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. …
Market Reports
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 …
The Charlotte multifamily market continues its strong recovery and shows no signs of slowing down. All facets of the multifamily market are improving with tightening apartment fundamentals, increased transactional volume and the announcement of several high-profile development projects. According to RealPage MPF Research, the Charlotte market has experienced 6.8 percent rent growth during the past 12 months, which ranks third in the country behind only San Francisco and San José, California. The market has also absorbed more than 3,300 units in the same time period, lowering the overall market’s vacancy to approximately 6.5 percent — the lowest vacancy figure seen in Charlotte in more than a decade. Transaction volume in the Charlotte metro, while only half of the activity level in the Triangle market, has been relatively strong with approximately $800 million in sales during the past 12 months. Capital sources continue to flock to the highest-grade assets, particularly infill locations, where historically low interest rates boost investor returns. A recent illustration of this trend was Atlanta-based Post Properties’ purchase of the 360-unit Circle at South End from Crescent Resources for $74 million or $205,556 per unit, a record per-unit price for a garden-style community in the Carolinas. On the …
Rhode Island is the smallest state in the United States in terms of geographic area. With a population of 1.05 million, it is the eighth least populous state; however, its small geographic area makes it the second most densely populated of all 50 states. This density of population is attractive to retailers looking to expand in The Ocean State. The city of Providence is the only major urban center in Rhode Island. As such, it serves as the cultural and economic hub of the state. Providence Place Mall, one of the most successful urban regional malls in the country, continues to serve as a strong anchor to the downtown area, bringing suburban customers in to the city of Providence to shop and eat at one-of-a-kind retailers and restaurants in the state, including Nordstrom, Cheesecake Factory, Dave & Busters, and Apple. Other than Providence Place, retail activity in the downtown market has been primarily focused on chain restaurants, such as Ruth’s Chris, The Capital Grille and McCormick & Schmick’s, continuing their presence and new local operators opening in the areas adjacent to the downtown core such as Federal Hill (Providence’s “Little Italy”) or along Thayer Street, which is the hub of …
Salt Lake City is progressing through a healthy apartment sector recovery as large developments near completion and major employers ramp up hiring efforts. The opening of the 700,000-square-foot City Creek Center in Downtown Salt Lake City brings upscale retailers such as Nordstrom, Tiffany & Co. and Brooks Brothers to the state, generating a number of retail jobs. More than 4,000 positions are expected to be added in 2012 in the trade, transportation and utilities sectors, which includes retail workers. With elevated gas prices, many of these employees will seek rental housing near work, including residences at the 125-unit Providence Place, which was completed in the central Salt Lake City submarket this year. In addition, more than 800 apartments and 775 condos are in the planning stages in this submarket. In outlying areas like West Jordan, which have received the bulk of new development over the past five years, slower construction activity is allowing demand to catch up. The fourth-quarter completion of the Adobe campus in Lehi should boost demand for apartments in the Orem area as the company is expected to employ 1,000 staffers at the site. Looking at fundamentals, the development pipeline in Salt Lake City is among the …