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 …
Market Reports
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 …
According to the Allegheny Conference on Economic Development, in 2013 there were more people working in Pittsburgh than ever before. The region has seen five consecutive years of continuous expansion and a current capital investment of $3.2 billion. Pittsburgh ranks among the top 15 metropolitan areas for five-year private sector job growth according to On Numbers Economic Index. Possibly more impressive than the jobs themselves, the earnings growth in the region over the same five-year period was 24.3 percent — the highest increase in the U.S. Pittsburgh’s unemployment rate fell to 6 percent in February, with the seven-county region posting an increase of 2,400 jobs in the same period. Among the companies expanding in Pittsburgh is Cigna Health. The company, which currently employs more than 1,400 in the region, plans to grow by 10 percent in 2014, adding approximately 150 new management, training and customer service positions to its regional post in Pittsburgh’s Parkway West submarket. This is great news for retailers in the area, which is also known as the Airport Corridor and which has been a mecca for retail for several decades. In recent years, retailers have struggled to survive here, as the submarket suffered from over-development and …
The outlook for the West Michigan industrial real estate market remains optimistic due to consistent levels of sales and leasing activity, according to Colliers International. The industrial market has recorded six successive quarters of positive absorption despite the market seeing a major shortage of high-quality inventory. Some 522,717 square feet was absorbed during the fourth quarter alone, lowering the vacancy rate to 6.57 percent. With options for space becoming more limited every day, new construction is an important consideration for many companies. That option, however, requires vacant land on which to build. Consequently, vacant land sales have emerged as the focus of many industrial real estate transactions. Construction of industrial space has reached its highest level in eight years — 419,000 square feet completed in 2013 and 792,000 square feet underway and projected for 2014. We’ve experienced more land sales in the last six months than we’ve seen in the last six years. Our industrial team has recently closed or put under contract more than 150 acres of vacant land, and much of that acreage is slated for new construction. Ambitious Plans Several projects have already begun, including the 110,000-square-foot expansion that Undercar Products Group began occupying in November 2013, …
The New Mexico office market has gained more traction and absorbed a healthy level of excess inventory this year. Vacancy fell to its lowest level in more than two years. This decline can be attributed to an absorption of vacant inventory and an increase in demand for medium-sized spaces. One of those purchases was carried out by the State of New Mexico, which acquired the 60,000-square-foot Plaza Maya, a vacant building that’s no longer competing for tenants. Downtown’s vacancy also declined when a 19,500-square-foot space was taken off the market by a new company that won the contract administering mental health services for the state. Some of the most popular office spaces seem to be in the size range of 4,000 to 25,000 square feet. The state has had more than 73,000 square feet of this kind of space absorbed recently. A new charter school in the Airport submarket accounted for about one-third of this inventory, with engineering, legal and healthcare administration service companies taking up the balance. Activity for smaller spaces of less than 4,000 square feet remained consistent with 2013 levels. This strong demand has led to larger Class A spaces being master leased by national executive suite …