Market Data

Regional Outlook

{West} 

Silicon Valley's Biggest Deal

Digital Bridge Holdings LLC and its consortium partners, including TIAA Investments and Public Sector Pension Investment Board, purchased Vantage Data Centers in Santa Clara, Calif., for $1 billion from Silver Lakes Partners. The demand for data center facilities is high because of ever-stronger mobile devices and the proliferation of more streaming content. Hyperscale facilities such as Vantage use virtual servers to accommodate increasing computer demands without needing more physical space, cooling, or electrical power. “An enormous amount of [construction] activity continues to occur as preleasing in future projects,” says Jeff West, CBRE director of data center research. “More than 111 megawatts of preleased space are under construction and are indicative of the sheer magnitude of leasing being driven by cloud service providers over the past several quarters.” 

(1) In the Northeast, Boston is a beacon for retail, based on these three figures provided by Marcus & Millichap. First, Boston has seen 700,00 square feet of completes construction year-over-year. Second, vacancy rates been well below the national trend since 2013, and it continues fall. They are seeing a 50-basis-point decrease in vacancy year-over-year. Third, the city has seen a 4% increase in the asking rent for retail year-over-year.

{West}

Cannabis Rocks in Denver Industrial Market 

Marijuana growers continue to expand in Denver's industrial market. Currently, they lease 4.2 msf and have expanded  14 percent since Q4 2015, according to CBRE. Cannabis operations are concentrated solely in Class B and C industrial space, with 63.4 percent in warehouse space. The average lease rate for marijuana growers was $14.19 psf triple net, which is two to three times higher than the average warehouse lease rates in the four top cultivation submarkets. Consolidation continues in the marijuana industry, with well-established operators buying smaller mom-and-pop growers. 


 

{Southwest}

Panama Canal Boosts New Development in Houston

Last year's expansion of the Panama Canal has resulted in a new 500,000-sf industrial development in Houston. Avera Cos. will build a railcar storage and expansion distribution facility, which includes 10,000 feet of rail, for Vinmar International, a Houston-based petrochemical marketer and distributor, and a major user of the Panama Canal.


{Midwest}

 

Transforming Chicago's Southwest Loop

  • Blackstone has started a $500 million renovation of the 3.9-msf Willis Tower (built as Sears Tower in 1970), which is the most the company has ever invested in a single building. Renovations encompass replacing the existing plaza with a glass wrap-around structure at the base of the tower; expanding the Skydeck for tourists; and adding amenities for office tenants.
  • Union Station also is getting a makeover in three phases. The first phase includes renovation of Union Station's historic rail house, a new 110,000-sf food hall, 100,000 sf of offices and hotel rooms, and two 12-story residential structures. Phases two and three will add more office and residential buildings.
  • Vacant since 1997, Chicago's Old Main Post Office will undergo a massive interior and exterior renovation by 601W Companies, a New York-based developer. The historic art deco building will be turned into an office development with a large public riverfront plaza with a boat launch and outdoor seating for restaurants and other amenities for office tenants.

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