Milwaukee ended 2011 with its sixth consecutive quarter of positive net absorption and more than 3 million square feet of absorption for the year. Xceligent Inc. reported that the Milwaukee industrial market ended 2011 with a vacancy rate of 7.6 percent, down from 8.6 percent at the end of 2010. The national industrial vacancy rate by comparison ended 2011 at 9.9 percent, according to CoStar Group. Hungry for space Of the 67 national industrial markets tracked by Cassidy Turley, 59 recorded positive demand for warehouse space. Milwaukee was among the top 10 performers along with Dallas, Indianapolis, Atlanta, Houston and Chicago, the latter of which only surpassed Milwaukee by 200,000 square feet in 2011. Milwaukee and Southeast Wisconsin continue to attract food industry manufacturers, distributors and packagers. Most recently, Seda International Packaging Co., an Italian firm, opened its North American headquarters in Pleasant Prairie. It joined other food retailers like Gordon Food Services and Affiliated Foods Midwest, which have opened distribution centers in the last 2 years. ALDI and Roundy’s Foods also both have distribution centers greater than 1 million square feet in Southeast Wisconsin. Janesville, Wisconsin also attracted Melster Candy, which relocated its manufacturing operations to a 100,000-square-foot plant, …
Market Reports
We've all said time and again that the key to recovery in office real estate is continued and significant increase in employment rates. Like much of the rest of the country, Memphis has begun to see an uptick in employment in the professional and business sector. In the Memphis MSA, employment in this all-important sector for office real estate jumped from 73,400 to 87,100 during 2011, approaching pre-recession highs of 88,800. Additionally, on May 3, the U.S. Bureau of Labor Statistics reported that productivity in the U.S. fell at an annual rate of 0.5 percent for the first 3 months of 2012, after steady growth during 2011. This is the first sign that corporations have achieved the efficiency they desired and needed to weather the latest economic storm. As demand increases, corporations will be forced to hire to fill the gap between demand and capacity, so the good news for the market is that employment rates, the most fundamental drivers of office real estate, should continue to improve. There are a couple of black swan events, the outcomes of which will shape the immediate future of the office market in Memphis, and specifically the Central Business District. The first is …
Overall, the first quarter of 2012 brought improving market trends to the office sector in Philadelphia and Delaware. The number of tenants in the market has increased, although this has not translated into a significant increase in occupancy. Some tenants are growing, but it is still common for companies to make lateral space moves or take smaller, more efficient offices. In CBD Philadelphia, occupancy decreased slightly during the first quarter from 88.6 percent to 88.4 percent. The main reason for the loss in occupancy during the first quarter was due to banking sector tenants Citizens and Wells Fargo consolidating space in the Market East submarket. The Lehigh Valley also had a decrease in occupancy, mainly due to the closing of a 100,000-square-foot T-Mobile call center. On the other hand, the Pennsylvania suburbs, Southern New Jersey and Northern Delaware all registered low, but positive absorption for the first quarter. Numerous large tenants are looking in the market. However, many of these leases are likely to be renewals or moves without significant additional occupancy. With the exception of a rumored 145,000-square-foot Capital One lease in Wilmington, Delaware, which is a new requirement, none of the deals in the market are anticipated to …
The southern New Mexico industrial sector remained strong in 2011 and we expect 2012 to be a year of continued expansion and growth. The largest concentration of growth in the industrial arena has taken place in Santa Teresa and the immediate surrounding area. The industrial market in this trade area has benefited greatly from its proximity to the border with Mexico and work done by Gov. Susana Martinez in attracting industrial tenants to the area. We have also seen an influx of manufacturing companies that moved their operations to Asia who are now looking to relocate back in North America, specifically to those trade areas that benefit from a geographic link to Mexico. Large box property owners gained the most in 2011 with the recent expansion of companies and businesses locating in the area. In 2011 Alaska Structures leased about 350,000 square feet of industrial space on the west mesa in Las Cruces. The company occupied one of the last remaining big boxes in the market, leaving little available big box space in the greater Las Cruces market. While 2011 was a good year for large boxes, landlords for mid-size and smaller boxes felt the pinch as tenants were able …
Minimal construction and large lease signings are expected to bring the retail vacancy rate in Columbus to a 5-year low this year. At the same time, investment activity should increase through year’s end, particularly in the multi-tenant retail segment, as investors take advantage of historically low interest rates. Many of the leases in the Columbus metro area will be executed in areas with healthy population growth and established foot traffic, including Polaris, Easton, and Westerville. The lease inked by Menard Inc. for 240,000 square feet at the old Northland Mall last year will help revitalize the Morse Road corridor. Slightly north, elevated household incomes will bode well for Westerville, where Walmart will open by mid-year. Both moves will increase traffic within the area, while attracting smaller tenants to vacated inline space nearby. Elsewhere, Earth Fare Inc. will move into 30,000 square feet at the Gemini Place Towne Center in Polaris, further solidifying the neighborhood as a top retail corridor in Columbus. As leasing activity picks up and development activity remains slack, most submarkets will post an improvement in vacancy in 2012. Economic Vital Signs The Columbus retail market is one of the strongest outside of the Upper Midwest, according to …
Trends in multifamily development and demand mirror both changing mentalities in a post-recession era and dynamic population shifts. There are an estimated 80 million echo boomers (Americans born between 1980 and 1995) that are beginning to move out of their family homes or college dorm rooms and into a very challenging job market. Most rent because they are either unable to buy or they consider owning a home low on the list of their financial goals at this stage in their lives. Even those older than the echo boomers have changed their ideology as it relates to homeownership after suffering through a collapsed housing market. The result of these shifts has kept the demand for multifamily housing high on both local and national levels. Current apartment developments are also responding to the demand for affordable luxuries. They now offer green efficiencies that will reduce utility bills and access to transit nodes that cut down on gas costs. Amenities such as fitness centers, coffee shops and pools with outdoor areas that allow residents to socialize on-site have become commonplace. In the Greenville market, the downtown apartment activity is bustling. Hughes Investments recently delivered the Riverwalk at Riverplace, a mixed-use development that …
Recovery was the name of the game in 2011 for many major retail corridors in Manhattan. SoHo and the Flatiron District were among the most significant rebounding areas. SoHo has benefited from international retailers’ expansion into New York and the city’s record-breaking tourism. New York City welcomed more than 50 million tourists in 2011, including 10.1 million international visitors — more than any other year in its history. The city generated $32 billion in visitor spending and $48 billion in economic impact, according to Mayor Michael Bloomberg and NYC & Company. And SoHo is a major stop on any tourist’s path. Broadway, Spring and Prince streets have long been the market’s primary retail corridors, and rents on these streets are nearly back to 2008 peaks, with very limited vacancy. In 2011, more tenants, especially European retailers, saw value and opportunity on the interior streets — Mercer, Greene and Wooster — which are one-third to half the rent of Broadway, Prince and Spring streets. The interior streets had suffered from higher-than-normal vacancy levels during the recession; now, they are flush with some of the biggest names in retail and are commanding higher rents than ever before. The Mercer Hotel and early …
The Milwaukee apartment market continues to enjoy higher occupancies, less concessions and yes, some actual rent growth. The market saw less available units in recent years. As the old law of supply and demand dictates, that drop in the number of available units has led to a significant reduction in concessions, thereby increasing effective rents. In some cases, not only was there an increase in effective rents, but in actual rents at some properties and within certain markets. What are the driving factors and what can we expect going forward? There are a few components at work — more jobs and virtually no new developments. Another important, but less quantifiable factor, is the desire of some potential homeowners to remain renters. When we talk about job growth, we are certainly not talking about a dramatic increase. Still, an increase is always better than a loss. After hemorrhaging jobs in the late 2000s, as the recession gripped the area and the rest of the country, Milwaukee began to rebound in 2010. In fact, according to Manpower International, the area was one of the top job growth areas in the country, ranking sixth in fastest employment growth of the top 100 metropolitan …
Like other markets in the country, the Fort Worth office market began its decline in 2007, got worse in 2008 and 2009 and then visibly rebounded by the end of 2010. The ‘bottom’ of the market, by general consensus of local brokers, was in mid-2010. Without the booming energy business, conditions would have been much worse. Additional market drivers that helped support the local economy and office market during the recession were healthcare and government. The Central Business District Class A sector is comprised of 13 projects with 5.39 million square feet, while the Class B inventory includes 31 buildings with 3,726,829 square feet. Including Class C buildings, total office inventory is a little more than 10 million square feet and the current overall vacancy rate is 12.1 percent. The reported Class A rent averages $26.87 per square foot, plus electricity. The Class B reported average rent is $18.38 per square foot, plus electricity, according to the most recent CoStar Market Report. Other Fort Worth submarkets include Northside, Southside, Alliance, Wise County and Hood County. The downturn and recovery has looked like the classic hockey stick pattern — slow downturn and sharp upturn toward the previous high when things started …
The dust seems to be settling in northeast Florida’s industrial market after the recession. Sales are still down and asking prices continue to decline for traditional industrial properties, but institutional investors throughout the state seem to be in acquisition mode. While investors are looking, there are not many properties for sale. Despite the fact that Jacksonville is the third largest industrial market in Florida, not many institutional-quality industrial properties come onto the market frequently. Rental rates seem to have stabilized for quality properties and landlords are beginning to reduce the value of concessions offered to tenants. The current overall industrial vacancy rate for northeast Florida is about 9.6 percent compared to 9.7 percent this time last year. Although this is still on the high side for our market, it is still much more favorable than Savannah, Georgia, where the reported vacancy rate is close to 16 percent. Savannah is one of the more competitive markets with Jacksonville, due to its vibrant port traffic. Recent transactions that have helped northeast Florida maintain single- digit vacancy rates include Saddle Creek Corp.’s 213,000-square-foot lease in the former General Motors parts distribution center, which is owned by Cabot Properties and located in the Flagler …