The downtown San Antonio office sector is shining brightest when compared to the second quarter. Vacancy has declined from 29 percent to 24 percent and absorption is in the black. “The downtown San Antonio office market experienced a big win in the third quarter,” says Kim Gatley, senior VP and director of research for NAI REOC San Antonio. Some of the major transactions for the CBD include HVHC Inc. leasing 112,652 square feet and Argo Group US Inc. leasing 77,000 square feet at the IBC Centre I & II complex. Transactions like these have lead to 265,034 square feet of positive absorption this quarter. But it's at the expense of the suburban market, which is struggling with 99,504 square feet of negative absorption this quarter. Year-to-date, San Antonio's non-CBD properties have posted 62,580 square feet of negative absorption. Citywide, there is 165,530 square feet of positive absorption in the third quarter, but the year-to-date total sits at 129,871 square feet of negative net absorption. Vacancy, however, remained relatively stable at 19.9 percent. Rental rates citywide have risen 2.1 percent from last quarter to sit at $21.11 per square foot. Bright areas for San Antonio: • Domicilio Conocido purchased Pacific Plaza …
Market Reports
The Dallas-Fort Worth office market is currently in a recovery phase helped along by the limited supply of new speculative construction projects and an increasing demand for space. The region has experienced slow, steady employment growth across diverse industry segments, which translated to positive net absorption for 2011. Asking rental rates are beginning to bottom out and concessions have reached their peak. Regardless of the sense of uncertainty for businesses on a national level, local tenants are making longer term decisions to take advantage of the current leasing environment. From the tenant’s perspective, two recurring trends are to optimize space efficiency and to create a positive environment aimed at recruiting and retaining employees. The need to meet these goals has prompted a number of relocations within the market. Office spaces that provide a multitude of area amenities within walking distance are likely to be in higher demand in 2012. Other tenants are looking for more efficient office space configurations and consequently properties with higher parking ratios will be increasingly important as tenants occupy denser, more efficient spaces. Access to public transportation also continues to become more important for corporations making long-term decisions. In 2011, the market saw the return of …
I am pleased with this quarter’s findings, not ecstatic, but pleased. After adding more than 200,000 square feet of office space to the market in the last two quarters, I am happy to announce that we have absorbed nearly 60,000 square feet this quarter. This is the first decrease in the amount of office space since the fourth quarter of 2010. This was due in large part to the sale of the CH2M Hill building along Williston Road, which accounted for 31,000 square feet of the 60,000 square feet in this report. Nationally, we saw the largest absorption of office space since third quarter 2007 (12 million square feet). Office fundamentals have improved locally. Vacancies are decreasing, there are fewer concessions, rates are stable, and lease terms are increasing. Regarding concessions, for those being asked for by tenants, landlords are replying with a demand for longer-term leases. The good news is that tenants are agreeing to them, hopefully because they see a brighter future in their own business. In terms of vacancies, there is a notable difference in showing and lease activity, perhaps because there is less uncertainty in the business world. This is further evidenced by the longer-term deals …
The office market vacancy rate for the Cleveland market registered 22 percent in the third quarter, up 10 basis points from the previous quarter, according to Grubb & Ellis. Vacancy in Cleveland's West submarket decreased to 24.9 percent, 130 basis points lower than the second quarter. While most of the region's submarkets saw little to no change in vacancy, the South submarket increased to 24.3 percent, 110 basis points higher than the previous quarter. The region posted 16,708 square feet of negative net absorption in the third quarter, lowering positive absorption to 115,416 square feet year to date. On a quarter-over-quarter basis, average asking rental rates for Cleveland's Class A office market increased 18 cents to $21.54 per square foot. During the same time period, average asking rental rates for Class B office space rose 11 cents to $18.02 per square foot. To view the entire report, click here
The Columbus retail market finished the third quarter with moderate positive absorption of 118,454 square feet, according to Colliers International. This marks the sixth consecutive quarter of positive absorption. Still, consumer demand and confidence have remained stagnant over the past six months. In construction news, both the 44,000-square-foot Rave movie theater and the nearby 55,000-square-foot Hobby Lobby Project in Grove City were completed in the third quarter. To read the entire Columbus retail report, click here. To read third-quarter reports on other property sectors, click here.
Amid the current economic uncertainty, the office market continued to mark positive gains within the third quarter seeing 193,955 sq. ft. of positive absorption. Although well short of pre-recession levels, this quarter’s performance shows a steady increase in leasing velocity as the Orlando market has averaged only 119,881 sq. ft. of quarterly absorption over the past year. The Orlando economy has continued to stabilize. Monthly decreases in unemployment have become somewhat of a trend as the latest local unemployment statistics for August saw a year-over-year decrease from 11.7% to 10.3%. This sustained trend does wonders for local economic sentiment, especially among small business owners whose bottom line is highly dependent on the spending habits of other businesses within the local market. The Orlando CBD saw another quarter of positive absorption with Class B space leading the submarket to a total net gain of 26,352 sq. ft. Maitland Center is also beginning to show improvement with 31,289 sq. ft. of positive absorption. The majority of this quarter’s positive gains were seen in the Southwest submarket which absorbed 93,145 sq. ft. of space amid a mix of expansion and new tenants. Average rental rates rose slightly to $20.68 overall. Also noteworthy this …
Nashville’s economic growth has remained positive throughout 2011, strengthening Nashville’s position as one of the more resilient and dynamic metropolitan areas in the southern U.S. Through August of 2011, the metro has recovered more than half of the jobs lost during the recession, having added nearly 22,000 jobs since the beginning of 2010. Currently the unemployment rate in Nashville is hovering around 8.4 percent, compared with 9.1 percent at the national level. The area has become a prime relocation destination for major corporations, bringing well-paying jobs to the area. In 2009, Nissan relocated its headquarters from Los Angeles to Cool Springs, and now employs more than 1,300 people. Amazon recently announced two new major facilities that will bring more than 1,500 jobs to the area. GM plans on restarting assembly at its Spring Hill plant, creating 1,700 jobs as part of the new labor deal. The area has become more than just the country music capital. It is now a hub for higher education and healthcare, as the three largest employers are Vanderbilt, HCA and St. Thomas Health Services. Like many markets across the U.S., the Nashville multifamily market has now rebounded beyond pre-recession levels in terms of both occupancy …
Business headlines over the past few months have been full of sunny reports from Seattle: Boeing, for example, is in full swing thanks to the production ramp up of the 787 and the backlog of orders for both the 787 and 737, representing a workload of more than 5 years. The tech sector is hopping here as well, with Google adding up to 840 jobs, Amazon doubling the positions available from a year ago to 1,900, and solid growth at Facebook. This all takes place, of course, in a market that happens to include big-name employers like Microsoft and the increasingly active Gates Foundation, and strong sectors such as Biotech and Pacific Rim trading. Given this strong and diverse economic base, then, it is perhaps no surprise that Seattle is robust compared with many other U.S. markets. This is not to say the recession had no effect — a year ago, rents in empty boxes were leasing at discounts of up to 40 percent of what had been paid by previous tenants. However, the market here has gradually stabilized, and those discounts have shrunk to 15 to 20 percent of previous rental rates. Today, in fact, retailers like HomeGoods, Sports …
While the San Antonio area has not been immune to the effects of the economic slowdown, the city’s location, business-friendly atmosphere, strong labor force and low cost of living continue to create a thriving environment for warehousing, logistics and manufacturing companies. One of those companies, Caterpillar Inc., recently completed the construction on the 260,000-square-foot first phase of its manufacturing facility in Schertz that will supply components to the company’s assembly plant in nearby Seguin. Also in Schertz, Sysco Corporation is close to completing a 635,000-square-foot distribution facility in an effort to consolidate and expand its operations in Central Texas. These and other new additions continue to make local headlines, but what really had the industrial market buzzing during most of the first half of 2011 was the activity generated by the Eagle Ford Shale oil and gas play. As with many south and central Texas markets, industrial activity in San Antonio’s MSA has been positively affected by the Eagle Ford Shale, a 24-county oil and gas play stretching from the Texas-Mexico border to well east of San Antonio. With its central location along the northern edge of the Eagle Ford Shale, San Antonio has attracted the attention of major energy …
It is no secret that, like much of the State of Michigan, the Motor City has not exactly been motoring along with regard to retail performance during the last few years. Southeast Michigan has been struggling, and since the beginning of the national recessionary cycle a few years ago, the state has been held up as an example of taking a retail roundhouse right on the chin from a faltering economy. A more nuanced view, however, reveals some more interesting — and in some cases more positive news — with regard to where southeast Michigan stands today, and how the region seems to be setting up for future growth. In a macro sense, it is accurate that Michigan was more challenged than the rest of the country by the initial economic downturn. There was a perception, real or not, that the struggles in the auto industry would substantially exacerbate the impact of the recession. The state’s unemployment rate was higher than the national average and Michigan was bleeding population. While some of those difficult circumstances and dire predictions seemed to be holding up two or three years ago, the state has made a pretty significant recovery in the last 10 …