The traditionally strong retail leasing market on the west side of Los Angeles mirrors the trends experienced throughout the rest of the county. The last part of third quarter 2008 saw a rise in retail vacancies, which is emblematic of the ever-worsening economy as seen in the rise in bankruptcy fillings, many retail closings and shelved expansion plans. Rental rates throughout the west side have been falling by as much as 20 percent while vacancy rates have risen from 3 to 4 percent in second quarter 2008 to 5 to 7 percent. However, unlike many national landlords, there have been few reports of west side landlords aggressively seeking to renew tenants earlier than normal. Even the glamorous Beverly Hills submarket has seen this vacancy increase with properties staying on the market longer and asking rental rates slipping 10 to 15 percent. Yet it should be noted that asking rates on the famed Rodeo Drive have been between $45 and $60 per square foot per month, and even far less traveled Brighton Way has seen landlords getting more than $20 per square foot per month. The Golden Triangle should get a boost from the November 24, 2008, opening of the five-star …
Market Reports
The Phoenix retail market expansion has slowed down considerably as it experiences the continued effects of the economic downturn. A decline in consumer spending, negative job growth and a housing market still struggling to recover will keep development to a minimum while vacancies increase in existing centers. At the end of 2008, the valley’s vacancy was 10 percent and should rise above 11 percent during 2009. A return to record vacancy rates seen during the 1980s is unlikely because of the slowdown in construction. In 2008, there was roughly 6.5 million square feet of new retail space delivered, but in 2009 planned projects will be put on hold. One reason is there is no pre-leasing being done, and in many cases banks require guaranteed tenants before they will consider construction loans. In response, developers are changing their focus from new ground-up development to infill and redevelopment properties. Expect more national, regional and local retailers to close during 2009. The list of major store closures in 2008 included national retailers Mervyn’s, Linens ‘n Things and Circuit City. There is still a short list of national retailers looking for space in the valley, including Wal-Mart, Fresh & Easy, Fry’s and Dunkin Donuts. …
The trend toward more workforce and low-income housing will be a very big part of Los Angeles’ future. Additionally, new and existing housing located near major transportation corridors will be in high demand amongst investors. The City of Los Angeles has proposed a 5-year housing plan with a $5 billion price tag to help provide more housing for those two market segments. Los Angeles apartment fundamentals are expected to have softened mildly coming into 2009, though vacancy will still be one of the lowest rates in the nation. Predictions are that the vacancy rate will have risen slightly to 4.5 percent by year-end 2008, then remain unchanged this year. The era of vacancy in the vicinity of 3 percent is not expected to return. Rent gains are decelerating from the invigorating pace of the past decade. This year, Los Angeles’ average asking rate is predicted to rise only slightly, approximately 0.7 percent, to $1,469 per month. In November, the 40,544-unit Beverly Hills submarket had an average asking rent of $1,909 per month; the Santa Monica submarket was at $2,404 per month; the 43,645-unit Wilshire/Westlake submarket at $1,308 per month; the 50,936-unit Hollywood/Silver Lake submarket at $1,468 per month; the Sherman …
As we continue to track changes and trends in the industrial sector on Long Island, two things remain constant: Go East and Go Up. The east offers land availability and height is playing a more significant role than ever in space utilization. It’s always been about cost effectiveness. When land was plentiful and less costly, it was more economical to build out, rather than up. With the shortage of land, the price has escalated such that, to achieve the same cubic feet of space, it is necessary to build or raise the ceiling heights for better economic functionality. This, coupled with better material handling equipment, makes it practical and necessary to accommodate growth and maintain profitability. A prime example of this is the pending sale of the Stimpson Company property in Bayport — a low-ceiling, 200,000-square-foot building set on 22 acres. An old line regional company is buying this property because it has an oversized plot, and while they were planning to raise the ceiling from 15 to 40 feet clear, plans were only recently abated as a result of the current economic environment. As mentioned, the towns of Islip and Brookhaven have been aggressively seeking industrial growth through their …
To most people, the word Baltimore conjures up images of the city’s vibrant downtown and historic areas, including Fells Point, the Inner Harbor, Federal Hill and Canton. In recent years, a number of significant multifamily developments have contributed to the rejuvenation of these trademark neighborhoods, bringing new households to areas previously dominated by daytime office workers and tourists. Recently completed multifamily projects in Baltimore include The Eden, Elm Street Development’s 270-unit project in Fells Point and The Zenith, Legacy Harrison’s 191-unit tower near Camden Yards. These properties have all leased briskly since opening in mid-2007. Across the Inner Harbor, Mark Sapperstein’s 250-unit project at the McHenry Row mixed-use development promises to be a major catalyst for the Locust Point neighborhood. Baltimore has experienced an unprecedented amount of development activity during the last 5 years, as nearly 3,000 new multifamily units were recently delivered inside the city’s boundaries. The Baltimore region is also home to the Baltimore-Washington Corridor, which runs along Interstate 95 in Howard and Anne Arundel counties, another hot spot that stands to see an even greater volume of construction and investment during the next 20 years. Among the major catalysts for the Baltimore-Washington Corridor’s rapid growth during the …
What area is your expertise? Multifamily Investments — Greater Seattle Area What trends do you see presently in multifamily development in your area? With vacancy rates below 5 percent in the greater Seattle area, we see continued rental rate growth, and continued demand for apartment rental units. In general, the number of apartment units is down, and more units in development for 2009 – 2011 will increase the unit count in the downtown areas. Who are the active multifamily developers in your area? Avalon, Lorig, SRM Development and SP Real Estate are some of the active multifamily developers with new projects underway. Please name one or two significant multifamily developments in your area. What impact will these projects have on the market? Avalon’s new Avalon at Meydenbauer recently opened in downtown Bellevue adding over 350 units within walking distance to Bellevue Square and the new Lincoln Center. SRM Development is underway with 130 units being developed in Seattle in South Lake Union nearby Vulcan’s new developments, Amazon’s new Headquarters and the new Bill and Melinda Gates Foundation. Where is the majority of development taking place? Why is this area doing well? The majority of new development is occurring in and …
What area is your expertise? I specialize in the sale and lease of industrial buildings and land in the Denver Metropolitan area. What trends do you see presently in industrial development in your area? Speculative construction is still ongoing in the industrial sector. The demand for functional office/warehouse, distribution and condominium warehouse buildings remains stable which has prompted several local and national developers to bring new product to the market this year. YTD deliveries and anticipated third quarter completion of speculative construction include: East I-7-/Montbello industrial submarket Whirlpool Building — 410,000 square feet (Panattoni Development Co.) Mile High Business Center — with a 337,000-square-foot building and a 90,000-square-foot building (Panattoni Development Co.) Airways Business Center — with an 83,225-square-foot building, a 79,650-square-foot building and a 57,630-square-foot building Majestic Commerce Center — with a 215,000-square-foot building (Majestic Realty Co.) Enterprise Park at Stapleton — with a 153,035-square-foot, a 148,90-square-foot, and 139,695-square-foot building (Etkin Johnson) Northeast industrial submarket OmniCenter — with two 38,240-square-foot buildings (Landmark Properties Group) Southeast industrial submarket Compark Commerce Center — with a 62,000-square-foot building (Urban Construction, Inc.) Corporate Park at Stonegate — with a 44,700-square-foot and a 37,580-square-foot building (Ascendant Development) Twenty Mile Commerce Center — with a …
What area is your expertise? West Michigan — Traverse City to Benton Harbor. What type of retail product is doing well in your area? Grocery and gas. What retailers are new to your area? Sonic and Johnny’s Lunch. Who are the active retail developers in your area? Several wish they were active, however, the lack of retailers coupled with the lack of financing has prevented several deals from moving forward. Please name one or two significant retail developments in your area. What impact will these projects have on the market? The Corner Shops, southeast corner of East Beltline and 28th Street SE, Jared’s and other inline retailers. Minimal impact on the market in general. Evergreen Properties proposed Lifestyle Center at the NE corner of Knapp and East Beltline avenues. They’ve secured D&W Grocery Store and have tentative agreements with several other retailers. It will be interesting to see what happens with the Aikens proposed development, which is less than one mile north of this site. Acquisition of the former Rogers Department store by Israel’s fine furniture on 28th Street SE will clearly have a dramatic impact on the southwest section of 28th Street. Where is the majority of development taking …
What area is your expertise? Reno/Sparks, Nevada What trends do you see presently in retail development in your area? We are seeing an increase in vacancy rates in both anchor spaces and in-line shops, as some existing tenants are vacating. What type of retail product is doing well in your area? As in most areas, Costco, Sam’s, Wal-Marts, and Dollar Stores are seeing increased sales. Sales have shifted to retailers with perceived value. Subway’s has also reported increased sales with their $5 sub sandwich promotion. What retailers are new to your area? Dillard’s, Cabella’s, Scheel’s and RC Willey. Who are the active retail developers in your area? Lewis Operating, Red Development and Bayer Properties. Please name one or two significant retail developments in your area. What impact will these projects have on the market? Damonte Ranch Town Center developed by Lewis Operating. The center is anchored by The Home Depot, Office Depot and RC Willey. The center has additional anchor space available. It is located in south Reno east of U.S. 395 at Steamboat and Damonte Ranch Parkway. This center is located in the middle of a master-planned community that will have over 15,000 homes in the immediate area when …
What area is your expertise? St. Louis County, Missouri — specifically the Chesterfield submarket. What trends do you see presently in office development in your area? In this submarket, vacancy is declining and new buildings are under construction with more being planned. Who are the active office developers in your area? MPD Development, Duke Realty, OPUS and Sachs Properties. Please name one or two significant office developments in your area. What impact will these projects have on the market? Valley Trails Center at 17401 North Outer 40 Drive, Chesterfield, MO 63005. Three 66,000-square-foot office/medical buildings (planned for near future). Located on Interstate 64/Highway 40 with great access from Boone’s Crossing interchange. Buildings will include balconies and have excellent visibility from the interstate. Adjoins a 26 mile trail system. Developer is MPD Development. Where is the majority of development taking place? Why is this area doing well? West St. Louis County due to access and strong demographics. What area do you expect to be the next big development market? Why? Development will continue in West St. Louis County/ Western Chesterfield area due to available land. What areas are doing well in terms of office leasing? Which areas are struggling with office …