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 …
Market Reports
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 …
In Providence, 100 Westminster and One Financial Plaza still have ample true Class A space available, but GTECH Center has arguably produced the best return on its tenant investment, essentially leasing up all of its available space to four or five tenants. Consequently, the GTECH Building just sold for more than $50 million. In addition, the new Blue Cross tower was successful in leasing half of its 20,000 square feet of available space. This activity has pushed rental rates for Class A space back over the $30 per square foot mark on new deals. The vacancy rate will dip just below 17 percent as Hasbro officially announced that it has leased approximately 135,900 square feet in the capital city. Finally, it looks like Ameriprise Financial will be moving from Cranston into One Citizens Plaza, which will help the Class A absorption. However, the recent failure of game developer 38 Studios will negatively impact occupancy rates; the company occupied space at One Empire Plaza, a 104,000-square-foot office building in Providence. Looking forward, Bank of America announced that it will vacate its headquarters located at 111 Westminster in April 2013. It is expected that 100 Westminster will absorb employees leaving this 340,000-square-foot …
It is important to understand that the mid-2000s did not reflect a sustainable level of industrial leasing activity. Real estate in general — and Phoenix in particular — has always been subject to cycles. The past few years have seen a flight to quality with tenants moving from older buildings to newer, more modern facilities. They were able to lease new space at bargain rates that were at or below what they were paying for their older facilities. The initial signs of an improving economy have already manifested themselves in an industrial demand increase. This trend is expected to continue and gradually gain momentum, albeit not along the same steep trajectory of recent growth patterns. At the end of the first quarter of 2012, the national industrial market consisted of 289,117,054 square feet. It currently has 39,089,600 square feet of vacant space. At the beginning of 2011, the industrial vacancy rate stood at 15.5 percent. With 6,993,112 square feet of positive net absorption in 2011 and 302,468 square feet in the first quarter of 2012, the vacancy rate now registers at 13.5 percent. Despite positive absorption, the overall average rental rates have seen little improvement over 2011 with the exception …
Recently employed residents are forming new rental households in metro Chicago, generating positive net absorption, a decline in vacancy and a rise in apartment rents. Additional payroll growth will stimulate new demand and reduce marketwide vacancy to its lowest annual level in 5 years by year’s end to about 4 percent in the city and suburbs. Over the longer term, the market’s stature as a primary destination for college graduates should sustain a vacancy rate of approximately 4 percent, though the delivery of new rentals may more significantly offset demand growth in the quarters ahead. The potential influx of college graduates, many of whom will occupy rentals and remain there for an extended period as they pay off student loans, has attracted developers. While the pipeline of planned projects in the suburbs is also expanding, the greatest potential effect of supply growth will register in the city, where completions will rise this year and additional projects wait to proceed. Steady hiring in the first quarter has sparked demand. Across the metro area, 8,000 jobs were added during the period, raising the number of positions created in the past 6 months to 14,400. The private sector continues to set the pace, …
Consumers are loosening their wallets in St. Louis, and the thaw in spending has given the local retail market a much-needed shot of adrenaline. The discount retailer is still king, but new concepts and developments are gaining ground. With positive absorption of space on the rise, investment sales are increasing. St. Louis is poised to see a major development in the central trade area at the former Hadley Township site. After several failed attempts at development in the past 10 years, Hadley seems destined for redevelopment at last. The 40-acre site is located on I-64 in the central suburb of Richmond Heights and will consist of an assemblage of 150-plus commercial and residential parcels. In the southern half of the development, Menards was selected by the city over Costco and will open one of its first St. Louis locations in early 2014. The site plan includes a 240,000-square-foot store with additional out parcels for retail and restaurant users. In the northern half, Pace Properties has received approval to develop a two-story, 400,000-square-foot, big-box store for an as yet unnamed retailer. This development will further enhance the desirability of the Richmond Heights/Brentwood area as a retail destination and will boost asking …
During the first quarter of 2012, job figures in the Pittsburgh metro area reached 1.14 million, the second highest watermark in Pittsburgh’s history. These figures coupled with improved financing options have prompted nearly $5 billion of current and planned investments in the downtown area. Among the latest projects scheduled for the central business district (CBD) are: • The Tower at PNC Plaza, an 800,000-square-foot office headquarters building being constructed at the intersection of Fifth Avenue and Wood Street; • The Gardens at Market Square, a 175-room hotel and 100,000-square-foot speculative office project by Millcraft Industries, that will be anchored by construction management firm dck Worldwide; • The Buncher Company’s 120,000-square-foot office building in the Strip District; • Sampson Morris Group’s redevelopment of the former Wholey’s warehouse into 223,000 square feet of Class A office space with lower-level integrated parking; and • the redevelopment of the 28-acre Civic Arena site. The plans for the former home of the Pittsburgh Penguins call for 1,200 housing units, 600,000 square feet of office space and 250,000 square feet of commercial space, all with LEED certification. In addition to constructing The Tower at PNC Plaza, the bank also purchased the former Lord & Taylor building …