Market Reports

Atlanta’s Rental Housing Market Promises Resilience, Despite Near-Term Challenges

by John Nelson July 17, 2023

Against the backdrop of rising interest rates, recent financial stress and murkiness over the Federal Reserve’s ultimate direction and economic implications, dealmaking in the first half of 2023 has remained exceedingly challenged across all real estate sectors as wide bid-ask spreads persist. However, compared to other spaces, rental housing in the Southeast remains relatively healthy from a fundamentals perspective, despite supply-driven softening in the near term. This trend is evident in many major markets, including cities like Atlanta. Occupancy and rent growth remain healthy in Atlanta. The rental vacancy rate for Atlanta as of January 2023 reached 5.4 percent, a 0.9 percent decrease over the previous year, based on data from the U.S. Census Bureau. This falls below the national average of 5.8 percent for the fourth quarter of 2022. The median rental rate in January 2023 was also up 4.3 percent year-over-year, reaching $1,941. Population growth, employment opportunities, infrastructure investments, a business-friendly environment and other demand drivers continue to intensify Atlanta’s need for housing; and long term, the outlook for rental housing in the metro is very strong. More than 6 million people now live in the region, according to recent Census data. The Atlanta Regional Commission predicts more …

July 17, 2023

California Market Reports Retail Western Western Market Reports

San Diego’s Retail Market Brings Positivity

by Jeff Shaw July 14, 2023

— By Reg Kobzi, Senior Vice President, CBRE — Despite economic headwinds and uncertainty, there remains a positive sentiment within the San Diego retail market due to the historically low vacancies that continue to persist quarter over quarter. Inflation across consumer categories erodes spending power and challenges the retail landscape, as well as the greater economy. Landlords proactively track consumer spending and tenant resilience to mitigate risk. Inflation has proven stubbornly high, but it is predicted to decline over the coming months as the economy cools. CBRE believes the rate hiking cycle is nearing an end, and the Feds should start to cut rates by the end of the year. Despite the economic challenges, San Diego is healthy as its unemployment rate has remained relatively steady and seen significantly less expansion than at the state and national levels. June is the 35th consecutive month that unemployment in San Diego was below the state norm and the 12th straight month below the U.S. average. San Diego retail vacancy stabilized at the beginning of 2023, mirroring the rate from the last quarter of 2022 of 4.9 percent. Since vacancy rates are indicators of the market’s overall health, this stabilization is a valuable …

July 14, 2023

Market Reports Midwest Midwest Market Reports Office Ohio

Cincinnati Office-to-Multifamily Conversions Are on the Rise

by Kristin Harlow July 13, 2023

By Anthony Armbruster, Colliers Although converting former office buildings to multifamily properties is by no means a new practice, conversions have been on the rise in recent years due to the changing work environment and office landscape. While the COVID-19 pandemic has started to fade away in many peoples’ minds, several of the changes in the work environment during that time have not. Many formerly in-office employees continue to work from home or have hybrid schedules post-pandemic. Additionally, tenants who are moving into new office spaces have shown a preference for smaller, more efficiently laid out, amenity-rich and suburban Class A office spaces. These changing consumer preferences have resulted in higher vacancies and fewer new tenants for older downtown office buildings than before the pandemic. Consequently, many of these older buildings are being converted into residential spaces, exemplifying the trend. An office building may be considered for a residential conversion when it is no longer economically feasible to continue running the building as such. However, not every office building at the end of its economically useful life is a suitable candidate for a residential conversion. Factors such as a building’s layout, location, age and cost of conversion play the most …

July 13, 2023

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Industrial Market Reports New Mexico Western Western Market Reports

Albuquerque’s Industrial Market Is Booming

by Jeff Shaw July 11, 2023

— By Will Strong, Executive Vice Chair, Industrial Capital Markets, Cushman & Wakefield — Albuquerque has emerged as a vibrant hub for industrial development, showcasing a thriving economy and a favorable business climate. With its strategic location, robust infrastructure and supportive policies, the city has become an attractive destination for ecommerce and logistics companies seeking growth and expansion. Situated in the heart of the Southwest, Albuquerque enjoys a prime location that serves as a gateway to various markets. It is conveniently connected to major transportation networks, including interstates 25 and 40, making it accessible for shipping goods across the region. The city is served by the Albuquerque International Sunport, facilitating efficientair freight and business travel. The market’s availability of reliable utilities, such as water, electricity and high-speed internet, further strengthens the city’s industrial ecosystem. The Albuquerque industrial market grew more than 300,000 square feet in the past year. Demand has been strong enough to continually outpace deliveries, enabling vacancies to tighten below the historical average, according to CoStar. Vacancies have fallen to just 2.4 percent, well below the national average of 4.5 percent. Albuquerque has a diversified base of industries, led by aerospace, high-tech manufacturing, distribution and logistics, technology and …

July 11, 2023

Market Reports North Carolina Office Southeast Southeast Market Reports

Outlook Remains Strong for Raleigh’s Office Market, Despite Current Obstacles

by John Nelson July 10, 2023

Despite shifts toward remote and hybrid work, office rents continue to rise in North Carolina’s Triangle region. Among the 25 largest office markets in the country, Raleigh experienced the second-highest rent growth between 2019 and 2022 — a testament to continued tenant demand. We’re also seeing renewed interest in trophy assets, where the average asking rent has reached an all-time high of $43.35 per square foot. Additionally, the first quarter showed a 280,000-square-foot increase in total office supply, indicating investor confidence in Raleigh’s resilience. Compared to rival markets, Raleigh wasn’t overbuilt pre-pandemic. The market doesn’t have millions of square feet of vacant space downtown and is more balanced than its competitors, leaving plenty of opportunity for future growth. Another indicator of Raleigh’s growth trajectory is the 32 percent year-over-year increase in tours given by JLL’s Office Agency Leasing team this year. Given the current economic headwinds, we know that prospects are taking longer to make decisions about their space. However, we also know they are actively evaluating their options and making long-term plans for their team’s future needs. At buildings within our portfolio, badge swipes last quarter reached a post-pandemic peak utilization of 68 percent – just 13 percent shy …

July 10, 2023

Market Reports Multifamily Nevada Western Western Market Reports

Las Vegas’ Multifamily Market Is All About Growth, Challenges

by Jeff Shaw July 7, 2023

— By James Hall, ABI Multifamily — It’s been a tumultuous year for global capital markets and asset prices, which have had to contend with a broad array of geopolitical and economic headwinds. The Las Vegas multifamily market — while it remains demographically sound — is dealing with inflationary-based pricing concerns and fundamental characteristics dampening investor appetite.Amongst all the noise and negatively skewed fundamentals, Las Vegas’ economy continues to grow, with tourism surpassing pre-pandemic levels this quarter. Harry Reid Airport reported the highest recorded number of passengers in February, indicating that the market continues to benefit from a surge in post-pandemic domestic tourism.A report released by the Federal Funds Information for States ranked Nevada as first in the nation for economic growth and momentum last year. The measurement considers a wide array of key economic and demographic indicators, including population, personal income and employment growth.While California continues to reel from a declining population, both Nevada and Arizona are benefiting from a surge in net-migration. The population of Las Vegas is expected to double by 2060, which would add an additional 2 million residents to the MSA, per Woods and Poole Economics..Las Vegas residents have a much higher propensity to rent …

July 7, 2023

Healthcare Industrial Market Reports Nevada Western Western Market Reports

Las Vegas Industrial Remains Resilient with Record-Low Vacancy Rates

by Jeff Shaw June 30, 2023

— By Jerry Doty, Senior Vice President, Colliers — Las Vegas was once known only for its flashy casinos and luxurious hotels, but over the past several years, it has become a growing distribution hub for the entire West Coast. Las Vegas is situated at the intersection of several major highways, making it an ideal location for businesses that need to move goods quickly and efficiently. The city’s proximity to the ports of Los Angeles and Long Beach also make it a gateway for goods entering and leaving the United States. Our industrial market has had an epic rise in recent years, and up until the recent economic shake-up with rising interest rates and uncertainty in the capital markets, there was no end in sight. We continue to ask ourselves if 2023 will be the year things finally slow down or, even worse, take a step back. First, the good news. One of the most striking statistics about the Las Vegas industrial market is the extremely low vacancy rate. Despite delivering about 8.5 million square feet over the previous five quarters, we still sit at a near record-low overall vacancy of 1.5 percent for the first quarter of 2023. Even …

June 30, 2023

Market Reports Multifamily Texas Texas Market Reports

Multifamily Sales Volume Slips Across Texas

by Taylor Williams June 28, 2023

By Taylor Williams Multifamily investment sales activity has been muted across major Texas markets during the first half of 2023, underscoring the unfortunate reality that even the most coveted asset classes are not immune to severe macroeconomic headwinds. Much like a year ago, the combined effects of stubborn inflation and corresponding interest rate hikes have wrought visibly negative changes to the world of multifamily investment sales. But in summer 2022, deals were still getting done at a decent clip; price disparities and depreciation were the most significant and obvious impediments to deal velocity. Today, buyers and sellers are more closely aligned on market realities as relates to price points, but many are simply not motivated to transact — at least in the short term. According to data from RealPage, in the first quarter of 2023, there were 337 multifamily transactions within the Dallas-Plano-Irving triangle, down from 510 in the first quarter of 2022. The greater Houston area saw 266 deals executed in the first quarter this year, a decline from 410 during that period in 2022, while the Austin market’s total number of transaction fell from 191 to 123 quarter-over-quarter. Multifamily sales prices responded differently to reduced deal volume from …

June 28, 2023

California Market Reports Retail Western Western Market Reports

Premiering Premier Retail Space in Los Angeles

by Jeff Shaw June 27, 2023

One word comes to mind when you pair Los Angeles and real estate: expensive. But creating a premier space can attract top-notch tenants, which then brings in the nearby clientele that can afford to live, work and play in, well, LA. Of course, tourists are enthusiastic spenders as well. Price tags and calories don’t count when you’re on vacation, after all. Way Out West Malibu-based developer, manager and sponsor Christina knows all about what it takes to cultivate a dynamic retail offering in Los Angeles. In uber-developed areas like this, it typically takes a tired or underachieving retail space in a prime location that can be made into something grand. “Christina operates with a laser focus on investing only in the ultra-prime submarkets of Los Angeles: Beverly Hills, Brentwood, Century City, Malibu, Santa Monica, Westwood, West Hollywood and Venice/Silicon Beach,” says Lawrence “Larry” Taylor, founder and CEO of Christina. “Redevelopment opportunities in these submarkets, which have limited inventory of pedestrian-oriented retail streets, are rarely available.” Given their scarce availability, the 46-year-old firm’s strategy has been to establish and maintain relationships with property owners in these markets. “Then, when disposition opportunities present themselves due to life changes, estate planning or similar reasons, …

June 27, 2023

Florida Market Reports Office Southeast Southeast Market Reports

Miami Continues to See Flight to Class A Offices Amid Record Rental Rates

by John Nelson June 26, 2023

A wave of new-to-market office tenants — specifically legal tenants following the influx of financial firms and tech companies — continue to expand their presence in Miami. The trend further solidifies the city’s spot as a top destination for companies seeking reduced taxes, strong talent and vibrant communities. Looking back at the first quarter of 2023, net absorption totaled over 81,000 square feet (compared to 76,000 square feet in the first quarter of 2022), marking the third-highest quarterly total since 2020. Most leasing activity occurred in the Central Business District (CBD) and in Class A product in Wynwood and Coral Gables as tenants continue to lease high-quality space. However, the lack of availability in quality product, as well as the overall economic uncertainty, has led to a slowdown in leasing volume to start 2023 — particularly among new-to-market tenants. Leasing activity totaled 750,000 square feet in the first quarter compared to 1.5 million in fourth-quarter 2022. The quarter closed with a 16.3 percent vacancy rate, the lowest level since the onset of the pandemic in early 2020. Class A availability fell 260 basis points to 21.1 percent year-over-year with the largest drops recorded in downtown Miami, which fell 540 basis …

June 26, 2023

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