The Charlotte, N.C., apartment market is well into its recovery; 2012 proved to be a strong year with improving fundamentals, healthy transaction volume and the formation of a robust new development pipeline. The exceptional year that Charlotte experienced in 2012 was not fully anticipated at year’s end 2011. However, MPF Research’s second quarter report (July 2012) showed Charlotte’s year-over-year rent growth at 6.8 percent, placing it third in the top 10 markets for rent growth nationally (of the top 50 national markets). This trend was reinforced by MPF’s third quarter publication which reported year-over-year rent growth of 6.3 percent. This marked the fourth straight quarter of year-over-year rent growth in excess of 6 percent. In addition, the report showed overall market occupancy levels of 95.9 percent, the second highest achieved in 14 years. Such favorable news serves as confirmation that the Charlotte economy has remained strong through the financial crisis, as banking sector jobs have remained largely intact and the overall economy of Charlotte is more diverse than many once thought. As a result of the favorable market dynamics, Charlotte’s visibility amidst the national investment landscape has increased, causing investors, developers and lenders alike to take note. Charlotte has quickly …
Market Reports
Blessed by location and good quality of life standards, the Danbury, Conn., retail market has grown in the recent 18 months and should continue to expand in 2013. Key among growth indicators are: • Whole Foods is opening its first store in the Danbury market in 2013. • Panera Bread and Petco recently opened second stores in this market. • Toll Brothers is under way with a new 1,200-home community in anticipation of regional population growth and changing demographics. • Danbury has the lowest unemployment rate in the state (around 6.5 percent). Location and Demographics Danbury is located in northern Fairfield County on the border of New York State and is approximately 50 miles north of New York City. (The Metro train to NYC takes just over an hour.) The population is approximately 80,000. Danbury serves Fairfield and Litchfield County in Connecticut as well as Westchester, Putnam and Dutchess counties in New York. Stamford, Conn.; White Plains, N.Y.; and Hartford, Conn., are each about an hour away. The relatively short commutes to these larger urban hubs entice real estate occupiers for office space and retail tenants with lower rental costs — on average, 20 to 25 percent less for comparable …
The Metro Phoenix industrial market has been climbing its way to recovery for the past few years, but the activity of 2012 showed the strongest signs of diversified activity of a healthy marketplace. While overall net leasing was down slightly from 2011, the city benefitted from an abundance of medium and large transactions reflecting many types of industrial users leasing and buying throughout the city. This diversity indicates overall health — and not just in our traditional big box arena. In several strong submarkets, we saw owners pushing back on users’ terms due to improved portfolio and individual property activity. The city’s big box hub of Southwest Phoenix experienced continued strong activity with a variety of notable leases and property sales. We saw a shift to speculative construction and actual groundbreakings taking place on multiple projects. Phoenix has more than 2.6 million square feet of industrial space under construction, with more than 2.2 million of that being situated in the Southwest area. Overall net absorption in that area totaled more than 1.3 million square feet in 2012, leading to a shortage of available large facilities following three years of top eight national leasing and sales activity. The overall net absorption …
Downtown Cleveland is in the midst of a redevelopment boom. During the last 12 months, the city has seen a new $350 million casino and a new $33 million aquarium open. And over the next 24 months, it will see a new $465 million convention center complex, a new $275 million multi-tenant office building and hotel and a $180 million redevelopment that will include a new 220,000-square-foot office tower as a part of consolidation efforts for the Cuyahoga County government. However, one of the most impactful and long-lasting components is the development of more than 1,100 new residential housing units that have either been announced or are under construction. If all come to fruition, it will increase downtown’s residential inventory by over 20 percent. Market Drivers Although there are numerous factors contributing to this residential building boom, the following stand out as key components. • Build it and they will come? They are already here. As of January 2012, the downtown area had just under 4,200 residential units. Of this, approximately 25 percent were developed in the past five years. However, this delivery schedule was much lower as compared to the blossoming demand. The source of this demand has come …
The office market in the Baltimore metropolitan statistical area — which encompasses the counties of Anne Arundel, Baltimore, Harford, Howard, and the eastern portion of Carroll County, as well as Baltimore City — experienced a slight uptick in activity in the fourth quarter of 2012. The market saw a 0.49 percent decrease in direct vacancy, dropping from 15.77 percent in the third quarter of 2012 to 15.28 percent in the fourth quarter. This dip is attributed to nearly 100,000 square feet of positive absorption within the overall market. As with any statistical number, a closer look at these numbers reveals several patterns that may or may not be indicative of larger economic trends within the market. The northern part of the market, consisting of Baltimore and Harford counties, saw negative absorption of 100,531 square feet. The 0.44 percent increase is directly attributed to office properties in Harford County entering the market at various levels of occupancy, including a 75,493-square-foot building outside the U.S. Army’s Aberdeen Proving Ground that entered the market completely vacant. Further inspection of activity throughout the north part of the market indicates that small and medium size tenants — firms under 20,000 square feet — are still …
A tight retail market, rising rents, and record low interest rates led to a jump in New York City multifamily investment sales in 2012. Multifamily building sales in New York City rose to $7.3 billion in 2012, a 45 percent increase compared to 2011, according to Ariel Property Advisors’ Multifamily 2012 Year in Review: New York City. There were 639 multifamily transactions comprised of 965 buildings in 2012, a year-over-year increase of 36 percent and 42 percent, respectively. The fourth quarter was particularly robust as investors rushed to close deals before tax increases took effect. In 2012, we also saw prices for multifamily buildings in prime New York City locations return to pre-financial crisis levels. In Manhattan, cap rates averaged below 4.75 percent and value-added assets traded at below 4 percent. Manhattan multifamily buildings operating at market rental rates even saw prices climb above $1,000 per square foot. One example of this was 105 West 29th Street, where a sale closed in June for $280 million, or $1,056 per square foot. This same institutional investor paid $475 million, or $498 per square foot, in January 2010 for a portfolio comprised of similar core assets at 415 East 53rd Street, 777 …
For the past several years, the City of Laredo has focused on creating a safe environment that promotes both a high quality of life for its citizens and a business-friendly atmosphere where various industries can prosper. Although some have expressed concerns about the situation on the Mexican side of the border, the U.S. side is safer than many mid-to-large cities and our economy is booming. With our prime location on the U.S./Mexico border, access to Interstate 35, and both Union Pacific and Kansas City Southern rail lines, international trade is the city’s major industry, as reflected in our status as the nation’s No. 1 inland port on the U.S.-Mexico border. Laredo will be the first city in the nation to house Mexican Customs officials pre-clearing air cargo charters leaving Laredo. This allows the cargo to land in Mexico as “domestic cargo” which can then be sent immediately to the manufacturing facility. Additionally, with the recent discovery of the Eagle Ford Shale, a new industry is developing that will fuel Laredo’s, and the state’s, economy for years to come. Geography has certainly played well into the growth and development of the community, with more than $216 billion in annual trade passing …
Retail operations struggled in the Jacksonville metro through the first half of 2012, but residential construction across the area will contribute to increased leasing activity in the coming months. In the bustling region around the already-expanding St. John’s Town Center, several new housing developments will add between 2,400 and 3,100 residential units, while more than 2,000 apartments are planned in the Arlington/Baymeadows/Mandarin submarket. High-end retailer Nordstrom has signed a lease to anchor the addition to St. John’s with a 124,000-square-foot store set to open in the fall of 2014, and another 30,000 square feet is planned for smaller stores. In other areas of the metro, retailer H&M has opened its first Jacksonville location at the Avenues mall. Winn-Dixie is planning six new stores, and retailers Family Dollar and Dollar General are poised to open a combined six new stores as well. These retailers moving into the region will help attract smaller tenants to nearby locations, filling in dark space and enabling owners to lift rents. After third quarter 2012, employment was down 500 positions although employers created 5,300 jobs during the third quarter. Employment over the quarter was broad-based, as 10 of the 11 sectors realized gains. Employment growth was …
The Nashville office market may have good cause to be the envy of the commercial real estate world. Despite a sluggish economic recovery for most of the United States, Nashville’s economy and office market have experienced a surge of growth fueled by a diverse business climate that includes healthcare firms, legal firms and corporate headquarters. That surge puts overall office vacancy at a 10-year low and Class A vacancy at record lows, 9.9 percent and 6.3 percent, respectively. Moreover, the types of development and transactions that are shaping the office market and economy are economic development homeruns, bringing or retaining growing firms’ corporate headquarters to Nashville and driving job growth. By any measure, 2012 was a banner year for Nashville’s office market. The CBD submarket has seen the most leasing activity, as many of Nashville’s major law firms and banks have secured homes for the next decade. Butler Snow’s deal at the Pinnacle building placed the 520,000-square-foot Class A office tower at 80 percent leased, and this building — which has the highest rents in the city — was closing in on full lease-up at the end of the year. Additionally, with the majority of downtown office space committed and …
The vacancy rate for the 19.7 million-square-foot Cambridge office and lab market decreased from 11.5 percent to 10.3 percent during the third quarter, with more than 150,000 square feet of positive absorption. Year-to-date absorption totals 386,000 square feet, with all of the positive absorption occurring in the lab market. The lab market continues to be the driving engine of the Cambridge market and with four consecutive quarters of positive absorption, it shows no sign of slowing down. The two largest leases of the quarter were signed by Merrimack Pharmaceuticals (110,000 square feet), a homegrown Cambridge company, and Boston Biomedical Inc. (63,000 square feet), which will open an oncology R&D facility in Cambridge. Conditions in the Cambridge office market generally favor landlords despite three straight quarters of modestly negative net absorption. The office vacancy rate stands at 10.9 percent, but with some sizeable commitments expected to transact in the fourth quarter and a number of active tenants touring the market, conditions are tight, particularly in the East Cambridge submarket. Office Market The 10.3 million-square-foot Cambridge office market has been statistically flat for much of 2012, barely moving from 10 percent at 2011 year end to 10.9 percent at the end of …