San Antonio has been hard to ignore by national and international commercial and multifamily real estate investors on both the equity and debt side of capitalization. It has many of the positive ingredients that combine to score compelling marks in the various economic and investment models that are used to evaluate investment strategy. NorthMarq Capital works with national and international debt and equity real estate investors raising capital for commercial and multifamily properties every day in our role as an intermediary. Factors consistently standing out that make San Antonio attractive are its economic foundation based on financial services, healthcare, government and tourism and includes industries as diverse as medical, energy, biosciences, cyber security and aerospace. San Antonio is a top travel destination and has experienced very healthy population growth. It has an affordable and business friendly environment along with a unique geographic location and high quality of life. These factors translate into positive sustained demand for real estate. Several sources have given accolades validating the success the San Antonio economy in recent history. The Milken Institute named San Antonio as the No. 1 performing city in the country and emphasized the productivity and energy the city has had in recent …
Office
We We ended 2012 with a “wait-and-see” New York City office market, a predicament common to other cities and commercial real estate sectors across the U.S. With elections, the fiscal cliff and 2012 behind us, we expect 2013 to be a bit of a transition year with moderate growth, but it will still be interesting to observe and be a part of one of the world’s most dynamic markets as Midtown, Midtown South and Downtown evolve and historic developments such as the World Trade Center continue to take shape. In terms of tenant activity, Midtown South is still the biggest story. Midtown South vacancy closed the year at 7.9 percent, with average asking rents of $49.69 per square foot, while the submarket’s Class A space was 5.2 percent vacant with average asking rates of $62.57 per square foot. With Google and its $2 billion New York City headquarters at 111 Eighth Ave., Midtown South’s Silicon Alley has emerged as the East Coast hot spot for tech and social media tenants that are drawn to the city’s media and financial agglomerations and talent pool. Though Midtown and Midtown South offer a different vibe and, generally, different types of office inventory, owners …
The office market in the Baltimore metropolitan statistical area — which encompasses the counties of Anne Arundel, Baltimore, Harford, Howard, and the eastern portion of Carroll County, as well as Baltimore City — experienced a slight uptick in activity in the fourth quarter of 2012. The market saw a 0.49 percent decrease in direct vacancy, dropping from 15.77 percent in the third quarter of 2012 to 15.28 percent in the fourth quarter. This dip is attributed to nearly 100,000 square feet of positive absorption within the overall market. As with any statistical number, a closer look at these numbers reveals several patterns that may or may not be indicative of larger economic trends within the market. The northern part of the market, consisting of Baltimore and Harford counties, saw negative absorption of 100,531 square feet. The 0.44 percent increase is directly attributed to office properties in Harford County entering the market at various levels of occupancy, including a 75,493-square-foot building outside the U.S. Army’s Aberdeen Proving Ground that entered the market completely vacant. Further inspection of activity throughout the north part of the market indicates that small and medium size tenants — firms under 20,000 square feet — are still …
The Nashville office market may have good cause to be the envy of the commercial real estate world. Despite a sluggish economic recovery for most of the United States, Nashville’s economy and office market have experienced a surge of growth fueled by a diverse business climate that includes healthcare firms, legal firms and corporate headquarters. That surge puts overall office vacancy at a 10-year low and Class A vacancy at record lows, 9.9 percent and 6.3 percent, respectively. Moreover, the types of development and transactions that are shaping the office market and economy are economic development homeruns, bringing or retaining growing firms’ corporate headquarters to Nashville and driving job growth. By any measure, 2012 was a banner year for Nashville’s office market. The CBD submarket has seen the most leasing activity, as many of Nashville’s major law firms and banks have secured homes for the next decade. Butler Snow’s deal at the Pinnacle building placed the 520,000-square-foot Class A office tower at 80 percent leased, and this building — which has the highest rents in the city — was closing in on full lease-up at the end of the year. Additionally, with the majority of downtown office space committed and …
The vacancy rate for the 19.7 million-square-foot Cambridge office and lab market decreased from 11.5 percent to 10.3 percent during the third quarter, with more than 150,000 square feet of positive absorption. Year-to-date absorption totals 386,000 square feet, with all of the positive absorption occurring in the lab market. The lab market continues to be the driving engine of the Cambridge market and with four consecutive quarters of positive absorption, it shows no sign of slowing down. The two largest leases of the quarter were signed by Merrimack Pharmaceuticals (110,000 square feet), a homegrown Cambridge company, and Boston Biomedical Inc. (63,000 square feet), which will open an oncology R&D facility in Cambridge. Conditions in the Cambridge office market generally favor landlords despite three straight quarters of modestly negative net absorption. The office vacancy rate stands at 10.9 percent, but with some sizeable commitments expected to transact in the fourth quarter and a number of active tenants touring the market, conditions are tight, particularly in the East Cambridge submarket. Office Market The 10.3 million-square-foot Cambridge office market has been statistically flat for much of 2012, barely moving from 10 percent at 2011 year end to 10.9 percent at the end of …
The Salt Lake office market will hopefully continue to improve throughout the next year. At the end of the third quarter, overall direct vacancy rates were 13.6 percent, down from the 14.9 percent rate recorded this time last year. Overall asking lease rates for the same period have also seen a slight increase of 41 cents per square foot to the now average asking lease rate of $19.92 per square foot, per year, full service. Although a healthy appetite for Class A office space has dropped vacancy rates in this category to below 10 percent, Class B space lags behind with vacancy rates close to 17 percent as of the end of the third quarter. There has been considerable buzz around the Downtown submarket, due mostly to the new City Creek retail center that was estimated to cost $1.5 billion. The project was developed by The Church of Jesus Christ of Latter-day Saints affiliate City Creek Reserve, in collaboration with their partner Taubman Centers. The retail complex is located in the core of Salt Lake’s CBD and came online in March of this year. Despite this unique development, vacancy rates remain high in this submarket. Overall direct vacancy rates for …
The Orlando office market continued to inch forward during the third quarter of 2012 with modest net absorption of 74,851 square feet. This marks the ninth straight quarter of positive net absorption for the Orlando office market, which includes more than 38 million square feet of Class A and B office space. Overall vacancy, however, rose 28 basis points quarter over quarter to 17.89 percent due largely to negative absorption in the Maitland Center submarket and due to an increase in available sublease space. The uncertainty created by the presidential election and the pending “fiscal cliff” were likely a factor in these modest third quarter results. Otherwise, office demand fundamentals continue to steadily improve. According to the Bureau of Labor Statistics, unemployment levels dropped to 8.4 percent in September, down from 8.7 percent in August. The office market will ultimately benefit from a multiplier effect as increases in construction and trade today should lead to increased demand for professional services and therefore increases in office using employment in the near future. Positive absorption in the third quarter was mostly due to growth within the Downtown/CBD submarket where 76,287 square feet of space was absorbed. The remaining non-CBD submarkets had mixed …
Despite the challenging and uncertain economic climate in New Jersey where the unemployment rate is now at its highest level in three decades and major companies are placing large blocks of space on the market, there is at least one encouraging sign of progress and glimmer of hope. Due to a number of factors, small and mid-sized biotech companies are choosing Central New Jersey — and areas adjacent to the Interstate 287/78 corridor — to base their operations. Several companies have located their headquarters or expanded branch functions in the I-287/78 corridor during 2012. In Bridgewater, Allergan leased 93,000 square feet, Dendreon leased 39,940 square feet, while Aptalis Pharma expanded into a total of 50,000 square feet. In Basking Ridge, Celgene renewed its 90,000-square-foot lease and Ipsen leased 32,500 square feet. Outside the I-287/78 corridor, Watson Pharmaceuticals recently expanded into an additional 32,000 square feet in Parsippany, and leased 32,000 square feet of lab/administrative space in North Brunswick. A recent study from BioNJ, a 300-member organization founded in 1994 that is focused on advancing the growth and prosperity of New Jersey’s biotechnology cluster, reinforces this trend and paints a vivid picture of its impact over the past few years. The …
The sun shines once again on Tampa’s office sector — especially for the Westshore submarket, the largest in the Tampa Bay area. Job growth and a lack of new development have led to strong net absorption and declining vacancy in 2012. All those factors create the very real possibility for speculative office development in 2013, especially given the region’s lack of large blocks of contiguous Class A space. Overall vacancy for Tampa’s 32 million-square-foot office market was 16.7 percent through the third quarter, a full percentage point lower than vacancy at the beginning of 2012. Westshore captured 250,000 square feet of the area’s 350,000 square feet of net absorption, but even the Downtown submarket totaled 100,000 square feet of net absorption through the third quarter — not bad for a section of the market that’s struggled disproportionately over the past few years and has 6.5 million square feet of office space. Conversely, Tampa’s I-75 submarket struggled, with negative 40,000 square feet of net absorption through the first three quarters of 2012, but it has a strong track record over the past 15 years and brighter prospects ahead. Net absorption could’ve been greater, too, but potential tenants waited out election results. …
A rise in office-using employment and corporate profits has benefited underutilized Milwaukee space and spurred some companies in the metro area to expand their space needs. Several leases above 30,000 square feet were finalized in the first half of 2012. The accounting firm Baker Tilly Virchow Krause LLP took 68,000 square feet. Healthcare information systems provider Connecture Inc. inked a deal for 32,200 square feet. Marshall & Swift/Boeckh, a provider of building cost data and estimating technology to the property insurance industry, leased 38,200 square feet. Leasing activity helped push absorption into positive territory during the first two quarters, although rent growth remains minimal. It will take a few quarters of strong absorption before any significant upward trend in rents is realized. The limited construction pipeline has helped stabilize vacancy. The few competitive projects to break ground must have major leases in place before building activity gets under way. A rise in owner-occupied and government construction, however, could affect short-term vacancy in targeted areas, if leased space is vacated. About 30,000 square feet of office space came on line in the second quarter upon the completion of the refurbished Clock Shadow Building on Bruce Street in Milwaukee. The mixed-use building …