A few things happened recently that may have long-term impacts on the Northern New Jersey office market: • Regional employment continues to improve. • Facebook is more than doubling its occupancy in Manhattan. • Merck made it official and is listing its 1-million-square-foot campus for sale. • Governor Chris Christie signed into law the Economic Opportunity Act of 2013. Regional employment continues to improve. Northern New Jersey falls within an MSA that includes New York City, Long Island and a portion of Pennsylvania. The unemployment rate for this MSA stood at 8 percent in August this year compared with 9.5 percent in July 2012, according to the Federal Reserve Bank of St. Louis. Using the theory that a rising tide floats all boats, the more people at work in the region, the better our economy performs. And everyone who works in real estate knows that real estate absorption is connected to one thing and one thing only: jobs. Facebook recently inked an office lease at 770 Broadway in Manhattan for one floor of 85,000 square feet and a portion of a second floor, which more than doubles the approximately 40,000 square feet the social networking company currently occupies in New …
Market Reports
Southern New Mexico's industrial market, particularly Dona Ana County, has remained stable through 2013. We project solid growth in this arena for 2014. A majority of the growth will be in the Santa Teresa area where Union Pacific is in the middle of a massive investment that will create the largest intermodal inland port in the United States. This project has already brought jobs and more than $40 million to New Mexico contractors so far. It is expected to create more than 600 permanent jobs in mechanical, electrical, architectural, utilities, track and civil engineering. Santa Teresa’s intermodal station has started to generate significant conversations with major companies for distribution and warehouse properties. Growth in Santa Teresa is further fueled by the proximity to the Mexican border where many of these same companies operate maquiladora plants on the Mexican side. We continue to struggle to meet demands for large-box users in Santa Teresa due to the limited availability of space in the area. This problem is compounded by the tight lending market, where little equity is available to developers looking to bring new speculative space on line. Additionally, many of the users looking in the Santa Teresa area typically do not …
Strong occupancy throughout the Minneapolis metro area is driving construction activity, and developers are hurrying to get projects off the ground ahead of competitors. Leasing activity is underway for a number of luxury high-rise projects coming on line in the city, heightening competition for renters who desire and can afford top-end amenities. Projects in vibrant locations, such as the Mill & Main Apartments across the river from downtown Minneapolis, have been well received. The Mill & Main building, which is nearly 70 percent leased, has views of the Mississippi River and downtown. New luxury apartments are attracting many nontraditional first-time renters, such as empty nesters. This trend is likely to expand the renter pool across the area as recovering housing prices give the large baby boom cohort more options when selling and downsizing. The higher rents that luxury properties command have reset the bar for Class A rents. Existing Class A properties near top-tier apartments will likely benefit because they can raise rents and remain more affordable than the newer units. Development Pipeline Nearly 3,000 apartments have been delivered in the metro area during the past 12 months, including 2,100 market-rate units. So far in 2013, approximately 1,000 rentals have …
A report t on the Houston retail real estate market reads somewhat like a 1960s newspaper headline: Low vacancy rates! Rising rent for retailers! Bidding wars and a soaring housing market! Together, these factors make the greater Houston area one of the most dynamic retail markets in North America. A Landlord’s Market Conditions clearly favor the landlords. Quality space that was renting in the low $20s per square foot during the downturn now commands rents in the $30s and in some cases the low $40s. Fierce competition for quality space is particularly intense within the range of 1,500 to 3,500 square feet. This has been forcing brokers and Realtors to get creative in discovering and closing on any available quality space for their tenants. Some are pressing landlords about space that’s set to roll over or asking which tenants may be willing to relocate. Rents are increasing largely because of high retail occupancy, which edged up from 93.3 percent to 93.5 in the Houston MSA during second quarter 2013, according to CoStar. At mid-year, net retail space absorption stood at a healthy 980,185 square feet. Yet, despite these positive signs, the Houston area’s older Class B and Class C retail …
South Jersey has room to grow, with several proposed ground-up centers taking center stage in the seven-county region as developers capitalize on residential growth tied to the market’s relative affordability. Meanwhile, “redevelopment” is the operative word for the 14 counties in the state’s more densely populated north and central regions, where industrial sites are being converted into mixed-use centers. Fueled by big-box absorption, the vacancy rate for open-air and freestanding retail in the northern counties inched down to 8.1 percent in mid-2013 from 8.2 percent a year ago. Central Jersey’s vacancies rose to 9.8 percent from 9.1 percent a year earlier, driven by small-shop closures. In the south, the average is 9 percent. Rents in the north crept up 0.1 percent in the first three quarters of 2013, with a median of $20 to $26 per square foot in top markets; central counties crept up 0.3 percent to a median of $15.50 to $16. South Jersey rents increased just 0.1 percent in the first two quarters of 2013, with a median of $13. For regional malls, one continuing trend is the move by owners to take interior spaces and turn them outward for more of a lifestyle feel. This began …
International trade is a driving force behind one of the most vibrant industrial markets in the nation. There are more than 1.7 billion square feet of industrial space in Los Angeles County, Orange County and the Inland Empire, with 18.2 million square feet of additional space under construction at the end of the third quarter. The South Bay and Central Los Angeles markets are leading the way in new development in Los Angeles County. The LA Basin’s occupancy gains of 12.7 million square feet during the first nine months of the year dropped its overall vacancy rate to 4.9 percent, from 5 percent last quarter and 5.3 percent a year ago. As the logistics hub of Southern California and the big-box capital of the U.S., international trade is especially critical to the Inland Empire’s industrial market. As a result of increased demand for modern warehouse facilities, warehouse construction in the Inland Empire more than doubled from a year ago to 16.4 million square feet. It was the most active in the nation. Increased demand for industrial space in the Inland Empire lowered the overall vacancy rate to 6.2 percent in the third quarter. This was 60 basis points lower than …
Downtown St. Louis has always marched to the beat of a different drummer. Despite a sluggish economy and a history of major corporations leaving for a variety of reasons, the downtown office market has experienced steady, incremental growth that has been reflected by the positive absorption since 2009. Much of this growth is due to tenants looking to expand or relocate in order to take advantage of the many options downtown, which generally are less expensive than suburban locations. Since 2012, downtown St. Louis has gained 425,000 square feet of positive absorption in the office sector. New Life for Older Buildings Recent building renovations also play a part in the growth. Creative companies are looking for open, contemporary facilities, which can be found in old buildings that have been redeveloped. These revitalized buildings now offer new infrastructure and modern space that exude a cool look and vibe. Indeed, that trend can be found in historic structures like the 450,000-square-foot Park Pacific, once the headquarters of the Missouri Pacific Railroad and now 80 percent luxury apartments and 20 percent office (tenants are CBS Radio and Creative Producers Group) and retail space. Cupples 9, a 144,000-square-foot building that was once part of …
Saying that Austin's multifamily market has been a strong performer for the past several years would be stating the obvious and hardly newsworthy, considering that all of the well-reported economic rankings list Austin at or near the top. Nevertheless, the numbers from the past five years are remarkable. While 2013 will go into the record books as one of the best years for multifamily landlords, the real story for 2014 — and beyond — is how the market responds to the two forces that have clearly started to change: supply and financing. Supply Surge There is no hiding the fact that a building boom is occurring in central Austin, as the cranes for multi-family construction easily outnumber the activity in hospitality and office properties combined. Completions for 2014 are expected to be approximately 12,000 units, with the highest concentration (more than 3,000 units) in the central sub-markets. This is a dramatic increase in new supply in a market that has been significantly under supplied due to the collapse of the capital markets in 2008. After a couple of years focused on urban, in-fill projects, the recent third quarter reports indicate that developers are returning to the suburbs, with over 18,000 …
If only the economy would cooperate, there are signs of improvement in the downtown and suburban Hartford office market. Modest expansion and non-traditional absorption of office buildings is beginning to create shortages of large blocks of office space in certain areas. Places like West Hartford Center, Glastonbury’s Somerset Square area, Corporate Ridge in Rocky Hill, downtown Middletown and downtown Hartford have all seen their best Class A buildings’ occupancy levels grow. Vacancy is being concentrated in buildings that suffer from either age-related challenges, capital issues or buildings that are in an ownership transition. Unfortunately, although the governor and legislature have taken some positive steps to create economic activity, the state is still mired in a high-tax, high-cost model that is eroding or tempering growth from many of our largest employers and keeping new businesses from entering the market. In spite of that self-inflicted condition, here are the trends that are currently shaping the current office market in Hartford County: Non-traditional absorption: real estate demand for educational, multi-family residential, medical and government facilities is booming compared to corporate office needs. Offices buildings are being taken out of inventory for conversions to schools, apartments, medical offices and state offices. While some of …
The Twin Cities retail market is still on the road to recovery, with 231,913 square feet of absorption since the beginning of the year. With steady positive absorption, the former tenant-favorable market is beginning to even out, especially with regard to the urban core or first-ring suburbs. Lease negotiations have started to tip in favor of landlords. Developers, tenants, landlords and brokers are all expressing increased confidence in the strength of the market. Among the tenants contributing to the healthy absorption of space have been Whole Foods, Walmart, and LA Fitness, all of which are opening stores throughout the suburbs. The overall vacancy rate in the third quarter stood at 5.7 percent, down from 6.2 percent the prior quarter, according to data compiled by the Welsh Cos. Vacancy at regional malls is 2.1 percent. The retail vacancy in the trade areas surrounding these regional centers follows suit with premier areas of demand among growing retailers. Chick-fil-A has also entered the Twin Cities market, opening stores in Apple Valley, Bloomington, Coon Rapids and Maple Grove. This continues the trend of new food tenants seeking more space in the Twin Cities, including Smashburger, Which Wich Superior Sandwiches and Freddy’s Frozen Custard & …