Greenville is undergoing significant growth and capturing the attention of national investors and tenants. Historically high rental rates, increased occupancy and strong construction activity for the first time in recent years collectively indicate a healthy market. Additionally, tight market conditions provide an ideal investment sales environment encouraging landlords to market their office assets for sale, something they couldn’t justify doing a few years ago. The market’s occupancy rate was up to 85.2 percent at year-end 2015 from 83.7 percent the previous year. As demand grows and space is absorbed, the market is shifting in favor of landlords, who are pushing up rental rates to levels never before seen in the market. Asking rental rates for Class A office space in the market averaged $22.41 per square foot at year-end 2015, increasing 9 percent in a one-year span. Class A space in the central business district (CBD) is even more costly with asking rental rates averaging $25 per square foot. With office users showing a strong desire to locate in the market and willingness to pay higher rental rates for quality space, developers are turning to new construction and adaptive reuse projects to meet the heightened demand for space. Several projects …
HOUSTON — JLL has secured a total of $450 million of financing for Prime Asset Management to recapitalize JPMorgan Chase Tower and Chase Center, two Class A office properties located in downtown Houston. The 75-story Chase Tower is Houston’s tallest building at 1,002 feet. Combined with the 20-story Chase Center, the complex totals 2.4 million square feet. An underground pedestrian tunnel connects the buildings. Chase Tower includes office space, retail and a sky lobby observation deck. Chase Center includes office and retail space along with a parking garage. Chase Tower is located at 600 Travis St. and was built in 1981. Chase Center is a shorter building adjacent to Chase Tower at 601 Travis St. MetLife provided a fixed-rate senior mortgage, while JPMorgan provided mezzanine financing for a term of 11 years. The mezzanine loan has a floating interest rate for the first year and then converts to a fixed rate for the following 10 years. Prime Asset Management, an international investment group that owns the two properties, will partially use the loans to replace its existing senior mortgage debt with MetLife, which was due at the end of 2017, according to the Houston Chronicle. Tom Melody and John Ream led …
NEW YORK CITY — New York REIT (NYSE: NYRT) has agreed to acquire all properties of JBG Cos. and some of its private funds, creating an $8.4 billion real estate investment trust (REIT) named JBG Realty Trust. JBG Realty Trust’s portfolio will span more than 14.5 million square feet of office, residential and retail properties across the gateway markets of New York City and Washington, D.C. The properties are concentrated in transportation-served, urban-infill submarkets. The combined company will be headquartered in Chevy Chase, Md., with a regional office in New York City. JBG has received all required approvals for the transaction from its owners and JBG Fund Advisory Committee members. The board of directors of NYRT has approved the merger agreement and recommended that its stockholders approve the issuance of common stock and operating partnership units in the transaction. JBG Cos. will receive 319.9 million shares of common stock and operating partnership units of NYRT in exchange for the contributed JBG properties. NYRT stockholders will own about 34.8 percent of the combined company’s shares and units, while JBG equity holders will own about 65.2 percent once the deal is complete. The Eastdil Secured group of Wells Fargo Securities acted as …
Overall the Rhode Island office market exited 2015 with positive momentum, which resulted in a strong first quarter 2016. While much of the activity is intrastate, it is a sign that local businesses have regained confidence in the overall economy outside of Rhode Island. In Providence, office building conversions to residential apartments continues to drive much of the urban office building demand. The largest of the recent residential conversions include the sale of 95 Chestnut Street (57,000 square feet) and 170 Westminster Street (62,000 square feet), which has resulted in contraction of the Class B Providence office market. In addition, The Rhode Island School of Design’s (RISD) recent expansion/purchase of a 12,000-square-foot office condominium at 123 Dyer Street has also spurred downtown demand. The Providence office market has also been affected by corporate consolidation. Citizens Bank, Bank of America, Textron and Blue Cross have all reduced the size of their footprints in Providence over the past 18 months. As a result, the Providence office market experienced a slight uptick in vacancy rates ending 2015, at about 16.5 percent. In the Jewelry District, three construction projects are well underway. The South Street Landing project is a $220 million dollar renovation of …
Detroit has become a five-sport town: The Pistons, Red Wings, Lions and Tigers have been joined by Dan Gilbert’s Bedrock Real Estate Services LLC, the entity that has made a sport out of assembling a downtown Detroit portfolio of commercial buildings. In the process, Gilbert is becoming the city’s biggest advocate. Talking about Detroit’s office market without including Gilbert’s latest investment is akin to discussing Detroit’s economy and excluding the automotive industry. The Quicken Loans founder and principal shareholder of the Cleveland Cavaliers put himself on the region’s real estate game board when the recession ended and he started buying up properties. To date, Gilbert and his team have amassed a portfolio of more than 85 properties in and around the downtown comprised of more than 13 million square feet and valued in excess of $2.2 billion. The March 2015 acquisition of the 43-story One Detroit Center at 500 Woodward Ave. — which has since been renamed Ally Detroit Center — and attached 2,070-space parking deck for well over $100 million was his biggest deal during the acquisition spree. Ally Financial is completing its relocation to the building this spring from the nearby Renaissance Center, as well as bringing employees …
SANFORD, FLA. — Demolition work has commenced on Flea World, the one-time home of “the nation’s largest flea market under one roof,” in Sanford approximately 25 miles north of Orlando. The 118-acre site is being cleared to make way for Reagan Center, a mixed-use project that could eventually include as much as 2.4 million square feet of offices, restaurants, retail stores, apartments and townhomes. The property is situated on U.S. Route 17 at Ronald Reagan Boulevard and County Home Road. The 34-year-old flea market space is situated directly across from the Seminole County Government Operations Center, the courthouse and Seminole State College. Reagan Center’s construction will kick off a 20-year effort by the municipalities of Seminole County, Sanford, Lake Mary, Winter Springs, Longwood and Casselberry to create an economic development corridor along Route 17. “Reagan Center will create employment opportunities for thousands of Central Floridians over the next decade and will be a major economic engine,” says Paul Partyka, partner at NAI Realvest in Orlando and the broker of record for the $300 million development. “Because of its location, size and economic impact, Reagan Center will rank as one of Florida’s benchmark development projects.” Hastings Homes is carrying out the …
In 2016, uncertainty in the oil and gas industry has made a major impact on the Fort Worth commercial real estate market. While each submarket is affected differently, the need for relocations and renovations will lead to a rising demand for quality office and retail spaces across the area. Development of Fort Worth real estate is expected to remain strong in 2016, with growing opportunities that create a strong and healthy market. Office Opportunity Downtown Fort Worth has become a hub for major players in the oil and gas industry, such as Holland Services, Forestar Oil & Gas and FTS International. Within the last 180 days, these tenants have put over 125,000 square feet of office space up on the market for sublease. However, the rest of the office sector has been consistently absorbing large blocks of space, proving healthy despite oil and gas concerns. We have seen at least six transactions totaling over 385,000 square feet within the last six months. Transactions included Charles Schwab’s 130,000-square-foot lease at Circle T in Westlake, and Teague Nall & Perkins’ 42,000-square-foot lease of the former Everest College building at the Mercantile Center in Fort Worth. The consistently strong demand for quality office …
For the Dayton office market, it’s all about timing. In one of Miami Valley’s largest office leases in recent memory, CareSource early this year signed a five-year lease to occupy 50,000 square feet on two floors at the 486,000-square-foot Kettering Tower downtown. The nonprofit managed healthcare plan is the largest Medicaid plan in Ohio and the second largest in the United States. CareSource said it will assess current and future business needs and redistribute business units from corporate headquarters and offices at 40 W. Second St. to Kettering Tower. In addition, some staff hired during the first quarter of this year also will be placed at the new location. The CareSource location at Kettering Tower increases the company’s footprint to nearly 600,000 square feet in downtown Dayton. The four downtown Dayton locations — including CareSource’s corporate headquarters at 230 N. Main St., Ballpark Village at 220 E. Monument Ave., offices at 40 W. Second St. and Kettering Tower will support 2,200 staff. The $6 million build-out of the multi-tenant Kettering Tower is specifically designed to accommodate CareSource. Tower Partners LLC, an entity whose investors include New York businessman Albert Macanian, owns the building. But the deal bringing 300 new jobs …
Raleigh’s office market is the strongest it’s been in years, with employment and corporate investments continuing to climb throughout the Triangle region. A current lull in the delivery of new construction and the market’s increased popularity have created a space crunch for Class A office space, especially for tenants seeking large blocks. While a good amount of new construction started or continued in 2015, there’s still a gap in “move-in ready” space. Vacancy fell from 11.7 percent in the second quarter to 11.2 percent in the third quarter, causing rent growth for Class A space. Direct asking rent increased from $23.81 per square foot in the second quarter to $24.14 per square foot in the third quarter and is expected to continue to increase until delivery of new construction picks up, which will likely be mid-2016/early 2017. The market has definitely shifted in favor of the landlord, and concessions that were made during the recession have fallen off as owners no longer have to offer them to secure tenants. Desire for Class A space in the Triangle has pushed pre-leasing rental rates to a historic high north of $33 per square foot — and they are likely go higher before …
The commercial real estate market in West Michigan was quite active in 2015 across all property sectors, including one massive data center deal that is expected to spur billions of dollars in investment. Both new development and transactions involving existing facilities drove deal volume in 2015. Consequently, vacancy rates dropped while leasing rates generally rose. We expect a high level of commercial real estate activity this year as well. A lack of inventory for existing product will continue to drive new development in 2016. Industrial Strength The industrial market, in particular, has experienced a shortage of quality product to satisfy the demands of distribution companies from across the area. The greater Grand Rapids industrial market consists of approximately 115 million square feet. At the end of 2015, the vacancy rate was 4.1 percent. This marks a significant improvement compared with the depths of the Great Recession when the vacancy rate approached 10 percent. For the first time in years, we are seeing speculative development across all sizes of industrial properties. Lease rates for these speculative buildings are significantly higher than what we have experienced in the recent past due to the relatively high cost of construction. The good news for …