Wednesday, November 27, 2024
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Market ReportsMidwestMidwest Market ReportsNebraskaOffice

Omaha’s Office Market Continues to Buck National Trends

by Kristin Harlow

By Kristi Andersen and Melissa Torrez, CBRE The office market remains one of the most uncertain commercial real estate sectors across the country. Facing declining asset values, rising interest rates and the increase of remote and hybrid work, many of the nation’s office markets are struggling.  Key indicators that typically track the health of the market include net absorption, rental rates and vacancy rates. Not surprisingly, given the recent challenges, net absorption of office space nationwide is currently negative, rents have gone down and vacancy is high. However, Omaha continues to buck those trends. A solid, steady economy The midwestern city boasts a diverse economy with agriculture, food processing, insurance, transportation, healthcare and education all being leading drivers. Warren Buffett calls Omaha home, as do several Fortune 500 corporations such as Berkshire Hathaway, Union Pacific Railroad, Mutual of Omaha and Peter Kiewit Sons’ Inc.  The Omaha economy consistently outperforms other metro areas, particularly during economic downturns. In December, the U.S. Bureau of Economic Analysis released 2022 Gross Domestic Product (GDP) data for counties and metropolitan areas. Douglas County, the most populous county in Nebraska, had the highest annual GDP growth at 9.2 percent for U.S. counties with populations greater than …

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Demand for retail space in the first quarter of 2024 has been driven by food-and-beverage, discount and experiential sector tenants.
AcquisitionsContent PartnerDevelopmentFeaturesIndustrialLeasing ActivityLee & AssociatesLoansMidwestMultifamilyNortheastOfficeRetailSoutheastTexasWestern

Lee & Associates Report: Industrial, Office Sectors Face Challenges as Retail, Multifamily Show Positive Trends

by Sarah Daniels

Economic headwinds such as elevated interest rates and persistent inflation led to mixed outcomes in the first quarter for industrial, office, retail and multifamily sectors, with market observers anticipating a contracting economy, as outlined by Lee & Associates’ 2024 Q1 North America Market Report. On the industrial front, market pressures — including interest rates and supply chain challenges — led to higher vacancy in the United States in the first quarter of the year. U.S. office space experienced its fifth consecutive year of contraction, as office worker attendance stagnated. Additional challenges, in the form of loans maturing in a high-rate environment, signal further challenges in the near future for the office landscape. Continued merchant demand, reduced closures and bankruptcies and limited supply converged to create a feeding frenzy for retail space, with vacancies at historic lows. And finally, geographically based factors drove multifamily markets, many of which (especially in the Midwest and Northeast) experienced a rebound in apartment demand fueled by rising consumer sentiment and moderating inflation, despite supply outpacing demand. Lee & Associates has made their full, first-quarter report available here (with breakdowns of cap rates by city, vacancy rates, market rents, inventory square footage and more). The summaries from each sector …

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Leasing ActivityOfficeTexas

McCarthy Building Cos. Signs 38,230 SF Office Lease in Houston’s Galleria District

by Taylor Williams

HOUSTON — McCarthy Building Cos. has signed a 38,230-square-foot office lease at 2200 Post Oak in Houston’s Galleria District. The St. Louis-based general contractor plans to move into the 22-story, 326,200-square-foot building, which is currently being renovated, next year. Brad Fricks and Adam Ross of Stream Realty Partners represented the landlord, Masaveu Real Estate, in the lease negotiations. Scott Wetzel and Beau Bellow of JLL represented the tenant.

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AcquisitionsNew YorkNortheastOffice

Zar Property, HPNY Acquire Manhattan Office Building for $15.1M

by Taylor Williams

NEW YORK CITY — A joint venture between two locally based investment firms, Zar Property NY and HPNY, has acquired a 57,000-square-foot office building located at 26-30 W. 61st St. in Manhattan’s Lincoln Square area. At the time of sale, the property was fully leased to the New York Institute of Technology, which has 24 months remaining on its lease. The seller was The Brodsky Organization. The joint venture purchased the property in an all-cash transaction.

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DevelopmentIndustrialLife SciencesMixed-UseOfficeWashingtonWestern

Office Properties Income Trust Completes 300,000 SF Unison Elliott Bay Life Sciences Campus in Seattle

by Amy Works

SEATTLE — Office Properties Income Trust (NASDAQ: OPI) has completed Unison Elliott Bay, a three-building, 300,000-square-foot life sciences campus located at 351, 401 and 501 Elliott Ave. West in Seattle. Unison Elliott Bay features Class A office space totaling 200,000 square feet. The buildings feature 14-foot floor-to-floor heights in two dedicated lab buildings inclusive of move-in ready lab and R&D space, with suites ranging from 12,500 square feet to 25,000 square feet. The campus includes dedicated mechanical infrastructure supported by standby generator power to accommodate lab and technological power requirements. The campus features reception areas, collaborative indoor and outdoor meeting areas, conference and training rooms, fitness and changing room facilities, and a landscaped courtyard with built-in pergola and sculptures. Additional amenities include covered and surface parking, secure bike storage and electric vehicle charging stations. The campus will also offer a chef-driven café, as well as a rotating mix of food trucks. Sonoma Biotherapeutics, a clinical-stage biotechnology company, has signed a 10-year lease for more than 83,000 square feet at the 501 building. The clinic-stage biotechnology company occupies three floors of office and lab space for its R&D and manufacturing center, which is intended for the development of engineered regulatory T …

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Fulton-Park-Campus_Chicago
DevelopmentIllinoisLife SciencesMidwestMixed-UseMultifamilyOfficeTop Stories

Trammell Crow Co. Plans 1.8 MSF Fulton Park Mixed-Use Campus in Chicago

by Hayden Spiess

CHICAGO — Trammell Crow Co. (TCC) has unveiled plans for a 1.8 million-square-foot mixed-use project in Chicago’s Fulton Market neighborhood. Dubbed Fulton Park Campus, the development will include four buildings comprising research and development (R&D), lab, office, residential and retail space.  Among the new buildings will be a 34-story residential tower, known as Flora, which will comprise 368 apartment units. Amenities at Flora will span three floors and include a club room; golf and game simulator room; fitness center and yoga studio; spa; sauna; and a dedicated work-from-home area with a sound recording booth. Additionally, the property will feature an outdoor deck with grilling stations, televisions and fire pits; a private dining space with a chef’s kitchen; and a pet wash and dog run. ESG Architects designed the residential building, which general contractor Power Construction will build. Leasing is scheduled to begin this summer.  At 1105 W. Carroll, TCC will develop a 26-story commercial tower featuring 660,000 square feet of lab and office space. Upon completion, the building will offer floorplates from 19,000 to 40,000 square feet, with 17-foot ceiling heights on select floors, private balconies and advanced technical infrastructure. Amenities will include a fitness center with an indoor pickleball …

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Freeport-Business-Center-Irving
AcquisitionsOfficeTexas

Hillwood Acquires 383,000 SF Office Park Near DFW Airport in Irving

by Taylor Williams

IRVING, TEXAS — Hillwood has acquired Freeport Business Center, a three-building, 383,000-square-foot office park located near Dallas-Fort Worth International Airport in Irving. The property spans 34 acres, and the buildings were 70 percent leased at the time of sale to tenants such as Northrop Grumman Corp., Yardi Systems, SiriusXM and Boeing. The undisclosed seller also recently invested $6.5 million in capital improvements to Freeport Business Center, including lobby renovations, window upgrades, fresh landscaping and updated building operation systems.

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63-Madison-Avenue-Manhattan
Leasing ActivityNew YorkNortheastOffice

American Eagle Signs 338,085 SF Office Lease at 63 Madison Avenue in Manhattan

by Taylor Williams

NEW YORK CITY — American Eagle Outfitters Inc. has signed a 338,085-square-foot office lease at 63 Madison Avenue, a 15-story building in Midtown Manhattan. The lease term is 20 years. The space encompasses 108,194 square feet across the entire 7th and 11th floors and the entire 66,597 square feet of one of the tower’s concourse areas. Additionally, a sublease arrangement totaling 162,291 square feet — approximately 54,097 square feet per floor — has been reached with CBS for the 8th, 9th and 10th floors. This sublease agreement will eventually convert into a direct lease. Mitti Liebersohn, David Goldstein, Anna Erickson, Nate Brzozowski and Will Demuth of Savills represented American Eagle in the direct lease and sublease negotiations. Mark Boisi of Cushman & Wakefield represented CBS in the sublease negotiations. Peter Duncan, Matt Coudert and Alex Bermingham represented the landlord, George Comfort & Sons, which owns the building in partnership with Jamestown and Loeb Partners Realty, on an internal basis.

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AcquisitionsColoradoOfficeWestern

Unique Properties / TCN Worldwide Brokers $4.7M Sale of Office Building in Denver

by Amy Works

DENVER — Unique Properties / TCN Worldwide has arranged the sale of an office building located at 1425 Market St. in Denver. The asset sold for $4.7 million. The names of the seller and buyer were not released. Renovated in 2015, the 17,700-square-foot building offers natural light and open floor plans. Sam Leger and Graham Trotter of Unique Properties / TCN represented the seller in the transaction.

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AcquisitionsData CentersMassachusettsNortheastOffice

JLL Arranges Sale of 56,324 SF Office, Data Center in Hopkinton, Massachusetts

by Taylor Williams

HOPKINTON, MASS. — JLL has arranged the sale of a 56,324-square-foot office and data center located in Hopkinton, about 30 miles west of Boston. According to LoopNet Inc., the two-story building at 117 South St. was built in 1981 and renovated in 1985. Mike Restivo and Scott Carpenter of JLL represented the undisclosed seller in the transaction. Brett Paulsrud and Tom Sullivan, also with JLL, arranged acquisition financing on behalf of the buyer, locally based investment firm Rhino Capital. The new ownership plans to implement a value-add program.

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