Market Reports

Supply of Affordable Housing Plays Catch-up to Demand in Texas

by Taylor Williams April 21, 2021

By Taylor Williams The fundamental forces of job and population growth that drive demand for market-rate multifamily properties are hard at work on the affordable housing sector in Texas, and it doesn’t appear that a supply-demand equilibrium is in the cards anytime soon. In addition, a perpetual shortage of low-income housing tax credits (LIHTCs) and other government-issued subsidies that are required to finance new development of affordable housing are working to keep supply growth in check. Throw in a global pandemic that has cost millions of people their jobs and depleted their savings, potentially forcing them to seek less-expensive housing, and you have a supply-demand dynamic that is far from balanced. The situation is further exacerbated by the fact that there is some overlap between workers in industries hit hard by the pandemic, such as leisure and hospitality, and the types of renters who need or qualify for affordable housing. Texas is hardly the only state facing these lopsided market conditions. According to a 2020 report by the National Low Income Housing Coalition, when it comes to housing that renters whose income levels are at or below 30 percent of their area median income (AMI) can afford, the United States …

April 21, 2021

Industrial Market Reports Texas Texas Market Reports

San Antonio Industrial Market Moves in Lockstep with National Trends

by Taylor Williams April 16, 2021

By Joe Iannacone, vice president of development, Titan Development; and Rob Burlingame, SIOR, CCIM, senior vice president, CBRE While industrial was a preferred investment vehicle prior to the pandemic, the impacts of COVID-19 have further cemented the property type’s place as the favorite asset class among investors. Newly implemented safety precautions related to COVID-19 have accelerated established trends toward e-commerce and delivery-based shopping. The pandemic has also exposed various weaknesses in the global supply chain, spurring predictions of a return to domestic manufacturing and processing of raw material. As more consumers have yielded to the convenience that e-commerce provides, investors of all types have acknowledged the strength of industrial fundamental metrics, causing demand to spike in the process. As a result, investors have spent the past year seeking existing and new industrial development opportunities to capitalize on what many see as a trend that will likely continue. The increased level of vaccine administration on the horizon has further accelerated this interest in industrial properties, with many experts predicting a return to somewhat normal living, working and shopping habits by the middle of 2021. On a more micro level, one subtype of industrial real estate — cold storage — could also …

April 16, 2021

Industrial Market Reports Midwest Midwest Market Reports Minnesota

Twin Cities Industrial Market Poised for Additional Growth

by Kristin Harlow April 15, 2021

By Joe Mahoney, Opus Development Co. Despite a confluence of major events in 2020 that shook our world — the pandemic, social unrest, historically high rates of unemployment — the industrial real estate market in the Twin Cities fared very well. While positive net absorption was limited in the second quarter of 2020, the rate accelerated to 1.1 million square feet during the fourth quarter and ended the year at 3.2 million square feet, according to CBRE Minneapolis-St. Paul. Active users also increased. In the beginning of 2020, there were 6.4 million square feet of users. At the end of the third quarter, that number had increased to 10 million, and by the end of the year, there were close to 12 million square feet of users, almost doubling over the course of the year. We see user demand continuing to trend up and accelerate this year. To support growth plans, users are looking for highly functional manufacturing, warehousing and distribution facilities. Many businesses are increasing efficiency and productivity by consolidating several obsolete buildings into one new highly functional, build-to-suit space. COVID-19 supply chain disruption has prompted some businesses to increase their footprint for storing more inventory and reducing reliance …

April 15, 2021

Market Reports Multifamily Texas Texas Market Reports

San Antonio Multifamily Market Maintains Healthy Supply-Demand Balance

by Taylor Williams April 14, 2021

By Sean Sorrell, senior managing director, JLL Last year, San Antonio’s multifamily sector was one of the only markets nationally in which the 2020 absorption exceeded that of previous years. Moreover, the city’s development pipeline was already contracting after 2019, so additional supply reductions in 2020 and 2021 due to COVID-19 should result in rebounding occupancy across the metro. The market is maintaining balance in terms of supply and demand and is poised to elevate its national prominence. The San Antonio multifamily market ‘s overall inventory is approaching 185,000 units, having grown by roughly 8 percent over the last two years. Ongoing supply growth has marginally outpaced demand, but even in the face of COVID-19, the overall market is approximately 92 percent occupied. JLL’s research shows that nationally, more than 6 percent of apartment renters have vacated their units since April 2020, either moving back in within parents or “coupling up” with roommates. San Antonio experienced very little of this effect, with an occupancy loss of less than 1 percent due to this temporary phenomenon. These displaced renters are likely to re-enter the apartment market in the near term, and, with ongoing in-migration, we anticipate the San Antonio market should …

April 14, 2021

Market Reports New Jersey Northeast Northeast Market Reports Retail

Diverse Mix of Retailers, Restaurants Remain Active in Northern New Jersey

by Taylor Williams April 13, 2021

By Danielle Brunelli, president, R.J. Brunelli & Co. On both the landlord and tenant sides, 2020 was a tough year for the Northern New Jersey retail market. But as some of the industry’s most optimistic voices predicted, the hard times are passing, and actually passing fairly quickly. In 2020, we saw leasing activity decline by almost 30 percent year over year. This languishing activity resulted in a 3.1 percent drop in the market rent on a per-square-foot basis. Over the past couple years, there were several bankruptcies in the works that were accelerated by the COVID-19 pandemic. These bankruptcies resulted in many new vacancies in the region, including former stores of Modells, Justice, Pier 1 Imports, Tuesday Morning, Steinmart and others. However, light has appeared at the end of the tunnel, and we are seeing renewed leasing activity as we close the first quarter of 2021. Users including Planet Fitness, Dollar Tree, Harbor Freight, Raymour and Flanigan, salon suites concepts, Five Below and others are leasing up vacant spaces quickly. Tenant Expansions A good example of an essential service business that has benefited from an increase in sales throughout the pandemic and aggressively expanded in the region in 2020 is …

April 13, 2021

Market Reports Retail Texas Texas Market Reports

Where Does the San Antonio Retail Market Stand One Year into the Pandemic?

by Taylor Williams April 9, 2021

By David Nicolson, president, Weitzman San Antonio In March 2020, health officials first used the term “pandemic” in reference to COVID-19. Since then, our communities, economy, commercial real estate industry and retailers and restaurants have gone through a year of challenges that few could have foreseen at the start of 2020. The fact that today we are in better shape than we could have predicted during the shutdown a year ago shows that the disruptions caused by the pandemic have been met with innovation, creativity and plain hard work. Here in San Antonio, those disruptions did result in a number of retail and restaurant closings. But since the second half of 2020, we’ve seen an upswing in tenant demand. In terms of closings, Sears closed its 150,000-square-foot store at South Park Mall and its approximately 134,000-square-foot store at Rolling Oaks Mall. With these store closings, Sears — once the nation’s largest retailer — no longer has a presence in the San Antonio market. Other closures include Stein Mart (three box vacancies), Pier 1 (five closed stores), Gold’s Gym (three closed locations) and Tuesday Morning (one closed location). Combined, these closings resulted in approximately 564,000 square feet of total vacancy being …

April 9, 2021

Illinois Market Reports Midwest Midwest Market Reports Office

Tenants, Landlords Analyze Future of Chicago’s Fulton Market District

by Kristin Harlow April 8, 2021

By Allen Rogoway, Cresa Chicago Over the past seven years, the Fulton Market office submarket has changed the landscape, and boundaries, of Chicago’s central business district (CBD) and what a “live-work” ecosystem can look like. Whereas the River North office submarket evolved over 30 years to become a low-cost alternative to the Loop for creative, boot-strapped companies requiring mostly small footprints, Fulton Market was developed for tech-centric, multinationals willing to pay “Trophy Tower” prices to attract and retain the very best talent. Employees didn’t mind adding a Chicago Transit Authority (CTA) transfer or 20 extra minutes to commute times each way in order to be in a neighborhood that was developed by big money yet felt authentic. Much of the architecture was preserved, and new construction was held to standards whereby the new mostly blended in with the area’s former produce, cold storage and century-old warehouses that had been converted for office use. Then old-guard companies and industries from accounting, consumer products and even law, started to set up shop in buildings that provided people with a very different workplace experience than what they were used to. Ownerships thoughtfully invested in tenant amenity spaces and retail pairings that matched with …

April 8, 2021

Acquisitions Market Reports Multifamily Texas Texas Market Reports

El Paso Multifamily Investment Demand Remains Strong Through First Quarter of 2021

by Taylor Williams April 7, 2021

By Jack Stone, director of investment sales, Greysteel “What do you have in El Paso?” The country is over a year into the pandemic, and Greysteel is still receiving calls on a daily basis from groups asking just that. We sold thousands of units in El Paso over the two years leading up to COVID-19, and there’s no end in sight. In fact, even in these uncertain times, demand seems to have grown. Attracted to the higher yields, strong tenant base and increasingly diversified economy, investors are coming to El Paso in droves. It’s no secret that the Texas multifamily market has been hot. Out-of-state groups were first drawn to markets like Dallas, Austin, Houston and San Antonio because they offered higher yields with fewer regulations than markets like New York and California. But it was only a matter of time before even those cities, which are seeing with cap rates begin to compress 4 to 5 percent, got too hot. Investors subsequently began exploring other options and turned to cities like El Paso, where the fundamentals were strong and yields still attractive. Demographic Advantages El Paso’s multifamily market has always had a strong tenant base. New players in the …

April 7, 2021

Georgia Industrial Market Reports Southeast Southeast Market Reports

Latest Shift in Atlanta’s Industrial Landscape: Mid-Sized Deals are All the Rage

by John Nelson April 5, 2021

While retail and office have had to adjust to a COVID-19 world, industrial has been the beneficiary. E-commerce, supply chain and last mile delivery are all the rage. But what has really gotten economic development leaders, elected officials and the media excited are the massive warehouse deals in cities like Atlanta that have created headlines and driven investor capital to industrial. Atlanta didn’t even truly get into the big-box industrial development game until 2004. From 1960 to 2006 there were just 13 buildings larger than 1 million square feet constructed in the metro area, but 11 were build-to-suits for users such as JC Penney, Kmart, Publix, Home Depot and the General Services Administration. Only Duke Realty (2004) and Majestic (2006) developed speculative properties spanning more than 1 million square feet. Between 2006 and 2015, there were 11 buildings more than 1 million square feet added to the city’s inventory, with seven of those south of Interstate 20, three in the Northeast 85 corridor and one on the Interstate 20 West Corridor. As Atlanta’s economy roared back in 2016, the market exploded with 17 new big-box facilities in just five years. While prior to 2015 the field of players constructing these …

April 5, 2021

Market Reports Restaurant Retail Southeast Southeast Market Reports Tennessee

Nashville Retail Market’s Investment Sales, Leasing Activity Defy Pandemic Impact

by John Nelson April 5, 2021

In spite of national trends, news of spiking default rates and a prediction of a national decline in retail tenancy, the middle Tennessee region appears to be emerging in equal (or better) condition from one of the most unusual years in history. Prior to the government-mandated shutdowns last year, retail activity in Nashville was at a fever pitch. A decade of year-over-year population and economic growth created a strong seller’s and landlord’s market, with no end in sight. The University of Tennessee’s Boyd Center for Business and Economic Research projected a 1 million-person population growth for Middle Tennessee by 2040. This strong, sustained growth pushed retail rents up more than 50 percent since 2010 and represents one of the largest cumulative increases in the nation, behind only Miami and Austin. In 2019, the Nashville region saw asking rents above the national average, according to CoStar Group. One year ago, the sudden and unexpected COVID-19 shutdowns made the collective hearts of 2008 survivors skip a beat. A real concern of what the next week or month might look like hit both landlords and tenants in the region, particularly in the downtown retail district that is historically reliant on tourism. As music …

April 5, 2021

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