, lease rates, property values and investment sales activity. This uptick is particularly encouraging considering that the recovery in the Cincinnati industrial market lagged the top five markets in this property sector nationally coming out of the Great Recession. The historical 20-year average vacancy rate for Cincinnati’s industrial market has ranged between 3 and 5 percent, but rose as high as 10 percent in 2008. With overall industrial vacancy on the decline for the past seven quarters, vacancy now stands at 6.35 percent, a five-year low. Bulk Distribution Space Becomes Scarce Vacancy in the bulk distribution subsector — large warehouse buildings primarily used to accommodate e-commerce, apparel or consumer goods — has been declining for the past eight quarters and now stands at 7 percent. That’s a departure from the usual 10 to 13 percent range. In the 29 million-square-foot bulk warehouse submarket of Northern Kentucky, vacancy is less than 2 percent. Space is so limited that no Class A bulk spaces larger than 200,000 square feet are currently available in Northern Kentucky. VanTrust Real Estate LLC has begun construction on a 273,000-square-foot …
Southern New Mexico’s industrial market, specifically Dona Ana County, remained stable throughout 2013. We project solid growth in this arena for 2014. We have not seen much growth in the first quarter of 2014, though the industrial market has remained stable. Rents have also remained about the same. They have decreased in some instances as landlords compete for the few new tenants entering the market. Fortunately, Southern New Mexico has experienced an uptick as a few companies entered the market from different states, which is obviously a positive sign. A food processing company just signed a lease/purchase agreement for 40,000 square feet. This company will create 150 to 200 jobs, a significant amount for Dona Ana, which has a population of about 225,000 people. A majority of the growth has occurred in the Santa Teresa area. Union Pacific is wrapping up its 2,200-acre facility, where it has invested $500 million to create the largest intermodal inland port in the United States. Union Pacific’s Intermodal ramp, refueling and crew change station was fully operational in early April. This facility has the lift capacity to facilitate 220,000 intermodal containers annually. It will provide rail access from Mexico’s interior and Pacific Ports to …
The Texas economy has recovered quickly from the recession, and Fort Worth is a prime example of a flourishing commercial real estate market. Leasing activity in the city’s retail market is high, despite low inventory and increased rental rates. Cap rates are low, investment sales have increased, and the scarce inventory has prompted multiple new developments. Incredible leasing activity involving both national and local credit retailers has been seen across the market, and the activity is projected to continue throughout the year. In particular, there are many high-end grocers entering the Tarrant County market, such as H-E-B, Sprouts and Whole Foods, to name a few. With leasing activity increasing in the market, there is a high demand for retail space, but there is a low supply, evident in the current 8 percent vacancy rate. The limited availability of leasable retail space coupled with high demand in the market has continued to drive up rents — rates have increased by 5.5 percent since the first quarter of 2013 — and has also begun to affect sales prices. The average asking price for Tarrant County retail investment properties currently stands at $146 per square foot, compared to $142 per square foot in …
In Providence, the Class A office market has stabilized, thanks to a number of large lease renewals last year as well as new activity in the market. The current vacancy rate for Class A office product is now under 9 percent in the Capital City with an overall office vacancy rate of 14 percent, which represents a decrease of 100 basis points compared to this same point last year. Consequently, this activity has pushed rental rates for Class A space back over $30 per square foot on new deals. Recently, Nortek completed a lease for 24,000 square feet at the Blue Cross Blue Shield building located in the Capital Center district of Providence. Tech startup Swipely has completed its move into more than 25,000 square feet at 10 Dorrance Street. But for the Swipely expansion, the downtown Providence Class B office market remains stagnant. There has been some activity on the capital markets front as well in Providence. The Foundry Associates recently completed its purchase of the former American Locomotive Works (ALCO) site, which totals more than 200,000 square feet of redeveloped office space, for $19.05 million. In addition, Providence-based Paolino Properties recently completed the acquisition of 100 Westminster (300,000 …
The Twin Cities retail market continued to improve in the second half of 2013 due to robust leasing activity at neighborhood centers. The vacancy rate registered 7.2 percent at the end of 2013, down from 8.6 percent a year earlier, according to Cushman & Wakefield/NorthMarq. That is the lowest vacancy rate since the fourth quarter of 2008. The market saw healthy absorption of 439,000 square feet during the second half of 2013. With retail spaces filling, rental rates declined modestly, dropping from an average of $27.73 per square foot during the second quarter of 2013 to $27.60 per square foot in the fourth quarter. The rental rate decrease was primarily due to the decline in rates at community centers, as discount retailers negotiated lower rents. Many of these discount retailers filled big-box and junior-box spaces that had been vacant for a long time. (To view larger version of chart, click here.) The Franchise Factor The majority of retailers that entered the Twin Cities in 2013, or expanded their operations locally, were focused on food and services such as hair care, massage, cellular and fitness. Five Guys Burgers & Fries and Yogurt Lab, relative newcomers to the market, now operate multiple …
A healthy retail market in California’s Inland Empire is expected in 2014. The region will gain measureable momentum as the return of homeowners is reviving tax revenue and retail sales in once-inactive neighborhoods. Retail builders are responding by restarting previously delayed projects in the area, including a few developments that have been involved in litigation for years. The Village at Mission Lakes was completed in 2013 after six years of stagnancy. After enduring several delays, Kendall Plaza in San Bernardino will come online in 2014. The value-add sector of the Inland Empire’s multi-tenant investment arena will move forward this year as buyers pursue opportunities ahead of a stronger improvement in operations. Local players and investors discouraged with a shortage of listings in Orange and Los Angeles counties will move farther east to find properties with potential upside. The influx of capital moving into the market will result in a greater number of repositioning plays, particularly in areas west of Interstate 15, where minimal construction has come online in recent years. Investors who acquire properties on highly trafficked corners should be able to leverage the tenant mix and collect higher rents. Once completed, these properties can be divested at cap rates …
Although the Tampa Bay economy may not have improved as much as everyone would like, the retail market is experiencing incredible activity. Many positive trends — redevelopment, new retailers, expansions, higher rents and, soon, new development — are driving the market upward: • The retail vacancy rate was back down to 7 percent for the first time in almost five years, according to CoStar Group. • Retail rents, which plunged between mid-2006 and mid-2012, finished the year at $13.69 per square foot and show signs of strength. • The number of square feet of retail space delivered to the market hit its lowest level in the past five years, according to CoStar Group. • Land is becoming scarce, especially in growing communities south of Tampa. Considering these conditions, it looks as though it’s a landlord’s market again. We can chalk this phenomenon up to the enthusiasm of restaurants, retailers and professional service firms demanding space due to a slight but steady rise in consumer confidence. Hillsborough County collected $14.7 million on its local option sales tax in November, the latest month for which state figures are available as of this writing. That figure changed very little in 10 of the …
While growth and development have been evident in most Texas areas during the last few years, Lubbock shines bright among cities in the Lone Star State. As Marci Russell, former chief economist with CNBC, said, “Lubbock’s got oil and gas, a strong agricultural presence, a great university and a health care system that is the envy of other communities.” The year 2013 brought amazing growth, and the positive economic trends look to continue in 2014. Building permits climbed to a surprising 987 last year, up 143 percent, and retail sales and payroll employment are still growing. Employment increased by 4 percent in 2013, ranking Lubbock fourth in Texas in terms of growth in that metric. The unemployment rate declined sharply to 4.3 percent, the lowest since 2008, and Lubbock’s consumer price index was up 2.1 percent year-over-year in January. Another sign of improvement in Lubbock is how the transportation system in the city has been enhanced with the completion of the Marsha Sharp Freeway and the Northwest Passage. Additionally, the Milwaukee Corridor continues to expand with development in retail, office, and small business on the West side. Sector-by-Sector Several large users of office and industrial space relocated and/or expanded to …