Market Reports

Las Vegas Tops List of National Office Performers

by Jeff Shaw June 29, 2022

By Ryan Sarbinoff, First Vice President and Regional Manager, Marcus & Millichap A growing, educated local labor force and lower rents compared to other office hubs in the region are driving office tenants to Las Vegas. The metro registered the largest drop in office vacancy among major U.S. markets over the 12-month span that ended in March, as tenants absorbed more than 2 million square feet. Much of this space was at Class B/C properties, with the subsector noting the strongest four-quarter span for demand on record. The resulting 330-basis-point reduction in overall availability during the year-long period slashed vacancy to a more than 15-year low of 12.4 percent, enhancing the sector’s outlook heading into the second quarter. The metro’s second-largest submarket by inventory, Southwest Las Vegas, exemplifies the strength of the local office sector. During the past year, the area accounted for half of the metro’s 20,000-square-foot-plus lease executions. International Gaming Technology’s sublease of a three-story building highlighted recent activity, with VisCap Media, Agilysys, DraftKings, Kiewit and Molina Healthcare all making notable commitments that dropped vacancy to 9.4 percent in March. Apart from leasing, this submarket is also the center of development. Roughly 60 percent of the space slated for completion …

June 29, 2022

Market Reports Office Texas Texas Market Reports

Tenants, Investors Maintain Faith in Fort Worth Office Market’s Long-Term Prospects

by Taylor Williams June 28, 2022

By Marshall Mays, vice president, Colliers Dallas-Fort Worth (DFW) is a hot market for commercial real estate right now, with people from across the country relocating to the area every day. The metroplex’s population is growing at an annual rate that rivals those of other top U.S. markets, including Austin, its neighbor to the south that is often considered to be a more glamorous city. With the increasing number of businesses relocating to Texas and more offices opening back up, the urban core of Fort Worth has become a particularly popular destination for industry growth in Texas. The Market Today The performance of Fort Worth’s office market has been particularly encouraging since the start of 2021. Overall, the city’s office vacancy rate currently stands at 13.3 percent, down from a pandemic-era high of 14 percent in the third quarter of 2020. This positive trend is aided by a quicker “return to office” in DFW. According to research from Kastle Systems, a security company that provides access control systems for office buildings around the globe, Texas as a whole has outpaced major cities and other states in terms of the speed and degree to which office occupancy rates have been recouped. …

June 28, 2022

Market Reports North Carolina Office Southeast Southeast Market Reports

A Migration Destination: Charlotte’s Office Market Continues to Evolve

by John Nelson June 27, 2022

By Chase Monroe, Carolinas Market Director and Charlotte Brokerage Lead, and Chris Schaaf, Executive Managing Director of Tenant Representation, JLL Nearly two years after the onset of the pandemic, Charlotte’s office market is showing strong signs of recovery as economic momentum builds. Last year, the Queen City set the stage for growth with 4.9 million square feet of office space delivered from pre-pandemic projects, boasting over 1 million square feet more than any other metro for deliveries that occurred in 2021. Market-wide preleasing also exceeded 60 percent and nearly 2.1 million square feet of office space was under construction. Entering 2022, the market continued to forge ahead as large occupiers started their return to the office, and leasing activity began to surge throughout the region. And long-anticipated projects, such as Legacy Union, 110 East and The Station broke ground. According to Urban Land Institute’s 2021 annual report, Charlotte ranked No. 6 among the hottest real estate markets in the United States, with developers and investors betting big on Sun Belt cities. Deemed an 18-hour magnet city by the Emerging Trends in Real Estate survey, people and businesses alike are flocking to Charlotte, the so-called “migration destination.” Thanks to strong economic …

June 27, 2022

Market Reports Multifamily Texas Texas Market Reports

Fort Worth’s Multifamily Vacancy Falls via Robust Job Growth, Household Formation

by Taylor Williams June 24, 2022

By Al Silva, senior managing director, investments, Marcus & Millichap; and Ford Braly, first vice president, investments, Marcus & Millichap The multifamily segment in Fort Worth is in a great position. The metro’s vacancy rate slid down to a multi-decade low of 3.1 percent last year, which facilitated stellar rent growth as the number of available rental units plummeted. Fort Worth’s average effective rent grew more than 15 percent in 2021 to $1,276 per month, and the elevation in 2022 is expected to remain in the double digits. Behind this momentum is robust household formation as citizens relocate to the metro for greater job availability, cost-of-living considerations and quality of life. An average of 16,300 new households were created annually in the Fort Worth metro area over the past decade, and the 2022 addition is expected to eclipse that benchmark by about 20 percent. This rate of household creation is about twice as fast as the national pace and is happening at a time in which the barriers to homeownership have rapidly intensified, pushing much of the new demand toward the rental segment. Barriers to Homeownership The median price of a single-family house in the Fort Worth area climbed to …

June 24, 2022

Affordable Housing Iowa Market Reports Midwest Midwest Market Reports Multifamily

Organizations Align to Address Housing Affordability in Des Moines

by Kristin Harlow June 23, 2022

By Ryan Kelly, TWG Development Despite the affordable housing crisis, Des Moines has managed to endure the adverse factors that have caused a boom in housing prices nationwide — but we still have a ways to go. A sustained demand, an influx of business and new projects by national developers all played a role in Des Moines’ multifamily growth over the past two years. Developing Des Moines Home to some of the largest multinational finance and insurance corporations, Des Moines has pioneered Iowa’s growth. The city has also seen population growth — the most recent census revealed that Des Moines’ suburbs led to Iowa’s development while the city itself grew by 5.4 percent. Des Moines is the 10th-best place for business and careers, according to Forbes, and ranked as the fifth-best city to live in, according to U.S. News and World Report. The capital city has experienced a boom in employment, with a rise in the number of high-tech jobs, at a 6.7 percent rate. The Midwest’s low cost of living (7 percent lower than the national average) and Des Moines’ proximity to large cities have contributed to the growth of key industries, including logistics, ag-bioscience, manufacturing, data and insurance. …

June 23, 2022

California Market Reports Retail Western Western Market Reports

L.A. Retail: A Tale of Two Pandemics

by Jeff Shaw June 22, 2022

By Nellie Day All of Los Angeles County might have been under the same restrictions throughout the pandemic, but their emergence from this period reveals a lot about the localized retail environments. “Los Angeles’ retail market has weathered COVID better than many other markets around the country,” says Matthew May, founder of May Realty Advisors in the Los Angeles submarket of Sherman Oaks, Calif. “However, the recovery has favored a diverse group of suburban markets.” Certain Suburbs Stand Out Markets like East Hollywood/Silver Lake, Inglewood/South LA and Santa Clarita boasted the highest 12-month rolling net absorptions in the county, according to CoStar — something May doesn’t believe was expected. “LA is known as a melting pot and this is reflected in the geographic and ethnic makeup of the top submarkets based on net absorption,” he says. “Vacancies in many of the suburbs were substantially less than in the Central Business Districts and tony retail areas from Beverly Hills to Abbott Kinney. These emerging markets were quite a surprise.” On the other hand, metro markets like Santa Monica, Downtown LA and Koreatown each had more than 100,000 square feet of negative absorption. Santa Monica’s Third Street Promenade has been one of …

June 22, 2022

Florida Market Reports Office Southeast Southeast Market Reports

Tenants Continue Moving to South Florida in Search of Class A Office Space

by John Nelson June 20, 2022

There is no denying in-migration is a driving factor in South Florida. Over 650,000 people moved to Miami at the height of the pandemic — nearly 89,000 came from out of state and a quarter of those came from New York. Year-over-year job growth is up 6 percent and is back at peak levels seen prior to the pandemic, while over 27 percent of employment is in office-using sectors for the first time ever. CBRE’s Spring 2022 Occupier Sentiment Survey revealed that most companies are back to developing long-term plans to expand or contract their office space now that employees are returning — at least some of the time — after two years of mostly remote work. For the second quarter in a row, net absorption in Miami totaled over 200,000 square feet, with the majority occurring in Miami’s central business district (CBD). Driven by expansions, Class A product accounted for approximately 85 percent of total absorption in the first quarter. The growth of Miami is starting to solidify as new-to-market tenants that looked to relocate to Miami during the pandemic are starting to move into their office spaces. Since 2020, over 1.3 million square feet of office leasing activity …

June 20, 2022

Industrial Market Reports Texas Texas Market Reports

Fort Worth’s Population Growth Spotlights Shortage of Class B Industrial Space

by Taylor Williams June 17, 2022

By Jason Baxter, president and CEO, Fort Capital While some might think that industrial warehouses are overflowing with e-commerce tenants, in Fort Worth, we have seen another tenant mix grow at an even more rapid pace: service providers. These are the plumbers, landscapers and electricians that work behind the scenes to keep cities running. With population growth skyrocketing in Fort Worth, the industrial space needed by these service providers is also growing at a rapid rate. According to the U.S. Census Bureau’s latest population estimates, Fort Worth’s population increase was the third-largest in the country between 2019 and 2020, a period during which the city added more than 19,000 new residents. This increase allowed Fort Worth to jump from No. 13 to No. 12 in terms of the largest U.S. cities based on population. We often forget that population growth at this scale impacts all facets of real estate — housing, office, entertainment, industrial. Each of these uses requires various types of service providers to maintain. Fort Worth and similar fast-growing markets do not have enough space to support this growing segment of the tenant base in addition to the e-commerce and logistics users that have become the face of …

June 17, 2022

Illinois Market Reports Midwest Midwest Market Reports Retail

Online, Luxury Retail Brands Expand in Chicago Neighborhoods

by Kristin Harlow June 16, 2022

By Kelly Nickele, Mid-America As the summer season begins, retailers and restaurateurs in Chicago are scheduling tours for the city’s warmest months of the year, and overall leasing velocity is continuing to increase. Here’s a quick review of the top retail real estate trends in Chicago now. Digitally native brands continue to expand, embracing omnichannel sales strategies. I grew up at Fremont & Armitage in Chicago’s Lincoln Park neighborhood through my high school years. I remember when Aldo, Barbour and Bebe anchored Halsted, and United Colors of Benetton (now Interior Define), American Apparel (now Parachute), Intermix (now Outdoor Voices) and Hanig’s (now Marine Layer), were the mainstays of Armitage. I saw tenants like BCBG relocate from Halsted (now Apotheco Pharmacy) to Armitage (now Serena & Lily), and locals like Art Effect and Lori’s remain relevant while the trade area garnered national attention and the 60614 zip code continued to report strong catalog and ultimately e-commerce sales. I’ve experienced the rise and fall of many retailers, the emergence of digitally native brands, the major shift in how and where we shop and the influence of social media in the retail industry. As a consumer and a retail advisor, I believe in …

June 16, 2022

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Industrial Market Reports New Mexico Western Western Market Reports

After a Long Pause, Spec Industrial Returns to Albuquerque

by Jeff Shaw June 15, 2022

By Alex Pulliam, Land & Industrial Advisor, NAI SunVista It’s been a long time coming. Albuquerque hasn’t built speculative distribution warehouses in nearly two decades. However, the recent strength of the market is giving developers confidence to break ground – and investors are paying attention. Industrial activity has been lively, thanks to accelerated macro trends from the pandemic, as well as the legalization of recreational cannabis. Albuquerque’s industrial vacancy rates have remained below 1 percent for over two quarters. Prior to that, vacancy rates hovered around a then “historic low” in the 2 percent range since September 2019. The demand from users has continued to climb and tenants are facing lease rate increases. While needing more speculative warehouses should be a matter of basic economics, it is not always easy to build in a tertiary market that lacks the memory of growth. Historically, Albuquerque would only secure a few 50,000-square-foot users per year, along with the occasional 100,000-plus-square-foot user. This deterred developers from taking a chance on new construction. But times are changing. Large tenants are taking note of Albuquerque’s access, affordability and workforce, while existing users are seeking modern buildings for efficiency and growth. These factors, combined with rental rate …

June 15, 2022

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