Fueled by an increase in population and job growth, Denver’s robust housing market and the constant influx of young professionals to the region has attracted some attention. Both new and existing retailers and investors are now looking to either penetrate or expand within this ever-growing market. Metro Denver added a total of 37,300 jobs last year. This was an increase of 2.7 percent from 2011, according to the Metro Denver Economic Development Corp. The region’s growth rate has consistently outpaced the national rate in every decade since the 1930s. By 2020, the region’s population is expected to increase from 2.9 million today to more than 3.2 million. Retailers are definitely taking note. Cabela’s, a Nebraska-based outfitter of hunting, fishing and outdoor gear, has two stores under construction that should be completed in the third quarter of this year. These will represented Cabela’s second and third Colorado locations. The chain already has a Grand Junction outpost. THF Realty also recently completed the 147,806-square-foot Walmart in the Lakeside Shopping Center redevelopment area. Metro Denver has seen quite a few Walmart Neighborhood Markets pop up throughout the region recently. Also new to the Denver market is Trader Joe’s. The California-based specialty grocer plans …
Market Reports
Like many markets in the Midwest and across the U.S., the Columbus industrial sector started the year sluggishly. First-quarter net absorption fell into the red with few notable leases to report, although a couple of significant investment sales closed. Generally, industrial activity is back-loaded into the second half of most years, and that should be the case for Columbus in 2013. Also, few markets have brighter long-term prospects than Central Ohio. After closing the fourth quarter of 2012 with 500,000 square feet of net absorption, Central Ohio’s 260-million-square-foot industrial market gave back 239,439 square feet in the first quarter of 2013, resulting in an 8.9 percent vacancy rate. The bulk warehouse sector suffered through 833,816 square feet of negative net absorption in the first quarter, resulting in a jump in the vacancy rate of 233 basis points to 10.6 percent. Bare Escentuals, a cosmetics retailer, registered the first quarter’s biggest industrial lease, expanding by 102,155 square feet to claim the entire 512,113-square-foot building at 5255 Centerpoint Drive. While leasing trudged along, a few investment sales took place in the first quarter of 2013, with notable deals including the sale of two buildings by KTR Capital Partners to affiliates of Welsh …
The recession negatively affected local, regional and national banks in Minneapolis/St. Paul and all commercial real estate product types. A wide range of real estate owned (REO) assets have sold in recent years, including single- and multi-tenant office buildings, industrial buildings, convenience stores, office condos, residential condos in bulk blocks, raw land, a campground, a historic warehouse, hotels — just about everything. The biggest sector of bank REO property has been land, particularly residential development land. Nevertheless, the start of the housing recovery has seen a reduction in the inventory of individual residential lots coupled with increased interest in some of our larger residential development sites from national homebuilders. While most of the insurance companies exited the Minneapolis commercial real estate market years ago, one of the national insurance companies did repossess a large Class A office property last year and sold it to a local investment group for a dollar more than the loan, which was $110 million. Zeller Realty Corp. of Chicago and Atlanta-based Invesco acquired the Fifth Street Towers from MetLife in April 2012. The buildings (two towers) were built in 1987 and 1988, and consist of roughly 1 million square feet. The group that lost the …
Improvement in Dallas Dallas office market fundamentals has been supported by economic concentrations in the finance/insurance, energy and technology sectors, as well as the amenity-driven desirability of infill submarkets, namely Uptown and the Arts District. Yet, any discussion of Dallas area office expansions must begin with State Farm Insurance. The firm has accounted for a significant portion of activity, leasing more than 2 million square feet of office space in Richardson and Las Colinas in the past year. Banks and financial firms, including Frost Bank, Wells Fargo, Capital One and USAA, are expanding as improving economic conditions support lending and investment activity. With a 500,000-square-foot expansion by Denbury Resources in Plano and the growing presence of Crosstex Energy and Alon USA in Dallas, it is clear that the new energy boom is a positive for North Texas offices too. Leasing activity among technology firms is strong with Ericsson’s new building underway at its Plano campus being the most notable, although smaller software and telecom companies are also expanding, such as Hawkeye Communications in Uptown Dallas. Overall office vacancy in Dallas/Fort Worth has fallen 210 basis points (bps) from its peak in 2010. While this is certainly a strong recovery, it …
“Hot” does not adequately describe Miami’s current residential real estate climate. Back from the brink of extinction in late 2009, the residential condominium market in Miami is currently booming. The apartment market is booming as well, but did not take it on the chin like the condominium market did. From 2009 to 2010, Greater Downtown Miami was considered one of the most overbuilt markets in the country. Developers delivered approximately 34,000 condos in the market in a six-year period, more than double what was delivered in the prior 40 years. The majority of those units came on line during the crash, which left Miami with an unsold inventory or more than 20,000 units in early 2010. Forecasters expected it would take 10 or more years for that inventory to be absorbed. Today that inventory of developer-owned units is down to less than 900, according to Condo Vultures, Miami’s condo watchdog. One can almost say that Brazil and Argentina brought back Miami’s high-rise condominium market. Brazilians and Argentineans in particular, but not exclusively, have experienced hyperinflation — to the point of scheduling the purchase of groceries on payday — like few others. They therefore have an acute understanding of the need …
The last quarter of 2012 indicated signs of overall market improvement including increased activity in the office sector, according to most New Castle County owners and leasing brokers. Most professionals anticipated a good start to 2013 based on this performance. Although there are a few bright spots, early reports for 2013 are not yet meeting the expectations that stemmed from the continuing improvement seen last year. It seems most activity so far this year represents smaller deals, which are not resulting in positive absorption. Most tenants are moving to take advantage of the opportunity to upgrade or resize their space. One favorable aspect of the market has been demand for medical office space. A new four-building medical office project that was started last year at Becks Woods on Route 40 in Bear, Del., is nearly fully leased or sold with the last building coming out of ground a few weeks ago. Additional medical projects are planned on Churchman’s Road near Christiana Hospital and on Lancaster Pike at Little Falls although groundbreaking has not yet occurred on either site. Christiana Hospital is nearing completion of its new Emergency Center at Route 1 in Middletown, Del., and we expect there will be …
In the immediate wake of the Great Recession (version 2.0), it was not uncommon to see halted development projects in greater Cincinnati. Now that the economy has rebounded, retail development has started to follow suit. However, the original developers that began many of the region’s key projects aren’t necessarily the ones finishing them. What follows is a summary of some key projects in various stages of completion that have had to adapt to changing market conditions and consumer preferences. Oakley Station Among the high-profile projects in the greater Cincinnati market that have undergone changes in development direction is Oakley Station. This former 74-acre Cincinnati Milacron complex, originally known as the Millworks project, was conceived as a Main Street-focused lifestyle center supplemented by structured parking that would incorporate some of the existing industrial structures. Once the recession hit, the project fell victim to the nationwide lending freeze and tenants’ slowing growth plans, making it difficult to move beyond the project’s design stage. However, given the location in the geographic center of Cincinnati and the easy access to interstates, Oakley Station was always prime real estate and stayed on developers’ radar screens. Now being developed by Vandercar Holdings, the developer responsible for …
There appears to be no sign that the recent growth experienced by many Texas metropolitan areas is slowing down anytime soon, and Fort Worth is no exception. Substantial job growth, solid multifamily fundamentals, low interest rates and a pro-business climate have put many eyes on the Fort Worth market. The Fort Worth-Arlington MSA is experiencing positive job growth, and is listed as one of the best performing metros in the nation. The MSA added 36,700 jobs, an expansion of 4.2 percent year-over-year ending February 2013. The MSA also experienced an unemployment improvement of 0.8 percent. This was the largest year-over-year percentage increase in employment among all metropolitan divisions and good enough to be ranked 13th nationally in job addition. Many of these jobs have come from the numerous road construction projects that the area has undertaken, such as the North Tarrant Express, which has more than 1,100 employees working on the corridor. The $2.5 billion project just passed the three-year mark and is currently ahead of its estimated completion date of June 2015. When complete, the North Tarrant Express will run from Interstate 35 West in Fort Worth to Industrial Boulevard in Euless, relieving congestion, improving safety and providing for …
Overall, the Atlanta real estate market has continued to improve. Low interest rates have helped stabilize assets and attract new business, with manufacturing leading the way. At the end of first quarter 2012, CoStar Group reported the overall Atlanta industrial vacancy rate was 15.5 percent. For the same period ending in 2013, CoStar reported the vacancy had fallen to 12.7 percent. Those numbers have not come easy and are a true testament to the quality of Atlanta’s real estate brokers, landlords and owners who have shown a creative ability to solve problems and make deals. The past 12 months have been filled with exciting new project announcements, including build-to-suits. Among the companies that have announced construction projects include Baxter Healthcare, Porsche, PPG, Caterpillar, Hill Phoenix and Mitsubishi. Additionally, companies such as US Lumber, Subaru, American Building Supply, Atlanta Bonded, Carters and Decoster have recently expanded, filling existing vacancies in the market. While the list is impressive, we need more expansion from the existing industry. According to the U.S. Census Bureau, the population in Atlanta’s MSA was 5.4 million in 2012, which included 1.9 million households. STDB Online data service projects that the Atlanta MSA population will increase at an average …
From a macro perspective, the Northern New Jersey office market has remained stagnant and continues to tread water. In 2012, corporations with capital stayed on the sidelines. The overall availability rate hovered around 21 percent with an average asking rent of $24.29 per square foot at the close of the fourth quarter, and those numbers were not expected to change much in the first quarter of this year. The few recent significant leasing transactions were not enough to move the occupancy needle. The biggest deals were Biomet Bone & Spine Healing Technologies’ lease of 102,224 square feet at 399 Jefferson Road in Parsippany; EMC Corp.’s lease of 81,700 square feet at 184 Liberty Corner Road in Warren; and Tower Insurance Co.’s 76,892-square-foot lease at Harborside Financial Center II in the Jersey City Hudson Waterfront project. The Tower Insurance lease was a boost to the Hudson Waterfront market. For a long time, the waterfront was one of the few bright spots in the state with even a brief period of rent growth. However, in 2012 a large amount of shadow space came on the market and led to roughly 500,000 square feet of negative absorption. With the election year over, it …