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
