Market Reports

Memphis Industrial Market Boom Continues After Record Year of Leasing, Sales

by John Nelson July 26, 2022

2021 was a banner year for the Memphis industrial market by virtually every measure. Leasing exceeded 32 million square feet, easily doubling the average of 12.8 million square feet per year; annual net absorption reached 12.7 million square feet, the highest ever recorded; 14.6 million square feet of inventory delivered to the market; rental rates reached historic highs; and investment volume topped $2.2 billion. The potent demand that carried the market to such record-setting extremes continued into the beginning of 2022, with leasing activity in the first quarter approaching 6 million square feet and net absorption surpassing 3.3 million square feet. Sustaining the steady upward trend the Memphis market has followed since the beginning of 2019, the direct vacancy rate rose 50 basis points from last year to 6.8 percent, but this increase is largely due to the profusion of spec product rather than any significant moves out of the market. In typical fashion, the bulk of leasing activity occurred in the Southeast, DeSoto County and Marshall/Fayette County submarkets, comprising more than 75 percent of the quarter’s total volume. But even the Northwest submarket has seen more action recently with the delivery of Amazon’s 181,500-square-foot last-mile facility in the Raleigh …

July 26, 2022

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Market Reports Multifamily New Jersey Northeast Northeast Market Reports

Fundamentals Remain Strong in Northern New Jersey Multifamily Market

by Taylor Williams July 25, 2022

By Mike Oliver, managing director, JLL Capital Markets Fundamentals remain strong within the multifamily markets of Northern New Jersey and the greater metro New York City area, though the dynamics have continued to shift since the onset of the pandemic. During COVID-19, there was movement away from urban areas toward the suburbs, creating a “tale of two cities” market dynamic. The suburban multifamily market became red-hot while urban markets cooled. Vacancies dipped below 80 percent in some instances, with heavy concessions being offered and flat to negative gross rent growth. Today, while the suburban markets remain very strong, urban markets are also now red-hot. This is attributable to more and more people heading back to urban centers in anticipation of returning to the office or simply wanting to be back in the excitement of downtown living and its dining, shopping and entertainment options. Additionally, many renters are being priced out of and fleeing Manhattan, Brooklyn and other New York City neighborhoods. Jersey City and the Hudson Waterfront provide attractive rental options with incredible access into Manhattan. Jersey City, for example, is demonstrating healthy fundamentals, as occupancy rates are back over 95 percent with strong growth on lease trade-outs. There …

July 25, 2022

California Hospitality Market Reports Western Western Market Reports

Should Hoteliers Stay in San Diego?

by Jeff Shaw July 22, 2022

Western Real Estate Business sat down with two hotel experts to discuss what the future holds for tourism-heavy markets like San Diego. They include Robert A. Rauch, managing partner of the locally based Hilton Campus Del Mar and Fairfield Inn & Suites San Marcos and a faculty associate at Arizona State University, as well as Gary H. London, senior principal of Carlsbad, Calif.-based London Moeder Advisors, which prepares commercial market and financial feasibility studies and analyzes real estate investments for prospective investors. WREB: How is San Diego’s hospitality and tourism industries stacking up to other markets that are similar in either size or tourist popularity? London: Because of an ongoing slowdown in international travel, many American travelers divert to San Diego as a favored domestic destination. San Diego’s tourism sector has been very strong since the perceived end of the pandemic-induced recession almost a year ago. Rauch: Over the nine months spanning from July 2021 to March 2022, San Diego has been in the top five of the 25 largest U.S. markets in all three categories of occupancy, average rate and RevPAR. Hotel occupancy comes in at 67.6 percent, average rate per night is $179.85 and RevPAR (revenue per available room) stands at …

July 22, 2022

Industrial Market Reports Michigan Midwest Midwest Market Reports

Detroit Industrial: Bright Future, Ready for Anything

by Kristin Harlow July 21, 2022

By Anthony Avendt, Cushman & Wakefield Like most markets in the U.S. and Canada, Detroit’s industrial sector has seen its ups and downs. Detroit’s always been a bit of an outlier though due to extreme volatility. What’s more, we’ve (hopefully) learned lessons from past downturns that well position the city and its commercial real estate regardless of continued strong demand and rent growth or any bumps in the road we may encounter. Detroit is a little different from similar-sized markets in the region. First, while it’s certainly part of the U.S. heartland, the city’s geographic position on a peninsula means it’s poorly suited for broad distribution to large swaths of the country. Second, of course, is the auto industry’s impact. The auto industry is widely dispersed across the U.S. now, but Detroit and Michigan remain its heart and brain. As the sector pivots to autonomous and electric vehicles, that is going to drive demand for industrial space. Ford already has announced an investment of $40 to $50 billion over the next decade-plus, including redevelopment of Michigan Central Station as anchor of its Mobility Innovation District. Stellantis, the parent of Chrysler, Jeep and Dodge, has announced its own $35.5 billion investment …

July 21, 2022

Market Reports Multifamily Texas Texas Market Reports

Why the Austin Multifamily Market Is Still Worth the Investment

by Taylor Williams July 20, 2022

By John D. Hutchinson, vice chairman, global head of origination, Trez Capital The COVID-19 pandemic brought mass migration to the Sun Belt states, and by far, the most sought-after location of the pandemic migration boom was Texas. Multifamily investment demand remains strong due a higher quality of living, affordability and job growth. People are leaving high-tax, high-regulation states and moving to states like Texas with lower taxes and more favorable business climates. Austin, specifically, has outshone the top cities in the “Texas Triangle” with its large influx of both people and jobs. Austin’s exponential population growth, attractive cultural qualities and high-income jobs have created demand for and premium prices on real estate. Although the U.S. economy has seen changes in the last couple of months, such as inflation and interest rate hikes, the city still affords a great opportunity for multifamily investors. According to data from CoStar Group, Austin has doubled its construction starts over the past year and is expected to add 15,827 new units in 2022. In fact, there was a record 25 percent rent growth and strong occupancy at the end of 2021. A Growing Market In 2021, the Austin area’s net population growth was about 16 …

July 20, 2022

Industrial Market Reports Nevada Western Western Market Reports

Las Vegas Industrial Market Shows No Signs of Stopping

by Jeff Shaw July 19, 2022

By Paul Sweetland, Senior Vice President, Colliers After a record year in 2021, Southern Nevada’s industrial market does not appear to be slowing down. The first-quarter vacancy decreased to 1.7 percent with 2.9 million square feet of net absorption. This is the lowest vacancy rate we have ever recorded in Southern Nevada. For comparison, vacancy only went as low as 3.1 percent during the boom that preceded the Great Recession. Demand was positive for all industrial subtypes for the first quarter, while rents for warehouse and distribution space increased 46 percent year over year. All industrial sectors added jobs on a year-over-year basis, with the largest increase being in logistics, which added 8,100 jobs. The current industrial boom has been driven by the influx of relocations and expansions from all over the U.S., but primarily from California. Southern Nevada’s strategic location, with its ability to service 12 markets within one day, has also made it an ideal location for regional and national distribution. New industrial completions totaled 2.1 million square feet this quarter, almost all of it being warehouse/distribution product. Southern Nevada is in its third major wave of post-Great Recession industrial development, with more than 8 million square feet now under …

July 19, 2022

Market Reports North Carolina Office Southeast Southeast Market Reports

A Return to the Office Spurs More Real Estate Decisions in Raleigh-Durham

by John Nelson July 18, 2022

The Raleigh-Durham office market is poised for future growth as it exits the pandemic, however the question for us all is when. Re-occupancy of buildings by office users has been stubborn in the current post-pandemic environment. Despite the sluggish activity since the beginning of the year, there have been bright spots with companies becoming more strategic about their office space decisions as they return, especially in newer projects that offer best-in-class experiences. Moving forward, there will be economic and geopolitical headwinds that may interfere with the pace of recovery. However, investors and developers continue to the see the value in the market due to our highly educated workforce, favorable business climate and one of the fastest growing population centers in the country. The return of the workplace is the main driving factor for the activity in the office leasing market. As companies execute their re-occupancy plans, they are reevaluating their existing buildings, footprints and workspaces in a way that we have never seen before. Forward thinking organizations are making decisions to create unique spaces where their employees want to come to work, rather than a space where they have to come to work. We have quickly seen that one size …

July 18, 2022

California Market Reports Retail Western Western Market Reports

San Diego Retail Momentum Continues in 2022

by Jeff Shaw July 15, 2022

By Chad Iafrate, Executive Director, and Phil Lyons, Managing Director, Cushman & Wakefield Retail leasing and investment sales transaction volumes continue to increase in 2022. This growth trend began to surge in the second part of 2021 following the pandemic recovery. Retail vacancy rates in San Diego County have decreased quarter over quarter to 5.9 percent, with vacancy lowest among power centers and strip centers. Asking rental rates, meanwhile, have increased across the county. This is primarily driven by significant rent growth at lifestyle centers (+5 percent from the previous quarter) and neighborhood centers (+2.8 percent). All major retail use categories seem to be back in expansion mode after four consecutive quarters of positive absorption. Pent-up consumer demand, stimulus and liquidity have all helped fuel growth plans in the retail sector with tenants continuing to try to make up for the lost year during the 2020 pandemic-related lockdowns. Suburban shopping centers have been the beneficiary of the work-from-home model as employees who would typically frequent retailers near their offices have pivoted to restaurants and shops closer to their residences. Investor confidence in retail centers also continues to increase, most notably from rising REIT activity and exchange buyers. Local retail investment …

July 15, 2022

Market Reports Midwest Midwest Market Reports Office Ohio

Air Force Base Propels Dayton’s Office Market

by Kristin Harlow July 14, 2022

By Richard Meder, Colliers While office markets across the country have experienced a slow climb back to normalcy following COVID-19-related restrictions, the Dayton office market has found its strength in the Wright-Patterson Air Force Base (WPAFB). Though the Dayton office market around WPAFB experienced similar ebbs and flows as that of the rest of the country during the pandemic, business never stopped. For some in other markets, the lasting effects of this disruption to the office market remain unknown. Business leaders must decide whether to implement a remote work lifestyle into their employee regimen or make a push to get back to normal office life — for some companies it is considered a hybrid approach. For the tenants in the WPAFB submarket, however, there was never question. While many office tenants vacated their spaces out of uncertainty, defense contractors cautiously occupying office spaces at the WPAFB submarket almost singlehandedly helped Dayton remain upright during the pandemic. With the submarket almost entirely consisting of defense contractors, this type of defense contracting work was not allowed to stop with the rest of the world. Having to adhere to both local and federal guidelines, decision-making among defense contractors certainly slowed, but it never …

July 14, 2022

Healthcare Market Reports Texas Texas Market Reports

As Healthcare Supply-Demand Gap Grows in Austin, Lean Construction Methods Take Center Stage

by Taylor Williams July 13, 2022

By Jake Snyder, director of preconstruction, Hoar Construction Thanks to its rich culture, technology-friendly atmosphere and eclectic music scene, Austin has blossomed over the past decade into a hotspot for businesses and residents alike that are seeking to ride the wave of the city’s phenomenal growth story. Just last year, the U.S. Census Bureau reported that Austin is the fastest-growing major metro area in the country, posting a 3 percent increase in population between 2020 and 2021. Pair that recent growth with a global pandemic, and you have an urgent need for increased healthcare development to accommodate the number of people moving into the city. However, as with most other facets of commercial real estate, construction took a proverbial uppercut blow from COVID-19. Project delays, price hikes and material shortages have made every aspect of the construction life cycle more difficult, but not impossible. According to Associated Builders and Contractors, nearly 650,000 additional workers are currently needed to meet the demand for labor on construction sites, while an estimated 1.2 million will leave their jobs this year to work in other industries. A recent report from labor market research firm JobsEQ also found that the Austin area could be short …

July 13, 2022

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