Market Reports

NAI: Atlanta’s Office Market is Going to be ‘Just Fine’ as New Developments Come on Line

by Alex Tostado January 11, 2021

By Claire Blevins and Collin Devaney, NAI Brannen Goddard We’ve all seen the depressing commercial real estate news stories about the state of the office market, with words like “bleak,” “hazy” or “obsolete” in the headlines. Questions surround every major market, including Atlanta — a metro market known for its dependable economy and robust demand. Admittedly, Atlanta has had its struggles during the pandemic, like slow leasing activity and rising rental rates, but not everything is doom and gloom. New City Properties, in the middle of breaking ground on Mailchimp’s new headquarters, announced it was upping the budget to prepare for future pandemics, including setting money aside for technology that is not even available yet. Other developers are choosing to prioritize private green space over expensive machinery. Midtown’s new Norfolk Southern headquarters, opening by the third quarter of 2021, takes advantage of its 3.4-acre lot by developing a campus-style hub filled with parks and a rooftop garden. Employees who utilize these outdoor spaces decrease the risk of airborne transmissions, as well as promote healthy habits. Not every office building has the room for large outdoor forums, so other owners are doing away with cubicles and building out private offices. Or …

January 11, 2021

Georgia Market Reports Office Southeast Southeast Market Reports

Robust Absorption and a Record Deal Bode Well for Atlanta’s Office Sector

by John Nelson January 10, 2021

Commercial real estate sentiment has returned to pre-pandemic levels, according to NAIOP’s fall 2021 survey. Those views are good news for the commercial real estate industry generally, and the metro Atlanta office market is helping to provide some impressive specifics behind the rising optimism. At 2 million square feet of office space, Atlanta led the country in positive absorption in third-quarter 2021, approximately 700,000 square feet ahead of No. 3 market New York City, according to Colliers International research. Atlanta’s relatively low costs, attractive weather, growing demographics and educated labor force are big advantages for the city’s economy and office market. Metro Atlanta ranked No. 8 for year-over-year job growth in August among the largest U.S. metro areas with an increase of 124,300 new jobs, according to the U.S. Bureau of Labor Statistics. Atlanta recorded an unemployment rate of 3.1 percent that month for the market, 210 basis points lower the national figure. Atlanta also ranks No. 8 nationally for tech talent, according to CBRE, with total tech occupations having increased 15.2 percent from 2015 to 2020. Savills cited Atlanta’s highest growth rate for technology-related graduates in the country, a big draw for innovative companies looking to relocate to or …

January 10, 2021

Market Reports Retail Texas Texas Market Reports

Pent-Up Demand Grows for Experiential Retail in Texas

by Taylor Williams January 7, 2021

By Taylor Williams With widespread vaccination several months away and the federal government having passed additional relief legislation, the end of the COVID-19 pandemic appears to be in sight. To that end, retailers and restaurants that have survived the public health crisis can, with some reservations, start to look toward the rebound phase. Because there’s no question that American consumers are itching to make up for lost eating, drinking and socializing time, provided they can do so in what they feel are safe environments. “Our biggest point of optimism for 2021 lies in the fact that people want to go out, eat, shop and be entertained,” says Lucas Patterson, executive vice president at metro-Dallas based Bright Realty. “As we continue to respond to the pandemic, people are increasingly ready to get out of their homes, be with others, eat at restaurants, have drinks and listen to music. We believe we can offer those opportunities as soon as the time is right.” “Looking forward, our biggest source of positivity involves consumers’ built-up savings and pent-up demand for human connection in a more normal existence,” adds Terri Montesi, CEO of Trademark Property Co, the developer behind mixed-use projects such as Victory Park …

January 7, 2021

Market Reports New Jersey Northeast Northeast Market Reports Office

Will 2020 Be A Year to Remember or Forget for the New Jersey Office Market?

by Taylor Williams January 6, 2021

By Jonathan Glick, executive vice president, Sheldon Gross Realty Projecting future trends is always challenging, particularly when you’re attempting to do it during a global pandemic. But to date, several promising signs suggest that New Jersey’s office market is moving in a positive direction —sluggishly and bumpily, perhaps — but in an encouraging direction nonetheless. Newly delivered projects can provide insight on where the Garden State’s office market is headed in terms of geography, design, functionality and usage. We offer several examples of 2020 deals that help illustrate these trends. Sheldon Gross marketed and brokered the sale of a two-story 13,000-square-foot office building in Cranbury that featured an appealing location, just off exit 8A of the New Jersey Turnpike. The structure had been for sale and vacant for two years, but its out-of-state owner was willing to wait until a fair market offer materialized, which it did just prior to the COVID-19 outbreak. But with the pandemic unleashed on the market, all communication and negotiations ceased. By May, the prospective purchaser had withdrawn from the transaction. It wasn’t until September that a new deal was negotiated with a buyer that intended to occupy most of the building, rather than sharing …

January 6, 2021

Market Reports Midwest Market Reports Mixed-Use

Pandemic, Shifts in Consumer Behavior Trigger Fundamental Changes in Design of Public Spaces

by Kristin Harlow December 24, 2020

By Bob Kraemer, Kraemer Design Group The way that we work, eat, shop, gather and interact in community spaces will never look the same. While we may someday return to dine-in experiences and large-scale events, it’s clear the novel coronavirus has prompted profound and pervasive societal changes that are here to stay. It should come as no surprise to anyone who understands the deep connection between designed spaces and the people who occupy them that public spaces will need to evolve. We have already seen an evolution of spaces in order to stay relevant, stay profitable and in some cases, stay open. What does all of this mean for design and development? To understand what the brick-and-mortar landscape of tomorrow might look like, we have to think differently about the design of public spaces and the evolving priorities and practices of consumers, diners and office users. The waiting game Thinking differently about the design and functionality of public spaces means ensuring spaces formerly seen as functional or utilitarian are updated to address health and safety concerns and are no longer viewed and designed as an afterthought — but as strategically designed spaces. For example, diners waiting to be seated or …

December 24, 2020

Market Reports Northeast Northeast Market Reports

Commercial Real Estate Trends for 2021: Building Documentation Enters the 21st Century

by Taylor Williams December 23, 2020

By Kurt Yeghian, CEO, and Jared Curtis, president, Existing Conditions Surveys Commercial and institutional real estate developers in the Northeast have one priority mantra for 2021: no more costly surprises. With property deals and development projects resuming in an industry badly scarred by the coronavirus pandemic, the CRE community wants certainty above all — certainty in determining the value of their assets, in acquiring struggling portfolios and in repurposing vacant spaces and structures. As-built conditions form the basic DNA of any development. Nowhere are those specifics more suspect than in the Northeast, where the only record of square footage, dimensions, walls, floors and other structural features are blueprints created decades ago by architectural interns with tape measurers or surveyors relying on low-tech equipment. Property owners encounter inaccurate blueprints more often in the Northeast than in other parts of the country, but it’s a common problem in any region with older development. Smart players in the development community are avoiding expensive surprises — and sometimes uncovering hidden value — by turning to 21st century building documentation techniques. These practices rely on the same digital reality capture technology that has fueled advancements in robotics, self-driving vehicles and drones. Our experience in this …

December 23, 2020

District of Columbia Market Reports Retail Southeast Southeast Market Reports

Pandemic Hits Retail Investment Sales in D.C., But Signs of Revival Start to Show

by John Nelson December 22, 2020

The retail investment sales market in the Washington, D.C.-Baltimore metro area, just like the rest of the United States, has been detrimentally impacted by COVID-19. Multi-tenant retail investment markets have essentially shut down, sellers and buyers are unable to come to pricing conclusions and most investment opportunities have shifted into urban areas that are experiencing more immediate distress. As COVID-19 cases continue to spike, and with further tightening of lockdown policy likely forthcoming, this trend will continue as the restaurant and entertainment industry bears the brunt of winter. This will present investors with the opportunity to purchase fundamentally solid urban real estate at a discount as the market for larger shopping centers waits to reset. It comes as no surprise that shopping center investment sales are anemic. Over the trailing three months in the D.C.-Baltimore area, there has been a paltry $49 million in sales volume across three transactions for retail centers exceeding $10 million. This compared to $196 million across nine transactions in the same period last year, a 75 percent decrease in volume. Further, of these transactions, two of them — Bel Air Town Center, purchased by JCR Cos. for $21 million, and Hagerstown Shopping Center, purchased by …

December 22, 2020

Market Reports Multifamily Texas Texas Market Reports

Austin Poised to Emerge From Pandemic as a Premier Multifamily Market

by Taylor Williams December 22, 2020

By Sean Sorrell, senior managing director, JLL As we enter 2021, there’s no doubt that we are emerging from one of the most unique and trying years that our modern civilization has ever confronted, and we all likely agree that we will never again endure a pandemic of this scale. As of the writing of this article, the first vaccines have arrived in Austin; our first responders have begun administering it to the public and we can finally see the light at the end of the tunnel. In the face of these challenges, Austin continues to flourish, at least on a relative basis, and its real estate industry is poised to take a firm lead as one of the strongest real estate markets in the nation, if not the world. A key discipline within the industry is the apartment rental market, which is currently facing obstacles but continues to successfully navigate market conditions all the same. The metro Austin apartment inventory is now approaching 200,000 units — a growth rate of 75 percent over the last eight years. While many cities would wilt under the pressure of this ongoing development surge, this market has flourished. The ongoing supply has marginally …

December 22, 2020

Market Reports Northeast Northeast Market Reports

COVID-19 Catalyzes Innovation in Marketing, Delivery of Real Estate Services

by Taylor Williams December 18, 2020

By Natalie Hwang, founding managing partner of Apeira Capital Advisors In the 1920s, President Calvin Coolidge made the saying famous that the business of America is business. Now, for the real estate sector in the age of COVID-19, the business of real estate is innovation. To build value in the pandemic economy, real estate companies need to find new modes of distribution, facilitated by technology, to connect with consumers, partners, tenants, investors and other key stakeholders. Once upon a time, and not all that long ago, bricks and mortar were king. Today, the COVID crisis has sharply accelerated online shopping and upended our traditional dependence on physical real estate as an exclusive distribution point for content, goods and services. This trend is nothing new, as businesses reliant on public contact have been casualties of tech innovation for decades. Long before the pandemic hit, e-commerce was displacing retail, robots were replacing warehouse workers and an erosion of labor’s bargaining power was placing downward pressure on service-sector wages. COVID-19 has only expedited the trajectory of these market participants and revealed the weaknesses of businesses that depend mainly on in-person contact. The urgency and suddenness of the lockdowns earlier this year demonstrated how …

December 18, 2020

Market Reports Midwest Market Reports Office

Office Space After Coronavirus: the New Norm with Remote Workers

by Kristin Harlow December 17, 2020

By Steve Kimball, emersion Design The impact of COVID-19 on workplaces will continue long after the virus has subsided. A majority of large corporations have embraced remote working, with many in the technology space such as Google, Twitter and Microsoft announcing they’ll keep a majority of employees permanently working from home. But it’s not just big technology companies that are taking this approach. New research from Harvard Business School cites at least 16 percent of the U.S. workforce will be remote moving forward. Additionally, a study by 451 Research shows that number could go as high as 67 percent being remote. Jobs in technology, healthcare, customer service, education, accounting and sales are considered the most likely to shift permanently to remote work. What does that mean for traditional office space? There will still be robust office environments, although changes are coming. These vary from what is in the office to where it will now be located. Downsize, upgrade Cost savings achieved by less square footage needs will enable companies to relocate to a more desirable location, offer additional amenities onsite and upgrade the office environment. While less space is required, companies can use the savings to upgrade the office with …

December 17, 2020

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