During the third quarter of this year, the Memphis multifamily market slowed down compared to the second quarter. Rent and construction were up, however, occupancy and sales fell during the third 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 third quarter of 2011 was 91.6 percent, compared to 92.1 percent in the second quarter. 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 new construction rose from $939 per unit in the second quarter of this year to $960 per unit in the third quarter of this year, an increase of 1.8 percent. Overall rents also increased slightly, from $733 in the …
Market Reports
When people manufacture products in the U.S., they manufacture them in the Rust Belt, and Cleveland is in the heart of the Rust Belt. Our manufacturing sector has experienced increased occupancy and decreased vacancy levels quarter over quarter for the past three quarters. Cleveland historically has been a manufacturing market, and when manufacturing is strong the Northeast Ohio market is strong. In addition to the strength of manufacturing, the development of the Utica and Marcellus Shale is the biggest factor affecting Cleveland right now. The Utica and Marcellus Shales have been big in the Pennsylvania market for the past five years, but development is now moving westward into Ohio. As drilling increases, so too does the need for services for the drillers. The drillers and their service providers need real estate, and there have been dramatic increases in prices over the past four months in rural markets such as Steubenville, Ohio. That growth is beginning to move toward Youngstown, Warren, and up to the Streetsboro area. Employment is expected to grow dramatically over the next five years. While the overall manufacturing market is surging, there are still challenges in old properties that were modern in the 1930s and 40s, which …
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 …
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 …