Market Reports

Restaurants Embody Trends That Define Houston Retail Market Post-Covid

by Taylor Williams December 1, 2021

By Jeff Tinsley, senior advisor, SVN | J. Beard Real Estate – Greater Houston As we reach the end of the calendar year, it’s become clear that 2021 has been a year of transition. Many new trends are emerging from the pandemic year of 2020 with regard to retail real estate. COVID-19-induced trends within shopping, dining and entertainment have given rise to a new generation of retailers to the Houston market. Many quick-service restaurants (QSRs) are looking to reduce store sizes for future locations and focus on streamlining their drive-thru, call in and pick-up order service. Some restaurant concepts are instilling the use of “ghost kitchens” and are aggressively looking to lease second-generation spaces in order to take advantage of the growing takeout and delivery demands. During the pandemic, one of the hardest-hit sectors was in the restaurant industry. Following months of minimized interaction between customers and proprietors due to dining room closures, we are now seeing a greater increase in pick-up and delivery requirements. Many restaurants are now using new technology and methods in terms of how service is offered, how food is prepared and how kitchen and service areas are designed. Furthermore, many food and …

December 1, 2021

California Market Reports Office Western Western Market Reports

San Diego County’s Office Market Positions for Pandemic Recovery

by Jeff Shaw November 30, 2021

By Christopher Reutz, Research Director, Colliers It’s no secret the San Diego County office market experienced unprecedented conditions in 2020. Yet, brighter days may be ahead for the local office market. The COVID-19 pandemic caused many “non-essential” businesses to adopt work-from-home policies. San Diego’s office market took an incredible hit from this in early 2020, amounting to 450,000 square feet of negative net absorption. This was the biggest drop in local demand in more than six years. Last year recorded 1.8 million square feet of negative net absorption, while the first quarter of 2021 posted nearly 400,000 square feet of additional negative demand. The forecast for San Diego’s office market, though, is cautiously poised for an upswing. Demand began to pick up this last quarter as the percentage of vaccinated employees increased. Demand for office space also increased with net absorption totaling 16,000 square feet, signifying the wave of move-outs had finally passed. Additionally, while vacancy during the recession increased from 9.9 percent to a current rate of 14.2 percent, it still remains lower than historical rates recorded during the Great Recession. From late 2008 through mid-year 2011, vacancy remained in the 15 percent to 16 percent range. While the national conversation has focused …

November 30, 2021

California Industrial Market Reports Western Western Market Reports

San Francisco East Bay Industrial Market Soars to New Highs

by Jeff Shaw November 29, 2021

By Steve Kapp, Executive Managing Director, Newmark Strong tenant demand, coupled with a limited supply of Class A industrial product, has pushed industrial rents in the San Francisco East Bay industrial market to new highs. Also known as the I-880 corridor, vacancy rates stood at 6 percent, down slightly from a year ago on a building base of 189 million square feet. Some submarkets like Fremont and Union City, as well as certain building types like new construction Class A warehouse, have performed even better than average. Warehouse rental rates now average above $1 per square foot, per month, in most East Bay markets. These show no signs of slowing down based on strong tenant demand. This demand goes beyond the typical ecommerce giants. Large lease deals were signed by Wine.com, Applied Materials, Home Depot and Chef’s Warehouse in the second quarter alone. Another trend is the rise of the life sciences sector. These firms have traditionally gravitated to research-oriented campuses in South San Francisco, Emeryville or Palo Alto. However, the I-880 corridor is chalking up a number of deals for pilot plants and good manufacturing practices (GMP) facilities. Sana Bio recently leased a 164,000-square-foot advanced manufacturing facility in Fremont, while Senti Bio …

November 29, 2021

Market Reports Midwest Midwest Market Reports Multifamily Nebraska

Omaha’s Healthy Multifamily Market Drives Increase in Agency Lending

by Kristin Harlow November 24, 2021

Despite some disruption from COVID-19, Omaha’s multifamily market is resilient. It remains a healthy, stable market boasting sound fundamentals and continues to experience increasing demand for apartments. Multifamily, in general, has outperformed many other real estate sectors during the pandemic. Omaha’s multifamily occupancy remains strong and rent growth over the past 12 months has shown a positive overall trend. In construction, the market takes a measured approach with roughly 1,500 units per year on average. According to Reis, there are 384 units scheduled to be delivered throughout the remainder of 2021, while absorption is forecast to be more than 400 units, resulting in a 0.1 percent uptick in occupancy. Solid market fundamentals Both Omaha and nearby Lincoln, Nebraska, are seeing strong investment sales activity although limited assets are available. The market is predominantly controlled by local players, many of which build for their portfolios and operate the properties. However, some smaller players and out-of-town investors have found the timing was right to exit out of the market and sell. Out-of-state groups are aggressively entering these markets and paying significant premiums for available assets. Driving investment sales activity are low interest rates and better returns than these groups can find in …

November 24, 2021

California Market Reports Office Western Western Market Reports

Sacramento’s Office Market is Eager for Stability

by Jeff Shaw November 22, 2021

By Cole Sweatt, Brokerage Manager, Sacramento Region, TRI Commercial Now that we’ve had the chance to analyze the data from the first two quarters of 2021, it seems that consumers and businesses are experiencing positive trends throughout Northern California. However, the initial recovery has come with challenges, including semiconductor shortages, supply chain disruptions and increased commodity prices due to a confluence of demand from consumers. We have seen relief in some of these sectors, which has led to increased production and the stabilization of commodity pricing. Although inflation should curb a bit this year, this would seem to be a temporary activity as average inflation over the next couple years is projected to be higher than the average of the prior decade. How is the office sector reacting, particularly in the capitol region near Sacramento? Office sales have been lukewarm in the first part of 2021. Investment strategies continue to change due to economic uncertainty and the long-term goals of companies occupying real estate. Employees have continued to trickle back into the office, but many employers have extended their stay-at-home and/or part-time policies through the fourth quarter of this year. As a result, the market is trending toward a flight to …

November 22, 2021

Market Reports Midwest Midwest Market Reports Nebraska Office

Lincoln Office Market Assesses Amount of ‘Shadow Space’

by Kristin Harlow November 18, 2021

Historically, Lincoln, Nebraska, has been a resilient Midwestern city. Home to state and county governments and the University of Nebraska-Lincoln, it has weathered past economic ups and downs and provided steady growth close to 2 percent each year. As COVID-19 restrictions ease, people are gradually returning to shop and find entertainment downtown, and new construction continues to rise above Lincoln’s skyline. Interestingly, the last time this many cranes were visible downtown was during the last economic downturn. It has been remarked that during that time, Lincoln “built its way out of the recession.” Now, many building projects are helping to maintain the resiliency of our economy during these challenging times. Prominent projects, proposed or initiated prior to the pandemic, continue to move forward. Examples include a proposed 15-story, 300,000-square-foot mixed-use building by Chicago-based Argent Group housing 200 residential units. Omaha-based White Lotus Development plans a $54 million redevelopment of the Pershing Auditorium block, a vacant city-owned venue. White Lotus would bring 100 affordable housing units with a wellness center, childcare center, retail, community green space and potentially a new city library. Other notable projects include a $21 million renovation of a 100-year-old, seven-story Atrium Building by new local owners. Pushing …

November 18, 2021

District of Columbia Industrial Market Reports Southeast Southeast Market Reports

Mid-Atlantic is Where Labor, Ports and Transportation Infrastructure Intersect

by John Nelson November 15, 2021

Speaking at the Port of Baltimore on Nov. 10, President Joe Biden touted the now passed $1 trillion infrastructure bill as a “once-in-a-generation investment” designed to help us push past the COVID-19 pandemic. The $17 billion earmarked specifically for port improvements is welcome news as on Nov. 15, the day the bill was signed, 90 container ships carrying goods valued at $85 billion were still waiting to dock off the coast of California. Throughout the pandemic, the transportation infrastructure and labor supply for the East Coast and the Mid-Atlantic specifically have demonstrated efficiency and productivity. The two main ports — the Port of Virginia and Port of Baltimore — processed record container volumes of imports and exports through cargo ship, rail and barge at record “turn times” of under one hour, meeting and overcoming many of the challenges within the supply chain. Connecting the dots As we approach the 2021 gift-giving season and beyond, it is crucial to focus on the “why I should care” factor. The Port of Virginia for example, which by 2024 will be the only 55-foot-deep port on the East Coast, experiences cargo movements that occur 64 percent by truck, which is nearly double the next …

November 15, 2021

Industrial Market Reports Midwest Midwest Market Reports Ohio

Columbus Industrial Market Is Going Strong for Eighth Straight Quarter

by Kristin Harlow November 11, 2021

Columbus has been the shining star of the industrial real estate market over the last five years, and for the eighth straight quarter, it has more than 5 million square feet under construction. This year is on track for more than 10 million square feet, with half of that already absorbed in the first part of the year. A question I always get is, “Why Columbus?” The answer (and the sell) is quite simple — location and population. Columbus is a 10-hour drive within 46 percent of the country’s population and manufacturing base. Incentives play a large role in the process as well, which enables developers to be competitive and drives tenants to the markets. Labor is always a factor in site selection, but now more than ever it tops the list as one of the most vital components of the decision-making process of choosing a site. With the Columbus region ranking No. 1 in the Midwest for population, jobs and GDP growth, it’s natural for developers to be highly attracted to the area. Columbus has three major industrial submarkets: West Jefferson, Rickenbacker and Etna Township. The West Jefferson submarket is home to Amazon, Target, Restoration Hardware and JoAnn Fabric. …

November 11, 2021

Market Reports Texas Texas Market Reports

San Antonio’s River Walk Hits New Heights

by Taylor Williams November 9, 2021

By Jeffrey Brown, FAIA, founding principal and CEO, Powers Brown Architecture San Antonio, with its 1.5 million residents, occupies an enigmatic identity, flying under the radar as the second-largest city in Texas and the seventh-largest city in the nation. Located between the south and central regions of the Lone Star State, San Antonio’s economy is fueled by tourism, military, financial services, energy and healthcare providers. Its lower-than-average cost of living and high quality of life make the “Alamo City” attractive for development. There is no mystery about San Antonio’s steady growth among locals, including developers, several of whom have created exciting new hyper-urban mega-developments in Central Business District (CBD)-adjacent locations. The recent announcement of Riverplace by Universal Services Group, part of the development team behind the recently completed Thompson Hotel and Arts Residences, reached an agreement last December with the City of San Antonio that paves the way for a $400 million development in the center city. Anchored by the Dream Hotel, Riverplace is the newest bookend to the various new projects and developments in the CBD, with the oldest bookend being the Pearl District, one of the original CBD-adjacent efforts. Riverplace and the Pearl District make up either end …

November 9, 2021

Market Reports Multifamily Southeast Southeast Market Reports Virginia

Richmond’s Multifamily Sector is the Best-Kept Secret in the Southeast

by John Nelson November 8, 2021

Mention “rising secondary multifamily markets in the Southeast” and what might come to mind are markets such as Charlotte, Raleigh, Nashville or Orlando. A less discussed candidate is Richmond, which has a case to be considered the multifamily sector’s best-kept secret. It’s a secondary market that’s moving forward full steam ahead for two primary reasons: supply and demand. More people = demand According to the 2020 Census, the population of the city of Richmond stood at 232,226, a 12.7 percent increase from the 204,375 reported in 2010. Richmond is the county seat of Henrico County, which had a population of 333,766 as of 2020. This is an 8.6 percent increase over the 2010 population count of 307,201. More residents are moving to Richmond, mainly for one reason: jobs. But the metro has other appealing factors as well, incuding its geographic location and low costs of living and doing business. In addition to being the site of growing employment centers, Richmond is proximate to major East Coast cities. New York City, Philadelphia and Washington, D.C., are easily accessible via train or airplane. But Richmond is relatively affordable, especially compared to other Mid-Atlantic markets and gateway cities on the East Coast. With …

November 8, 2021

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