It’s no secret that Cincinnati has a beautiful landscape, a world-class arts and culture scene, and a rich history, but it is little known for its vibrant business community. Cincinnati is truly located in the “heart of it all” and many people are indeed surprised by the economic influence that exudes from this market. Cincinnati is the 24th largest U.S. metro area with a population of just over 2 million. Cincinnati is home to ten Fortune 500 company headquarters, and, per capita, that places the city higher than New York, Boston, Chicago, or Los Angeles. Kroger Company, Procter & Gamble and Macy's Inc. are all headquartered in the city and it has recently been chosen as the North American headquarters for First Group and dunnhumby, both of which have tapped into the local labor pool. With the strength of the city’s business community, Cincinnati’s office market has been relatively stable over the last 15 years, with overall vacancy rates hovering around 15 percent. Unfortunately, it has not been immune to the economic woes of the last several years and many companies have made cuts or downsized. The Cincinnati office market is approximately 37 million square feet and around 13 million …
Market Reports
Industrial real estate activity is up in the El Paso/Juarez, Mexico metro area, indicating that the recession-driven slump, which had been intensified by reported violence on the border, has not deterred companies from making long-term commitments to the region. The increase in industrial leasing and sales, as well as improved employment statistics and increasing commercial truck crossing data are all positive signs for the future of the local industrial economy. The industrial market in El Paso and Juarez totals 115 million square feet split between two countries and is an intersection of international manufacturing firms, global supply chains and the local economy. During the past 3 years both the global recession and security situation in Mexico have reverberated across the industrial market. However, industrial leasing and sale activity is up on both sides of the border, with Juarez leading the way at 658,000 square feet of net absorption during the first 6 months of the year, and El Paso recording 264,000 square feet. However, El Paso was the first city to start the rebound in 2010 with almost 600,000 square feet of net industrial absorption in the second half of the year. Both markets have seen industrial vacancy levels recede …
The city of Huntsville, Alabama, is no stranger to threats of economic disaster, so overcoming it is a matter of pulling together a team of commercial brokers and economic development professionals who will see office and industrial buildings half-full, rather than half-empty. In 1948, the U.S. Army hung a ‘For Sale’ sign on Redstone Arsenal, only to remove it for a team of rocket scientists. In the 1970s, Huntsville’s space industry packed its bags after the last Apollo launch, leaving the city like a bad divorce, before the hands of fate reached out in the form of missile defense. In 2005, the Base Realignment and Closure (BRAC) initiative set Huntsville on a fast track to economic growth and commercial prosperity. Three hard years of unprecedented national financial crashes played havoc with the market, but what remains is a handful of proverbial optimists. The North Alabama Commercial Brokers Association (NALCOM) meeting in February entertained a loyal group of survivors who at this point are unlikely to fail. They believe an increase in inquiries is a positive sign, even if they aren’t at 2007 levels. Rather than analyzing high vacancy rates and crying over companies who left two years ago, they shifted …
Borrowing a Charles Dickens title, Colorado is “A Tale of Two Cities,” or more accurately, two markets. High density infill markets show strong leasing activity in terms of absorption, rental rates and down time, while lower density rural areas still lag in recovery. Urban markets such as Denver, Boulder and Englewood are returning to earlier days where spaces are quick to fill with an average down time of six months, a waiting list of prospects and increasing rents. For example, a recent side shop vacancy at King Soopers-anchored Belleview Square in Englewood was backfilled with a waiting list of five tenants before the retailer had even closed their doors. On the other hand, secondary and tertiary markets such as Falcon, Colorado Springs and Greeley are slower to lease up with an average down time of 12-15 months and little rent growth. Acquisition activity has not yet recovered, and very few Class A properties are on the market. However, development activity is picking up. Active retail categories include quick service restaurants, health and dental, discounters and mattress stores. One of the interesting trends is the boutique pet store concept occupying less than 4,500 square feet, which seems to be harvesting an …
There is no denying that the industrial market in the Inland Empire is improving. In the past three quarters, a great deal of space has been leased, and vacancy is therefore down. Voit’s first quarter industrial market report revealed that vacancy rates have declined to 8.95 percent in the market, down from 11.55 percent year-over-year, in large part because ten buildings over 500,000 square feet have been leased in the last three quarters. There is actually now a shortage of buildings in this size range. Big Buildings Make a Comeback As occupancy increases, lease rates are rising. This excites developers and investors alike. On the development side, the market is seeing speculative development for the first time in three years in certain size ranges — a huge indication of an improving marketplace. At least four industrial buildings are either under construction or in pre-development in the Inland Empire right now. Watson Land Company recently broke ground on a 600,000 square-foot building in Redlands, while the O’Donnell Group has broken ground on a 786,000-square-foot building in Banning. In addition, at least two others in the 600,000 to 700,000-square-foot range are now ready to break ground. While excitement grows around new projects, …
For a city that has at times been portrayed as emblematic of the kind of economic fallout left in the wake of the recent recessionary cycle, Detroit is actually responding quite well. The current state of the Detroit office market is just one data point — but it’s a promising one. In greater Detroit — and across Southeast Michigan — there are tentative signs that things are moving in the right direction for the first time in several years. Not everything is positive by any stretch of the imagination, but the progress, while tentative, looks genuine. Since the city’s office market bottomed out in the summer of 2010, it has been slowly and steadily recovering. There were a few low points in August and September of last year, but the market began absorbing some space toward the end of the year, and that trend has continued in the first part of 2011. As you might expect, however, the progress has been uneven. Consolidation areas like Southfield, where there is a lot more activity in the marketplace, have generally done slightly better than destination-focused markets like Dearborn and Livonia, which had taken a more significant initial blow and subsequently have not …
While most of the country grows based on the birthrate, Las Vegas has grown at almost six percent per year based on the tremendous influx of new residents. That growth fueled retail development matching the pace until the growth suddenly stopped in 2008. But today, a different scenario is beginning to emerge. With many retail tenants going out of their spaces, beginning in 2008, the local retailers that had survived began a flight to quality. Key tenants in strip centers moved up to anchored centers. Other retailers that had been in the back of strip centers moved up onto pads. The addition of new space has been in waves, with the first starting in 2009, as the local retailers that survived the prior year and saw rents decreasing began adding second locations. The second wave of tenants began at the end of 2009, as strong regional retailers began seeking additional locations. The third wave, which has so far been quite small, is the national tenants. With so many choices around the nation, the national retailers are still trying to decide if Las Vegas, which was hit particularly hard, makes sense regarding expansion. The type of tenants that have been most …
Although the Indianapolis retail market took a hit during the downturn, it never sunk as deeply into the doldrums as other U.S. cities, and has been relatively quick to rebound from its modest slide. Maintaining an unemployment rate well below the national average (8.7 percent at year-end 2010), with the prediction of 20,000 new jobs for 2011 ensures this market is headed in the right direction. Retail real estate brokers in this statistical region of more than 2 million were actually quite busy in 2008 and 2009 when most other regions were reeling from the economic crunch. Recognizing still-strong market fundamentals, retailers tried to seize on the doom and gloom of the times to lowball local landlords, who for the most part would not yield to unreasonable rent offers that they knew would tie them up for years to come. While retail vacancies remain low in the city’s most robust retail corridors, they are higher than they were before the downturn began in areas where demographics have shifted. We continue to see a flight to quality in this market with the most attractive, well-positioned shopping centers commanding surprisingly strong rents. For instance, Class A big box rents in highly desirable …
The St. Louis market, long known for its diverse economy, has been slow to extricate itself from the downturn. The retail real estate brokerage business has been mostly dormant for the past 2 years, particularly the tenant representation side, as scant few national retailers dared to brave the murky expansion waters. Rental rates in the market decreased slightly from third quarter 2010, ending at $12.51 per square foot. However, rates have held up better in some submarkets, including West St. Louis County, where they are $20-plus per square foot. Prime properties at hard corners are holding their own, but second-tier properties have taken a pretty hard hit with rents down into the mid- to high-single digits. When the recession started, many landlords granted rent reductions almost uniformly to tenants and will have to live with their decisions for a while, but other owners held fort and demanded to see sales reports as proof. This resilient region of nearly 3 million people is starting to show new signs of life heading into spring 2011. The market has seen slight improvements in retail vacancy rates, which dropped from 8.4 percent in third quarter 2010 to 8.1 percent in fourth quarter 2010, according …
There is a visible upside to the Boise retail market as we begin 2011. Major employers such as Micron Technology, Hewlett-Packard and Albertsons seem to be holding their own after some layoffs in recent years. A number of national retailers are considering smaller store footprints, which has led them to consider smaller markets like Boise. And pedestrian friendly downtown Boise endured the economic downturn reasonably well, remaining an employment and cultural center that’s home to dozens of local shops and other small businesses. In addition to art galleries, restaurants, coffeehouses, jewelers, wineries, salons, apparel shops and gift shops, national tenants such as The North Face, Anthropologie, Urban Outfitters and Office Depot are well located in the city. After a brutal 2009 and soft 2010, the Boise retail leasing market is showing signs of recovery, despite that the greater Boise area posted negative absorption of about 100,000 square feet last year due to a few large move outs. One long-delayed major lifestyle retail project is moving ahead and is a positive sign that confidence is returning to the market. After a 3-year delay, CenterCal Properties is breaking ground later this year on the 90-acre mixed-use Meridian Town Center in the growing …