Market Data

Regional Outlook(6)

Markets to Watch

• Chicago —Windy City apartment sales could drop 30 percent this year, the steepest percentage decline since 2002, according to CB Richard Ellis. CBD sales rose 125 percent last year and the average unit price increased 85 percent to $274,370.

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• New York —Hit by the credit crunch like everyone else, Macklowe Properties put the 1.8 million-sf General Motors building on the market to raise some cash to pay off the $7 billion debt on the Equity Office Properties portfolio it bought last year. World Trade Center owner Larry Silverstein has offered $3 billion for the GM property, which would be the highest price ever paid for a U.S. office building.

Market Strength Forecast 2008–2012

Markets ranked on 14 property, economic, and demographic variables

Source: Grubb & Ellis

Columbus Grows as Midwest Hub

Columbus, Ohio’s industrial market is poised to grow as a key logistics hub as fuel costs and infrastructure issues drive the market, according to Grubb & Ellis/Adena Realty Advisors in Columbus. About 2.5 million sf of speculative industrial construction is planned for the Columbus area this year. Central Ohio attracted more than $1.5 billion in commercial investment sales in 2007, with office transactions accounting for more than $332 million in sales. Two downtown properties sold last year for $40 million and $46.5 million.

Vegetarian Fast Food

It may sound like an oxymoron, but New York City’s first meatless fast-food stand is open near Grand Central Station. Owner James Tu plans to take the chain nationwide, according to Springwise.com, opening a second restaurant in Hollywood, Calif., this year. Offering meatless versions of fast-food favorites such as burgers and chicken sandwiches, Zenburger’s target market is “flexitarians — those who eat a vegetarian diet some of the time,” Tu says — a much larger group than vegetarians.

Boise Industrial Stymied

Boise, Idaho, is well positioned for distribution given its midpoint location between cities such as Seattle, Portland, Ore., Denver, and Salt Lake City. However, national tenants looking to lease find a dearth of large quality warehouse space in Boise, according to Thorton Oliver Keller’s winter 2008 report. Local officials are considering a tax initiative to encourage large speculative development, but the bigger problems are the market’s high cost of industrial land and relatively flat lease rates.

Oklahoma OK if Recession Hits

Oklahoma and other energy states should fare better than the national average if a full-blown recession hits the U.S. this year, according to economists at Oklahoma State University’s Center for Applied Economic Research. “If there’s a state to be in, it is one of the energy states, and it’s one with moderate housing prices, and we happen to fit that bill,” says economist Mark Snead in a Tulsa World interview.

Tulsa, Okla., Property Snapshot

Recent transactions

Source: Tuslabusiness.com

Project Rehab

The School of the Art Institute of Chicago has opened the 25,000-sf Sage Studio for Fashion Design in the Sullivan Center, the former Carson Pirie Scott department store, designed by Louis Sullivan. Chicago developer Joseph Freed & Associates purchased the architectural icon in the heart of Chicago’s CBD for $19 million and is repositioning it as a retail and office mixed-use project. But it’s not the first Chicago department store to welcome students: In the early 1990s, DePaul University purchased the shuttered Goldblatt’s department store and converted it to the university’s downtown campus.

Top Office Leasing Markets

By percent change in economic rent

Source: CB Richard Ellis

Medical Mixed-Use Promotes Healthy Development

Ryan Cos. is developing its second medical mixed-use center in the Milwaukee market. A 28-acre medical office and retail project is on the boards for Franklin, Wis., adjacent to a full-service outpatient care facility. The development will contain 180,000 sf of class A medical/specialty office, 50,000 sf of specialty retail targeted at pharmacies, spas, and other complementary uses, and about 6 acres of land sites available for build-to-suit. Ryan also is developing a medical center in Menomonee Falls, Wis.

France Attracts Worldwide Investment

Nearly 60 percent of France’s commercial real estate acquisitions were made by foreign investors, with North American investors making up 19 percent of all commercial real estate purchases. Transaction volume in 2007 was up for the fourth straight year, topping e28.5 billion, a 17 percent increase over 2006, according to Cushman & Wakefield. Nearly 70 percent of investment activity took place in the Paris market, with about e8.5 billion of transactions occurring in the provinces. While the office market attracted the largest share of investment euros, retail in- vestment increased 160 percent in volume over 2006. Industrial transactions also were up, accounting for 13 percent of activity.

Top Markets for Shopping Center Acquisitions, 2007

(by sf)

Source: SNL Financial