With a 20 percent increase in population in the City of Richmond over the past half decade, and more to come, the city still struggles to attract national retail tenants such as The TJX Cos., Williams-Sonoma and Ann Taylor LOFT, as well as other soft and hard goods users. What Richmond does not struggle attracting are breweries, distilleries, regional and local restaurant operators and many start-up retailers dipping their toes into the growing 22 to 35 demographic calling Scott’s Addition and Manchester home. The food-and-beverage scene in Greater Scott’s Addition is blowing up with the addition of restaurant operations such as ZZQ (rated the best BBQ in Richmond), Lucky AF (from EAT Restaurant Partners), Wood & Iron, Tazza Kitchen and the James Beard Award-winning Peter Chang’s. When coupled more than 15 breweries, distilleries and the city’s only meadery, this energy is attracting ‘retailtainment’ such as River City Roll, Bingo Beer, The Circuit, Tang & Biscuit, Movieland by Bow Tie Cinema and Brambly Park. TRP (Thalhimer Realty Partners), Historic Housing (Louis Salomonsky’s firm) and Capital Square 1031 are local companies leading the developments, and Greystar and Bonaventure have come in from out of town to plant their flag as well. The …
By Mike Adams, Managing Director, Stream Realty Partners The state of office is transitioning to a desire for dynamic spaces. Tenants in the Orange County office market are gravitating toward assets that act and function like hotels. They are seeking out the newest buildings and the most unique office environments. This is evidenced through leasing activity being the strongest in the Irvine/Tustin Legacy and Irvine Spectrum submarkets. Employers are looking for a reason to bring their workforce back to the office and are recruiting high-caliber employees. One way to do this is through office space. Creative office space is still in high demand — and won’t likely change soon. Companies focused on employee retention want to create an “Instagram-worthy” type office environment. They are looking for office space that will create a buzz and function as a recruiting tool. Office buildings are unique assets that facilitate collaboration, culture and training. This interest in new development signifies a flight to quality of office assets — for landlords and tenants alike. Several trends related to the desire for quality include: Hotelization — office spaces that act and function as hotels Biophilic design — the concept of connecting a building with nature Proptech — using innovative technology and …
By Chris McCluskey, vice president of development, VanTrust Real Estate; and Robert Folzenlogen, senior vice president of strategic development, Hillwood In the past decade, the popularity of “live-work-play” developments has skyrocketed, making the concept a somewhat overused cliché in the commercial real estate world. However, the reasoning behind the acclaim remains true — people love convenience and a sense of community. And “live-work-play” is the reason that cities like Frisco that are located outside dense urban cores have thrived. According to the U.S. Census Bureau, Frisco’s population has grown by 71 percent over the last decade, consistently ranking as one of the fastest-growing cities in the nation. But this growth did not happen overnight; rather, a combination of ideal location and elected leaders’ vision has driven much of Frisco’s success. By prioritizing all real estate classes — office, residential, retail — Frisco has been able to find the right balance between bustling urban amenities and the serene background of suburbia, making it one of the most competitive landscapes today and for the foreseeable future. A Balanced Approach Suburbs are no longer known for just their family appeal, although this feature still remains a high priority for many households. Young professionals …
By Chris McCluskey, vice president of development, VanTrust Real Estate; and Robert Folzenlogen, senior vice president of strategic development, Hillwood In the past decade, the popularity of “live-work-play” developments has skyrocketed, making the concept a somewhat overused cliché in the commercial real estate world. However, the reasoning behind the acclaim remains true — people love convenience and a sense of community. And “live-work-play” is the reason that cities like Frisco that are located outside dense urban cores have thrived. According to the U.S. Census Bureau, Frisco’s population has grown by 71 percent over the last decade, consistently ranking as one of the fastest-growing cities in the nation. But this growth did not happen overnight; rather, a combination of ideal location and elected leaders’ vision has driven much of Frisco’s success. By prioritizing all real estate classes — office, residential, retail — Frisco has been able to find the right balance between bustling urban amenities and the serene background of suburbia, making it one of the most competitive landscapes today and for the foreseeable future. A Balanced Approach Suburbs are no longer known for just their family appeal, although this feature still remains a high priority for many households. Young professionals …
Similar to the early stages of the COVID-19 pandemic in 2020, a gap has started forming with price expectations between apartment owners and investors. The price disparity at the start of the pandemic was driven namely by market uncertainty, adjustments to underwriting assumptions and increases to lender and insurance escrow requirements. As the pandemic played out, we saw a mass exodus from denser gateway cities, an influx of government stimulus money and a phasing out of state-specific stay-at-home orders that allowed the economy to open back up. Capital moved away from the retail and hospitality industries hit the hardest, with the multifamily sector reaping the benefit. The second half of 2020 saw a dramatic rise in rents, occupancy and new lease and renewal signings. These trends led to a calming of the debt and capital markets, paving the way for the price gap between buyers and sellers to evaporate as an unprecedented wave of investment flooded into the multifamily space, with 2021 hitting a new high of $213 billion of investment volume, well above the previous peak of $129 billion in 2019, according to Yardi Matrix data. Now midway through 2022, we’re seeing a buyer-seller price gap begin to take …
By Jordan Carter, Executive Vice President, Kidder Mathews Much like the city itself, Portland multifamily owners are no stranger to adversity — whether that refers to the weather, news media or the instability of today’s economy. There’s no doubt the rising interest rate environment will have an impact on the lending market for both refinances and sales in the short-term, but the good news is market fundamentals in the Portland metro remain solid. At 4.53 percent, our vacancy rate sits well below the national average of 4.98 percent, per CoStar. The average apartment rent is now $1,600 per month, thanks to year-over-year rent growth of 8.5 percent, which CoStar projects to remain near 5 percent for the next couple years. New construction, which peaked at nearly 13,000 units in 2018, has slowed dramatically due to legislative and policy changes that have disincentivized developers. These challenges have been magnified by elevated material costs and an arduous permitting process. Year-over-year deliveries of 4,000 units illustrate the dramatic slowdown, as they’re well below the supply needed to meet a demand of more than 10,000 new units annually. The hot single-family home market also continues to push prospective home buyers out of the market. …
By Rob Roe and Jessica Urbin, JLL What does the future of the office in Cleveland look like? While there isn’t one straightforward answer, there’s no doubt that the office of today looks much different than it did five years ago. Though some companies still maintain a traditional office space, the onset of hybrid work has indisputably changed the way many companies use — and choose — their real estate. This adoption of hybrid work has driven the market’s evident transformation. Smaller office spaces As companies adopt hybrid work models, the need for larger office spaces decreases. This doesn’t mean companies are eliminating their office real estate, though. In fact, 60 percent of office workers want to work in a hybrid style today, and 55 percent are doing so already. These downsized spaces support this work model by creating shared spaces, such as cubicles or lockers, as well as incorporating more conference rooms and small team rooms to hold private video calls. They also encourage something employees can’t get at home: in-person collaboration. New spaces are being outfitted with intentional spaces to meet, such as lounge areas, desks in open areas, cafés and more. In addition, having small spaces doesn’t …
By Kyle Knight, senior vice president, Weitzman Houston Houston’s construction of new retail space, after reaching a record low in 2021, is on track to exceed that level, based on projects in the pipeline for this year. But the increase is not large, and total new deliveries will remain on the conservative side. The limited new space is driving demand to existing projects and helping lift marketwide occupancy levels. The limited deliveries of new retail space, combined with healthy retail demand and limited closings, is helping Houston’s retail market build on the occupancy gains it experienced during 2021. As a result, the retail market currently has a healthy occupancy rate of 96.1 percent. The market remains among the strongest in recent memory, although economic issues — rising interest rates, increased construction costs, inflation — may lead to a slowdown. On the positive side, retailer, developer and investor interest remains at extremely high levels, since retail real estate is a long-term game that factors in short-term concerns. The retail market also bolstered by robust demand for small-shop space, new construction that is either built-to-suit or significantly preleased, healthy job and population growth and an economy that benefits from rising energy prices. …
By Kyle Knight, senior vice president, Weitzman Houston Houston’s construction of new retail space, after reaching a record low in 2021, is on track to exceed that level, based on projects in the pipeline for this year. But the increase is not large, and total new deliveries will remain on the conservative side. The limited new space is driving demand to existing projects and helping lift occupancy levels marketwide. The limited deliveries of new retail space, combined with healthy retail demand and limited closings, is helping Houston’s retail market build on the occupancy gains it experienced during 2021. As a result, the retail market currently has a healthy occupancy rate of 96.1 percent. The market remains among the strongest in recent memory, although economic issues — rising interest rates, increased construction costs and inflation — may lead to a slowdown. On the positive side, tenant, developer and investor interest remains extremely high since retail real estate is a long-term game that factors in short-term concerns. The retail market also benefits from several positive influences, including robust demand for small-shop space, new construction that is either built-to-suit or significantly preleased, healthy job and population growth and an economy that is bolstered …
At the mid-year mark, industrial occupancy in the greater Richmond area remains strong, closing with an overall occupancy rate of 98.5 percent in the categories being tracked (Class A, B, select C vacant and investor-owned product with a minimum of 40,000 square feet total RBA). Class A occupancy remained steady at 97 percent at the end of the second quarter. Class B occupancy also remained steady at 94 percent at the end of the first quarter. CoStar Group reports overall industrial occupancy at 96.8 percent for product of all sizes, including investor-owned facilities, but excluding flex space (minimum 50 percent office). There remains a shortage of space in the 25,000- to 50,000-square-foot range as most spec buildings being built are larger single-tenant buildings. Richmond’s strategic Mid-Atlantic location along Interstate 95 provides access to 55 percent of the nation’s consumers within two days’ delivery by truck, and in addition to being the northernmost right to work state on the Eastern seaboard, Virginia has once again been named as the No. 1 state for business by CNBC. Metro Richmond has a civilian labor force of almost 700,000 (1.03 million population) with unemployment rates at 3.7 percent as of June. With 12 Fortune …