Greg Zeifman is a senior associate in Marcus & Millichap’s Miami office. What area is your expertise? • Miami-Dade County Industrial Properties What trends do you see presently in industrial development in your area? • I do not foresee any new starts in the Miami-Dade industrial market. Although developers will finish projects that have already begun, there will be no new significant development. The recent addition of institutional, big-box product in the northwest Miami-Dade Medley submarket will lease-up its vacant space. What type of industrial product is doing well in your area? • Newer, Class A and B product continues to do well. However, owners must keep rents stable or lower them. Small to mid-range tenants who previously occupied Class C or functionally obsolete properties now have renegotiating power and are able to move to nicer locations. Properties in close proximity to the airport will enjoy higher occupancy rates; whereas, properties in the east Miami-Dade market, such as Hialeah, where product tends to be functionally obsolete, will experience the highest vacancies. Who are the active industrial developers in your area? • Flagler Development Group is an active developer in the Dade market. Please name one or two significant industrial developments …
Southeast Market Reports
Industrial properties in the Upstate region of South Carolina continued to perform at a steady if unspectacular rate through 2008, and this trend is expected to continue through 2009. The market will continue to see good activity on the leasing side of the business. This activity, while driven by the confusion of the credit market, has still reflected the desirability of the area as a place for new businesses and the continued growth of key industries. The current expansion of BMW’s facilities has heightened the likelihood of both secondary and tertiary suppliers opening or expanding locally in anticipation of the plant’s growth. This is further intensified as the International Center for Automotive Research complex continues to grow. The recent opening of the Carroll A. Campbell Jr. Graduate Engineering Center will further improve local research and development capabilities. This strategic investment was cited as one of the reasons the Upstate area was chosen for a multi million-dollar titanium manufacturing facility. Equally impressive has been the announcement that Fitesa, a Brazilian manufacturing company, also plans to establish a presence in the region. Another source of growth has been from foreign-owned corporations that view this as a good time to expand in the …
Howard Bissell of The Bissell Cos. sums his take on the Charlotte office market by echoing a concern voiced by developers all across the country. In nearly every major market and in a vast array of property types, developers are hurting because of rampant economic uncertainty. Tenants and investors simply don’t know what’s next, so they aren’t making any moves. “There’s a lot of concern over the unknown,” Bissell says. “Depending on where you are in the Charlotte market, you can point to slow downs in the velocity of leasing. What we started seeing last year has just accelerated into 2009.” For developers like Bissell, the main concern in Charlotte isn’t that the office market has slowed, but that it’s taken a rapid course downward, a quick pace that nobody quite anticipated. Tenants are on the sidelines looking in. Bissell has had to put two of his developments on hold due to the recession. “We’re out there trying to capture every deal that we can, so long as it makes sense,” he says, noting that he foresees pursuing deals more aggressively in the next year. At the Charlotte Chamber of Commerce, Jeff Edge takes a brighter point of view toward …
The Memphis industrial market, comprised of 176 million square feet of warehouse space and 7.7 million square feet of flex space, reached a total of just more than 184 million square feet at the end of 2008. Deliveries during that time included just more than 2.8 million square feet in nine new buildings, including the 1.1 million-square-foot Nike Footwear Distribution Center in the Northwest submarket. In the DeSoto County, Mississippi, submarket the 800,000-square-foot Building F in the Crossroads Distribution Center and the 600,000-square-foot Building 3 in the Olive Branch Distribution Center were added as well. Annual deliveries have been in steady decline since hitting a 5-year peak of 6.9 million square feet in 2005. More than 1 million square feet of industrial space is currently under construction in the market, and more than half of the space is pre leased. Virtually all speculative building deliveries in the market have been occurring in DeSoto County, where the business environment is friendly and tax incentives are healthy. During the second quarter of 2008, 16 buildings were delivered in DeSoto County, driving the vacancy rate in the submarket to a high of 23.4 percent, as of the end of the quarter. Three straight …
The Charlotte industrial market has continued to weather the global economic storm with relative stability. Experts in the market believe this is by design and is not just good fortune. A disciplined development community that did not over-build the city is the foundation for the stability. The market size for institutional grade industrial product in Charlotte is approximately 30 million square feet. The entire market is well more than 100 million square feet, which comprises user-occupied and manufacturing product that institutional investors are not trading day-to-day. With 3.3 million square feet available, the institutional market stands at 11 percent vacant. Given the gloomy economic news that we have all grown accustomed to hearing, an 11 percent vacancy rate is not particularly unhealthy. The key statistic is this: in a 30 million-square-foot market, only 250,000 square feet is being constructed, representing less than 1 percent of the market. In addition, only 1.7 million square feet of product is in the planning stages, with no assurances that it will go vertical in the near future. If all 1.7 million square feet of product were to be built — which won’t happen — it would represent a 5.7 percent increase in inventory. There …
To most people, the word Baltimore conjures up images of the city’s vibrant downtown and historic areas, including Fells Point, the Inner Harbor, Federal Hill and Canton. In recent years, a number of significant multifamily developments have contributed to the rejuvenation of these trademark neighborhoods, bringing new households to areas previously dominated by daytime office workers and tourists. Recently completed multifamily projects in Baltimore include The Eden, Elm Street Development’s 270-unit project in Fells Point and The Zenith, Legacy Harrison’s 191-unit tower near Camden Yards. These properties have all leased briskly since opening in mid-2007. Across the Inner Harbor, Mark Sapperstein’s 250-unit project at the McHenry Row mixed-use development promises to be a major catalyst for the Locust Point neighborhood. Baltimore has experienced an unprecedented amount of development activity during the last 5 years, as nearly 3,000 new multifamily units were recently delivered inside the city’s boundaries. The Baltimore region is also home to the Baltimore-Washington Corridor, which runs along Interstate 95 in Howard and Anne Arundel counties, another hot spot that stands to see an even greater volume of construction and investment during the next 20 years. Among the major catalysts for the Baltimore-Washington Corridor’s rapid growth during the …
The Memphis apartment market is expected to record mixed performance this year, due to a spike in new inventory and decelerating employment growth. On the demand side, weakness in the housing market is keeping many individuals within the renter pool, boosting retention rates and supporting a modest uptick in tenant demand. Foreclosure activity rose 15 percent in the first quarter, when compared to the same period one year earlier, and is expected to continue this year as more adjustable-rate mortgages reset. Subsequently, apartment demand for Class B and Class C properties should pick up in this year, causing vacancy for the metro’s affordable rentals to improve. On the supply side, development activity is accelerating after 5 years of below-average additions to stock. By year-end, developers are expected to boost inventory by 1.1 percent, or nearly double the 5-year average, pushing vacancy higher while moderating rent gains. Builders have brought approximately 175 new apartment units to the Memphis market during the past 12 months, representing a modest 0.2 percent increase in inventory. One year ago, deliveries had totaled approximately 210 units. Development activity is picking up, as builders have roughly 1,100 units underway in the metro area. As for significant developments, …
Submitted by Barry Wolfe, VP Investments and Michael Zimmerman, senior associate with the Fort Lauderdale, Florida, office of Marcus & Millichap Real Estate Investment Services. Posted Online 5-28-08. What area is your expertise? Broward County (Fort Lauderdale)/Miami-Dade County (Miami), Florida What trends do you see presently in retail development in your area? The housing market downturn and credit market shake up have caused retail development in South Florida to slow. Developers are having difficulty getting as much leverage as they had grown accustomed and lenders are now requiring either total or partial recourse. Another reason for the decrease in construction is simply that there is not a lot of available land for new development. What we are seeing in the pipeline is discount retail centers, such as Super Wal-Mart and Super Target, adding locations throughout both counties. What type of retail product is doing well in your area? Class A assets, such as grocery anchored (and in particular Publix-anchored centers) are always viable whereas un-anchored Class B/C shopping centers are struggling with vacancies, in part due to increasing expense pass-throughs. What retailers are new to your area? One of the largest new South Florida retailers is Ikea, which recently opened …
Submitted by Alex Zylberglait CCIM, SIOR and Ryan Shaw, associate vice president and associate with the Miami office of Marcus & Millichap Real Estate Investment Services. Posted Online 05-07-08. What area is your expertise? Our primary focus of business is office properties in Miami-Dade County, Florida. What trends do you see presently in office development in your area? Office developments over the past few years have been limited to mostly office condominiums and build to suit. The office condo market was short lived and non-existent at this point. Unfinished condo projects are currently going back to for rent product and therefore adding nominal supply back to the market. The majority of office development for Dade is focused in the downtown Miami and Airport West submarkets. Downtown has seen three projects break ground for approximately 1.77 million square feet of Class A space. The airport area is targeted for many of the import and export companies that see much of the business go through the Miami International Airport as cargo planes transport much of the imports that come into the Port of Miami. Broward county is a little bit different in respect to they have had little new development in the …
A barrage of national and local coverage has detailed the nation’s housing woes and economic uncertainty – which are clearly having an impact on Atlanta’s multifamily for-sale market. Average absorption rates slowed in all Atlanta submarkets during the first quarter to less than one sale per month, and many projects are struggling to make up for lost contracts as buyers cut their losses, get cold feet or discover they are unable to secure financing or sell their existing homes. The good news is that the necessary steps are underway to correct the supply-demand imbalance. Projects with standing inventory are increasingly employing new strategies to gain traction by enticing buyers with reduced prices and increased incentives; being more open to negotiation on price; and attracting the broker community by providing a portion of commission for properties under construction at the end of the recission period, rather than all at closing. More proposed developments in the pre-construction phase are going on hold until the market recovers, being converted to rentals or cancelled altogether. For example, The Related Group has placed its One Cityplace project on hold; John Weiland announced that plans for One Museum Place are on hold until at least next …