The northern Nevada office market remained weak in 2008 with all four quarters recording increased vacancy and negative net absorption, a continuation of a trend that began in 2007 when three out of four quarters finished with negative net absorption. Last year finished with negative 116,000 square feet of leased office space and vacancy exceeding 20 percent. Directly related to the drastic downturn in the residential real estate market, Reno’s office performance had been fueled by the national homebuilders, mortgage companies and title companies, who saw their requirements for office space drop as quickly as the demand for their products and services. The area’s office sector quickly changed from growth and high demand to nearly non-existent demand and increasing vacancy, thus leaving investors and developers scrambling for tenants. With rising vacancy and demand declining, many office property owners are willing to slash effective lease rates to secure tenants. The average asking rate for Class A properties at year-end 2008 was $22.08 per square foot, a $1.56 less than a year earlier, and Class B was down to $16.68 per square foot. During the highs of late 2006, the effective rates for class A product exceeded $27 per square foot. With …
Office
What area is your expertise? St. Louis County, Missouri — specifically the Chesterfield submarket. What trends do you see presently in office development in your area? In this submarket, vacancy is declining and new buildings are under construction with more being planned. Who are the active office developers in your area? MPD Development, Duke Realty, OPUS and Sachs Properties. Please name one or two significant office developments in your area. What impact will these projects have on the market? Valley Trails Center at 17401 North Outer 40 Drive, Chesterfield, MO 63005. Three 66,000-square-foot office/medical buildings (planned for near future). Located on Interstate 64/Highway 40 with great access from Boone’s Crossing interchange. Buildings will include balconies and have excellent visibility from the interstate. Adjoins a 26 mile trail system. Developer is MPD Development. Where is the majority of development taking place? Why is this area doing well? West St. Louis County due to access and strong demographics. What area do you expect to be the next big development market? Why? Development will continue in West St. Louis County/ Western Chesterfield area due to available land. What areas are doing well in terms of office leasing? Which areas are struggling with office …
What area is your expertise? For the purpose of this report I will be discussing the office market in and around Akron. What trends do you see presently in office development in your area? Akron has historically been a fairly conservative and stable office development market. Fortunately, this has meant that our area has not fallen in the trap of being over developed like a lot of cities experience in a market downturn. However, as we’ve experienced in the past down markets, those tenants that are making moves are expecting and getting rental concessions, increased tenant improvement allowances and very attractive rental rates. We’ve also experience a substantial increase in locally owned businesses opting to either build or buy their own office space which is due to the attractive mortgage rates and sale prices. Who are the active office developers in your area? In the 35-plus years that I’ve been in the office/industrial real estate business, I have not seen as many major expansion projects announced as I’ve seen in the past 18 months in our area. These projects will undoubtedly help bolster the Akron economy and help spur additional growth, or a trickledown effect as some would choose to …
What area is your expertise? We primarily focus on office properties located in the Reno/Tahoe region of Northern Nevada, as well as some outlying areas. The Northern Nevada office market is defined as Reno/Sparks as far north as Spanish Springs and as far south as Mt. Rose Highway, HW 431. Our expertise mainly lies within the seven submarkets in the Reno/Sparks market: South Meadows (89521), Meadowood (89511), Central Reno (89509), Airport (89502), and Downtown Reno (89501). We also track West Reno (89523) and Sparks (89431, 89436) What trends do you see presently in office development in your area? We have seen a tremendous slowdown in new office development over the past 2 years. The booming economy of yesteryear produced an abundance of office space that has outpaced the economic demands of the market. Direct results of this overbuilding are the inflated vacancy rates and a standstill for new development. Most of the office development occurring comes in the form of existing building redevelopment and renovation. Much of this activity is occurring in Downtown Reno where the downtown Reno redevelopment district provides incentives for redevelopment through flexible zoning and tax incentives, therefore allowing developers to achieve a highest and best use …
Despite being just south of Philadelphia, Delaware continues to maintain its presence in the New England market and its own identity. After a very active period from 2005 to 2007, office development in Wilmington’s central business district (CBD) is now taking a breather. The last project finished, the Renaissance Center at 4th and King streets, still has significant vacancies. The suburban market has also slowed, and new developers are taking a wait-and-see approach before speculatively breaking ground on new projects. This current slowdown in market activity is attributable partly to the market and partly to the usual summer slump. The slowdown has brought overall vacancy rates to 17.1 percent for Class A and B office product, including sublease space. The Wilmington CBD comes in with the highest rate at 20.5 percent (Class A and B, including subleases), while western New Castle County posts a rate of 6.2 percent, an anomaly compared to the other submarkets that lean more towards the CBD’s rate. Currently, rents for Class A space in the CBD can run from the low $20s to low $30s per square foot. Suburban rents for Class A space are equivalent, ranging from the low to high $20s. Leasing may …
What area is your expertise? Seattle, Washington What trends do you see presently in office development in your area? There are currently 13 office projects of 100,000 square feet or larger under construction in the Greater Seattle Office Market comprising approximately 3.7 million square feet. Who are the active office developers in your area? Daniels Development Company, Vulcan Real Estate, Schnitzer West, Touchstone, Opus Northwest and Martin Selig Real Estate. Please name one or two significant office developments in your area. What impact will these projects have on the market? 818 Stewart Building — Developed by Schnitzer West is due for delivery third quarter 2008. This is the first new Class A construction to be completed in the Courthouse district area of Seattle’s Central Business District (CBD). Fifth & Columbia — Developed by Daniels Development, it will become a key part of Seattle’s established financial district when it is completed in late 2010. Where is the majority of development taking place? Why is this area doing well? Much of the new construction in Seattle is occurring in the North CBD and South Lake Union areas. The North CBD houses the new federal courthouse and South Lake Union will be home …
What area is your expertise? Phoenix metropolitan area — office What trends do you see presently in office development in your area? Deliveries of office buildings have slowed for the first time in several years. During first quarter 2008, only 66 buildings were delivered compared to 110 buildings second quarter 2007. However, there is still more than 6.8 million square feet under construction. Who are the active office developers in your area? Opus West, ALTER Group, Lincoln Properties, RYAN Companies, McShane Construction, DMB Associates and Higgins Development Partners. Please name one or two significant office developments in your area. What impact will these projects have on the market? Opus Pima Center — Scottsdale has virtually run out of land for new development. Therefore, developers chose to negotiate 65-year ground leases with the Native Americans to develop on their land. This project is part of a master development totaling over 3.5 million square feet of office, industrial, and retail. The project is a 209-acre, mixed-use business park located along the Loop 101 Freeway (major Valley freeway) at the Via De Ventura / Pima/90th Street interchanges in Scottsdale. The underlying land owner is the Salt River Pima-Maricopa Indian Community. The master developer …
What area is your expertise? Connecticut — Fairfield County. What trends do you see presently in office development in your area? Slow to moderate growth in office demand. An adequate supply of product is available but not many “lookers.” Who are the active office developers in your area? Very little new development. Mostly local developers without national recognition e.g. Building and Land Technology of Norwalk and The Davis Company, also of Norwalk. Please name one or two significant office developments in your area. What impact will these projects have on the market? Blackrock Realty’s new railroad station project is underway in Fairfield that will become Fairfield Metro Center office park. The 100 Fairfield Metro Center building will encompass the first phase of the development and contain 200,000 square feet of Class A office space. A pavilion building on-site will add another 70,000 square feet to the overall development. Phase I is scheduled for completion in 2009. Where is the majority of development taking place? Why is this area doing well? Lower Fairfield County. It’s located along the commuter route to New York City. What area do you expect to be the next big development market? Why? The 33-acre Wilton Corporate …
What area is your expertise? Office market in the Kansas City metropolitan area. What trends do you see presently in office development in your area? Little new development. Some mixed-use projects in the works. Who are the active office developers in your area? Local developers. Please name one or two significant office developments in your area. What impact will these projects have on the market? Park Place – Mixed-use suburban office project including retail, residential, office and hotels. Located in suburban Kansas City (Leawood, Kan.) Plaza West – mixed-use office, retail, hotel project on Country Club Plaza. Will be corporate headquarters for local advertising firm Bernstein Rein. Where is the majority of development taking place? Why is this area doing well? Suburban Kansas City What area do you expect to be the next big development market? Why? Suburban Kansas City What areas are doing well in terms of office leasing? Which areas are struggling with office leasing? Suburban Kansas City and Country Club Plaza do well. Downtown Kansas City has struggled but with a new entertainment district along with opening of Sprint Center, it is poised to take off. Please give a measure of office vacancy rates. Please give a …
High construction costs and slow absorption have limited the amount of speculative office construction in most of El Paso, with the exception of medical developments near the new hospitals and surgical centers. The current trends are for highly efficient, high-profile buildings with plentiful parking and state-of-the-art amenities. Energy efficiency is also a high priority, but the cost of construction has delayed many plans to upgrade to better office space. The predominant areas of new development are concentrated on the peripheries of El Paso to the northeast, east and far west sides. The availability of large tracts of land and the immediate proximity to the highest population centers and employers are what is driving this development. On the east side, Sierra Providence Health Network is completing a new 110-bed, general acute-care hospital that opened at 3280 Joe Battle Boulevard at the beginning of June. A planned expansion will accommodate 290 beds. Adjacent to the hospital, Trammell Crow Company is developing a medical office building. The company is one of the newest and most aggressive office-specific developers to locate in El Paso. In the downtown market, Borderplex Community Trust is extremely aggressive and is active in acquiring downtown properties for redevelopment. Mills …