Market Data

Regional Outlook

South

Miami’s Big Deal

Miami’s hotel transaction volume rose 154 percent in 2011, according to Jones Lang LaSalle, the strongest deal volume since the peak year of 2005. Last year $557 million in hotel sales closed. The largest, at $130 million, was the Royal Palm in Miami Beach bought by KSL Capital Partners from Sunstone Collins. Miami Beach’s revenue per available room grew 17.5 percent last year and is forecast to grow 12 percent to 14 percent this year. It is also a major market for independent brands, with more than 70 percent of the upper-tier rooms in independently owned hotels.

South

Aldi Expands to Houston

Houston is on track to add 30 Aldi outlets in the next three years, according to the discount grocer. Ten of the no-frills stores will open in the Houston area by spring 2013. Aldi stores average around 17,000 sf, with at least 85 parking spaces, according to the company website, in community shopping centers in trade areas of 35,000 or more. Because of its smaller format, Aldi operates in a number of major urban metros such as New York and Chicago where Walmart is still establishing a foothold. There are 1,200 Aldi stores in 32 states.

East

Lowest U.S. Industrial Vacancy, 1Q 2012

Westchester County, N.Y.

1Q12 6.0%

1Q11 9.4%

National

“The middle class consumer has downsized. Shoppers who used to spend $50 for designer jeans at The Gap are now spending $20 for house brand jeans at Target. This is shaping retail growth and contraction.”

—Cassidy Turley, U.S. Retail Report, May 2012

Midwest

West

Las Vegas Retail Holds Steady

Las Vegas’ retail vacancy rate has remained in the 10 percent range for the past 12 quarters, averaging 10.5 percent for 1Q12, according to Applied Analysis research. Positive net absorption has continued for three of the last four quarters, with 203,300 sf leased in 1Q12. Yes, they are still building in the desert: 300,000 sf will come on line in 2013, and another planned 4.3 msf is being actively marketed. Average asking rents fell from $1.53 psf to $1.45 psf YOY, indicating “that landlords have become increasingly aggressive in their efforts to attract tenants,” says Brian Gordon, Principal of Applied Analysis. Overall, rents are down 34.1 percent from the peak. Of product types, power centers are outperforming neighborhood and community centers both in leasing and rents.

North

Canadian Housing Bubbles Up

Toronto has gone “condo crazy” according to Canada Mortgage and Housing statistics. Overall housing starts jumped 14 percent in April to 244,900, the highest number since September 2007, almost all of the increase due to condo construction. In 1Q12, a record 84,698 units were on the market and 338 projects were actively selling, according to research firm Urbanation. But low interest rates, an influx of foreign buyers, and very high single-family home prices are also fueling a condo buying boom, with more than 6,000 new condos sold in Toronto in 1Q12, the highest number ever recorded for a first quarter. But some analysts estimate that 20 percent to 30 percent of sales are to investors, increasing the fear of an unstable market. The average 1Q12 price was $519 psf, an increase of 8.1 percent YOY.

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