Market Reports

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

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

Features Florida Market Reports Multifamily Southeast Southeast Market Reports

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

by Jaime Lackey June 13, 2022

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, …

June 13, 2022

Florida Industrial Market Reports Southeast Southeast Market Reports

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

by John Nelson June 13, 2022

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 …

June 13, 2022

Industrial Market Reports Texas Market Reports

Port Houston’s Growth Comes Full Circle

by Taylor Williams June 9, 2022

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 …

June 9, 2022

Illinois Market Reports Midwest Midwest Market Reports Multifamily

Downtown Chicago Multifamily Market Roars Back

by Kristin Harlow June 9, 2022

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 …

June 9, 2022

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