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Market Reports

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Market ReportsNew YorkNortheastNortheast Market ReportsOffice

Seizing Opportunity: Office Demand, Conversions Offer Bright Spots as NYC Market Stabilizes

by Taylor Williams

By Maya Khan, managing director, CBIZ Between the pandemic and the advent of hybrid work, it’s been a challenging stretch for the New York City office market. But savvy investors see skies clearing as interest rates come down and more employers call workers back to the office. The stabilizing market also offers new opportunities for office-to-residential conversions, thanks to recently enacted state and city incentives. In fact, office buildings sold for such purposes accounted for 50 percent of all development sales in Manhattan in the first half of 2024, according to data from Ariel Property Advisors. In what follows, we’ll take a deeper dive into those trends and look at how some New York real estate leaders who spoke at CBIZ’s “Manhattan to Main Street” panel are taking advantage of the current environment. The event, held in the fall of 2024, focused on the more than $2 trillion in commercial real estate debt that is set to mature before 2028 and broader economic factors influencing the New York real estate market; it drew 85 attendees from the local real estate community. Opportunity on the Upswing It’s no secret that the Big Apple’s office sector has taken a beating in the …

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KansasMarket ReportsMidwestMidwest Market ReportsMissouriRetail

What’s Driving New Growth in Metro Kansas City?

by Kristin Harlow

By Garrett Cohoon, Block & Co. Inc. Realtors The commercial real estate activity in the Kansas City metropolitan area showed substantial growth in 2024 for the retail, multifamily and industrial sectors. The office sector is still seeing record vacancy rates, but the annual loss over 2023 is slowing down. According to CoStar, the office vacancy rate for 2024 is up 11.8 percent in Kansas City while the national index is at a 13.9 percent increase. That’s only 0.5 percent higher than last year in Kansas City and we expect to see that trend turn around in the next year.  The retail sector saw new brands like Aritzia grow into the Kansas City market. Whataburger opened its 14th location in the past two years as drive-thru restaurants have continued to be a preference for consumers and investors alike. Wellness-based businesses and health clinics have also made good strides in the market.  Kansas City has seen an increase in new experiential attractions this year, including national businesses like Puttery minigolf, Andretti indoor karting and SandBox VR. These new attractions have been key to many new development complexes and redevelopments of existing strip centers. Mattel also announced a new adventure park to be …

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Village-at-Forum-Parkway-San-Antonio
Market ReportsRetailTexasTexas Market Reports

San Antonio Retail Market Maintains High Occupancy Streak

by Taylor Williams

By William McDonough, vice president, Weitzman San Antonio’s retail market is reporting record-high occupancy as it continues its longest-ever streak of balanced supply and demand. With a new high of 95.2 percent, the Alamo City retail market has now posted healthy occupancy rates of 90 percent or higher for 14 years straight. The occupancy rate is based on Weitzman’s review of a total San Antonio retail inventory of approximately 49 million square feet of retail space in multi-tenant shopping centers with 25,000 square feet or more. Occupancy remains high due to stable tenant retention and strong demand for well-located vacancies. For example, shortly after Conn’s announced in mid-2024 that it planned to close its area stores, discount apparel retailer Burlington announced its plans to backfill three of the nine stores slated for closure. The market is also reporting an increase in new construction, but the deliveries overall have actually increased occupancy due to the fact that they are primarily for anchor stores and largely preleased shop space. Last year, the market did see new vacancies created due to the chain-wide failures of Conn’s, Big Lots, American Freight Furniture and 99 Cents Only. But in a tight market like San Antonio’s, …

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Market ReportsNevadaRestaurantRetailWesternWestern Market Reports

For Las Vegas Retail Investment, The House Always Wins

by John Nelson

— By Roy Fritz, First Vice President, CBRE Retail Investment Properties – West — Las Vegas’s retail investment market continues to hit the jackpot, mirroring the lucky winners that visit the city every week. The Valley remains a magnet for growth, attracting new investors who would never have considered Las Vegas in the past.  High-profile recent additions like the state-of-the-art, 70,000-seat Allegiant Stadium, Formula 1 Las Vegas Grand Prix race, MSG Sphere and the Fontainebleau luxury resort and casino have retailers and investors drawn to the city’s bright lights as they seek out that next big win.  Major League Baseball is also making its mark in Las Vegas with the Oakland Athletics’ planned move to the city. The new stadium, set to open in 2028, will feature a 33,000-seat capacity and state-of-the-art amenities. It will also further cement Las Vegas as a premier sports and entertainment destination. This growth is supported by strong underlying fundamentals and economic diversification. The sentiment across the Valley’s business landscape is that the area has clearly transitioned from a tertiary market, which was highly dependent on Southern California capital just a few years ago, to a solid secondary market. This transformation has attracted investments from all …

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District of ColumbiaMarket ReportsRetailSoutheastSoutheast Market Reports

No Boogeyman in Sight for DC’s Retail Market, Yet

by John Nelson

In the summer of 2012, fresh out of college and starting my career in retail brokerage at KLNB, a seasoned retail broker-turned-developer warned me to consider other careers.  “Retail is dying,” he said. “Why would people go to stores when it’s so easy to order online?” Well, it’s been 12 years since that moment, and I’m still waiting for the retail boogeyman to appear. As I write this, I’m happy to report he hasn’t arrived — and the data suggests he’s nowhere in sight. The Washington, D.C., metropolitan statistical area (MSA) is now in its tightest fundamental position on record due to limited new supply and continued demand from national, regional and franchised concepts.  In the Washington, D.C. market, we have the second-lowest retail square footage per capita among major MSAs, with new retail supply representing just 0.4 percent of total inventory. This places the Capital Region in the bottom quartile of retail real estate inventory growth among national MSAs that have more than 100 million square feet of existing inventory. The result? Retail availability in the D.C. metro has decreased to 4.8 percent (compared to the national average of 4.7 percent), down from 5.1 percent year-over-year and 5.3 percent …

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Winston-Pull-Quote
Market ReportsTexasTexas Market Reports

Why Texas Property Taxes Are Overstated — And What To Do About It

by Taylor Williams

By Lee Winston, partner at Gray, Winston & Hart PLLC No income tax in Texas. The Texas Constitution prohibits it, so local funding depends primarily on property taxes.  But to many Texas businesses, this “necessary evil” has become just plain evil. Over the last several years, property taxes in Texas have exploded.  State politicians have taken notice and are ramping up demands to reduce or eliminate property taxes, but the alternatives are more than unpopular. For instance, nobody wants to pay — and no politician wants to stand for election on — instituting a near 20 percent sales tax. And everyone knows this.  To avoid this reality, lawmakers have pivoted to find a villain, and the appraisal districts that place the taxable value on property are a ready target.  The popular solutions to rein in this villain are appraisal caps, increased exemptions and value limitations, all of which offer relief to residential property owners but do little for commercial owners. And these “fixes” result in a system that is neither equal nor uniform, undermining the constitutional foundation of taxation in Texas. Our elected officials have yet to address the fundamental issue driving the over-valuation of most commercial properties, which is …

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IndustrialMarket ReportsNevadaWesternWestern Market Reports

Las Vegas Industrial Market Seeing Slowdown Heading Into 2025

by John Nelson

— By Amy Ogden, Partner, Industrial, LOGIC Commercial Real Estate — With the presidential election barely in our rearview mirror, many are taking a moment to assess how the outcome might impact (positively or negatively) their operations. On the one hand, this has been a resilient year for Las Vegas’ industrial market, which tracked close to 4.5 million square feet of net absorption. On the other hand, we are beginning to see a slowdown in momentum. The uncertainty of potential changes has left decision-makers hesitant, preferring to avoid any premature moves until after the holiday season.  Nevertheless, the market is far from idle. The recent rate cut of 50 basis points, along with expectations of an additional reduction at the upcoming November meeting , has set a quiet hum of activity in motion. Investors and key players are discreetly exploring opportunities, positioning themselves strategically for when the time is right to act.  Local industrial vacancy rates have also jump to about 7 percent as an influx of new deliveries come online. Vacancy rates are projected to hit double digits, considering an additional 4 million square feet is expected to deliver by year’s end. This is something we haven’t seen within …

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District of ColumbiaMarket ReportsOfficeSoutheastSoutheast Market Reports

DC Office Market Presents an Opportunity for Reclassification and Innovation

by John Nelson

The Washington, D.C., office market is facing challenging times, marked by unprecedented vacancy rates, dwindling demand and a significant supply-demand imbalance. Within these constraints, the flight to quality trend is reshaping how investors and lenders view office assets and should lead to an inventory reclassification.  The divide between high-quality assets and lesser properties widens almost daily, creating a bifurcated market with fierce competition for quality space. Meanwhile, older, less desirable properties languish, accumulating vacancies as they fail to meet current occupier expectations.  Without intervention, the less desirable properties will continue to drag down the market’s perception, obscuring the success of top-tier spaces with a headline vacancy rate. To contribute to the stabilization of the market, office participants must acknowledge this divide and assess distressed assets not as liabilities, but as opportunities to reset and reclassify properties based on realistic usage and demand. Lenders are central to this process as they control a substantial portion of distressed office stock. After years of extending loans to stave off foreclosure during uncertain times, many are now realizing that relief is unlikely to materialize organically. As a result, foreclosures are already up 121 percent in 2024 year-to-date over 2023 in Washington, D.C. On average, …

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6107-State-Highway-6 N.-Houston
Market ReportsRetailTexasTexas Market Reports

The Evolution of the Texas Drugstore

by Taylor Williams

By Jason Baker, principal at Baker Katz If you look back about 150 years or so, drugstores have played a big role in communities nationally and across Texas. From the beginning with small corner pharmacies to today’s large retail chains with 24-hour service, drive-thrus and a wide range of products, drugstores have filled retail and service needs in the communities they serve. However, in the past few decades, there has been a noticeable shift. In the 1980s and 1990s, national chains such as Walgreens and CVS expanded rapidly, often setting up stores at the exact same intersection. These stores became go-to spots for everything from prescriptions to film processing to everyday essentials and necessities. However, their fast-paced growth also came with its own set of challenges, such as high costs of real estate and operational expenses that left the underlying real estate of many of the drugstores vulnerable when market conditions changed. Shifting Consumer Behaviors Force Adaptation Over the past two decades, consumer behavior has changed significantly. With the rise of telehealth, people can now see a doctor on Zoom and get a prescription without ever leaving their home. At the same time, online giants and big-box retailers have also …

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Market ReportsNevadaOfficeSoutheast Market ReportsWestern

Vegas’ Office Market Balances Growth, Resilience Amid Challenges

by John Nelson

— By Patti Dillon, Executive Vice President, Colliers — Las Vegas’ office market is at a critical juncture as shifting dynamics could shape its future for years to come. New developments like the anticipated 30-acre studios development project in discussion with Howard Hughes Corporation present opportunities, though second-generation office space is expected to dominate over the next three to five years. This shift is driven by cost efficiency, evolving tenant demands and the higher expenses tied to new construction. Though new builds offer state-of-the-art facilities, the adaptability and affordability of second-generation spaces make them a practical solution for many businesses. Las Vegas continues to attract high-profile corporate tenants from out of state. These companies are drawn to flexible office spaces that feature modern technology and proximity to mixed-use developments that support the evolving hybrid work model. The increasing demand for live-work-play environments has placed a premium on mixed-use developments that combine residential, office and retail spaces. Despite ongoing demand, the market faces significant challenges. Investor confidence has been impacted by broader economic factors, including the U.S. elections, geopolitical tensions and inflationary pressures. Supply chain disruptions, rising construction costs and higher interest rates also create barriers for developers and limit financing options …

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