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 …
Market Reports
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 …
The Inland Empire apartment market improved slowly since the end of the recession, as apartment demand received little help from the local job market. In the past year however, an economic recovery finally began to take shape, boosting expectations for accelerated improvements in apartment fundamentals. Prior to 2012, local payroll growth significantly lagged state and national gains. After the U.S. shed more than 8.7 million jobs, employers rehired nearly 66 percent of workers so far nationally. Meanwhile, as 53 percent of laid-off Californians returned to work, the Riverside-San Bernardino metro recouped just 31 percent of the jobs lost. Despite the slow overall recovery in the employment market, Inland Empire job creation surged in 2012. Metrowide employment increased by 34,400 workers last year. This represented a gain of 3 percent and was the largest 12-month rise since September 2006. In comparison, state and national headcounts expanded just 2.3 percent and 1.7 percent, respectively. Hiring has accelerated so far in 2013 with both public and private employers announcing hiring plans. The Riverside County Sheriff’s Department will add 500 deputies, while AT&T plans to add 500 California workers. Many of these workers will be based in Riverside. With job creation expected to build …
The industrial real estate market in Southeast Wisconsin continued its climb upward during 2012 as the overall vacancy rate fell from 7.1 percent to 6.5 percent. The result was positive net absorption of 3.6 million square feet for the year. This trend marks two-and-a-half straight years without a quarter of negative absorption. Seven of the eight counties in the Milwaukee industrial market area posted a reduction in vacancies during 2012. In Kenosha County, for example, the vacancy rate dropped from 11.1 percent in the fourth quarter of 2011 to 9.4 percent in the fourth quarter of 2012. Two transactions by Venture One Real Estate LLC accounted for most of the positive net absorption. The first transaction, which occurred in December 2012, was the sale of a 62,000-square-foot facility to EMCO Chemical Distributors Inc. This deal was followed shortly by Venture One’s acquisition of the 160,300-square-foot former Cenveo Inc. facility in Kenosha. Kenosha’s industrial market should perform well this year because of overflow demand from the Racine County market, which will necessitate deals in Kenosha. The shortage of space in Racine County will make it a better candidate for build-to-suit and speculative developments in 2013. Transaction Highlights Strong demand in Waukesha …
Birmingham — Alabama's largest apartment market — is in the midst of a continued recovery from the economic downturn. The city posted a net-gain in jobs, occupancy and rental rates, which has helped spur new development, particularly at close-in urban locations. Last year was a turnaround year for Birmingham. The city gained 700 jobs and the Birmingham-Hoover unemployment rate dropped to 5.8 percent by December, two percentage points below the national average, according to the Bureau of Labor Statistics. The gain in jobs was the first annual increase since 2007. For the apartment market, 2012 results were strong: a 2 percent increase in occupancy pushed occupancy rates to 93.2 percent market-wide. Additionally, rent levels increased by 3.2 percent in 2011 and 1.9 percent in 2012, according to MPF Research. The favorable market dynamics have drawn the attention of regional and national investors, which has led to healthy transaction and development volume. In 2012, 27 apartment complexes traded in the Birmingham MSA, totaling approximately $300 million in volume. Both local owners and several owners headquartered in New York and Florida, for example, made significant investments in Birmingham, including the CLK Properties acquisition of the five-property Park Lane portfolio in April. On …
In the words of Benjamin Franklin, New Jersey’s multifamily housing investment market is “a barrel tapped at both ends,” with fluid trading activity extending from the Hudson River’s Gold Coast to the shores of the Delaware River. Statewide, multifamily properties continue their reign as one of the healthiest investments. Low vacancy rates, convenience to mass transit and a high concentration of properties, particularly in Central and Northern New Jersey, continue to feed the appetite of investors who are hungry for virtually any building class. Thanks to the state’s choice location along the Boston/New York City/Philadelphia/Washington, D.C., corridor, New Jersey has historically been, and continues to be, one of the strongest and most desirable markets for multifamily investments. From urban walk-up buildings to suburban garden-style apartment complexes, the Garden State boasts some of the best multifamily housing stock in the nation. This is further bolstered by a strong average occupancy rate of more than 95 percent and durable rent growth. Both of these conditions are fueled by the enduring effects of the residential housing crisis as well as people “priced out” of cities like Philadelphia and Manhattan, who are seeking a more affordable living option. These migratory tenants are flocking to …
In 2012, Hawaii’s major economic indicators continued on a positive trajectory. The tourism sector, on which Hawaii’s economy is centered, showed growth in both visitor arrivals and visitor expenditures in every month of the year. According to the Hawaii Tourism Authority, total visitor expenditures for 2012 were a record high of $14.3 billion, an 18.7 percent increase over 2011, while the total visitor arrivals of 7.99 million exceeded the previous record of 7.63 million in 2006. Wage and salary jobs, personal income, and state general fund tax revenues all also increased in comparison to 2011. According to the latest reports from the Bureau of Labor Statistics (BLS), job growth accelerated during 2012 in Honolulu, with similar improvements taking place statewide. The construction sector, along with hospitality and leisure employment, both increased at a higher rate than any other sectors with increases of 5 percent and 3.7 percent, respectively. Improvement to the hospitality and leisure sector is notable due to the fact that leisure and hospitality jobs represent the third largest employment block in the state and its largest metro area. With respect to construction, this sector plays an important role in driving consumer confidence. This, in turn, gave retailers the …
The industrial real estate market in West Michigan, and particularly in Kent County, continues to trend positive. CBRE’s most recent survey of this real estate class recorded the fifth consecutive period of positive absorption, resulting in a vacancy rate of 7.8 percent for gross industrial space. The industrial base in West Michigan includes nearly 95 million square feet of gross space, of which nearly 50 million square feet is categorized as “leased” space, with the balance “owner occupied.” The absorption of space is being led by the slow and steady improvement of economic conditions in our region. As of the December 2012, the Grand Rapids unemployment rate stood at 6.5 percent, much better than Michigan and the nation, with unemployment rates of 8.9 percent and 7.8 percent, respectively, for the same period. Economic Catalysts Much like the rest of the state, West Michigan has benefited from the steady improvement of the auto industry. The increase in vehicle sales — brought about by both pent-up demand following the recent recession and by need resulting from natural disasters such as Hurricane Sandy — has boosted manufacturing orders to local companies that supply parts and capital equipment to the auto industry. Additionally, our …
It looks like the worst may be over for the Tampa Bay office market, and 2013 is shaping up to be the best year for investment sales and leasing activity since before the start of the recession. The health of the local office market is directly tied to job growth, and professional and business services employment has increased over the past few years. With additional job growth forecast in 2013, tenant expansions could develop as the year progresses. Many tenants weighing moves to larger spaces in the near term will monitor available spaces and advance timetables in the event vacancy in their target locations falls rapidly. For owners of Tampa Bay office properties, the news comes at a great time, as they should see some relief from high vacancies in 2013. That said, additional tenant demand will be needed to make a significant dent in the overall vacancy rate and support more substantive rent growth. Overall, the Tampa/St Petersburg office market ended the fourth quarter of 2012 with a vacancy rate of 13.6 percent, which was down from the previous quarter. Net absorption totaled 356,991 square feet, which was a vast improvement over the negative 390,098 square feet recorded in …