Market Data
Market Trends
Briefly Noted
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Hospitality — "The gates are opening for eager private
equity and institutional buyers to take calculated risks in primary and secondary
markets, says Arthur Adler, managing director and CEO-Americas for Jones
Lang LaSalle Hotels. He adds that foreign investors will define
the market in several gateway cities. JLL expects American hotel
transaction volume this year to match last year's $15 billion,
which was a four-year high and a 24 percent increase over 2010.
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Industrial — Sales of industrial properties improved
significantly in 2011, up 67 percent in the first 11 months over the previous year,
according to Cassidy Turley. While cap rates have remained around 7.8 percent to 8
percent, strong demand and low interest rates may push them down during 1Q12.
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Multifamily — Class B apartment properties will play a
bigger role in 2012 as rising rents — with increases averaging around 4.5
percent — force renters to settle for lower-quality digs,
according to Greg Willett, MPF Research vice president. Occupancy averages 94.6
percent in the nations 64 largest markets, with Pittsburgh
topping the chart at 97.8 percent.
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Office — In 2011, vacancy rates fell in about
two-thirds of the office markets tracked, says Jon Southard, director of forecasting,
CBRE-EA. "Although total employment growth was lackluster in 2011, office-using
sectors, such as professional and business services, have been among the best
performers in this regard and have provided just enough support to keep the office
market moving toward recovery," he says.
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Retail — The retail market is playing both sides
against the middle in 2012, according to Lane4 Property Group's
Kansas City Retail Report. Luxury and discount retailers are upping leasing activity,
at the expense of mid-tier retailers. So look for more dollar stores, off-price
apparel shopping, and automotive parts stores as well as luxury retailers in major
markets. Other trends noted by Lane4 include the increase of
"dining, medical services, training and exercise, and
education" tenants in retail centers.

Booyah for Mooyah
Mooyah is moving up the better burger chain, hoping to match national brand
recognition with Five Guys and Smashburger. Mooyah has contracts in place for opening
300 units this year, according to FastCasual.com, adding outlets in Alabama, Arkansas,
Florida, Kansas, Louisiana, Oklahoma, Virginia, Maryland, and Washington, D.C. The
chain is opening 14 units in first quarter alone. Started in 2007, the chain has 22
stores in Texas, along with single outlets in Connecticut, California, and
Tennessee.
"Given the relatively small investable universe in Canada, we continue to notice a
growing trend of Canadian buyers heading south of the border."
— Mark E. Rose, chair and CEO of Avison Young
Warehouse Winners
Top 5 markets for warehouse space net absorption, 2011
- Dallas (10.9 msf)
- Phoenix (7.8 msf)
- Detroit (5.7 msf)
- Indianapolis (5.4 msf)
- Atlanta (5.4 msf)
Source: Cassidy Turley
"In the coming year, expect self-storage to continue its migration toward a more
retail-style property, … focused on location, demographics, and
construction quality."
—Stephen Mellon, national director of self storage, Grubb &
Ellis
Multifamily on a Roll
Apartment building sales rose 27 percent in 2011, ringing up close to $57 billion.
The second-largest transaction category — properties between $10
million and $20 million — was up 63 percent. And the median per unit
sales price for properties priced $1 million to $10 million increased 12 percent, the
first increase since 2005.
2012 Outlook: Sellers will bring more properties to market by midyear; buyers
will target class B and value-add assets and core properties in secondary markets.
Source: Marcus & Millichap