Market Trends Online(17)
Industrial Condo Snapshot
Florida residential is not
the only condo-crazy market -- industrial condos also have a strong showing in
the Orlando area.
2006 new product deliveries
Flex - $150-$200 psf
Office/warehouse - $115-$155 psf
Source: GVA Advantis
More Jobs in Boston
Robust job growth in the greater Boston area helped send the 1Q06 office
vacancy rate below 10 percent for the first time since 2002, according to Jones
Lang LaSalle’s Market Intelligence Monthly. Job growth in the office-using
sector more than doubled with financial services jobs increasing from 1,100 to
4,700 -- good news for Boston’s
CBD office property owners. Net absorption in the greater Boston area totaled nearly 1.2 million sf in
the first quarter.
Santa Monica Snapshot
Located a block from Santa Monica’s
prime retail strip, Third Street Promenade, the fully leased 36,535-sf
Building sold for $18.7
million in a 1031 exchange.
From Malls to Mixed Use
Congress of New Urbanism’s “Malls into Mainstreets: A Manual
for Converting Dying Malls into Vibrant Communities” presents the lessons
learned from studying six mall-to-mixed-use-development conversions, including:
Timing is everything. Consider such factors as market
conditions, ownership, anchor status, and site and location factors.
Use parking carefully. Take advantage of shared parking
opportunities, especially in mixed-use situations that include office, retail,
and residential users.
Change is good. Many properties require extensive demolition
as consumer and tenant preferences for physical space have changed dramatically
over the years.
Go public. Incorporate civic facilities such as parks, museums,
and town halls into redevelopment plans to broaden their appeal and foster a
sense of public ownership rather than private development.
Photo Caption:Yesterday’s mall configuration of a fortress-like
structure surrounded by a sea of parking has been turned inside to create the
popular lifestyle center of today.
Image: Congress of New Urbanism
A combination of strong local restaurants and national retailers
may be the secret to a good mixed-use tenant base, according to Shopping Centers
Today. For an anchor, developers aim for a winning combination of destination
and convenience as they consider what attracts residents, visitors, and office
workers to mixed-use developments. Often an upscale grocery store such as Whole
Foods or Bristol Farms fills the bill. Signing national credit tenants now is
easier given the success of mixed-use and the willingness of big-name tenants
to create new store formats and adjust prototypes. Leasing small spaces to
local restaurants often is easier than trying to find mom-and-pop retailers and
they add to the development’s variety. Yet tenanting mixed-use remains a
challenge: Each use -- office, residential, retail -- needs its own entrance
separate from the other uses, and each segment needs to be economically
feasible on its own, based on the area’s demographics.
Shopping for Premier Retail Space
psf rental rates (3,000 sf minimum)
1. New York’s
2. San Francisco’s Union Square: $330
3. Los Angeles’ Rodeo Drive: $300
4. Chicago’s Michigan Ave. at Oak St.: $262.50
5. San Jose, Calif.’s Westfield Valley Fair: $200
Source: Grubb & Ellis Retail Market Trends Summer 2006
The Award Goes to…
Forest City Commercial Development projects Victoria Gardens in Rancho
Cucamonga, Calif., and Stapleton District 1, the first phase of Denver’s
Stapleton Airport redevelopment, won two of the Urban Land Institute’s2006
Awards of Excellence. The awards recognize the entire development process
including leadership, community contribution, public/private partnership, and
environmental issues. To read about the other winners go to www.uli.org and
click on Awards.
Images: Forest City
Recently the commercial
real estate market has seen too much money chasing too few properties,
of that private capital may take a detour into infrastructure
according to Ernst & Young’s Spring 2006 Global Real Estate
the crumbling state of U.S.
highways and bridges and shortage of local and federal funds for
repair, the public/private partnership model seems a natural solution.
projects are common in Australia,
Europe, and increasingly Asia. In these
public/private partnerships, or PPPs, governments solicit bids from
private-sector companies to design, build, and operate infrastructure
usually under a long-term lease arrangement. Companies then solicit
from infrastructure funds created by banks and other sponsors. The
Australia-based Macquarie Group is the most active fund in the U.S.,
but several European funds are interested
in expanding into the U.S.
market. Macquarie and Spanish company Cintra S.A.
paid the state of Indiana
$3.85 billion to operate the Indiana Toll Road for the next 75 years in
toll and concession revenues. The two companies also paid the city of
Chicago $1.8 billion for a 99-year lease on the Chicago Skyway
Bridge, an eight-mile toll road
connecting the city to Indiana.
Seniors Housing Update
Median price per unit
$40,000 per bed
Source: Marcus & Millichap
1Q06 Office Asking Rents
Source: Grubb & Ellis
Class A: San Diego, $35.64 psf
Austin, Texas, $22.27 psf
Boise, Idaho, $15.60 psf
Class B: Washington, DC, $29.98 psf
Cleveland, $17.56 psf
Wichita, Kansas, $11.60 psf