The Memphis apartment market is expected to record mixed performance this year, due to a spike in new inventory and decelerating employment growth. On the demand side, weakness in the housing market is keeping many individuals within the renter pool, boosting retention rates and supporting a modest uptick in tenant demand. Foreclosure activity rose 15 percent in the first quarter, when compared to the same period one year earlier, and is expected to continue this year as more adjustable-rate mortgages reset. Subsequently, apartment demand for Class B and Class C properties should pick up in this year, causing vacancy for the metro’s affordable rentals to improve. On the supply side, development activity is accelerating after 5 years of below-average additions to stock. By year-end, developers are expected to boost inventory by 1.1 percent, or nearly double the 5-year average, pushing vacancy higher while moderating rent gains. Builders have brought approximately 175 new apartment units to the Memphis market during the past 12 months, representing a modest 0.2 percent increase in inventory. One year ago, deliveries had totaled approximately 210 units. Development activity is picking up, as builders have roughly 1,100 units underway in the metro area. As for significant developments, …
Market Reports
What area is your expertise? Phoenix and Tucson What trends do you see presently in retail development in your area? Infill, redevelopment and lifestyle type centers. What type of retail product is doing well in your area? Grocery anchored, New Power Centers with added lifestyle hybrid, and Lifestyle Centers. What retailers are new to your area? Fresh N Easy, Cabellas, Bass Pro Shops, CineMark, Bloomingdales and IKEA. Who are the active retail developers in your area? Vestar, Macarich, General Growth, Kimco, DeRito Partners, and Pederson Group. Please name one or two significant retail developments in your area. What impact will these projects have on the market? City North is a 5.5 million-square-foot, mixed-use development by Thomas J. Klutznick Co. and Related Urban. The retail center is anchored by Bloomingdale’s and Nordstrom. The site will draw shoppers from all over the city, while initially hurting other successful retail development sales, but in the long term it will be a great addition to the Phoenix area. Where is the majority of development taking place? Why is this area doing well? Southeast Valley and West Valley. The new retail development is following the housing growth. What area do you expect to be the …
What area is your expertise? Utah Multifamily What trends do you see presently in multifamily development in your area? Rental rates for apartments are on the rise. Utah realized the highest rent growth in all western states over last year. 9.9 percent increase. The condo market has definitely slowed down considerably. We are starting to see platted projects available for sale as developer confidence with current market conditions are low. Rental rates will continue to climb over the next two years. Who are the active multifamily developers in your area? Active multifamily developers in the Utah market are Cow-boy partners, The Church of Jesus Christ of Latter-Day Saints (LDS), and The Metro Condominiums. Please name one or two significant multifamily developments in your area. What impact will these projects have on the market? City Creek Center in downtown Salt Lake City is a sustainably designed, walkable urban community of residences, offices and retail stores that will rise over the next four years on approximately 20 acres across three blocks in the heart of downtown Salt Lake City being developed by LDS. Upon project completion in 2012, the city will be one of few in the nation with a vibrant, mixed-use …
With more and more New York City industrial neighborhoods becoming gentrified, industrial properties are in increasingly short supply. The situation is especially notable in the outer boroughs, where most of city’s industrial real estate activity is focused. Over the past ten years, approximately 30% of industrial property in the outer boroughs has been converted for other uses. In fact, the city’s decision to rezone industrial neighborhoods for residential and commercial development has created a strong market for warehouse and manufacturing spaces. The outer boroughs are all experiencing similar industrial market conditions, with a vacancy rate hovering at about a mere 3%. In Brooklyn, the Bush Terminal and Gowanus areas remain heavily industrial, while Red Hook, Green Point and Sunset Park are seeing an increase in residential developments. The Bronx has always offered a smaller inventory of warehouse and manufacturing facilities, predominately in Port Morris and Hunts Point, and recent conversions have made availabilities tighter than ever. The industrial market on Staten Island, which was always limited, has not experienced much change. Queens is currently the most active borough in the industrial sector. Many neighborhoods, such as Woodside, Maspeth, Corona and College Point, have kept their industrial identities. Other areas, like …
What area is your expertise? Retail leasing, sales, and development in Michigan. What trends do you see presently in retail development in your area? Retail development is stagnant at this time. However, there are several planned developments that will certainly become more viable when the local economy improves. What type of retail product is doing well in your area? Neighborhood Strip Centers. What retailers are new to your area? Tim Horton’s and several independent restaurants. Since the earlier part of the decade, we haven’t had much in the way of “new” traditional retail to the market. Who are the active retail developers in your area? Mostly local developers. The Gillespie Group, Strathmore Development and The Eyde Company. Please name one or two significant retail developments in your area. What impact will these projects have on the market? East Village near the MSU Campus in East Lansing. Currently in planning stages only and no tenants named at this point. Will encompass 250,000 square feet of retail, with a movie theater, a hotel, 100,000 square feet of office and both for lease and for sale residential units. Encompasses over 20 acres. Numerous planned projects around the Eastwood Towne Center but nothing definite …
What area is your expertise? Office market in the Kansas City metropolitan area. What trends do you see presently in office development in your area? Little new development. Some mixed-use projects in the works. Who are the active office developers in your area? Local developers. Please name one or two significant office developments in your area. What impact will these projects have on the market? Park Place – Mixed-use suburban office project including retail, residential, office and hotels. Located in suburban Kansas City (Leawood, Kan.) Plaza West – mixed-use office, retail, hotel project on Country Club Plaza. Will be corporate headquarters for local advertising firm Bernstein Rein. Where is the majority of development taking place? Why is this area doing well? Suburban Kansas City What area do you expect to be the next big development market? Why? Suburban Kansas City What areas are doing well in terms of office leasing? Which areas are struggling with office leasing? Suburban Kansas City and Country Club Plaza do well. Downtown Kansas City has struggled but with a new entertainment district along with opening of Sprint Center, it is poised to take off. Please give a measure of office vacancy rates. Please give a …
High construction costs and slow absorption have limited the amount of speculative office construction in most of El Paso, with the exception of medical developments near the new hospitals and surgical centers. The current trends are for highly efficient, high-profile buildings with plentiful parking and state-of-the-art amenities. Energy efficiency is also a high priority, but the cost of construction has delayed many plans to upgrade to better office space. The predominant areas of new development are concentrated on the peripheries of El Paso to the northeast, east and far west sides. The availability of large tracts of land and the immediate proximity to the highest population centers and employers are what is driving this development. On the east side, Sierra Providence Health Network is completing a new 110-bed, general acute-care hospital that opened at 3280 Joe Battle Boulevard at the beginning of June. A planned expansion will accommodate 290 beds. Adjacent to the hospital, Trammell Crow Company is developing a medical office building. The company is one of the newest and most aggressive office-specific developers to locate in El Paso. In the downtown market, Borderplex Community Trust is extremely aggressive and is active in acquiring downtown properties for redevelopment. Mills …
What area is your expertise? Houston Industrial Leasing Market What trends do you see presently in industrial development in your area? Houston’s industrial market continued to record strong development activity at the start of 2008. The Port of Houston area, Northwest and North Houston (near IAH) account for the bulk of the new construction. Driving the robust activity in these submarkets is the strong growth and expansion at Houston’s Bush Intercontinental Airport (North Far) and the Port of Houston (Southeast). What type of industrial product is doing well in your area? Houston is becoming more of a distribution hub than ever before. We are seeing larger size transactions contributing to the overall absorption. Who are the active industrial developers in your area? First Industrial, ML Realty, Clay Development, Transwestern, ProLogis, and Duke Realty to name a few. Please name one or two significant industrial developments in your area. What impact will these projects have on the market? Interport Distribution Center – First Industrial Realty Trust – located in the Port area. Park 288 – Transwestern – Central / Med Center. Underwood Distribution Center – Clay Development – Port area. Where is the majority of development taking place? Why is this …
What area is your expertise? Office leasing and sales. What trends do you see presently in office development in your area? Most of the office development in our area is in the medical services and is space that controlled by the large Hospital groups. Who are the active office developers in your area? Second Story, Locus Development, First Companies, AJV, Christman, Fusion Properties, and others. Please name one or two significant office developments in your area. What impact will these projects have on the market? The new Medical centers on Michigan Ave Hill that will include a new DeVos Children’s Hospital, Lemmen-Holton Cancer Center, MSU Medical School, Expansions to the VanAndel Institute, and the new Metro Health Village in the southwest suburbs. These new buildings signify the new “industry” of West Michigan and will impact future developments for the next 25 years. Where is the majority of development taking place? Why is this area doing well? As stated above most of the development in the Grand Rapids area has been related to the Health Fields on Michigan Ave Hill (known as Medical Mile) and at the new Metro Health Village in the southwest suburbs. Health care is relatively recession proof, …
What area is your expertise? Indianapolis and Central Indiana Industrial buildings sales and leasing and land sales. What trends do you see presently in industrial development in your area? The Indianapolis industrial market got off to a strong start this year with 2.5 million square feet (MSF) of positive net absorption recorded for the first quarter 2008. Completed deals during the quarter included Fastenal Company (435,000-SF purchase), National Distribution Centers (230,000-SF expansion), Firestone Building Products (221,000-SF lease), Adidas (162,000-SF lease) and Remy International (57,000-SF lease) to name a few. This increase in activity from year-end 2007 helped the overall industrial vacancy rate lower from 7.9 percent to 7.7 percent. Several move-ins by companies that signed deals late in 2007, such as CVS Indiana LLC. in Mount Comfort, as well as Gatorade’s occupancy of its mammoth 1.1 MSF build-to-suit (BTS) facility in Ameriplex also contributed to this vacancy reduction. Another factor enabling vacancy to lower was the slowdown of speculative construction, particularly in the bulk market after 7.5 MSF of mostly speculative, bulk construction occurred in 2007. In fact, no new construction of any kind was completed during the 1st quarter as developers took a step back to allow this new …