Industrial

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Hot Streak Leads to the Best Market Dallas has Seen in Years

by Haisten Willis February 12, 2016

Dallas is on a hot streak. This is the best market Dallas has seen in years. Companies are expanding and corporate relocations are driving new development in office, industrial and retail. Based on the healthy, active market of 2015, the momentum should carry over and remain strong through the first half of 2016. Office Dallas has become a headquarters hub in the past few years with companies like Toyota and Liberty Mutual putting down roots in the Metroplex. Companies are doing well financially and are growing, which is great news for the office sector. Leasing activity is at an all-time high with all sizes of companies experiencing growth. Office expansions and mid-term lease extensions are becoming the norm. In November, GEICO’s regional headquarters relocated to a larger facility with the goal of hiring nearly 200 employees before year’s end. The insurance company leased 224,000 square feet at 2280 Greenville Ave. in Dallas, brokered by Tom Lynn and Nick Lee, CCIM, of NAI Robert Lynn and Griff Bandy of NAI Partners in Houston. GEICO’s former headquarters building in the North Dallas area is now on the market. We’re also seeing the employment industry shift from focusing solely on clients to employee …

February 12, 2016

Industrial Market Reports New Jersey Northeast Northeast Market Reports

Data Infrastructure Positions Newark to Emerge as a Tech Sector Hub

by Jaime Lackey February 10, 2016

For Newark, New Jersey, the well-documented trend toward urbanism and the emergence of creative solutions that position older properties to serve modern needs are creating strong momentum. At a time when leasing activity is ticking upward across the city’s diverse tenant base, it also is becoming clear that Newark’s superior data capacity positions the city to become a hub for tech start-ups and, ultimately, a national hub for the tech sector. For Millennials, Old is “In” According to new Pew Research Center analysis of U.S. Census Bureau data, it is estimated that about 53.5 million millennials (adults aged 18 to 34) are part of the U.S. workforce today. Companies run by or interested in attracting millennials — whether focused on technology or any other sector — are gravitating to 24/7 downtown or urban locations. And they are seeking smart, collaborative work spaces. The result? Old is “in” — at least when it comes to tenant preferences for office space. At The Berger Organization, we are stripping antiquated fit-outs and tapping into the popularity of exposed ductwork, open floor plans and loft-inspired architectural elements. The resulting environments speak to modern desires and individual company cultures, while paying homage to their urban …

February 10, 2016

Industrial Market Reports Texas Texas Market Reports

Houston Industrial Sector Remains Strong in Spite of Oil Price Fallout

by Haisten Willis February 5, 2016

Depending on who’s speaking, or what you’re reading, the forecasts for the 2016 Houston industrial real estate market run the full spectrum from bull to bear. Whether you are a landlord trying to fill a vacancy; a developer weighing the decision on whether to build or not; or an investor or a potential tenant looking for the best lease terms, your decision making is driven by a few key factors. These include the price of oil and where you think it is headed, the type of industrial facility you build/own/require, and in what submarket of Houston it is located. With current oil prices hovering in the low $30s per barrel, and threatening to go lower, you don’t have to look hard to find plenty of economists forecasting a rough 2016 for Houston industrial real estate. But that’s not the whole picture. No doubt the ongoing drilling downturn has hit the city hard. A recent survey was conducted of single-tenant manufacturing facilities ranging from 10,000 to 50,000 square feet in the West, Northwest and North Houston submarkets. The survey reported over 2.4 million square feet available in 120 buildings, with an additional 240,000 square feet under construction in 15 more buildings. …

February 5, 2016

Industrial Market Reports New Jersey Northeast Northeast Market Reports

New Jersey Industrial Market Improves to Pre-recession Level

by Jaime Lackey February 3, 2016

With an increasing number of tenants seeking to relocate to New Jersey from parts of New York City, including Brooklyn and the Bronx, the Garden State’s industrial market is at its healthiest since first-quarter 2008. The amount of vacant space has now reached pre-recession levels, decreasing from 7.5 percent to 7.2 percent during the third quarter of 2015. Moreover, the vacancy rate experienced its best year-over-year improvement since the first quarter of 2014. Strong markets include central New Jersey submarkets Exit 8A, Exit 9/Brunswick, and Route 287 West, while the Meadowlands area remains the strongest submarket in northern New Jersey, followed by Exit 14/Newark near the port, and the Route 46/23/3 submarket. While transactions by large tenants, such as Amazon, dominated activity during the first half of the year, industrial buildings were filled up by smaller and mid-sized tenants during the third quarter of 2015. Retailers/wholesalers led the way, which is not surprising considering the continually growing e-commerce sector and recent increases in consumer spending. Supporting the recent economic resurgence of the sector, tenants in the manufacturing industry were also very active during the quarter, though many of their leases were small in size. Transportation companies also took space, enhancing …

February 3, 2016

Georgia Industrial Market Reports Southeast Southeast Market Reports

Atlanta’s Industrial Market Continues Historic Pace of Sales, Leasing Activity

by John Nelson January 11, 2016

Atlanta’s industrial market is hotter than the proverbial pistol. Second-quarter activity set a single-quarter record with more than 18.2 million square feet leased or sold. When added to the activity from the previous three quarters, Atlanta strung together more than 59.6 million square feet of completed transactions. This represents the second highest activity level ever recorded for a four-quarter period. There was more than 6.3 million square feet of positive net absorption. Combined with the previous three quarters, Atlanta shows a total of more than 19.7 million square feet of positive net absorption for the last four quarters. For the second quarter, the availability rate dropped one-tenth of a percent to 14 percent — the lowest it has been since the fourth quarter of 2000. And just four to five years ago, the overall availability rate was above 20 percent. Development and construction are absolutely booming. With more than 7 million square feet of new construction recorded during the second quarter, the market also set a record for new construction in a single quarter. When looking at the four-quarter total, we see more than 18.8 million square feet of new construction — a level not seen since 1998. Of that …

January 11, 2016

Industrial Market Reports New York Northeast Northeast Market Reports

NY Capital Region: The Industrial Market is Firing on All Cylinders

by Jaime Lackey December 16, 2015

In the Capital Region, an industrial/warehouse market with a little over 63 million square feet of space (spread over a 10-county area), vacancy rates have returned to pre-recession levels. It has been a long and steady climb out of a deep recessionary market, which hit this sector of the market the hardest during 2009. During that time, vacancy rates were hovering around the 11 percent mark. In the second quarter of this year, the regional vacancy rate stood at 7.3 percent. Compare this figure to the fourth quarter of 2014, when the vacancy rate was 8.9 percent. As a region, we are again enjoying the absorption of industrial space, as some regional operators expand and some new faces enter the market. We are constantly examining and reviewing the market to understand the current activity, and to anticipate and prepare for the coming trends and changes. So what has lead to the Capital District’s industrial/warehouse market recovery? Several factors are responsible. First and foremost, the overall recovery of both the national and local economies has played a significant role in our industrial recovery. According to the Bureau of Labor Statistics, the unemployment rate in the United States stood at 5.3 percent …

December 16, 2015

Industrial Market Reports Massachusetts Northeast Northeast Market Reports

Recent Decrease in Absorption an Anomaly; Boston Industrial Market Thrives

by Jaime Lackey December 16, 2015

All of the property sectors in the Boston area are thriving, thanks to one of the strongest economies in the nation. As of April this year, the unemployment rate in Massachusetts was 4.7 percent and in Boston, it was 3.7 percent, according to the U.S. Bureau of Labor Statistics. Economists generally consider employment to be essentially “full” when unemployment rates dip below 5 percent. By comparison, the unemployment rates in neighboring states were 6.3 percent for Connecticut, 3.8 percent for New Hampshire and 6.1 percent for Rhode Island. The U.S. unemployment rate in April was 5.4 percent. Boston’s overall industrial vacancy rate at the close of the second quarter was 8.1 percent, according to CoStar, and includes warehouse/distribution space, flex space and R&D facilities. It was the fourth consecutive quarter that the vacancy rate has remained in the low 8 percent range. Overall net absorption has been negative this year: -82,364 square feet in the second quarter and -41,089 square feet in the first quarter this year. This compares with positive net absorption of more than 3.1 million square feet in the third and fourth quarters of 2014. However, we believe that the first half of this year is a …

December 16, 2015

Industrial Kentucky Market Reports Southeast Southeast Market Reports

Leasing is Up 40 Percent from 2014 in Louisville’s Industrial Sector

by John Nelson December 14, 2015

Louisville’s industrial market continues to impress as it has successfully navigated recessionary times to the now current brisk market with solid activity. Even within those leaner times of 2009 and 2010, Louisville grew its occupied footprint by approximately 1.6 million square feet with perhaps a recipe that includes its beneficial geographic location and infrastructure, diverse manufacturing and logistics economy buffeted by UPS Worldport and Supply Chain Logistics, and aggressive state incentives provided by Kentucky and adjacent neighbor Indiana. The I-65 corridor is currently, and has been, white hot over the last 15 years. Louisville, like many similarly sized cities with populations over 1 million, has developed to its outer edges and industrial development is now spilling into smaller adjacent communities such as Shepherdsvillle, Ky., and Jeffersonville, Ind., both of which no longer resemble their former industrial selves. National and international developers like Prologis, USAA, Dermody, Exeter, DCT, Pinchal and Welsh, along with local developers such as Main Street Realty, Capstone, America Place and Crossdock, have found these communities and the I-65 corridor not only ripe with opportunity, but flush with tenants. On the Louisville side of the Ohio River, current speculative construction along the corridor includes more than 1.4 million …

December 14, 2015

Industrial Market Reports Southeast Southeast Market Reports Virginia

Richmond’s Industrial Market Fires on Most Cylinders, Save for Large Spec Projects

by John Nelson December 7, 2015

Greater Richmond’s industrial market is as strong as it has been in a generation. Given the overall growth of the economy, including industrial employment and investment, it appears that the engines driving industrial economic growth will remain steady and the need for industrial real estate will continue to be steady. Greater Richmond’s industrial market is moving fast and on most cylinders, with the only laggard being pure speculative development of high-bay large block industrial and small incubation flex product. All other cylinders are pumping, including industrial and flex leasing, design build-to-suits, land sales, freestanding occupier building sales and investment sales. Absorption and general growth activity is coming not only from local existing companies and start-ups, but also by companies outside of the area looking to relocate or open additional facilities here. The flavor of the demand has been relatively diverse reflecting the Greater Richmond area’s stable economy and Mid-Atlantic location with its superior logistic opportunities. Economic Trends Greater Richmond’s population is nearly 1.3 million people, and total employment is more than 650,000 in the Richmond metro area. The diverse economy includes 10 Fortune 1000 headquarters; pharmaceutical, chemical, biotech and other 21st century manufacturers; financial and information technology services; Fifth District …

December 7, 2015

Luminant Acquires Two NextEra Power Plants in Texas for $1.5B

by Nellie Day November 30, 2015

DALLAS — Luminant has acquired NextEra’s La Frontera portfolio, a pair of natural gas power plant facilities in Northeast Texas, for $1.5 billion. The portfolio consists of Forney Energy Center and Lamar Energy Center. La Frontera can generate power for about 1.5 million homes during normal conditions. The acquisition is expected to close next spring. The Forney Energy Center is located in Forney. It has a capacity of 1,912 megawatts (MW) and started commercial operation in 2003. Lamar Energy Center is located in Paris. It has a capacity of 1,076 MW and started commercial operation in 2000. The acquisition represents a total purchase of 2,988 MW of capacity within the Electric Reliability Council of Texas (ERCOT) market. ERCOT manages the flow of electric power to 24 million Texas customers, representing about 90 percent of the state’s electric load. “These plants are strategic investments that enhance our asset portfolio while building on our existing operations in ERCOT,” says Mac McFarland, Luminant’s CEO. The two combined-cycle gas turbine power plants will join Luminant’s energy portfolio, which already includes coal, natural gas and nuclear power. The portfolio also includes significant purchases of wind-generated electricity and a recently announced solar power purchase agreement. The …

November 30, 2015

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