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Market Reports

Strong rent growth has spurred investor appetite for Florida’s multifamily market and has boosted out-of-state and international multifamily investment and development. —Jeffrey Margolis, Partner, Berger Singerman LLP
FeaturesFloridaMarket ReportsMultifamilySoutheastSoutheast Market Reports

Florida Apartment Market’s Strong Real Estate Fundamentals Attract National, International Investors

by Jaime Lackey

There is an overall sentiment that the Southeast multifamily real estate market, and specifically Florida, is doing better than any other region in the United States. Despite record inflation, rising interest rates, increased construction costs and supply chain issues, investors, developers and lenders are becoming increasingly bullish when it comes to the Florida multifamily market. A rising population count resulting in a swift pace of rent growth and tight apartment vacancy have led to increased out-of-state and international interest and capital being invested in the state. With competitive yields and better returns compared with alternative investments, investors view Florida multifamily projects as a sound opportunity. Florida has been less stringent when it came to COVID-19 policies and lockdowns compared with restrictions adopted in the Northeast and on the West Coast. Limited and lenient state-wide restrictions in Florida during the health crisis allowed the state’s economy to recover more quickly than most major U.S. markets. In addition to an established migration of retirees, Florida has attracted a younger population, with workers looking for warmer climates and relaxed COVID-19 policies. Similarly, massive migration from other regions is being fueled by the ease of doing business, a favorable regulatory environment, business-friendly tax rates, …

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FloridaIndustrialMarket ReportsSoutheastSoutheast Market Reports

Miami’s Industrial Market is in a Position of Strength Heading into Summer 2022

by John Nelson

Amid a record-breaking year for Miami-Dade County in 2021, industrial market fundamentals grew even stronger in the first quarter of 2022. Last year, the national industrial market saw unprecedented activity resulting from unlimited investment capital from Wall Street, private equity firms and REITs deploying significant capital into buying existing income-producing property and development sites. In the first quarter of 2022, market fundamentals continued to heat up in Miami-Dade County and are expected to continue to attract investors and developers that are looking to capitalize on a growing population and soaring demand for warehousing space. The ongoing global supply chain challenges are forcing existing tenants’ requirements to include additional warehouse space for storage. Simultaneously, new-to-market tenants are continuing to flock to the area, despite a shrinking supply of available space. Together, this confluence of activity triggered a record low vacancy rate of 2.7 percent in Miami-Dade County in the first quarter, a 150-basis-point decrease year-over-year. Rental rates also reached a record high of $11.80 per square foot triple-net, which is an increase of 8.3 percent year-over-year. We expect continued growth in port markets, as well as increased leasing activity from third-party logistics and e-commerce tenants. In 2021, Amazon leased multiple locations …

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IndustrialMarket ReportsTexas Market Reports

Port Houston’s Growth Comes Full Circle

by Taylor Williams

By Taylor Williams If ever there was a time to start a commercial real estate story with a line about how everything’s bigger in Texas, a 2022 update on Port Houston’s activity would surely be it. For that really is the case in and around Houston’s economic engine. The various pieces of infrastructural groundwork that the port began laying over the last decade-plus in anticipation of expanded activity are seeing heavier utilization. The channel itself, its shores lined with 900-ton cranes, are being deepened (from 45 to 46.5 feet) and widened (from 530 to 700 feet) at accelerated paces to accommodate the ever-growing volume of cargo passing through the port. And with the forward progress of all these projects and initiatives comes healthy demand for bigger industrial tracts to develop and spaces to lease.  “We’re simply in a different place now than we were a decade ago,” says John Moseley, Port Houston’s chief commercial officer. “At that time, not everybody was convinced that Houston would become a massive import hub. But we saw demographic changes and felt that as a marine terminal operator, we controlled our own destiny. So we invested in our infrastructure and economic development to attract distribution …

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IllinoisMarket ReportsMidwestMidwest Market ReportsMultifamily

Downtown Chicago Multifamily Market Roars Back

by Kristin Harlow

By Mike Drew, Structured Development As a longtime developer of multifamily, commercial and mixed-use properties in Chicago, I can tell you we’ve never seen anything like the last few years. From the highs of the pre-pandemic multifamily construction boom to the lows of the first year of COVID-19 lockdowns — when downtown emptied out — to today, it’s been a rollercoaster ride. But the multifamily sector has ultimately proved resilient and is roaring back stronger than ever. Here’s a look back at the past three years and a glimpse of three projects we broke ground on during the pandemic: Schiller Place, Big Deahl and Harrison Row. Early pandemic exodus  For the years 2019-2021, developers were expected to build 9,000 apartment units in downtown Chicago, according to Integra Realty Resources. This figure was lower than the expected 10,700 units because of rising construction costs and uncertainty around property taxes, but still strong. Average rents for downtown Class A rental communities were $3.31 per square foot, per Integra, and occupancy was a robust 94.9 percent. When the pandemic hit nine months later, it greatly slowed that activity. Gov. J.B. Pritzker issued the first stay-at-home order on March 20, 2020, followed by other …

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Market ReportsMultifamilyNew MexicoWesternWestern Market Reports

New Mexico’s Multifamily Market Heats Up

by Jeff Shaw

Companies, Investors Court New Mexico’s Multifamily By Todd Clarke, CEO, NM Apartment Advisors Strong employment and changing post-pandemic lifestyles have led to a surge of demand for New Mexico’s multifamily rental market.  Investments made more than a decade ago are paying off from SpacePort NM and the NM Rail Runner, as well as the film and television industries, which have made New Mexico the third best place to film in the country behind Los Angeles and New York. Although Santa Fe — the fifth best international destination and oldest state capital — remains undeserved by more than 6,484 units, the market is on track to deliver 1,500-plus units. This is well ahead of Albuquerque’s less than 1,000 new units. More development will hopefully continue, thanks to a new Integrated Dynamic Ordinance (IDO, or zoning), recent investments in mass transit expansion lines and a vibrant tech eco-system at the Innovation District in downtown Albuquerque. Several major employers have announced expansions in the market, including Intel (750 jobs), Netflix (3,000 jobs), Facebook/Meta (35 IT jobs, 1,500 construction jobs) and Amazon (four distribution facilities totaling more than 3,500 new jobs). Based on historic benchmarks, this creates an acute housing shortage in Albuquerque. Recent …

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FloridaMarket ReportsRetailSoutheastSoutheast Market Reports

The Sky is Not Falling for Miami’s Retail Market as Healthcare, Dining Activity Soars

by John Nelson

When the world shut down in March 2020, “Chicken Littles” everywhere proclaimed the end of one of the primary asset classes in commercial real estate: retail. Retail tenants largely abandoned expansion plans and entered survival mode by shifting focus to seeking rent abatements and lease restructurings. Landlords in weak financial positions fought to meet significant debt obligations, while those in stronger positions took the opportunity to evict struggling tenants and refresh inventory, hoping that more creditworthy tenants would come calling. Fast forward two years and any lingering uncertainty about the survival of retail has waned, and, today, we seem to be in one of the stronger landlord markets in recent memory. What drove this radical shift from fear and hesitation to boundless market optimism? Increased competition among tenants with strong financial backing. Two factors have changed the landscape: private equity-sponsored healthcare companies and capital-rich restaurant groups. Medtail in Miami Healthcare businesses appeared to thrive during the pandemic as most were able to remain operational through state and local “shut down” orders. Many of these businesses used the pandemic as an opportunity to pounce on large spaces vacated by big box retailers and service-oriented businesses, like nail salons, barbershops and dry …

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CaliforniaMarket ReportsRetailWesternWestern Market Reports

San Diego’s Unique Retail Environment Proves Pandemic-Resilient

by Jeff Shaw

By John Hickman, Managing Director, NewMark Merrill San Diego may be California’s second most populous county, but you wouldn’t know it by strolling through one of its many business districts. The county has grown up since its early days as a small military outpost, yet today its hundreds of communities and neighborhoods still impart a small-town feel. The retail real estate market reflects an intimate beach town vibe with a tightly knit brokerage and landlord community. Brokers and investors can cover the market with a limited footprint, while many retailers can achieve a major presence with a handful of locations. This is opposed to the dozens of locations they may require in other California markets, such as Los Angeles, Orange County and the Bay Area. And big, national brands aren’t the only retailers finding success — 98 percent of firms in San Diego are small businesses. Retailers in San Diego are open to taking chances on new concepts and structuring different types of leases. They’re also willing to pay slightly higher rent to gain access to the area’s strong demographics and limited supply of new shopping centers. This uniqueness provided resiliency during the pandemic and will contribute to a thriving …

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IndustrialMarket ReportsTexasTexas Market Reports

Population Growth, Industrial Activity Explode Along Central Texas’ I-35 Corridor

by Taylor Williams

By Paige Suvalsky, field research manager — Central Texas, CBRE; Rob Burlingame, senior vice president — Central Texas, CBRE; and Miller Hamrick, Texas industrial & logistics research lead, CBRE CBRE Research recently profiled Austin and San Antonio as an “emerging” industrial market along the Interstate 35 corridor in Central Texas. This region makes up much of the western portion of the “Texas Triangle”, a mega-region on a global scale that had an economic output of $1.5 trillion in 2021 and a population of just over 20 million people. The Texas Triangle represents a top 25 global economy, just ahead of Spain. The northern apex of the Texas Triangle, Dallas-Fort Worth (DFW), is projected to surpass Chicago by 2034-2035 to become the third-most populous urban region in the United States with a population of 9.4 million.  This massive boom in population and business is driving the current rush to Central Texas and pushing regional and national developers to stake their claims in this growing market. Currently, about 5.5 million people live between the stretch of Texas from Laredo to Georgetown, and this area’s population is expected to grow by 10.8 percent over the next five years.  According to data from the …

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FloridaMarket ReportsMultifamilySoutheastSoutheast Market Reports

Tenant, Investor Demand Propels South Florida’s Multifamily Market to New Peak

by John Nelson

Miami’s multifamily market slowed down dramatically at the start of COVID-19 and now has quickly rebounded to record levels. Collections and occupancies are excellent, new supply is quickly absorbed, population/household growth is on fire, the job market has largely rebounded, wages are up, home prices are at record levels — meaning more people are renting — and limited land is keeping construction in balance. Going forward, the market is ideally positioned for continued long-term growth thanks to positive market fundamentals and continued strong sales activity. Demand for rentals was strong pre-pandemic and will grow even greater in the post COVID-19 era as South Florida continues to increase its resident count. Between 2020 and 2021, South Florida added 42,842 residents, including 14,318 new residents in Miami-Dade County. With the influx of residents, South Florida is expected to have over 37,000 new households created each year over the next five years. That represents over 14,800 new renters per year, assuming 60 percent of households enter homeownership and 40 percent rent, which is in line with historical ratios. Record year for sales 2021 was a record-setting year for the South Florida multifamily market. The region experienced 603 multifamily sales totaling $11.4 billion, which …

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IndustrialKansasMarket ReportsMidwestMidwest Market ReportsRetail

Retail, Industrial Brokers in Wichita Market Remain Busy

by Kristin Harlow

Wichita experienced considerable retail and restaurant expansion throughout 2021, with other new stores planned for 2022. The two biggest new players to Wichita include Top Golf at 29th Street and Greenwich Road, now under construction, and Scheel’s entering the market with a new 220,000-square-foot store to be located in the former Sears space at Towne East Square. Top Golf is anticipated to open in late 2022, spurring more retail activity on North Greenwich.  Furniture stores have been actively backfilling big boxes, including Bob Mills who took the former Michael’s, and Wichita Furniture, a strong regional player, taking the former 100,000-square-foot Kmart building on West Kellogg/US-54. Discount stores have continued to find a way to open more locations to increase their footprints in the market, both new construction and conversion of former retail spaces. Ollie’s Bargain Outlet opened its west store at Central and Ridge roads, and is also opening a store at Brittany Center.    Quick-service restaurants (QSRs) have been active, including two new locations opening in 2022 for Dunkin’ and several new Dutch Bros Coffee locations as they enter the market as well in late 2022 and 2023. Tropical Smoothie Café opened a location last year and Smoothie King …

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