Market Data

Regional Outlook

South

Nashville’s Big Deal

In June, Nashville cut the ribbon on Tennessee’s most expensive municipal project: the $600 million Music City Center. With the new 1.2-msf convention center, Nashville hopes to corner the market on trade shows and events, adding to its already $4.2 billion tourist trade. Along with the six-block-long center, more than 1,000 hotel rooms have been built, with 3,000 more planned, and 1 msf of additional commercial space expected, according to Cassidy Turley. Already the center has booked 123 meetings, representing more than 1 million hotel rooms, according to The Tennessean.

Multifamily Investors Zero In on Atlanta

A strong employment outlook has multifamily investors targeting Atlanta, squeezing downtown cap rates and pushing investors into outlying submarkets in search of better deals, according to Marcus & Millichap’s 3Q13 report. Almost 58,000 jobs were created since 3Q12 — the largest increase since 2007 — and 61,000 jobs are being added this year, pushing local employment close to its prerecession peak. As a result, apartment sales in Atlanta are up 23 percent since 3Q12, with institutional deals up 32 percent. Institutional cap rates are hitting the 5 percent mark, while B and C class properties are in the 6 to 7 percent range. Inventory will expand by 1.4 percent this year; however, more than 50 percent of young professionals are priced out of the most desirable housing markets, providing a ready supply of renters.

East

“After a relatively quiet first quarter, investors jumped back into the Manhattan market in the second quarter yielding an increase in commercial property sales volume of more than 30%. … The prices paid for properties increased dramatically in the quarter, especially for office properties and development sites.”

— Eastern Consolidated Real Estate Investment Services

Is New Jersey on a Diet?

While nearly every state in the Union added eating and drinking establishments in 2012, New Jersey lost 111, the largest numerical decline, according to the National Restaurant Association. Kansas (78), Massachusetts (66), Wisconsin (39), Maine (38), South Dakota (8), and Idaho (7) rounded out the biggest (and only) losers, while Florida (1,751), California (1,721), and Texas (1,296) opened the most locations. Tennessee saw the largest percentage growth in restaurants — 9 percent — followed by Florida, Louisiana, Minnesota, and Indiana. Overall, the U.S. added 12,371 eating locations last year, the largest increase since 2007.

Midwest

West

California Office Development to Increase

Nearly half the office developers surveyed in the San Francisco Bay Area plan to begin a new project in the coming year, while only one-third of Southern California developers are planning new office construction, according to the Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Survey. The May survey suggests “a slower but still positive growth rate of nonresidential construction in 2016 and 2017 as the new office space is absorbed.”

Lowe’s Enters Small-Format Market

With the purchase of 60 Orchard Supply Hardware Stores in California and Oregon, Lowe’s is positioned to compete in the smaller-size neighborhood home improvement and garden center market. Purchased in bankruptcy for $205 million and debts, Orchard’s 36,000-sf stores with 8,000-sf outdoor garden centers give Lowe’s a presence in a number of high-density California markets. Lowe’s will maintain the separate Orchard Supply brand, plus its current management. Eight underperforming stores in California markets will close as part of the bankruptcy proceedings.

National

Hotel Investors Sleep Easier

Hotel prices rose by 12 percent last year, surpassing all other property types, according to CoStar. While most of the gains were in six major markets, investors are now looking to secondary markets, fueled by positive occupancy forecast for 2013–17. Phoenix, Minneapolis, Atlanta, Las Vegas, and Charlotte, N.C., are all expected to increase occupancy by more than 3 percentage points in the next three years.

Recommended

Building Progress

Fall 2020

Moody's Analytics Reis Chief Economist Victor Calanog, Phd, CRE, outlines how construction in many sectors will fail to meet expectations for 2020.

Read More

This Is the Altered Normal

Fall 2020

Esri’s data on consumer behavior, demographics, and employment can help real estate adapt in the COVID-19 world.

Read More

Market Trends in Commercial Real Estate

Summer 2020

Office Renters Change Priorities in Wake of Pandemic | Recreational Real Estate on the Rise | Case Study: COVID-19's Impact on Eastern PA Big-Box Market | Hospitality Owners Have Reservations as Occupancy Drop | Seniors Housing Responds to Mounting Pressure from Pandemic | Mixed-Use Developments Can Keep It Local | Supply Chain Reacts to Social Distancing | Self-Storage Weathers Early COVID-19 Storm

Read More

The CMBS Stress Test

Summer 2020

The commercial mortgage-backed securities market is particularly vulnerable amid the COVID-19 pandemic, with borrowers and lenders looking for creative solutions to unprecedented problems.

Read More