Market Trends Online
Best Retail Buy
A recent survey of retail market participants revealed that the grocery-anchored center is the most favored product type assuming the property:
- contains the area’s dominant grocer;
- has good demographics and not too much competition;
- is not too large; and
- is in an area with high barriers to entry.
Source: New Market Real Estate Group
“Many companies erroneously make dispositions the first step in their post-merger portfolio optimization, making costly decisions purely on market rates, lease terms, or utilization ratios rather than holistically evaluating each location for its best use.”
- “When Companies Combine: Optimizing Physical and Human Capital Post Merger,” CB Richard Ellis special report
Markets Moving On
Capitalization rates in industrial and multifamily properties are already 90 basis points and 80 bps respectively above mid-2007 levels, according the CB Richard Ellis/TWR Investment Outlook, Spring 2009. This suggests that the industrial market is 30 percent to 60 percent through its correction and the multifamily market is 40 percent to 60 percent through its correction, the report says.
Lowest Industrial Vacancy Rates, 1Q09 Estimate
Los Angeles 5.7%
Tucson, Ariz. 7.4%
Salt Lake City 7.4%
San Francisco 8.0%
Kansas City, Mo. 8.0%
National average 11.4%
Source: National Association of Realtors/TWR
Top 5 Suburban Office Markets, 2008
Market Volume (in billions)
Los Angeles $2.6
San Jose, Calif. $1.2
Northern New Jersey $1.2
Source: National Association of Realtors
Chicago’s iconic Sears Tower is being renamed the Willis Tower after London-based insurance broker Willis Holdings leased more than 140,000 sf for about $14.50 psf. The 110-story property, once the world’s tallest building, suffered a status fall after the Sept. 11 attacks made companies wary of occupying potential terrorist targets. Star tenants such as Ernst & Young have departed since. Purchased in 2004 for about $840 million, the building’s vacancy is about 18 percent.
Ready to Go Green?
Leadership in Energy and Environmental Design project registration and accreditation for LEED-AP professionals will transfer to the Green Building Certification Institute on April 27, according to the U.S. Green Building Council. In addition, the new LEED 2009 rating system will go into effect that day.
With the transition, the LEED accreditation program has undergone significant changes, including the creation of multiple credentials with tiered requirements. Click here for more information: http://www.gbci.org/.
Fastest Growing Metros, July 2007-July 2008
MSA Population growth Percent growth 2008 population
Raleigh-Cary, N.C. 44,804 4.3 1,088,765
Austin-Round Rock, Texas 60,012 3.8 1,652,602
Kennewick-Pasco-Richland, Wash. 7,936 3.5 235,841
Palm Coast, Fla. 3,069 3.5 91,247
Gainesville, Ga. 6,194 3.5 184,814
Source: U.S. Census
U.S. Real Estate Value Cycle Forecast
Office: Majority of national office stock in recession by 2009 and remains there until 2012, followed by expansion phase
Retail: Majority of national retail stock in recession in 2009, declines slightly in 2010 and begins recovery by 2011.
Industrial: Most industrial stock in recession through 2010 and 2011, coming into recovery in 2012.
Multifamily: Multifamily stock in recession in 2009 is only slightly above the amount in recovery. Most national multifamily stock will pull out of recession in 2010 and continue to recover through 2012.
Source: Korpacz Real Estate Investor Survey, 1Q09
"Where it used to take years for ... a bad mall to go out of business, I think it's going to happen more quickly. For us, we know the winners and losers already. But the time [the losers] are going to be around [will] shorten." – David Simon, chairman and CEO of Simon Property Group
Retailers Likely to Expand This Year
Apparel Food Grocery Service Value-oriented Misc.
Ross Stores Rue 21
Au Bon Pain
Noodles & Co.
Panera Bread Fresh & Easy
Smart & Final
Sprouts Farmers Market
Sunflower Farmers Market AT&T Mobility
O’Reilly Auto Parts Costco
Urban Active Fitness
Source: Colliers International