Market Reports

An Inflection Point for the Greater Los Angeles Office Market

by Jeff Shaw June 23, 2021

By Nico Vilgiate, Executive Vice President, Colliers Greater Los Angeles has one of the largest office development pipelines in the nation, which includes new construction and some sizeable adaptive reuse projects. There is currently more than 6 million square feet in this pipeline with nearly 2.7 million square feet scheduled to deliver this year. This will increase overall vacancy throughout 2021. The most significant developments are occurring in Downtown and West Los Angeles, which contain more than 55 percent of all new office construction. One of the most prominent projects is One Westside, a shopping mall conversion that will contain 584,000 square feet of creative office space in West Los Angeles. Google will be moving into the building upon completion. The greater Los Angeles overall vacancy rate of 18.3 percent is 50 basis points higher than the previous peak in 2013 when it reached 17.8 percent. Sublease availability has increased over the past four quarters due to the work-from-home mandate. However, there has been an increase in the overall average asking rate in the past few quarters. The rate has increased by 4.4 percent year-over-year to about $3.54 per square foot, per month. Asking rate rental growth during this period was strongest …

June 23, 2021

Market Reports Multifamily New York Northeast Northeast Market Reports

Opportunities Abound for Buyers and Sellers in New York City’s Multifamily Market

by Taylor Williams June 22, 2021

By Lev Mavashev, founder and principal, Alpha Realty Last year in 2020 and even now well into 2021, the COVID-19 pandemic has many New York City property owners feeling like deer in headlights. Should I push forward? Take a step back? Or should I just freeze and brace for impact from the worst disaster to strike the world in living memory? While little is certain in these uncertain times, for New York’s multifamily owners considering their future beyond 2021, values might drastically be impacted by the following factors. Rising Property Taxes New York will never move forward unless its real estate industry moves forward. Next to finance and, increasingly, big tech, the industry is the biggest driver of the state economy, and its 12-month enforced hiatus has cost the state $1.6 billion in lost tax revenue. The state can’t just print money to make up that shortfall, so it is doing one of the only things that is certain in life: issuing taxes. From hikes in property taxes to capital gains, personal income to corporate tax, both the city and state are creating a clear roadmap to recouping what’s been lost. Property taxes will definitely be going up for the …

June 22, 2021

Market Reports Maryland Office Southeast Southeast Market Reports

Maryland Governor Hogan’s Good News for Baltimore’s CBD, Demand Rises for Mental Health Space

by John Nelson June 21, 2021

Among Maryland’s hardest hit submarkets the past 12 months is the Baltimore Central Business District (CBD), where the vacancy rate has risen to 16 percent, according to CoStar Group. Notable departures from companies such as T. Rowe Price and Legg Mason have accelerated during the pandemic due to aging infrastructure and rising crime, coupled with the expansion of sexy nearby submarkets, Inner Harbor East and Harbor Point. Combined these factors have stressed property owners and businesses trying to survive. Downtown restaurants in particular have suffered even more from the double whammy of the area’s rising pre-pandemic vacancies followed by the crushing hit from the spread of COVID-19 and government shutdowns. State government swoops in But Baltimoreans just received some good news from Maryland Gov. Larry Hogan that is sure to spur economic and social revitalization of its CBD. Over time the State of Maryland will be relocating 12 agencies and approximately 3,300 employees to available properties throughout the CBD from an aging Midtown office complex known as State Center. The first agency on the move will be the Department of Human Services (DHS), which has an RFP out for approximately 105,000 square feet of office space. The Department of Health …

June 21, 2021

Market Reports Multifamily Texas Texas Market Reports

Investors Take Notice as RGV Multifamily Market Emerges from Pandemic Lull

by Taylor Williams June 18, 2021

By Brad Frisby, associate, NAI Rio Grande Valley As the national economy and society as a whole move toward recovery from the COVID-19 pandemic, multifamily investors of all varieties, eager to deploy capital into the space, are increasingly looking at markets in the Rio Grande Valley (RGV). While the region’s multifamily investment market has unquestionably experienced its share of decreased activity over the past 15 months, deal volume and velocity have really picked back up through the first two quarters of 2021. Many investors that are targeting the RGV are banking on its solid fundamentals holding through the recovery and are eyeing deals with five- to 10-year holding strategies in mind. Although the RGV remains something of a seller’s market — many multifamily deals are trading at sub-6-percent cap rates — buyers are willing to pony up to be in this high-growth market. This holds especially true when one considers the RGV as an alternative to Dallas, Houston or Austin. But it’s precisely from those markets that we continue to see an influx of capital looking for multifamily deals. Prior to the pandemic, the annual combination of limited new deliveries and steady job growth in resilient industries like healthcare, education …

June 18, 2021

Industrial Market Reports Midwest Midwest Market Reports Office Ohio Retail

Toledo, Ohio Market Shows Stability in Various Areas

by Kristin Harlow June 17, 2021

By Harlan Reichle, Reichle Klein Group As the Toledo, Ohio, area’s retail market proved to be stable and solid in the second half of 2020 and the industrial market continued a remarkable stretch of high performance since the Great Recession, 2020 was a tough year for the office market. However, all three property types have yet to register any negative COVID impact in our latest survey results. Retail Toledo’s retail market proved to be quite stable and solid during the second half of 2020. Given the fraught last year along with the headlines and travails of retail stores, gyms and restaurants, the general public might find this result surprising, but it was clear to our retail leasing brokers since mid-summer 2020 that transaction activity was snapping back fairly quickly after the initial shock of the spring 2020 lockdowns. Our year-end 2020 market survey found overall market vacancy down from both the end of 2019 and mid-year 2020. The decline in anchor vacancy more than offset a small increase among inline spaces as the market absorbed 39,183 square feet of space in the last six months of the year. It is a nearly exact repeat of the market’s performance in the …

June 17, 2021

Industrial Market Reports New Mexico Western Western Market Reports

New Mexico is Primed for Industrial Growth

by Jeff Shaw June 16, 2021

By Tim With, Senior Vice President, Colliers The amount of empty space in New Mexico’s industrial market has shrunk to unforeseen levels. Albuquerque, the state’s largest MSA, reported a total of 41.5 million square feet of industrial space and only a 2.4 percent vacancy rate at the end of 2020. Absorption levels have increased through the first quarter of 2021, and available inventory is becoming difficult to find as the vacancy is down to 1.9 percent. Albuquerque has been on the brink of new construction for some time, with the need for new Class A space far outweighing the current availability. The nationwide industrial supply posted record deliveries in 2020 that totaled more than 300 million square feet. This represents about a 2 percent year-over-year increase in total inventory. In comparison, Albuquerque’s inventory grew by less than 1 percent over the past five years, while vacancy rates decreased by almost 550 basis points. Most new construction has been build-to-suit activity. Tenants, meanwhile, are challenged with a lack of choice as a considerable amount of the existing vacant space is functionally obsolete. The average overall asking lease rates for existing warehouse/distribution space was $6.58 per square foot, triple net, at the end of …

June 16, 2021

Market Reports New York Northeast Northeast Market Reports Retail

New York City Must Be A Leader in Reimagining Retail in the Post-Pandemic World

by Taylor Williams June 15, 2021

By James Nelson, principal, head of Tri-State investment sales, Avison Young It probably won’t be a shock to learn that in the aftermath of COVID-19, we are going to need to reimagine retail. Even before the pandemic hit, retail vacancy was becoming more prevalent throughout New York City. Now more than ever, landlords and retailers are going to need to think outside the box to fill vacancies and allow retailers to survive. A recent survey among members of the International Council of Shopping Centers (ICSC), which consists of landlords, tenants and service providers, found that 57 percent of retail professionals believe that the economy will improve over the course of the next year. That being said, 73 percent wanted to see businesses open again in their state. A key question involves when we could expect to return to the in-person conventions and events that our industry is known for. ICSC is famous for its annual conference in Las Vegas that draws over 30,000 people. It’s a chance to catch up with friends and business contacts in a fun setting while also being able to accomplish dozens of meetings over a few days, as everyone is in the same place. Industry …

June 15, 2021

Market Reports Maryland Multifamily Single-Family Rental Southeast Southeast Market Reports

Baltimore’s Stable Apartment Market Attracts New, Returning Buyers

by John Nelson June 14, 2021

Consistent with much of the nation, the Mid-Atlantic region locked down at the onset of the COVID-19 pandemic in March 2020. However, by late August 2020 and throughout the first quarter of 2021, activity in the multifamily asset class picked up considerably. As operations stabilized and investors could better determine valuations, regional transaction volume quickly heated up as investors returned with pent-up demand. Aided in part by the continued government stimulus and rent regulation in the Mid-Atlantic, Baltimore’s durable “meds and eds” employment bases, anchored by the life sciences, medical, higher education and technology sectors, bolstered the region’s stability. The Baltimore multifamily market has performed in-line with comparable metropolitan areas in the Mid-Atlantic, with flat to moderate rent growth. Rents are expected to stagnate or struggle in response to heightened development occurring in Downtown Baltimore, Owings Mills and Towson, and the new supply may surpass demand in the near-term. Despite muted rent growth projections, transaction volume has returned with an expanded pool of multifamily investors, driving cap rates down and valuations up. Shifting east “Charm City” boasts blue-chip Downtown employers such as T. Rowe Price, Pandora, University of Maryland Medical Center, Johns Hopkins Hospital and Under Armour. In theory, this …

June 14, 2021

Industrial Market Reports Texas Texas Market Reports

RGV Industrial Market Maintains Steady Growth, Draws Investors’ Attention

by Taylor Williams June 11, 2021

By Daniel Galvan, SIOR, principal, Coldwell Banker Commercial RGV The Rio Grande Valley (RGV) industrial market continues to be very active despite a small, temporary slowdown due to the COVID-19 pandemic. With single-digit vacancy rates in both Hidalgo and Cameron counties, absorption is holding at a steady pace as available space has declined. To that point, the market saw approximately 250,000 square feet of net absorption in 2020. Rents have also continued to increase modestly with elevated demand, rising approximately 5 percent in the first quarter of 2021 relative to that period in 2020. However, that rate of growth should slow a bit in the coming months given that the market is still fraught with uncertainty due to COVID-19. Despite this uncertainty, we typically see upcoming vacancies continue to be filled prior to actually becoming vacant. While the agriculture industry continues to be a very large driver of absorption in the RGV’s industrial sector, there are more deals than ever for users that focus on consumer goods and fulfillment. There has also been a large amount of growth in demand from third-party logistics (3PL) companies and manufacturers. These users ultimately accounted for about 200,000 square feet of positive absorption in …

June 11, 2021

Colorado Industrial Market Reports Western Western Market Reports

Industrial Leasing Activity Outpaces New Construction in Denver

by Jeff Shaw June 10, 2021

By Tyler Smith, Managing Director, Cushman & Wakefield While the office and retail sectors in Denver continue to grapple with pandemic-related disruptions, the industrial sector remained the dominant performer within the commercial real estate market through the early part of 2021. The Denver industrial market recorded more than 718,000 square feet of positive net absorption, and nearly 3.8 million square feet of leasing activity during the first quarter of 2021. However, with metro-wide vacancy trending above the five-year average and 1.8 million square feet of speculative development delivering vacant during the first quarter of 2021, the discussion in the Denver market remains focused on whether industrial supply has begun to outstrip demand. The maturation of Denver’s industrial market has closely mirrored the city’s population growth over the past decade. Denver experienced a population boom of nearly 20 percent from 2010 to 2020. Fueled by the resulting uptick in consumer demand and increased economic diversification, Denver’s industrial inventory skyrocketed as well, growing by 19.4 percent during the same period. Since 2017 alone, over 22 million square feet of new development has delivered in the market. Despite robust leasing activity and nearly 10 years of uninterrupted positive net absorption, industrial vacancy in Denver has been …

June 10, 2021

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