Do you remember how it feels to be on a wild rollercoaster ride, excited and confused, trying to make sense of the ride yet wondering when it will end? That’s exactly what developers, brokers, retailers and landowners are feeling in the commercial retail market. Although Macon finds itself somewhat insulated from what major retail markets are feeling during the “Great Recession,” it is certainly not immune to the prolonged effect of this economic downturn. With the lack of financing, local and regional developers have had to adjust the delivery of their projects in the wealthy submarket of North Macon and the South Bibb County area. While they too recognize Macon as somewhat of an insulated market, they are not blind to the fact that nationally some major retailers have closed, rental rates are declining, vacancy exceeds 20 percent and negative absorption is beginning to rear its ugly head. The Shoppes at River Crossing, Macon’s newest lifestyle center on Riverside Drive, hit a speed bump with the departure of Circuit City, but has quickly recovered with the recent announcement of Jo-Ann Fabrics & Crafts’ lease of a 20,331-square-foot building. With a commitment from a major anchor, Fickling and Co. is moving …
Market Reports
The Tampa market has passed through the most severe phase of the recession, a period during which the apartment vacancy rate climbed 360 basis points. In some Pinellas County submarkets, vacancy will surpass 11 percent this year as the local unemployment rate exceeds metro and state levels, while subdued population growth will reduce housing demand. Hillsborough County submarkets, meanwhile, will fare somewhat better as completions slow. Still, sluggish demand will be behind apartment performance, forcing owners to continue to offer concessions to maintain sufficient occupancy levels. The metro area’s vacancy rate is expected to be among the highest in the country this year, and revenues will contract sharply. In 2010, employers will cut 4,000 jobs, a 0.3 percent reduction, but an improvement from last year, when 51,000 positions were eliminated. Developers are forecast to complete 1,000 units this year, down from 1,400 new rentals in 2009. Planned projects total about 5,100 units, or 3 percent of existing stock. Although supply growth will ease in 2010, demand will remain weak, resulting in a 30 basis point rise in vacancy to 10.8 percent. Last year, vacancy climbed 180 basis points. This year, asking rents should fall 3.8 percent to $767 per month, …
The Jackson office market remains strong, with occupancy rates of 81 percent and average rental rates of $19 per square foot. As the state capital, government is the driving force for local real estate, and recently, the public sector has been working with private developers to establish partnerships. With more than $600 million in private and public development during the last couple of years in the CBD, companies are intrigued by downtown’s revitalization. The King Edward restoration by HRI Properties, Watkins Partners and Deuce McAllister is an example of where local government property was transformed into a new 186-room Hilton Garden Inn combined with 64 newly leased apartments. Fondren Place is another public/private partnership where Peters Real Estate and The Mattiace Company partnered with Jackson Public Schools to convert a former school to boutique shops, restaurant space and a new 37,500-square-foot office building with retail space. The construction of the Jackson Convention Complex has spurred hotel development to support Jackson’s first convention center with the nearly completed Sleep Inn and the newly renovated Clarion Hotel Roberts Walthall. Eley Guild Hardy Architects fell in love with a Neo-Classical Revival-style former bank and is transforming it into a LEED-certified building for its …
The Austin retail market is holding steady in the current economy due in no small part to positive media coverage. According to Sherry Sanchez of NAI Austin, numerous media organizations have placed the city near the top in many “best of” ranking lists. These honors have helped keep the retail market stable because job seekers from all over Texas have been coming to Austin, moved by reports of finding better jobs in the Capitol City. “There's a big huge flight of people moving to central Texas who don't even have jobs yet,” she says. “We have job opportunities all over the map for people from blue-collar workers to white-collar workers.” Companies in the city are also spurred on by stimulus money aimed at green energy projects. Finally, the stability of government jobs means a large number of Austinites are gainfully employed. But because no markets anywhere in the country are thriving, these factors mean that Austin is simply staying ahead of the glut. “We're not seeing attrition as rapidly as they are in a lot of parts of the country. Our service providers are hanging in there — some are expanding — and our restaurants are doing well,” Sanchez says. …
Recent news: Several large transactions have taken place recently: pet supply retailer PetEdge signed a new 215,000-square-foot lease in Billerica, Dealer Tire took approximately 100,000 square feet in Mansfield, and Harvey Industries signed a new lease for 55,000 square feet in Southborough. A number of new prospects are also looking to capitalize on aggressive rental rates. These include Sonepar, in the market for 180,000 square feet; Horizon Beverage, in the market for 400,000 square feet; and New England Sheets and Horn Packaging, each in the market for 150,000 square feet. Major industrial users leaving the market include General Motors which will vacate 400,000 square feet in Norton and Adidas/Reebok which will vacate an additional 500,000 square feet in Lancaster and Stoughton. Submarket update: Overall, the Metro South industrial market has been hit the hardest, recording its worst metrics in 10 years and posting a 22 percent availability rate at the close of 2009. The strong-performing Metro West Market, which saw nominal adjustments in vacancy rates, absorption and average asking rents, managed to capture several large transactions in 2009, including Genzyme, Verizon and FedEx Smart Post. The Metro North Market posted lower vacancy and lower tenant velocity. Predictions for the next …
Recent news: The leasing activity in Connecticut has been very healthy in recent months as evidence by the new leases signed in the marketplace. Some junior anchor box examples include a 24,000-square-foot REI deal in Norwalk; a 37,000-square-foot Stop & Shop Supermarket in West Hartford; a 30,000-square-foot PC Richards deal in Milford; and numerous other deals. Also, the recent sale of the Shaw’s Supermarket sites to existing supermarket chains demonstrate that retailers feel that Connecticut is still a very healthy market. Another trend, which has been very apparent in Connecticut, has been the surge in franchise concepts leasing smaller spaces within supermarket anchored shopping centers and community centers. Some franchises that are active include Massage Envy, Sport Clips, Robeks, Five Guys, Doctors Express and numerous others. Submarket update: The luxury-oriented streets (Greenwich Avenue in Greenwich and Main Street in Westport) had a weak 2009. However, the outlook for 2010 is much more promising with recent signature stores openings, including Apple and Ralph Lauren. Leasing activity has increased dramatically and leasing inquiries are at its highest levels since the summer of 2008. Predictions for the next year: The “Year of Fear” (2009) is over, thankfully, and the “Year of Caution” (2010) …
The conservative nature of the Des Moines marketplace has been tested in the past 24 months yet cautious optimism prevails. Historically the high concentration of financial service and insurance companies translated into quick absorption of large blocks of space. However, the downturn in the economy and the move of companies such as Allied-Nationwide, Wellmark Blue Cross/Blue Shield and Aviva to new, owner-occupied buildings left behind significant blocks of space that have increased the office vacancy rate to almost 19 percent and will send it even higher. New construction and development has been divided between the central business district (CBD) and the west suburban markets. The 152,000-square-foot Davis-Brown Tower and the Wellmark’s 550,000-square-foot headquarters are significant additions to the CBD Gateway West corridor, while Aviva’s 360,000-square-foot, United States headquarters is situated in the ever-emerging Jordan Creek corridor. Although development of smaller office buildings has been slowed, there are some signs of positive growth. Delta Dental Iowa is nearing completion of its new 25,000-square-foot headquarters at Northpark Office Park in Urbandale. In addition, two significant lease transactions were signed in the west suburban market, including 25,000 square feet for Strategic America at 6600 Westown Parkway and 93,000 square feet for Sammons Financial …
The Denver industrial real estate market stopped its 2008 free-fall and stabilized in the second half of 2009. A recipe of back-to-back quarters of positive absorption and no new speculative construction caused the vacancy rate to hold steady at 8.6 percent. Tenants are still vacating blocks of space as leases expire, and the weak economy continues to take its toll, but statistically this has been somewhat offset by the lack of new product coming to market and a handful of tenants relocating or expanding. The renewable energy sector had a dramatic impact on the Denver industrial market in 2009 as solar-panel and wind-turbine manufacturers continued to make large investments in the Front Range. As a result, the area is experiencing a ripple effect as smaller tenants are entering the market to fulfill the raw-material requirements and installation needs of these manufacturers. In addition, the U.S. Department of Energy recently awarded more than $75 million in advanced energy manufacturing funds through the Recovery Act to six Colorado clean-tech companies. Hopefully these tax credits will be the foundation for continued job creation and reinforce the Colorado manufacturing industry in 2010-2011. The major development projects currently underway are two buildings totaling 660,000 square …
At the end of 2009, the Southeastern Wisconsin retail market showed a vacancy rate of 11.6 percent, according to the CB Richard Ellis Fourth Quarter MarketView. In 2009, the market witnessed a dramatic increase in vacancy rates, compared with a 9.3 percent rate in the fourth quarter of 2008. Most of this change occurred in the first and second quarters, and we are now seeing the market bottom out, as the vacancy rate continues to climb at a much less dramatic pace. Average asking rents fell from approximately $19.50 per square foot triple net at the end of 2008 to approximately $16.50 per square foot triple net at the end of 2009. Several mid-box retailer bankruptcies led to this rapid increase in the vacancy rate. Other store closures also played a significant role in rising vacancy rates. One bright spot in 2009 was the activity that occurred in the grocery category. Active retailers in this category include Aldi, Piggly Wiggly, Woodman's and Roundy's dba Pick ‘n Save. Aldi opened stores in Brookfield, Grafton and Wauwatosa, Wisconsin. Piggly Wiggly announced plans to open additional locations by taking over three former grocery store boxes. These sites include a former Supersaver in Kenosha …
The retail market in Chicago, mirroring that of the nation, has been plagued with vacancies as a result of retailers suffering from lack of consumer demand. From 2003 to 2008, roughly 80 percent of the American GDP was comprised of spending. This means that the country’s output, or contribution to the world, has been focused on consumption. By contrast, from 1990 to 2006, the earnings of individual workers in the United States increased by less than 0.5 percent per year, while the GDP increased about 3.6 percent per year. This consumer psychology led to increased debt and home equity lines of credit given to many unqualified borrowers. The additional debt introduced to the American economy enabled people to spend money on items they were not, in reality, able to afford. How does this shift in consumption impact retail real estate in the third largest metropolitan statistical area in America? It moves the consumer to buy goods based on need and reduces the retail therapy or impulse buy. In the same way, business owners also make cuts in acquiring goods for luxury and begin focusing on the items needed for basic survival. Add to that a staggering 11 percent unemployment rate …