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
Market Reports
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 …
During the second quarter of this year, the Memphis multifamily market showed signs of growth. Occupancy, rent, absorption and sales were all up from the first quarter of this year. Construction remains relatively flat; however, after three consecutive quarters of no new units coming on line, 114 units were delivered in the second quarter. “We’re seeing continued improvement in our market,” says Tommy Bronson, III, vice president of the multi-housing group in CB Richard Ellis’ Memphis office. “Due to record low construction levels, we’re seeing positive rent growth, occupancy and concessions burning off.” The overall occupancy in the second quarter was 92.1 percent, compared to 91.6 percent in the first quarter of 2011. The strongest submarkets are Germantown/Collierville, Downtown and Cordova, which all average in the low- to mid-90s for occupancy, Bronson says. “In those locations, we are often seeing no concessions now, which is a big deal in the Memphis market because we’ve been a concessionary market during the last few years,” he says. Bronson adds that Class A and B properties are pushing rents because concessions are burning off. Rents for Class A and B properties rose from $803 per unit in the first quarter of this year …
Market Overview Unlike most major markets across the U.S., the retail real estate landscape in the Washington, D.C. MSA, which includes the inner-city core as well as Northern Virginia and nearby Maryland, looks quite similar to that of 2006. While most big cities face the issue of too much supply and not enough demand, D.C. is busy developing new centers to keep up with demand. For example, Hines’ CityCenterDC project in downtown D.C., now under construction on the 10-acre site of the District’s old convention center, is a 2.5 million-square-foot mixed-use project that promises to have a major impact on the East End of downtown. The 1.3 million-square-foot first phase, slated for completion in late 2013, is set to include office buildings, condos, apartments, 185,600 square feet of retail, a park and a central plaza. Upon completion, the retail portion will total about 400,000 square feet. Inside the Beltway, 10-acre sites aren’t easy to come by and, given its critical mass, CityCenterDC has the potential to be a game-changer in this market. Two of the city’s waterfront areas are also seeing major development. Thanks to the efforts of Forest City Washington and a host of other developers, the Southeast Waterfront …
The market for soft and hard goods remains somewhat weak due to uncertainty in the economy and labor market (although the Houston job market is generally stronger than the rest of the country). However, in the last several months, many big boxes that went dark due to bankruptcies and/or downsizing have been absorbed, either in the totality or because of the lack of 50,000-square-foot tenants in the market. Landlords have had to get creative and divide larger spaces to accommodate smaller tenants. Generally, the most active tenants in this arena have been health clubs, discount stores, dollar stores and non-traditional retailers. Landlords, eager to fill dark spaces, are making very aggressive deals (low base rents, extra tenant allowances, more free rent, etc.). On the other hand, fast casual (FC), quick-serve restaurants (QSRs) and casual dining remains robust. As such, many companies are aggressively seeking locations in Houston. It has been increasingly difficult to find locations that can accommodate FC, QSR’s (especially users with a drive-thru) and casual dining needs because quality locations have become scarce and parking requirements can’t be adequately met. Alternatively, fine dining has been spotty with good thru-puts but lower average checks. Many restaurateurs have been reluctant …