“When the going gets tough, the tough get going.” The old adage is certainly taken to heart in Jonesboro. Amid the uncertainty of the recent recession, Jonesboro has become a beacon of resiliency and steadfast performance, resulting in much-deserved attention in nearly every aspect of commercial development. In fact, the Jonesboro MSA is one of only 54 U.S. metros that had gains in total employment between pre-recession November 2007 and post-recession November 2011. According to Garner Economics, a look at November 2011 employment shows that only 54 metros, or 15 percent, are at levels exceeding their November 2007 totals, which was one month before the recession officially started. Jonesboro has continued to increase its population, growing at a very respectable 2 to 2.5 percent per year for the past three decades and counting. This steady, consistent growth in population and tax base has made Jonesboro a huge attraction for expansion, particularly in the retail and healthcare segments of the market. 2011 saw just under 300 commercial building permits issued at a value of more than $250 million dollars, and nearly $40 million dollars worth of permits were issued in the first quarter of 2012. Investment in new infrastructure and facilities …
Market Reports
Retail activity in Greater Pittsburgh will likely gain positive momentum through the remainder of 2012, with moderate growth expected in 2013. Grocery stores, local restaurants, fast casual national chain restaurants, medical retail, and upgraded locations for existing national tenants have led the way for recent retail activity in Pittsburgh. The general atmosphere at the annual ICSC RECon convention in Las Vegas was upbeat and optimistic regarding the retail sector recovery nationally. I believe that the ICSC convention is a strong indicator that retail growth is headed in an upward direction. The Pittsburgh retail markets are broken into four quadrants: North (Cranberry/Wexford), South (South Hills Village/Mt. Lebanon), East (Monroeville/Murrysville) and West (Robinson). The Cranberry/Wexford market continues to be the most active, with sales being driven by the new 500,000-square-foot McCandless Crossing Development. Tenants there include Lowe’s, LA Fitness, Hilton, Fidelity Bank and Cinemark. The Northern quadrant along the Route 228 corridor continues to develop with new projects, such as the relocation of Dick’s Sporting Goods to a new larger facility and the completion of the Cambria Suites project. Additional activity on the Route 228 corridor includes a new free-standing La-Z-Boy furniture store, GetGo gas and convenience store, and two additional outparcels …
After posting slightly positive net absorption for three consecutive quarters, the industrial market in Cincinnati bucked that trend in the second quarter by recording negative absorption of 836,000 square feet, according to Xceligent. This setback can partially be attributed to a falloff in demand, but was largely the result of several large owner-occupants moving out of their buildings. As a result, the overall vacancy rate climbed 20 basis points in the second quarter to 10.2 percent. Still, that’s below the peak vacancy rate of 10.7 percent reached in the second quarter of 2011. Significant new vacancies in the second quarter included Avon (750,000 square feet), Hamilton Fixture (330,000 square feet), and Sonoco Corrflex (319,000 square feet). This wiped out the positive absorption recorded in the first quarter. Through the first half of 2012, the market has posted 395,000 square feet of negative net absorption. Underlying Trends Similar to what we experienced in 2011, tenants are taking advantage of discounted rental rates in Class A product. There has been marginal activity involving Class B or C product. The good news is that there are growth opportunities with some space requirements of more than 100,000 square feet. That demand is driven by …
Following a near record level of seniors housing transactions nationally in 2011, the Dallas/Fort Worth seniors housing market has continued to plow ahead through the Great Recession, supported by positive job growth from the aged child, strong demographics and a resilient housing market. This resilience has led DFW to become one of the most sought after seniors housing investment and development markets in the country for institutional quality investors looking to hedge risk in their portfolio. Like in most major metros, Dallas saw a significant pullback from renters through 2009 and 2010 in the independent living product, primarily caused by senior’s inability to sell their homes, combined with 2,550 units of new construction coming on line. This created significant softness in the suburban markets (Plano, Frisco and McKinney) during the downturn, but all have gained momentum as the economy and housing market has strengthened. From 2008 to 2010, the overall independent living occupancy dropped across the Metroplex from 86.1 percent to 83.0 percent, but has recovered to approximately 85.7 percent through the absorption of 803 units during the past four quarters. “We expect to continue to see positive absorption and rent growth in the DFW Metroplex over the next 12 …
Limited multifamily rental development and additional hiring by local employers will sustain another strong year for the Louisville apartment sector during 2012. Despite a slight increase in vacancy during the first three months of the year, tight conditions prevail as many residents moved into apartments during the past two years. Local employers expanded payrolls during the past two years and more than half of the jobs lost in the metro during the recession have been recovered. The market continues to benefit from the revival of Ford, while the area’s logistics and transportation employers have added workers as more packages and freight move through Louisville en route to other markets. The reinvigorated drivers of apartment demand continue to benefit most locations around the metro, but none more than the submarkets encompassing suburban communities located beyond the inner beltway. Overall vacancy in this area, which contains about three-fourths of the market’s apartments, sits at less than 4 percent, with the Class A rate closer to 3 percent. A lack of new construction will keep rents and vacancies healthy in the Louisville metro area. The 35-unit Whiskey Row Lofts in the West Central submarket delivered in the first quarter, becoming the only market-rate …
In the last nine months, we’ve seen a re-energized national retailer base in the Connecticut market that’s seeking new opportunities and absorbing prime retail space. The national retailers never completely disappeared; however, from late 2008 through the spring of 2011 there was little momentum from this sector. This newfound activity has served to restore the confidence of both the landlord and the local retailer base, effectively stabilizing rents and reducing vacancy rates in prime retail corridors. There was a great deal of talk about the “flight to quality” during the economic downturn and that trend continues. We are seeing especially enlivened activity in the upscale retail main streets in Connecticut including Greenwich Avenue in Greenwich, Main Street in Westport and Elm Street in New Canaan. This is not only a local trend, but a global one, as rental rates on high street retail corridors around the globe experienced a 4.8 percent increase year-over-year and luxury goods have made a strong comeback with year-over-year growth of 8.5 percent for the 12 months ending in August 2011. This trailed only the wholesale clubs segment in terms of overall performance. U.S. luxury retailers are also the beneficiaries of a weak U.S. dollar that …
After emerging from the downturn, Denver’s industrial market is well and truly back on its feet. As options for large, Class A industrial users of more than 200,000 square feet dwindle, build-to-suit projects are popping up at levels last seen in 2006 and 2007. This is a great sign for the overall health and recovery of the state’s industrial real estate market. Polystrand has almost completed a 120,000-square-foot manufacturing facility in southeast Denver; Interline Distribution is underway with a more than 200,000-square-foot warehouse project along the I-70 corridor scheduled for delivery in August 2012; and U.S. Foods recently purchased land in Eastgate Park where it plans to build a 400,000- to 500,000-square-foot building. There are several other users that have either made similar land purchases or are in the market for large portions of land. In fact, there is a healthy inventory of well-located development sites available, which can be purchased at prices that make sense for users choosing the build-to-suit route. Although large blocks of quality Class A space are sparse in the Denver region, rental rates have not yet risen to a level that would compel developers to start speculative development. Also, there is little guarantee that their …
The Chicago downtown office market is on a roll. Vacancies have fallen for more than 12 months straight as corporations pull the trigger on new or rehabbed office space in marquee locations to accommodate consolidation and growth. One of the big stories is that the market is far more geographically diverse today. We are seeing the suburban sprawl in reverse as corporations leave far-flung business parks to seek out trendier 24-hour neighborhoods such as River North (Chicago’s tightest submarket), the West Loop and the Millennium Park/East Loop-area. Where you work is also increasingly where you live. Chicago’s 136.7 million-square-foot office CBD market reported a 14.9 percent vacancy rate at the end of the first quarter, a welcome decline from the 15.4 percent reported during the fourth quarter of 2011. According to CBRE Group, downtown vacancy has fallen in every quarter since the end of 2010, when the rate was 17 percent. It peaked at 17.3 percent midway through 2010. Overall vacancy numbers include sublease space. Direct vacancy was 13.6 percent in the first quarter of 2012, down from 14 percent in the prior period. Compare that to the suburbs, where the first-quarter vacancy rates rose to 24.6 percent after consecutive …
As the economy picks up in Columbia, South Carolina, the area’s multifamily market shows improvement. Columbia’s unemployment rate has declined steadily over the last year to its current rate of 8 percent. The largest employers in Columbia — which is the largest MSA in the state of South Carolina — are the state government, the University of South Carolina, Fort Jackson, Palmetto Health Baptist, and Blue Cross and Blue Shield of South Carolina. Columbia also showed an increase in manufacturing jobs over the past year. The area also benefits from recent economic development announcements. In May 2011, Michelin North America announced a $200 million dollar investment in its Lexington facility with 270 new jobs. Nephron Pharmaceuticals plans to build a $313 million manufacturing and research campus in Cayce’s Saxe Gotha Industrial Park, creating 700 new jobs. The University of South Carolina plans to build a state-of-the-art $91 million Moore School of Business to be located downtown at Assembly and Green. The former business school location will be leased to the Department of Justice for 20 years, which will bring in an additional 250 jobs. Amazon.com built a distribution facility in Columbia, which currently employs 600 workers, will eventually create up …
The Southern Maine retail market is rebounding. According to Malone Commercial Broker’s retail survey, Greater Portland’s vacancy rate was at a 10-year high of 10.8 percent in 2009 but dropped down to 6.24 percent in 2011. We are seeing absorption of some empty big boxes, and new retailers are entering Maine’s marketplace. Last year, Buffalo Wild Wings opened its first Maine restaurant in South Portland and then opened a second location in Auburn. Five Guys opened its first Maine location in Portland in 2011, and Elevation Burger opened in South Portland at the beginning of 2012. Despite national headlines that Urban Outfitters is struggling, in 2011 the trendy chain leased approximately 10,000 square feet on Middle Street in Portland. Other retailers new to Maine’s marketplace over the last year include Aveda, BAM! Books-A-Million, J. Jill and White House Black Market. In addition to new retailers entering Maine, some existing national and regional retailers are expanding. To name a few: ACE Hardware has opened a new location in Falmouth; Subway has opened additional locations in Scarborough, Westbrook, and Lewiston; and Verizon opened a flagship store off of Franklin Arterial in Portland. Maine banks and credit unions are expanding as well. Norway …