A barrage of national and local coverage has detailed the nation’s housing woes and economic uncertainty – which are clearly having an impact on Atlanta’s multifamily for-sale market. Average absorption rates slowed in all Atlanta submarkets during the first quarter to less than one sale per month, and many projects are struggling to make up for lost contracts as buyers cut their losses, get cold feet or discover they are unable to secure financing or sell their existing homes. The good news is that the necessary steps are underway to correct the supply-demand imbalance. Projects with standing inventory are increasingly employing new strategies to gain traction by enticing buyers with reduced prices and increased incentives; being more open to negotiation on price; and attracting the broker community by providing a portion of commission for properties under construction at the end of the recission period, rather than all at closing. More proposed developments in the pre-construction phase are going on hold until the market recovers, being converted to rentals or cancelled altogether. For example, The Related Group has placed its One Cityplace project on hold; John Weiland announced that plans for One Museum Place are on hold until at least next …
Market Reports
What area is your expertise? My specialty is in the sale of multifamily in the North Bay region San Francisco Bay Area (Marin, Sonoma, Napa and Solano Counties). What trends do you see presently in multifamily development in your area? Developers for the most part have pursued condo development in lieu of apartment development on land zoned high density residential. This is due to the huge economic value advantage condos offered over apartments. The apartment development we have seen has been concentrated in either a few very large Class A apartment assets, or affordable (tax credit and bond enhanced) or senior living. Who are the active multifamily developers in your area? Spanos, Fairfield Residential and DR Horton Please name one or two significant multifamily developments in your area. What impact will these projects have on the market? The Moore Building (79 units in Downtown Santa Rosa) and Water Street North (107 entitled apartment units in Downtown Petaluma) are two interesting projects. Neither project has or will have a significant impact on the supply of units. What is more interesting is that both projects are victims of the same problem: projects getting entitled without a market to support them. In the …
Submitted by Ron Anderson, VP of Research and Technology, NAI Avant LLC in Columbia, S.C. Posted 02-22-08. What area is your expertise? Columbia, S.C. What trends do you see presently in retail development in your area? Currently, there are several active types of development: Wal-Mart and Target anchored community centers ranging from 200,000 to 300,000 square feet Unanchored retail strips from 6,000 to 20,000 square feet Auto dealerships relocated from in town to suburban locations Additional home improvement locations Bank locations Fast food locations What type of retail product is doing well in your area? All retail seems to be quite strong at this point Who are the active retail developers in your area? Active retail developers are Fletcher Bright, WRS, Edens & Avant, Kahn Development, and Owen Development. Please name one or two significant retail developments in your area. What impact will these projects have on the market? • Village at Sandhill is a 1 million-square-foot lifestyle center in Northeast Richland County. It is being developed by Kahn Development of Columbia. This project has introduced the lifestyle center to the region and created a retail anchor in Columbia’s fastest growing suburb. • The Shoppes at White Knoll is a …
Submitted by Kitty Wallace, senior vice president with the West Los Angeles office of Sperry Van Ness. What area is your area of expertise? My area of expertise is Southern California, but for the purpose of this interview I will focus on Los Angeles County. What trends do you see presently in multifamily development in your area? The rapid escalation of construction costs has subsided and in some cases is even coming down and labor is more widely available and less expensive. Despite reduced costs, land costs have started to come down. As demand for luxury condos wane, many development sites that were once slated for condo-construction will most likely be redirected to multifamily apartment buildings or mixed-use buildings. Who are the active multifamily developers in your area? A few major multifamily developers in the area are Legacy Partners, Related Development Company, NMS Properties, JPI Development, Lowe Enterprises, Fifield Company, and JSM Development. Please name one or two significant multifamily developments in your area. What impact will these projects have on the market? One significant multifamily development is the $600 million mixed-use development on Hollywood and Vine by Legacy Partners. This project is comprised of a hotel, retail space, condominiums, …
What area is your expertise? Office / San Diego/ Submarket: Kearny Mesa What trends do you see presently in office development in your area? Once known primarily as an industrial market Kearny Mesa continues to add new office buildings to its inventory. The market currently consists of approximately 9.4 million square feet of office space of which only 13.8 percent is Class A space. Recent development projects support an increased movement toward new Class A office buildings. Two brand new Class A developments underway in Kearney Mesa include the Sunroads Centrum (273,468 square feet) and the Terraces at Copley Point (380,000 square feet). These two projects together will add an additional 653,468 square feet for a total of 1.3 million square feet of Class A office space in the Kearny Mesa market. Who are the active office developers in your area? Sudberry Properties, Sunroads Enterprises, the County of San Diego, Badiee Development Inc., and The Ghianni-LaRussa Group. Please name one or two significant office developments in your area. What impact will these projects have on the market? Sunroad Centrum: The Sunroad Centrum is a 273,468-square-foot, Class A office tower in Kearny Mesa designed by Brian Paul & Associates, which is …
What trends do you see presently in retail development in your area? Developers continue to move forward on projects in which they have an anchor tenant and financing. Land and construction costs have risen to a point where the rents developers need aren’t feasible to tenants, thus putting the project on hold. What type of retail product is doing well in your area? Regional malls and our two lifestyle centers continue to perform very well. What retailers are new to your area? Dick’s Sporting Goods, Famous Dave’s, LA Boxing, and over a dozen new tenants to our area that are currently in negotiations with landlords. Who are the active retail developers in your area? Center Cal, CE John and Company, Gramor Development and Opus NW are the most prominent players right now. Please name one or two significant retail developments in your area. What impact will these projects have on the market? Cascade Station was recently completed located next to Portland International Airport, on the east side of Portland near the border of Oregon and Washington. This project’s success was banked on the fact that customers who don’t want to pay a Washington State sales tax will cross the Columbia …
What area is your expertise? Industrial properties in Miami-Dade County (Miami) and Broward County (Fort Lauderdale). What trends do you see presently in industrial development in your area? Industrial development in South Florida is at a slow down and absorption is creeping along. Given the land constraints of the Atlantic Ocean and Florida Everglades, build-to-suits are also harder to find in Broward and Dade counties. What type of industrial product is doing well in your area? Multi-bay and multi-tenant warehouses are in high demand because they continue to absorb space for a variety of tenants from 500 square feet to 5,000 square feet. Many businesses that can function without their storefront locations are downsizing and moving their business to warehouses where they do not have to pay the high retail rental rates. Big box industrial warehouses over 65,000 square feet are also doing well. There is less demand for space over 10,000 square feet and under 65,000 square feet, as tenants desiring this size space are feeling more of the effects of the current economic downturn. Please name one or two significant industrial developments in your area. What impact will these projects have on the market? In Broward County, two …
What area is your area of expertise? My area of expertise is Southern California, but for the purpose of this interview I will focus on Los Angeles County. What trends do you see presently in multifamily development in your area? The rapid escalation of construction costs has subsided and in some cases is even coming down and labor is more widely available and less expensive. Despite reduced costs, land costs have started to come down. As demand for luxury condos wane, many development sites that were once slated for condo-construction will most likely be redirected to multifamily apartment buildings or mixed-use buildings. Who are the active multifamily developers in your area? A few major multifamily developers in the area are Legacy Partners, Related Development Company, NMS Properties, JPI Development, Lowe Enterprises, Fifield Company, and JSM Development. Please name one or two significant multifamily developments in your area. What impact will these projects have on the market? One significant multifamily development is the $600 million mixed-use development on Hollywood and Vine by Legacy Partners. This project is comprised of a hotel, retail space, condominiums, and 375 luxury apartments. It is scheduled for completion in 2009. Another major development is the NoHo …
What area is your expertise? Atlanta industrial What trends do you see presently in industrial development in your area? Spec developments has slowed given uncertain economic conditions. Spec space to be delivered this year is 4.9 million square feet, down about half from this time last year. Almost all new development is bulk warehouse of 400,000+ square feet. What type of industrial product is doing well in your area? The bulk market has been active. Distribution is stable. Who are the active industrial developers in your area? DCT Industrial, First Industrial Realty Trust, Duke Realty Corp., Majestic Realty Co., IDI, Raco, Panattoni Development Co., John W. Rooker and Associates, Robert Pattillo Properties, McDonald Development, Jadow Realty and M.D. Hodges. Please name one or two significant industrial developments in your area. What impact will these projects have on the market? IDI’s newly planned Meridian 75 Logistics Center is a 200 acre park along Interstate 75 near Macon. The park will accommodate 3 million square feet when completed and Majestics Airport Center III where the developer has started 4 buildings including a 600,000-square-foot bulk warehouse. Where is the majority of development taking place? Why is this area doing well? Northeast and Airport …
Since 1995, container volume at the port has increased by approximately 400% and now exceeds 2.3 billion TEU s (20-foot equivalent units). With this growth, national developers have entered the market and started large speculative construction projects totaling more than 4.5 million square feet. However, the market is still relatively small at 23 million square feet. While the port s growth will ultimately create strong demand, there are some questions concerning building size and near-term absorption and overbuilding that will be addressed in the next year. Many of the speculative buildings exceed 500,000 square feet. The Savannah industrial market s vacancy is certainly healthy at 5.4%, but the current state of spec development will probably drive it higher in the short term. Additionally, the amount of vacant space may stall rent growth and keep it in the $3.30 to $4 per square foot range over the next year. At Duke, we were fortunate enough to acquire a fully leased, 5.1 million-square-foot portfolio from local developer Wrenn Blalock, we are also exploring additional land opportunities to maintain our position as a leading developer in Savannah. Our Savannah portfolio includes Portside at Grange Road and Crossroads Business Center, where we will acquire …