Office

Lee & Associates’ First-Quarter 2023 Sector-by-Sector Analysis Indicates Market-Wide Cooling

by Sarah Daniels May 2, 2023

High interest rates and economic uncertainty in the first quarter of this year contributed to lower absorption and declining rent growth in industrial, retail and multifamily sectors across the country, with some regional exceptions, according to Lee & Associates’ 2023 Q1 North America Market Report. Meanwhile office continues to struggle. The sector experienced its third-largest quarterly contraction since the beginning of the pandemic, as work-from-home preferences decoupled office occupancy from job growth numbers. The full Lee & Associates report is available (with further breakdowns of factors like vacancy rates, market rents, inventory square footage and cap rates by city) here. The analysis below provides an overview of four major commercial real estate sectors alongside trends, economic background and exceptions within each sector. Industrial Overview: Sharp Decline Hits First-Quarter U.S. Demand There was a sharp first-quarter decline in U.S. tenant demand for industrial space as wholesalers and retailers reconsider their inventory levels out of caution over the economic outlook. Net absorption in the first quarter totaled 39.4 million square feet, a 57 percent drop from the record set a year ago. The overall U.S. vacancy rate settled at 4.4 percent, an increase of 40 basis points from the close of 2022, comfortably …

May 2, 2023

Leasing Activity Office Texas

Locke Lord Signs 27,826 SF Office Lease in Downtown Austin

by Taylor Williams May 1, 2023

AUSTIN, TEXAS — Dallas-based law firm Locke Lord has signed a 27,826-square-foot office lease at 300 Colorado St. in downtown Austin. The firm is relocating from 600 Congress Ave. to the 32-story building, which houses a 13-story parking deck, onsite restaurant, conference center, catering kitchen and a fitness center. Atlanta-based Cousins Properties owns the property in a joint venture with Riverside Resources and Ironwood Real Estate.

May 1, 2023

Leasing Activity Office Texas

Cushman & Wakefield Negotiates 12,647 SF Office Lease in Irving

by Taylor Williams May 1, 2023

IRVING, TEXAS — Cushman & Wakefield has negotiated a 12,647-square-foot office lease at Riverside Commons in Irving. The six-building, 467,285-square-foot office campus offers a café, fitness center and two conference facilities. Johnny Johnson and Rodney Helm of Cushman & Wakefield represented the undisclosed landlord in the lease negotiations. Ryan Buchanan and Josh White of CBRE represented the tenant, design and engineering firm KAI Enterprises.

May 1, 2023

Loans New York Northeast Office Top Stories

SL Green Receives $500M Refinancing for Third Avenue Office Building in Midtown Manhattan

by Taylor Williams May 1, 2023

NEW YORK CITY — Locally based real estate giant SL Green Realty Corp. (NYSE: SLG) has received $500 million in funds to refinance debt on 919 Third Avenue, a 1.5 million-square-foot office building in Midtown Manhattan. Designed by international architecture firm Skidmore, Owings & Merrill, the 47-story building was originally completed in 1970. It was designed to accommodate an existing New York City landmark, famed restaurant and saloon P.J. Clarke’s. SL Green owns the building in partnership with an institutional investor advised by J.P. Morgan Global Alternatives. The property is 80 percent leased to tenants such as Bloomberg, which expanded by an additional five floors last winter, as well as law firm Shulte Roth & Zabel LLP. Another law firm, Cohen Clair Lans Greifer & Simpson LLP, became the building’s newest tenant when it inked a 17,862-square-foot deal last month. A consortium of lenders led by New York City-based Aareal Capital Corp. and French lender Credit Agricole Corporate & Investment Bank provided the financing. James Millon, Tom Traynor and Mark Finan of CBRE arranged the debt. The loan bears interest at a rate of 250 basis points above the Secured Overnight Financing Rate (SOFR), which closed at 4.81 percent on Friday, …

May 1, 2023

Development Office Texas

Creation, LGE Design Build Open $17M Joint Headquarters Office in Dallas

by Taylor Williams April 28, 2023

DALLAS — Two Arizona-based firms, developer Creation and LGE Design Build, have opened a $17 million joint headquarters office in Dallas. The companies collaborated on the acquisition, design and build-out of the 32,000-square-foot space, which is located at 1280 E. Levee St. in the Dallas Design District and will house about 40 employees. Amenities include a fully stocked breakroom, speakeasy, fitness center, interior library and multiple conference rooms. Creation and LGE, which plan to occupy about 20,000 square feet and lease the remaining 12,000 square feet, will retain their current spaces and operations in Arizona.

April 28, 2023

Leasing Activity New York Northeast Office

Nonghyup Bank Signs 8,194 SF Office Lease at 120 West 45th Street in Manhattan

by Taylor Williams April 28, 2023

NEW YORK CITY — Nonghyup Bank has signed a 10-year, 8,194-square-foot office lease at 120 West 45th Street in Manhattan. The South Korean lending institution will occupy space on the 19th floor of the 458,446-square-foot building, which is known locally as Tower 45. Paul Glickman, Diana Biasotti, Kyle Young and Kate Roush of JLL represented the landlord, Kamber Management Co., in the lease negotiations. CBRE represented Nonghyup Bank.

April 28, 2023

Acquisitions Industrial Office Oklahoma Texas

SkyWalker Property Partners Sells 20,160 SF Industrial Flex Facility in Tulsa

by Taylor Williams April 27, 2023

TULSA, OKLA. — An affiliate of Dallas-based SkyWalker Property Partners has sold a 20,160-square-foot industrial flex facility in Tulsa. The building at 3717 S. Sheridan Road sits on 1.7 acres and was vacant at the time of sale. Michael Schnake and Ward Seibert of Oil Capital Commercial Real Estate Services represented SkyWalker in the transaction. The buyer, local sign maker manufacturer Gravley Holdings LLC, was self-represented.

April 27, 2023

Market Reports Midwest Midwest Market Reports Nebraska Office

Omaha Office Market Is Somewhat Insulated from Broader Economic Conditions

by Kristin Harlow April 27, 2023

By Eric Rose and Erick Tjarks, Cresa The Omaha office market proved to be somewhat insular from the effects of the many factors the real estate industry has experienced since 2020 (COVID-19, the hybrid work-from-home model, discussions of impending recession to name a few). Although down year-over-year, which given the recent interest rate hikes is expected, market sales volume remains above-average over the surveyed period going back to 2007. Though, this transaction volume dropped precipitously in the second half of 2022 and has continued to be slow in early 2023. However, the local market has seen pockets of increased activity, as Northwest Omaha saw heightened transactional volume, with Midtown Omaha, downtown Council Bluffs and suburban West Dodge following suit. As showcased above, market cap rates have largely accounted for interest rate hikes and are currently stable but subject to future interest rate increases. These statistics all point to a stable market, with fundamental performance on solid footing. However, it should be noted that, according to CoStar, 2022 is only the second year on record when demolitions outpaced gross deliveries, with only 93,000 square feet of net deliveries Omaha ranked in the bottom 10 of the top 60 office markets …

April 27, 2023

Acquisitions Content Partner Features Midwest Northeast Office Southeast Texas Walker & Dunlop Western

Willy Walker, CEO of Walker & Dunlop, Outlines Capital Flow Issues, Market Pressures with Economist Dr. Peter Linneman

by Sarah Daniels April 27, 2023

On the April 12 episode of “The Most Insightful Hour in CRE” webcast, Willy Walker, CEO of Walker & Dunlop, spoke to renowned economist Dr. Peter Linneman, founding principal of Linneman Associates, about pressing issues facing the economy, pandemic repercussions, market predictions and much more. The discussion began by diving into the economy and real estate market in its current state of flux, with many challenges facing both investors and developers. Walker outlines the unease created by the recent Silicon Valley Bank and Signature Bank crises. “One of the data points announced by the Fed is that since the crisis, bank lending in the United States has gone down by $110 billion over the two weeks since the Silicon Valley Bank collapse. Banks borrowed $160 billion in the two-week window prior. There’s a big drive toward liquidity; and yet there’s no new liquidity going out into the market.” “There’s 4.4 trillion dollars of commercial real estate (CRE) loans outstanding across all lending sources — CMBS, life insurance companies, banks, etc.,” continues Walker. “About half of that is non-multifamily properties. Banks hold about 40 percent of total outstanding loans on commercial properties.” If banks were to pull back from holding 40 percent …

April 27, 2023

Leasing Activity Office Texas

Kelly-Moore Paints Signs 15,000 SF Office Headquarters Lease in Irving

by Taylor Williams April 26, 2023

IRVING, TEXAS — Kelly-Moore Paints has signed a 15,000-square-foot lease to relocate its headquarters office from Northern California to Irving. The paint manufacturer and retailer plans to move about 30 senior executives and other team members into its new space at 500 E. John Carpenter Freeway before the end of the year. Tyler Isbell of SRS Real Estate Partners represented Kelly-Moore Paints, which has a manufacturing plant in nearby Hurst and operates about 160 stores throughout Northern California and the Southwest, in its site selection and lease negotiations.

April 26, 2023

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