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IndustrialMarket ReportsMidwestMidwest Market ReportsMissouri

Spec Industrial Activity in St. Louis Region Rivals Pre-Pandemic Levels

by Kristin Harlow

World and domestic markets are constantly recalibrating as the global supply chain continues to see a disruption from the COVID-19 pandemic. It has never been more clear though just how important freight logistics and a healthy supply chain are to keep the economy moving. Demand for distribution space continues to grow, and the latest data available reveals the bi-state St. Louis market is rebounding well from the uncertainty of 2020 and 2021, and is positioned to assist distributors and developers to meet the growing demand. The St. Louis region has more than 51 million square feet of modern bulk inventory supported by a strong labor force and an exceptional freight network that provides tremendous optionality to move goods into and out of the region via river, rail, truck and runway.  Those advantages are contributing to historic lows in vacancy rates, with only 4.5 percent of modern bulk space (more than 250,000 square feet) available at this time. This follows on the heels of the overall vacancy rate for the entire St. Louis industrial market dropping below 6 percent in 2020, the first time it fell so low in more than 15 years. Fortunately, construction in the bi-state region has rebounded …

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CaliforniaIndustrialMarket ReportsWesternWestern Market Reports

Industrial is the Belle of the Ball in LA

by Jeff Shaw

By Robert Flores, Senior Vice President, CBRE Not too long ago, industrial real estate was generally viewed as an obscure and often unpopular subset of commercial real estate. Instead of owning a concrete box, many investors and developers were drawn to the flashier structures in Central Business Districts and hip submarkets. Fast forward a few short years, and industrial has firmly taken center stage for many who might have previously shunned the sector. The Greater Los Angeles area is one of the beneficiaries. The Greater Los Angeles region is the second-largest metro in the U.S. and is home to some of the nation’s most critical infrastructure. With the ports of Los Angeles and Long Beach accounting for more than 40 percent of the country’s inbound container traffic and Los Angeles International Airport serving as a major gateway for passengers and air cargo, the local industrial market is ground zero for industrial users. At the close of the second quarter, the Greater Los Angeles industrial market totaled more than 1 billion square feet of rentable space with a vacancy rate of just above 1.5 percent, according to our CBRE research. Based on current activity levels and leasing velocity in the market, …

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CapRock
ArizonaIndustrialMarket ReportsWesternWestern Market Reports

Phoenix’s Industrial Market is Firing on All Cylinders

by Jeff Shaw

By Rob Martensen, Executive Vice President, Colliers As a racing driver, it is important that my vehicles fire on all cylinders to run their best. In the Phoenix metro area, the engine cylinders of the industrial market are the different industries, as well as the geographic locations around the Valley where these industries conduct business. First, let’s look at advanced manufacturing. Intel, which already has a large presence in the Southeast Valley, just announced a $20 billion expansion of its Price Road facility. This will create hundreds of construction jobs and demand for these contractors to find space, not to mention all the equipment suppliers, etc., that will require space for the long-term. With the huge demand for semiconductors and the supply of land and labor, Taiwan Semiconductor Manufacturing Company (TSMC) has chosen Phoenix to build its next fabrication plant. TSMC will spend $12 billion to build the new factory, which is already under construction in North Phoenix. This will create a huge demand for industrial space in the Deer Valley submarket to support TSMC. Other manufacturing companies like Apel Extrusions, MLILY and Ball Container have either recently completed projects or are under construction on new manufacturing facilities. Food and beverage …

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Park Center
FloridaIndustrialMarket ReportsSoutheastSoutheast Market Reports

By the Numbers: Orlando’s Industrial Fundamentals Remain Strong

by John Nelson

Orlando’s industrial market emerged from the early panic of 2020 in solid shape, and both occupier and investment activity have continued in earnest ever since. While the preceding year has brought its share of pandemic-induced challenges to the Orlando market, the industrial sector itself has not been adversely affected, other than by labor shortages and the escalating prices of construction materials for new development. Sector fundamentals remain strong, with healthy leasing and positive net absorption of space, robust tenant activity and continued speculative development that is focused primarily along the 429 Corridor and in the Orlando Central Park and Airport/Southeast submarkets. Economic fundamentals are also sound. The unemployment rate in Orlando as of June 2021 was 6 percent, down an impressive 1,300 basis points from the height of pandemic unemployment in May 2020. Oxford Economics projects that Orlando is expected to see job growth of 2.1 percent in 2021, 9.1 percent in 2022 and should recover all of its lost jobs by third-quarter 2022, a majority of which are in the leisure and hospitality sector. Central Florida is the state’s fastest-growing region, and the U.S. Census Bureau expects its growth to outpace South Florida by a factor of two to …

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Market ReportsMidwestMidwest Market ReportsMissouriRetail

E-Commerce Growth, Restaurant Oversaturation Shape St. Louis Retail Market

by Kristin Harlow

By Tim McFarland, Sansone Group It is hard to describe 2020 as anything other than a lost year. COVID-19 brought us quarantines, social distancing, masks and plenty of uncertainty. The pandemic pushed our healthcare system to the brink, stressed our supply chain and caused a global economic slowdown.  The St. Louis commercial real estate market certainly felt the effects of COVID-19, with retail and hospitality being hit the hardest. The retail sector was turned upside down by lockdowns that transformed homes into virtual offices, mandates that forced the closure of non-essential businesses and capacity restrictions that required restaurants to learn how to survive without dine-in business for a large portion of the year. These factors have caused an increase in vacancy to nearly 5 percent, and average asking rates to soften to $13.02 per square foot, off by 15 cents per square foot from this time last year. Perhaps most intriguing was seeing trends in the retail market accelerated by COVID-19. E-commerce For years now there has been a trend toward e-commerce. That is true now more than ever as the pandemic has accelerated the drive to digital. More than five years of e-commerce adoption was compressed into a three-month …

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CaliforniaMarket ReportsMultifamilyWesternWestern Market Reports

Los Angeles’ Apartment Market Turns a Corner

by Jeff Shaw

By Mark Ventre, Senior Vice President, Stepp Commercial As it turns out, COVID has once again delayed hopes of a return to normalized operations for apartment owners. Just when it seemed the shackles that have hindered the ability to raise rents and recoup lost income would be removed, it now appears the light at the end of the tunnel has grown more distant. Fortunately, there have been positive indicators that the economic environment in Los Angeles for the first half of 2021 has improved considerably from the second half of 2020. According to the California Labor Market, the unemployment rate lowered from 17.9 percent to 10.6 percent a year ago. Apart from the third quarter of 2020, which experienced an enormous economic bounce back of 33.4 percent, the second quarter of this year has seen a GDP increase of 6.5 percent, one of the strongest since 2003. This is great news for a city that was particularly hard hit, considering the amount of hospitality and leisure jobs. However, Los Angeles has still lagged the nation with respect to rent growth in 2021. Average asking rents have improved by 3.9 percent since the beginning of the year, far below the national average …

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ArizonaLife SciencesMarket ReportsOfficeWesternWestern Market Reports

Phoenix’s Life Sciences Market is on a Record Rise

by Jeff Shaw

By Alexandra Loye, Senior Vice President, Healthcare & Life Sciences Services, Colliers Despite global and domestic market challenges from the pandemic, Phoenix continues to shine amongst its competitive Western cities. With Maricopa County being the fastest-growing county in the U.S., Phoenix offers employers a diverse, educated workforce, business-friendly environment and affordable housing options. Arizona’s economy is booming and experiencing record revenue growth, as well as personal income growth. From 2019 to 2020, Arizona led the nation (tied with Montana) in the category of highest personal income growth with a 7.1 percent increase. The state is also projected to add 325,000 jobs in the next 12 months. Phoenix’s life sciences industry has gained significant momentum during the past 12 months, with no slowdown in sight. The Phoenix Biomedical Campus (PBC) in downtown Phoenix is ground zero for life sciences development and tenant activity. The 30-acre campus is currently occupied by Arizona State University, the University of Arizona, Northern Arizona University, Translational Genomics Research Institute (TGen), OncoMyx Therapeutics, Calviri, Vidium Animal Health, and Exact Sciences, which recently acquired Paradigm Diagnostics and Ashion Analytics. The PBC is the ideal environment when it comes to collaboration and innovation for life sciences tenants. The 227,000-square-foot, …

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IndustrialMarket ReportsMississippiSoutheastSoutheast Market ReportsTennessee

High Demand for Memphis Industrial Leading to Another Record-Shattering Year

by John Nelson

Fueled by the acceleration of e-commerce amid the COVID-19 pandemic, the Memphis industrial market’s record-setting momentum continued into the first half of the year. Demand fundamentals are the strongest they’ve ever been, with lease transaction volume at mid-year exceeding 12.2 million square feet for the second year in a row and total market direct net absorption reaching an unprecedented 5.3 million square feet. To put these numbers in perspective, lease transaction volume and direct absorption through June of pre-pandemic years averaged 5.8 million square feet and 1.6 million square feet, respectively. The market’s direct vacancy rate has hovered around 6.5 percent since the end of 2019, an impressive feat given the exceptional amount of speculative product that has been added to inventory over the past year and a half. New to the market The region’s central location, complemented by its world-class transportation infrastructure and low rental rates, make Memphis an attractive option for industrial users. Notable deals that have occurred since the beginning of 2020 include Milwaukee Tool’s 1.1 million-square-foot lease at I-269 Industrial Park, as well as two new Amazon leases totaling nearly 2 million square feet, growing the e-commerce giant’s Memphis-area footprint to more than 6.7 million square …

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CubeSmart-Austin
IndustrialMarket ReportsSelf-StorageTexasTexas Market Reports

Volume of Self-Storage Deals in Texas Explodes

by Taylor Williams

By Taylor Williams A number of economic, demographic and bureaucratic headwinds are propelling investment in self-storage properties across Texas, such that some brokerage firms are on pace to have record-breaking deal volumes in 2021.  Last year, the outbreak of COVID-19 postponed the typical leasing season of late spring and early summer. Individuals and businesses grappled with economic uncertainty by tightening their purse strings. But by fall of last year, leasing and occupancy rates had rebounded, making it clear to investors that self-storage assets tended to flow cash better than other property sectors. Consequently, a number of players shifted out of asset classes like retail, office and hospitality and into the more stable self-storage space. The early months of the pandemic also coincided with the natural tapering off of the development cycle in Texas. Numerous submarkets in major Texas cities had become overbuilt in the years leading up to 2020, and COVID-19 served as an additional governor on new supply, further bolstering leasing velocity and rent growth. And as the federal government pumped trillions of dollars of aid into the economy, ushering in a new era of inflation, investors were able to adjust their revenues to cover rising costs with ease.”  …

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Addison-Station-Dallas
Market ReportsTexasTexas Market Reports

Taking its Toll: How the Pandemic Is Shifting Activity Along the Dallas North Tollway

by Taylor Williams

By Greg Langston, principal, managing director, Avison Young The Dallas North Tollway (DNT) is a staple thoroughfare for Dallas Fort-Worth (DFW), connecting the metroplex’s urban core in Dallas to the thriving northern suburbs.  Over the past 12 years, since the recovery from the Great Recession began, much of the market’s activity and energy has occurred along this tollway. Weighing the performance of assets in submarkets that connect to the DNT versus those that don’t, those in DNT-connected submarkets have outperformed in total and in annualized averages. Centers of Action Three core submarkets — Uptown/Turtle Creek in the urban core, Upper Tollway/West Plano and Frisco/The Colony in the far north region — have driven much of this growth. The northern suburbs have done a great job attracting massive corporate headquarters and relocations deals, while Uptown/Turtle Creek has created a unique identity as a thriving urban hub full of walkable amenities, mixed-use developments and more.  Beyond the DNT, major developments like Cypress Waters have helped drive strong interest and activity to the center of the region. To the west, Tarrant and Denton counties have seen robust growth along State Highway 114, with several major institutional employers like Deloitte, Charles Schwab and Fidelity …

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