Market Reports

South Central Wisconsin’s Economic Engine Continues to Set the Pace

by Kristin Harlow June 10, 2021

By William Mears, Coldwell Banker Commercial McGuire Mears & Associates What a difference a decade makes. While some may characterize the evolution of the development and investment climate of the Janesville-Beloit, Wisconsin metropolitan statistical area (MSA) with a population of 160,120 as an extreme makeover, others will note the area has been South Central Wisconsin’s best kept secret. Case in point: the numbers speak for themselves, and local real estate and economic development officials are bullish on this location’s growth trajectory. For starters, the area’s logistical friendly environment, its value-add real estate and workforce assets and its seasoned development team provide the right ingredients to facilitate development opportunities. Since 2010, the Janesville-Beloit MSA has added more than 12 million square feet of commercial and industrial space. Recognized brands such as Amazon, Kerry Foods, Fairbanks Morse Defense, SHINE Medical Technologies and Prent Corp. represent a sampling of the area’s business community. These companies and their 3,500+ counterparts drive the area’s annual GDP figure, which is nearly $7 billion. Industrial and warehousing demands from end-users seeking to leverage critical supply chain inputs are continually impacting the county’s real estate market. As a result, industrial vacancy rates are hovering around 2 percent, and …

June 10, 2021

California Market Reports Multifamily Western Western Market Reports

Affordability, Jobs Drive Multifamily Residents to the High Desert

by Jeff Shaw June 9, 2021

By Bob Basen, Executive Vice President, Coldwell Banker Commercial Real Estate Solutions The High Desert’s multifamily market remained surprisingly strong during the pandemic. Historic low vacancies in the High Desert apartment market, combined with low cap rates in Los Angeles and Orange counties, have made this market a favorite for “down the hill” investors. With the exception of three substantial multifamily projects in Hesperia, there has been no real apartment development in the High Desert since the mid-2000s. The recently completed The Villas, a 96-unit, age-restricted project developed by Eagle Hesperia 55 LP, has had phenomenal success with a waiting list prior to completion. With the success of this project, there will be a second phase containing another 96 units. Frontier Homes’ Las Casitas Apartment Homes and the 200-unit West Main Villas, developed by Bruno Mancinelli, were also very successful with two-bedroom apartments renting for more than $1,600 per month. This is a number that was unheard of prior to these projects. With those kinds of rents, we can and should expect to see increased apartment development in the High Desert. Hesperia has decreased its development impact fees, which may have spurred the above-mentioned developments within that city. There are currently …

June 9, 2021

Industrial Market Reports New York Northeast Northeast Market Reports

New York City Industrial Market Held Strong in 2020, Has Promising 2021 Ahead

by Taylor Williams June 8, 2021

By Jakub Nowak, senior vice president investments, Marcus & Millichap Last year’s COVID-19 lockdown took a major toll on parts of New York City’s real estate market. The city’s industrial sector, however, fared relatively well compared with other asset classes. Although dollar volume for outright industrial sales transactions over $1 million fell by almost 25 percent from $1.75 billion in 2019 to $1.35 billion in 2020, the average price per square foot over the same period held flat at about $445 per square foot. Meanwhile, capitalization rates for industrial properties in 2020 continued their steady downward trajectory, compressing further from 4.7 to 4.4 percent on a year-over-year basis. Importantly, these 2020 sales numbers do not account for the $800 million-plus of institutional capital that poured into local industrial real estate by way of partial interest sales. Notable transactions included a joint venture between Hackman Capital and Square Mile Capital deploying just under $375 million for a majority interest in Queen’s Silver Cup Studios; GIC obtaining a 25 percent stake in Sunset Park’s Industry City for $330 million; and a joint venture between Madison Realty Capital, Meadow Partners and Acadia Realty acquiring a share of Sunset Park’s Liberty View Plaza for …

June 8, 2021

Market Reports Retail Texas Texas Market Reports

RGV Retail Market Displays Creativity, Resourcefulness in Response to Pandemic

by Taylor Williams June 7, 2021

By Lupita Gutierrez-Garza, principal, and Christian Gutierrez, senior associate, Southern Commercial Real Estate Group The impacts of COVID-19 on the retail sector in the Rio Grande Valley (RGV) have mirrored those of the rest of the country. However, the way the region responded was different from the way it addressed past crises, such as natural disasters, and even very different from past responses to local problems like peso devaluations and drug cartel activity along the border. The response was multifaceted and included many trial-and-error situations. But through sheer determination and quick thinking by local leadership, regional landlords and tenants managed to mitigate all the uncertainty to not only survive, but to thrive. What made a difference in the region was the behind-the-scenes build-up of its economic infrastructure that has slowly been chipping away at the inequities the region has endured for years. Infrastructure build-up has been ongoing for over a decade and has come in many forms, including education and medical, industrial and logistics, aerospace technology and wind energy. All of these sectors managed well during the peak of the pandemic and continued to expand at phenomenal paces. Their growth has piqued a lot of outside interest and investment …

June 7, 2021

Industrial Market Reports Maryland Southeast Southeast Market Reports

Baltimore’s Industrial Market is Stronger Than Ever, And There’s More to Come

by John Nelson June 7, 2021

Baltimore’s industrial market has been flourishing for years, but current trends suggest it may be poised to become one of the hottest markets in the United States over the next few years. Supporting these dynamics will be continued growth in e-commerce, a new emphasis by manufacturers and retailers on expanding their “safety stock” in warehouses and increasing land constraints in the Mid-Atlantic. The confluence of these trends is expected to drive average Baltimore industrial rents at one of the fastest clips of any market in the United States over the next two years. In 2021, the Baltimore industrial market recorded its most active first quarter of gross leasing in over a decade. Net absorption of 1.3 million square feet sparked the year with a strong start as the region’s industrial vacancy rate continued to hover near its lowest level in more than a decade. Vacancy in Baltimore industrial properties has been stable since 2018, despite approximately 12 million square feet of new warehouses constructed in that time span. Several important trends are driving the record-breaking market conditions and are expected to facilitate growth into the foreseeable future. The first trend is a sharply recovering economy in 2021 that may perform …

June 7, 2021

Market Reports New Jersey Northeast Northeast Market Reports Office

Tenant-Focused Approaches Fuel Leasing Growth Within New Jersey’s Suburban Office Markets

by Taylor Williams June 4, 2021

By Mark Meisner, president and founder, The Birch Group For many years, corporations have been rethinking their office space utilization, both in terms of square footage per employee and various configurations that allow employees to collaborate and thrive within office settings. As we look ahead to the return to the office, we are already hearing that corporate culture, the sharing of ideas and training of new hires have become driving forces in getting people back into the workplace. At the same time, an increasing number of companies are also considering the hub-and-spoke model as part of their overarching corporate strategic planning. The openings of these satellite offices allow companies to tap into larger talent pools, reduce employee commute times and in some cases, avoid mass transit altogether. Over the past several years, we’ve seen companies like Ross Dress for Less take space on both sides of “The River,” opening offices on Long Island and in The Meadowlands to supplement its New York City headquarters. Now more than ever, with the suburban office market showing signs of a resurgence, there is an onus to go back to the basics and leverage a tenant-focused approach to bolster leasing and differentiate properties. At …

June 4, 2021

Market Reports Midwest Midwest Market Reports Office Wisconsin

Industrial Companies Drive Boom in Milwaukee Office Growth

by Kristin Harlow June 3, 2021

By Andrew Jensen Jr., Cushman & Wakefield | Boerke Milwaukee was once known as a city of industries and beer, the hometown of Allen-Bradley (now Rockwell Automation), Briggs & Stratton, Harley-Davidson, Johnson Controls, Master Lock, Rexnord and, of course, the Miller, Pabst and Schlitz brewing juggernauts. Today, Milwaukee’s economy is more diversified, and its industrial companies are quieter and not as flashy. But the area’s industrial firms are still central to its success and are now driving the area’s office market. In and near Milwaukee’s central business district (CBD), major recent office deals, all involving industrial users, include: ● Milwaukee Tool, based in the suburb of Brookfield, will soon expand into Milwaukee with a $30 million redevelopment of a vacant five-story, 333,000-square-foot office building. Milwaukee Tool will employ up to 2,000 people there, the largest-ever influx of jobs to the CBD by a suburban-based firm. The City of Milwaukee is providing up to $20 million in financing for the project. ● Utilities and infrastructure contractor Michels Corp., based in the small Wisconsin town of Brownsville, chose a riverfront development site 60 miles away in Milwaukee for an office expansion after considering Chicago and New York City. The $100 million project, …

June 3, 2021

Market Reports Restaurant Retail Texas Texas Market Reports

Food & Beverage Industry Returns to Growth Mode in Houston

by Taylor Williams June 2, 2021

By Jason Baker, principal, Baker Katz At a time when commercial real estate professionals see promising COVID-19 metrics and a better-than-expected vaccine rollout as signs that the end of the pandemic is near, it’s natural to examine where some of the most interesting and encouraging signs of recovery are already popping up. Food and beverage (F&B) has certainly weathered the pandemic storm as well as any other retail sector. Understanding what comes next in F&B — what the next generation of successful concepts might look like and how the industry will likely evolve — begins with appreciating why the sector has remained relatively resilient during the pandemic. In telling that story, we can start to get a sense of what’s next for F&B concepts and real estate strategies, both in the Houston market and across the country. F&B Ascends It’s not surprising that F&B is having a moment. It was the hottest commercial real estate category before the pandemic, and it remains the most consistent industry bright spot today, though industrial players might disagree. Demand remained high throughout the pandemic, especially for quick-service and fast-casual concepts. A handful of newer players were hit hard early during the COVID-19 outbreak, but …

June 2, 2021

California Industrial Market Reports Western Western Market Reports

Industrial Demand is Unabated in the High Desert

by Jeff Shaw May 27, 2021

By Joseph W. Brady, President, Bradco Cos. The High Desert portion of San Bernardino County, also known as the Mojave River Valley, is anticipating exceptional industrial development growth in the upcoming years as the balance of the Inland Empire builds out and has no significant land to further develop. The Mojave River Valley region contains more than 22 million square feet of industrial space. The City of Hesperia has recently experienced a mass grading project — probably the largest grading project in the High Desert’s history. Covington Capital is mass grading 232 acres where it intends to build a 3.5-million-square-foot industrial complex. The first building (1,055,360 square feet) will be developed for Modway. It will increase the major furniture distributor’s ability to serve regional and national distribution requirements from its current 310,555-square-foot facility in Fontana. The 60-acre site is being developed by Exeter Property Group. Big Lots opened its new distribution center in north/east Apple Valley in late 2019. This 1.3-million-square-foot facility sits just south of Walmart’s distribution center. Brightline West has also acquired property in north Apple Valley near Dale Evans Parkway for a high-speed rail station that will move passengers from Southern California to Las Vegas in 90 minutes at speeds …

May 27, 2021

Industrial Market Reports Texas Texas Market Reports

Buyers Crowd Texas Industrial Markets

by Taylor Williams May 26, 2021

By Taylor Williams E-commerce has revealed some fundamental truths about how humans consume goods, mainly that price point and convenience are by far the most important criteria in purchase decisions. The COVID-19 pandemic has served to further ingrain these mentalities and to suck more people into the world of online shopping in the name of adhering to public health guidelines. According to the U.S. Census Bureau, in 2020, a year in which a global health crisis spurred furious increases in online shopping, total e-commerce sales clocked in at $791.7 billion, up a staggering 32.4 percent from 2019. E-commerce sales accounted for 14.4 percent of all retail sales in 2020 — essentially double the 7.3 percent proportion in 2015. In addition, the National Retail Federation (NRF) is projecting that e-commerce sales will grow by 18 to 23 percent in 2021, yielding a total annual sales volume in excess of $1.1 trillion. Based on 2020 figures provided by the NRF, which cited total retail sales of just over $4 trillion, the e-commerce component is now poised to account for more than a quarter of the market. Especially in the early days of the pandemic, the need to minimize shopping trips and shelter …

May 26, 2021

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