Economic conditions in Clark County and Las Vegas continue to improve with evidence of a slow and steady recovery finally emerging. Analysts from the UNLV Center for Business and Economic Research’s late summer survey noted respondents remained optimistic about general economic conditions in southern Nevada, with 82 percent expecting to see no change or improvement. Their Southern Nevada Business Confidence Index rose to its highest level in more than four years during the summer, echoing this positive sentiment. A couple of indicators highlight the emergence of a more favorable environment, with retail sales improving, McCarran Airport traffic on the rise and the gaming “take” on the rebound. Median existing home sale prices have jumped more than $12,000 compared to the same period a year ago. Furthermore, the labor market in Clark County has stabilized with more than 6,000 jobs added to non-farm payrolls since the spring. The overall county population has also increased to its highest level in five years, according to US Census estimates. In the multifamily market, the past two indicators carry the most weight for the region’s apartment market. A healthy apartment market requires significant population densities with a positive trend. This needs to be supported by …
Market Reports
After five years of economic challenges, the Orlando industrial market — hit harder than any other industrial region in Florida — is rebounding. During the recession, central Florida experienced what amounted to a full stop in home construction, the failure of dozens of banks and almost no foreign investment. Vacancy rates for Orlando’s industrial warehouse market peaked in 2010 at nearly 15 percent and remained high until 2011. But now the economy is picking up. Payrolls expanded by 4,400 jobs year-over-year for the period ending in May and construction of multifamily residential has grown consistently. The improvements are part of a trend that could extend for years. Today, the industrial market that had the highest vacancy rates in the state is now experiencing the greatest absorption, with 1.1 million square feet leased in the second quarter of this year, for a six-month total of 2.4 million feet. That’s a 19.3 percent gain over the same period in 2011 and the third consecutive quarter of positive absorption. The overall vacancy rate has fallen to 10.7 percent, and that doesn’t tell the whole story. Outlying areas and Class C properties are lagging. In Class A and Class B properties in southwest Orlando …
The major headlines dominating the greater Baltimore region this summer involved the unexpected resurgence of our beloved professional baseball team following nearly two decades of performing at a level below .500, and the logistical challenges facing the organizers of the second annual Grand Prix racing event scheduled for the Labor Day weekend. Connecting this news to the regional retail environment, we see a tremendous amount of winning and successful projects emerging throughout the area, combined with a great deal of noise and fast-moving activity. Fasten your seatbelts for a quick lap around the Charm City marketplace. Downtown CBD As General Growth Properties slowly emerged from bankruptcy, the company renewed its focus on re-energizing its retail assets lining the retail magnet known as the Inner Harbor by attracting new merchants and restaurants and upgrading the physical plant. The arrival of Bubba Gump Shrimp Co. and Ripley’s Believe It or Not Museum were among the notable adds. There is still some work to do with regard to reinvigorating The Gallery at Harborplace, which has lost some luster due to the emergence of Harbor East, but the improvements have been noticeable and well received. In Baltimore, the waterfront rules. The Cordish Company rebounded …
The retail market in Greater Rochester has been active for the first three quarters of 2012, and we anticipate steady demand into 2013. The most active retailers in the market have been national restaurant chains, dollar stores, retail bank branches, medical (urgent care) and gas stations. Overall market vacancy is currently 7.47 percent with the southeast market at 4.77 percent, and the northwest market at 5.06 percent, showing the tightest vacancy levels. The southeast market includes both the 1.3 million-square-foot Eastview Mall corridor in Victor and the Monroe Avenue corridor in Pittsford. The Monroe Avenue corridor is centered at Pittsford Plaza and Wegmans’ flagship grocery store. The southeast market boasts the highest household income demographics in the region, which has attracted retailers like Trader Joe’s, which is opening in Pittsford Plaza in October; The North Face, currently under construction across from Eastview Mall; and Von Maur, which is currently under construction and replacing The Bon Ton at Eastview Mall. Benderson Development is completing construction of the small shop space at Victor Crossing, a power center anchored by a Walmart Supercenter and Kohl’s on Route 96 just south of Eastview Mall. New tenants include HomeGoods, PetSmart, Dollar Tree, and Famous Footwear. …
Resilient apartment demand will continue to insulate the Los Angeles apartment market from the effects of the uneven recovery, though modest downside economic risks will persist. For example, the Eurozone crisis and economic slowdown in China – the Port of Los Angeles’ largest foreign trading partner – will limit imports and exports and moderate overall employment gains. Local manufacturers have already shed 5,000 jobs in 2012, and 2,400 transportation and utility positions were eliminated in the past two months. Nevertheless, metro-wide employment expanded by more than 40,000 jobs in the past six months, a growth of 1.1 percent compared to 0.6 percent nationally. Additionally, gains have been relatively broad-based. The professional and business services, as well as education and health services industries, have added 25,000 jobs since the start of 2012. Resurgent tourism has also boosted leisure and hospitality payrolls by more than 10,000 workers. Rehiring, combined with a still weak demand for single-family homes, has supported apartment leasing. Asking rents have particularly improved. In the first half of 2012, market-wide asking rents appreciated 5 percent to $1,730 per month, compared to a gain of 3 percent for all of last year. Rent increases have been particularly robust in the …
Despite little commercial real estate development with the lowest rental rates in a decade, Las Vegas’ office leasing market has inched up in the positive direction. There are also indicators that the area’s commercial real estate market will continue to struggle, with vacancy rates remaining as high as 25 percent until the end of 2012. Las Vegas remains one of the most challenging real estate markets in the country with some submarkets showing vacancies as high as 32 percent, while others report vacancies as low as 16 percent. Still, there have been some significant developments recently impacting the office market. Zappos.com will occupy the former Las Vegas City Hall building in Downtown Las Vegas, which will house about 2,000 employees. This signals continued revitalization for the Downtown area. Those 2,000 employees will need housing and, with a younger workforce, will probably spend disposable income on entertainment, particularly in the area close to their place of employment. Along with Zappos, government-related entities occupying commercial space is on the rise, and traditionally those entities prefer to be centrally located. While there is noticeable activity taking place in certain Las Vegas submarkets like Downtown, other areas of Las Vegas are also improving — …
Using the turtle and the hare metaphor, it is appropriate to associate Atlanta’s medical office market with the turtle and the metro area’s general office market with the hare. With a few exceptions, Atlanta’s medical office market has continued a slow and steady expansion during the last 30 years. While the size of the medical office market is substantially smaller than the general office market, it has not experienced the booms and busts that have plagued general office market over the same 30 year period. On-campus and Class A medical office buildings have consistently enjoyed 85 percent or greater occupancy. The primary difference in the stability of the two segments of office space is that the demand for general office is driven by the state of the overall economy, while demand for medical office is driven more by the health and size of the general population. Metro Atlanta’s population has increased by more than 51 percent since 1990. The last few years have seen slower growth in the medical office market primarily due to the unknowns of the Affordable Care Act law (Obama-care). Initially, there was uncertainty over whether the law would pass or not. After the law passed, then …
The industrial market has remained very stable over the past four years in New York’s Capital District, and promises a strong pattern of growth for the next six to 12 months. As the office market struggles in the central business district, fueled by the state’s tenuous occupancy of numerous privately held properties, the industrial marketplace has flourished with extended commitments from existing users and the entrance of new users. With Upstate New York making a name for itself in the nanotech industry, a great deal of national attention has been drawn to the region, which had previously been characterized as not being nationally significant. In addition to the tech industry, national distribution groups have committed to and/or focused their site searches in the Capital District. One of the area’s most significant industrial deals this year involved a local manufacturer making a 15-year lease commitment to remain in the region, by tripling its footprint in a single-tenant building of 140,000 square feet. This commitment to the Albany marketplace was a further sign of the support from the state’s economic development officials, the abundant availability of the appropriate workforce, and the distribution characteristics of the region. At full capacity, this facility will …
Activity is picking up in the Indianapolis retail market, buoyed by a strengthening economy that has intensified retail expansion. Positive job growth, escalating new home construction and rising retail sales are attracting new stores and have instigated other retailers to consider additional locations in selective pockets around the metro area. The northern submarkets within Hamilton County are particularly active, especially around Exit 10 of I-69 in Noblesville, where new housing construction has fostered retail growth. In Carmel, the renovation and re-tenanting of The Centre and The Corner are moving forward. The 82nd Street corridor is also lively as the nearly completed expansion of The Fashion Mall has attracted new retailers to the state such as West Elm and Free People. Nearby, last year’s repositioning of Rivers Edge is initiating smaller new developments with Dairy Queen, Wendy’s and Famous Dave’s among the recent openings. The 127,000-square foot project will include an Earth Fare grocery, Walgreens and Panera Bread. Large spaces are being filled across the metro area. Jo-Ann Fabrics is taking 28,000 square feet along Highway 36 and Brickhouse Fitness has penned a lease for 15,000 square feet along Lafayette Road. Although retail construction is at near historic lows, smaller buildings …
San Antonio’s multifamily market has historically been exempt from the fluctuations typical of other Texas cities. While San Antonio has had its share of new deliveries over the years, the multifamily stock has not increased in step with its Texas contemporaries. The traditional engines of the city– hospitality, health care and the military–provide a rock-solid foundation, but do not offer the types of high-paying wages that drive rent growth and new construction. New construction has also been inhibited by a lack of institutional capital flowing to San Antonio because it was perceived as a “low growth” market. Things, however, are changing. Job growth in industries such as energy, manufacturing, and the financial sector are drawing families to the region like never before, just as long-time San Antonio organizations such as USAA, the Medical Center and the University of Texas—San Antonio (UTSA) continue to expand. As a result of new jobs and a nationwide regression of home ownership rates to more historic levels, San Antonio’s multifamily market is seeing a rapid increase in demand. Developers, both local and national, have begun planning new developments… As of August 2012, San Antonio multifamily properties boast an overall occupancy rate of 92.9 percent. As …