With tenant demand increasing and retailers looking to expand in Cleveland, positive net absorption and limited development have created a balanced retail market that will lead to improvement and growth in 2012, according to Marcus & Millichap. The construction levels are relatively low with only 260,000 square feet of shopping center space scheduled to be completed this year, more than doubling last year’s 121,000 square feet. By comparison, 2008 saw 1 million square feet in retail completions. “When you look at it and put it in perspective versus construction levels seen during the last 10 years, it’s significantly below the levels we saw at the height of the market,” says Scott Wiles, a director and vice president within Marcus and Millichap’s National Retail Group. “It was an expected trend that last year was the low point for construction levels in the submarket, and that stems from 2009 and 2010 being very inactive leasing markets,” Wiles says. This year’s limited construction will aid Cleveland’s retail growth, however, in light of an uptick in leasing. “The positive thing about Cleveland is that we never see the construction levels that some of the sexier markets see, so it doesn’t throw our supply and …
Market Reports
During the last two quarters, vacancy rates for Class A and Class B office properties in Columbia have declined. So far in 2012, overall Class A vacancy rates have fallen from 12.2 percent to 11.4 percent, while Class B vacancy rates have fallen from 27.3 percent to 27.1 percent. However, as tenants have been taking advantage of the opportunity to upgrade their spaces, the overall vacancy rate has remained unchanged at 22.2 percent, as Class C vacancy rates have increased from 23.7 percent to 26 percent. The Cayce/West Columbia submarket saw the biggest statistical declines in vacancy during the last year. Class A vacancy declined from 27.6 percent to 17.3 percent. Class B vacancy rates declined from 25.7 percent to 13.8 percent. While the change demonstrates increased activity in the submarket, the submarket saw only 13,603 square feet of positive absorption for the year. Activity in the Central Business District has been muted. In 2012, vacancy rates have declined by 40 basis points. Tenants are upgrading to Class A spaces from Class B and C buildings. Vacancy rates for Class A buildings downtown declined 70 basis points to 11.8 percent. However, vacancies have increased in Class B spaces rising 40 …
New multifamily developments are springing up throughout San Diego County. Strengthening apartment market fundamentals and rising demand are among the many reasons why investors view this as the perfect time to capitalize on development. There are currently more than 1,500 multifamily units under construction and slated for completion by the end of this year in the county — more than triple the amount of new units delivered in 2011, according to RealFacts. Developers are finding a more cost-effective approach to investing in this market by purchasing land for development as opposed to buying existing apartments and refurbishing. However, finding suitable land for development remains a challenge. Locations throughout the county attracting the highest developer interest and already witnessing new construction activity are centrally located, mixed-use urban areas. This is no surprise as walkability and easy access to transportation is highly sought after by the younger generation of renters. This population is currently estimated to be more than 959,000 strong — larger than that of the Baby Boomer population, according to SANDAG. A number of projects have broken ground in the Downtown market, primarily in Little Italy and East Village, as developers take advantage of the area’s unique characteristics. Two notable …
Retail operations have likely bottomed in Cincinnati and will show signs of modest improvement through the remainder of 2012. Encouraged by a more stable job market and restored savings accounts, consumers are beginning to spend more freely. National retailers, which stalled expansion plans during the recession, will capitalize on discounted rents to move into prime retail corridors in Hamilton County and Northern Kentucky. Anchored shopping centers will outperform due to their ability to draw steady shopper traffic, keeping vacancy at Class A properties tight. The revitalization of the CBD will attract young professionals, while the recent opening of The Banks project will boost visitor volume. Demand will pick up for inline space within the area as restaurants and boutiques look to capture the increase in foot traffic. Developers who built in outlying areas will struggle to backfill unanchored strip centers. Until single- family home sales pick up, lenders will be unwilling to provide start-up financing for local retailers, leading to a weak recovery in tertiary markets. By the Numbers Employment gains are driving modest improvement in the retail sector. Cincinnati employers created 10,400 jobs during the first quarter. On a year-over-year basis, 20,300 jobs were generated, an increase of 2.1 …
More than a handful of times I have invoked the “If you build it, they will come …” line in discussions with office developers discussing the Southwest submarket of Austin, with the assurance that they can rely on statistics, trends and history. In fact, Austin is in a position to justify the delivery of new Class A office space in the Southwest submarket and there are some rock-solid reasons why. Located in the most geographically and environmentally challenging part of Austin, the Southwest submarket has grown from a mere 1.8 million square feet to more than 6.3 million square feet in the past 15 years. During that time, weathering two downturns, it has shown a resiliency for absorption, occupancy and rental rate strength that leaves the rest of the suburban market in the dust. Here are the factors that drive that resiliency: · Proximity to executive housing: Decision makers consistently find reasons to locate businesses close to their and other executives’ homes. The most attractive areas for executive homes is in the Southwest part of Austin’s MSA. This will be even more significant as traffic issues continue to cause longer commute times. · Adjacency to downtown: In particular, the south …
The first half of 2012 has proven fairly stable for the Columbia industrial market. While the first quarter of 2012 experienced trickle over activity from the end of 2011, the second quarter tempered that with marked slowdown. Even though the vacancy rate remained relatively flat at 15.78 percent, average asking rates actually increased 5 cents to $3.53 per square foot. The Columbia industrial market has seen significant investment during the past 12 months, with manufacturing continuing to lead the pack with major investments from Amazon.com, Mars Petcare, Nephron Pharmaceuticals, Bridgestone, Michelin and Continental Tire. South Carolina — and the Central Midlands area, in particular — has experienced significant growth. Amazon.com delivered its 1.2 million-square-foot distribution center and Nephron is building its $313 million campus in Lexington County. Mars Petcare is constructing a 290,000-square-foot expansion in Richland County, in the Southeast corridor. South Carolina is fast becoming the North American capital for tire manufacturing, with most of those facilities located throughout the Midlands region. Bridgestone is expanding, adding 474,000 square feet to its current facility and the company is constructing a new 1.5 million-square-foot manufacturing facility in Aiken. Continental Tire continues construction on its $500 million plant in Sumter County and …
Along the Seacoast in New England, the industrial sector has been busy during the past 12 months with a number of sales and leases, reflecting the steady recovery of the economy. There is more activity and we are even seeing a new crop of startups in the market looking for space. Buyers have found opportunities to pick up industrial properties at attractive prices and while locking in low interest rates from commercial local banks offering SBA and conventional financing. The largest recent deal in the market is SigSauer’s lease of a 206,000-square-foot facility at The Pease International Tradeport. The Exeter, New Hampshire-based company is making a substantial investment in building upgrades and new equipment before moving in. Rochester, New Hampshire, was successful in attracting a new 343,000-square-foot project at The Granite State Business Park. The building is a joint project between Albany Engineered Composites and Safran, a French aerospace company. The building will be located on a 50-acre parcel and will employ approximately 400 workers. Westinghouse is expanding from its existing base in Newington to an 80,000-square-foot building at the nearby Pease International Tradeport. The company has signed a lease at this high-bay building and is completing renovations before moving …
The Idaho retail market is showing signs of growth. Boise and Twin Falls are experiencing new developments breaking ground and national retailers are expanding or moving into the area. Much of this new development is coming in from California, Utah, Colorado and Arizona. Tenants are making deals again. Anchor tenants in second-generation space are looking in that $8-per-square-foot to $11-per-square-foot range for larger spaces. Shop spaces in A+ locations are still demanding high $20 per square foot lease rates and even into the low $30 per square foot for the higher-end projects like Meridian Town Center and the Whole Foods/Walgreens developments in Boise. Local and regional retailers are making a strong push to secure prime space as they are seeing lease rates start to rise. Many tenants are more willing to lock into longer lease terms if they can keep a lower rate. Landlords are beginning to provide tenant improvement allowances so long as the lessees can prove financial stability. Idaho is also experiencing retail market trends that are similar to the rest of the country. Larger healthcare facilities are driving the expansion of surrounding retail developments in Nampa and Twin Falls. Additionally, a few of the big box retailers …
The office sector has enjoyed a renewal of leasing activity in suburban Johnson County and South Kansas City, while the remainder of the market continues to be sluggish. Large tenants — 50,000 square feet and above — have accounted for most of the activity, whereas the smaller tenants have remained stagnant. The majority of tenants continue to renew their leases unless there is a compelling reason to relocate, such as a business expansion or downsizing. The economic uncertainty continues to be the most significant factor affecting the overall office market. However, many large space users have chosen to jump across the state line to relocate to either Kansas or Missouri due to the attractive economic incentives either state is offering. That trend has helped boost the overall leasing activity. In 2011, Johnson County and South Kansas City recorded net absorption of 646,000 square feet, which is remarkable considering the average for the entire Kansas City metro area since the late 1990s has been 401,000 square feet annually. This trend has continued in the first half of 2012 as tenants absorb large blocks of contiguous space. For example, Netsmart Technologies has leased 64,000 square feet in Overland Park, Kansas. Netsmart is …
The off-campus student housing market in Austin is unique when compared to the majority of student markets around the country. From a macro perspective, the University of Texas at Austin (UT) is situated in one of the leading markets in the country in terms of population growth (42 percent from 2000-2011 Austin/Round Rock MSA), job growth (6.1 percent unemployment vs. 8.8 percent national average) business-friendly local and state economies and overall quality of life (“No. 1 best city to live in for the next 10 years” — Kiplinger’s Personal Finance, June 2011). UT has a current enrollment of more than 51,000 students and is the fifth largest institution in the country. UT regards itself as a leader in academics, athletics and as one of the leading research institutions in the U.S. For all the above reasons and more, UT continues to be a huge draw for students both in Texas and from out of state. Despite legislative enrollment limits of approximately 50,000 students, the student housing market in and around UT is one of the strongest student markets in the country today. West Campus (a roughly 10 by 10 block area due west of UT) reported market occupancy for the …