Market Reports

How Multifamily Owners Can Cater to the Northeast’s Growing Base of Life Sciences Renters

by Taylor Williams August 17, 2021

By Justin Wybenga, vice president of asset services, GMH Communities Every day, we see the world constantly changing. Whether it’s advancements in technology, culture, arts or sciences, there are many things to look forward to as life and business return to normal. One sector of commercial real estate that continues to experience breakthroughs is life sciences. Case in point: Mayor Bill de Blasio and the NYC Economic Development Corp. announced that the organization would double its investment to $1 billion to establish New York City as the global leader in life sciences. With the increasing demand for research and lab space comes an emerging need for innovative housing that supports the rapidly growing population of researchers, professors, graduate students and third-shift workers. Historically, amenities and services for this group have been an afterthought. We saw a void in this space and recently launched a completely new vertical called “Innovative Living.” Innovative Living takes best practices from conventional multifamily and student housing, including cutting-edge technology and best-in-class amenities and services, and tailors those features to accommodate the specific needs of professionals and graduate and postgraduate students working or learning in major innovation hubs. Understand Residents’ Needs Fostering a collaborative living environment …

August 17, 2021

Industrial Market Reports Texas Texas Market Reports

Austin’s Industrial Market Reaches New Heights — But Will It Stay There?

by Taylor Williams August 16, 2021

By Bob Mohr, chairman, Mohr Capital When people talk about Austin, they call it one of the best places in the country to live. They talk about the live music scene, the die-hard fans who flock to The University of Texas football games and the hills sprouting bluebonnets. They talk about Austin attracting California residents and companies during the pandemic, bolstering the city’s tech base and positioning it as a significant Silicon Valley rival. They talk about office demand and the increasing costs of single-family housing. Few people mention Austin’s industrial market, but they really should, because there’s a heck of lot to talk about. At 55 million square feet, Austin’s industrial market is still fairly small, especially compared with the Lone Star State’s big three metros of Dallas-Fort Worth (DFW), Houston and San Antonio. Despite its size, the Austin industrial market is experiencing significant demand from various companies, particularly e-commerce and service-related tenants. And even though Austin tends to be a bit of a bubble market, money is flowing in the form of new construction and investor interest. Absorption Pushes Occupancy Historically, Austin has not been a big box warehouse market. Most industrial inventory is smaller, developed to cater …

August 16, 2021

Market Reports Multifamily North Carolina Southeast Southeast Market Reports

Charlotte’s South End Remains ‘Go-To’ Submarket for Young Renters

by John Nelson August 16, 2021

Charlotte’s South End district has firmly established itself as one of the most dynamic millennial urban submarkets in the Sun Belt. It is increasingly on par with the most thriving areas in other growth cities such as Atlanta, Austin and Nashville and is becoming a 24-hour neighborhood with dining, nightlife and high-end jobs. Charlotte is one of the few cities in the region that has both a true city center as well as a relevant mass transit system. The city’s LYNX Blue Line, which runs from Interstate 485 to the University of North Carolina at Charlotte’s main campus, has proven to be very meaningful for the local multifamily market. LYNX was the catalyst driving South End’s emergence and gives the neighborhood its own heartbeat as renters can commute to Uptown for work or UNC Charlotte for class. Developers are taking note with several apartment projects and mixed-use developments underway in the area, including Broadstone Queen City and Haven South End. As South End has grown into a more dynamic district, Charlotte is becoming an even more attractive destination for recent college grads who are looking to work in the city’s established financial sector, as well as for firms like Lending …

August 16, 2021

Market Reports Northeast Northeast Market Reports

Commercial Borrowers in the Northeast Benefit from Elevated Liquidity

by Taylor Williams August 13, 2021

By Taylor Williams After months of disruption and uncertainty, commercial lenders throughout the country and the Northeast are eager to deploy funds, creating an environment in which borrowers are somewhat insulated from economic and geopolitical forces that threaten to derail the recovery. With interest rates still at historic lows and investors of all types looking to recoup returns unexpectedly lost to COVID-19, there is tremendous liquidity in the market. There’s also the simple fact that lenders are for-profit companies with expenses to cover. As the saying goes, if “they’re not lending money, they’re not making money,” and they’re losing market share. As a result, sources say, lenders are competing among themselves to finance deals. When lenders compete, borrowers win. “The overall level of capital flowing into the U.S. commercial real estate market is equal to or greater than where it was pre-pandemic,” says Matt Swerdlow, director of capital services at New York City-based intermediary Ariel Property Advisors. “Right now, there’s more capital than deals, so borrowers can get better spreads, higher proceeds or less structure just because the availability of capital is so broad.” “Despite the fact that we’re in a post-pandemic market, it’s heavy competition for deals, which has …

August 13, 2021

Industrial Market Reports Midwest Midwest Market Reports Ohio

Cincinnati Industrial Market Is Positioned for Even More Growth

by Kristin Harlow August 12, 2021

By Jeff Bender, Cushman & Wakefield Cincinnati and Northern Kentucky have the same logistical advantages they’ve always had, with their location within a day’s drive of two-thirds of the U.S. population, allowing reach and penetration to major metro areas. With those advantages, the region has enjoyed a robust industrial market, similar to most key markets in the country. Lessons learned from the pandemic, the pending opening of a nearly 1 million-square-foot e-commerce national air hub and growth of the Cincinnati/Northern Kentucky Airport (CVG) will truly differentiate the market from an occupier’s perspective. What’s more, that increased demand and Cincinnati’s topographical constraints, creating new supply limitations, will continue to make it a darling of institutional investors. Quick delivery model Amazon’s presence and $1.5 billion investment near the airport and Cincinnati’s central location place it in a prime spot for fulfillment, a big demand driver over the next decade. For example, let’s say you need to buy or repair a laptop, smart phone, tablet or any other electronic device. The order for a new computer could be fulfilled the next day most anywhere in the world even if the order is placed late in the evening. With a repair, you box it …

August 12, 2021

California Market Reports Multifamily Western Western Market Reports

Investors Look to Orange County Multifamily Sector for Stability, Diversification

by Jeff Shaw August 11, 2021

By Dan Blackwell, Executive Vice President, CBRE Demand for multifamily properties in Orange County continues to show great strength. This is driven by steady rent collections and favorable interest rates as apartments in the region have performed well during the pandemic. As investors look to buy stable, income-producing assets in Southern California, the focus on the multifamily sector in our region has intensified. We have witnessed increasing interest from first-time buyers over the past few weeks, in addition to continued interest from 1031 exchange investors and those who sat on the sidelines during much of 2020. This demand is buoyed by willing lenders offering favorable interest rates in the low 3 percent range due to the area’s excellent rent collection track record. Most buyers are looking for 50 percent to 60 percent leverage, with in-place capitalization rates typically ranging between 3.75 percent and 4.25 percent, depending on location. However, given the limited supply, we are seeing buyers bid pricing higher and cap rates compressing for many assets. Private investors continue to be the predominate buyers, mainly driven by the need for diversification and a stable cash flow. We are receiving more requests from LA County investors that may have sold a multifamily …

August 11, 2021

Market Reports Office Texas Texas Market Reports

Three Trends That Are Influencing Commercial Real Estate Design in Austin

by Taylor Williams August 10, 2021

By Travis Albrecht, design director, AIA, Gensler Austin is bursting at the seams — just ask anyone who is currently trying to buy a home here. According to the latest U.S. Census Bureau figures, the city’s population has increased by 22 percent since 2010. The city will continue to grow and evolve, but people are attracted to its longstanding welcoming and laid-back culture. How does that translate into design and urban planning for this expanding, vibrant metropolis? Here are the major trends impacting design across commercial real estate in Austin that we have seen in our work as architects and designers, as well as insights gleaned from clients. Experiential Office Buildings As we adapt to a hybrid lifestyle where the workforce is split between the office and home, the role of the workplace and the office building will be to strengthen relationships, teach others and build community, culture and purpose. People want to work in dynamic, activated environments, which is why today’s successful office buildings and workplaces are now included within mixed-use developments, rather than as standalone campuses or office parks. Ground floors must be activated with retail space, service amenities, artwork, community or public gathering areas, even when workers …

August 10, 2021

Industrial Market Reports Washington Western Western Market Reports

Puget Sound’s Industrial Leasing Activity is Explosive in 2021

by Jeff Shaw August 9, 2021

By Brian Cagayat, Research Analyst, Cushman & Wakefield Washington officially reopened at the end of the second quarter of 2021, lifting most of the COVID-19 restrictions that had been in place for more than a year and bringing a mixture of relief and uncertainty to residents and businesses. Workers in the industrial sector were mostly considered essential, so many continued to work onsite through the pandemic. The industrial sector was also instrumental in helping aid and support everyone through the pandemic conditions, with some of those leading industrial users based here in the Puget Sound. New leasing activity in the Puget Sound region has been explosive in 2021, totaling 14.1 million square feet in the first half of the year. This has nearly equaled the 15 million square feet of annual activity tracked in all of 2020. Net occupancy growth still remains a bit in the red through the first half of 2021 with a negative 423,000 square feet of absorption. However, we expect a considerable portion (of over 10 percent) of the 29.1 million square feet of leasing activity signed since 2020 to translate into net growth in future quarters once those companies officially take occupancy. Ecommerce and 3PL firms have been …

August 9, 2021

Market Reports North Carolina Office Southeast Southeast Market Reports

A City on the Rise: Charlotte Office Market Poised for Growth and Recovery

by John Nelson August 9, 2021

Last year posed many challenges for Charlotte’s office market, as companies continued to delay making decisions about their office space needs. In the fourth quarter, leasing velocity had slowed, with limited deal activity driven largely by lease expirations. But the city still scored several corporate relocations and expansions, faring well compared to other major cities throughout the country. Fast-forward to June 2021, and the light at the end of the tunnel is getting brighter as more occupants set re-entry plans for this fall. This is a transformative year for Charlotte. Commercial Café ranked the Queen City as No. 5 in the United States for the most anticipated office deliveries in 2021 with more than 4.1 million square feet delivering in the metro area this year. Uptown added to its skyline with the addition of 366,000 square feet at Legacy Union Two, the completion of the 742,000-square-foot Ally Charlotte Center, Honeywell’s 330,000-square-foot corporate headquarters delivering later this fall and the 156,415-square-foot FNB Tower delivering this summer. At the end of the first quarter, new construction in Uptown was more than 82 percent preleased. And as more tenants seek out highly amenitized and efficient space, new construction is expected to be the …

August 9, 2021

Life Sciences Market Reports Massachusetts Northeast Northeast Market Reports Retail

Low Interest Rates Spearhead Uptick in Retail Investment Throughout Boston

by Taylor Williams August 6, 2021

By Taylor Williams The business of trading retail properties is booming across the greater Boston area, and the combination of cheap capital, a desire to recoup lost business and potential changes in tax law are prompting buyers and sellers alike to transact at a frenetic pace. As is often the case in times of robust investment sales activity, low interest rates are the straw that stirs the drink. At its latest meeting in June, the Federal Reserve opted to hold the federal funds rate — the short-term rate by which lending between financial institutions is priced — at a target range of 0 to 0.25 percent. The Fed cut rates by 100 basis points to this target range in March 2020 in response to the COVID-19 outbreak and has kept them there ever since. A fiscal policy defined by record-low rates is persisting even in the face of inflation, which hit its highest mark in 13 years when the U.S. Consumer Price Index rose by 5.4 percent in June 2021 relative to June 2020. Economists have cited sustained injections of federal stimulus and relief money and elevated government spending in response to the pandemic as the key drivers of this …

August 6, 2021

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