Market Data

Regional Outlook

West

California's Big Deal

The state of California accounted for 29 or close to a quarter of 2011's top single-asset hotel deals, including the $137 million sale of the Mondrian Los Angeles, which was the second-highest U.S. price per room sale at $578,000 per room. Private investors and private equity are seeking comfort in hotel deals: 130 single-asset transactions priced at $10 million or more checked in at $8.9 billion in 2011, considerably higher than 2010's $5 billion in sales, according to the LWHA 2011 Major U.S. Hotel Sales Survey.

Tech Demand Fuels Bay Area Market

San Francisco's unemployment rate dropped 230 basis points in the last two years, down to 7.8 percent, and the office market has followed suit, seeing its strongest leasing since 2006. Growth continued through all four quarters last year, endinga with 2.1 msf of positive absorption. Given the lack of new construction and demand from technology tenants in the South Financial district, rents for class B product are competing with and sometimes surpassing class A rents, according to CBRE. Submarket asking rates for both property classes average $40 psf. Nearly half the market demand, about 3 million sf from technology tenants, is focused on this submarket and a few others that account for about 20 percent of the market's space.

National

Without Borders

What's filling those empty Borders big boxes across the nation? A variety of retailers: HH Gregg in Aventura, Fla., Furniture King in Glendale, Ariz., and a Jo-Ann Fabric and Crafts in Reading, Pa. Discounters Stein Mart and Ross Dress for Less have taken up residence in Atlanta and DeKalb, Ill., stores, respectively. A Vacaville, Calif., store was divided between two retailers: Ulta Beauty and Kirkland's. Among the non-retail tenants, childcare chain Children of America has leased a former Borders in the Chestnut Hill neighborhood of Philadelphia. And in the Chicago suburb of Deerfield, Ill., NorthShore University HealthSystem signed a 15-year lease for a 24,500-sf, two-story former bookstore.

South

Retail Hot in Miami-Dade County

  • Vacancy rate: 5%
  • Number of unfilled big boxes: 31; Downsizer Best Buy is subletting up to 15,000 sf in some of its locations
  • Expanding retailers: Walmart's Neighborhood Marketplace, Aldi, Target, Whole Foods, Fresh Market, and Publix
  • Under construction: 55,000 sf in downtown Miami

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