When it comes to growing cities, Texas is booming. The Lone Star State boasts the highest number of cities on Forbes’ annual list of America’s Fastest Growing Cities. Three Texas cities made it into the top 10: Austin (at No. 1), Dallas (No. 4), and Houston (No. 10).
Forbes’ list of America’s fastest-growing cities rates the 100 most populated metros in the country based on several factors, such as the estimated rate of population growth for 2013 and 2014, year-over-year job growth for 2013, unemployment data, median salaries for local college-educated workers, and the rate of economic growth for 2013.
The following cities topped this year’s list:
1. Austin, Texas
2013 population growth: 2.5%
2. Raleigh, N.C.
2013 population growth: 2.15%
3. Phoenix
2013 population growth: 1.67%
4. Dallas
2013 population growth: 1.91%
5. Salt Lake City, Utah
2013 population growth: 1.33%
6. Denver
2013 population growth: 1.75%
7. Ogden, Utah
2013 population growth: 2.05%
8. Charlotte, N.C.
2013 population growth: 1.92%
9. Orlando, Fla.
2013 population growth: 1.82%
10. Houston
2013 population growth: 1.82%
Source: “America’s 20 Fastest-Growing Cities,” Forbes.com (Feb. 14, 2014)
Monday, March 3, 2014
Friday, January 31, 2014
25 Predictions for 2014
International capital will seek property returns around the globe.
Global
1. Much of the world will see slow growth
2. Global investors will push into new property markets
Europe, Middle East & Africa
3. Second tier cities will be back on the radar
4. European economy to emerge from recession
5. UK economy will strengthen through further government stimulus
6. UK regional markets and secondary assets will be back in play
7. Large-scale infrastructure investments across the GCC
8. Foreign companies will expand to South Africa and beyond
Asia
9. Modest growth in office rentals in Asian Financial Centers
10. Chinese investors will buy overseas in a big way
11. JREITs will expand
India
12. More supply deferrals in 2014
13. Regulatory changes will boost investments
Singapore
14. Singapore's prime office rents will jump by 10-16%
Australia & New Zealand
15. Domestic property investors will take back Australia
16. Leasing conditions will improve in all sectors
17. New Zealand development activity will rise
Latin America
18. Mexican Investment will be Drive by New REITs
19. More Foreign Investors will target Colombia
USA
20. U.S. GDP growth will struggle to average 2%
21. QE will end and interest rates will rise
22. U.S. Home prices will rise as much as 9%
23. Secondary U.S. markets will see expanded demand
24. Industrial will be top U.S. performer in 2014
Canada
25. The Prairie Provinces will be real estate hot spots
Full story here http://www.colliers.com/en-us/insights/market-news/2014-commercial-real-estate-predictions#.UuvNrU2A0y8
Credit: Colliers International
Global
1. Much of the world will see slow growth
2. Global investors will push into new property markets
Europe, Middle East & Africa
3. Second tier cities will be back on the radar
4. European economy to emerge from recession
5. UK economy will strengthen through further government stimulus
6. UK regional markets and secondary assets will be back in play
7. Large-scale infrastructure investments across the GCC
8. Foreign companies will expand to South Africa and beyond
Asia
9. Modest growth in office rentals in Asian Financial Centers
10. Chinese investors will buy overseas in a big way
11. JREITs will expand
India
12. More supply deferrals in 2014
13. Regulatory changes will boost investments
Singapore
14. Singapore's prime office rents will jump by 10-16%
Australia & New Zealand
15. Domestic property investors will take back Australia
16. Leasing conditions will improve in all sectors
17. New Zealand development activity will rise
Latin America
18. Mexican Investment will be Drive by New REITs
19. More Foreign Investors will target Colombia
USA
20. U.S. GDP growth will struggle to average 2%
21. QE will end and interest rates will rise
22. U.S. Home prices will rise as much as 9%
23. Secondary U.S. markets will see expanded demand
24. Industrial will be top U.S. performer in 2014
Canada
25. The Prairie Provinces will be real estate hot spots
Full story here http://www.colliers.com/en-us/insights/market-news/2014-commercial-real-estate-predictions#.UuvNrU2A0y8
Credit: Colliers International
Tuesday, September 10, 2013
Tuesday, July 30, 2013
Tuesday, June 11, 2013
Vacancy Rates Continue Decline in Second Quarter 2013
Economic activity posted a steady pace of growth over the past few months, as consumers and businesses seemed committed to moving forward. Gross domestic product rose 2.4 percent in the first quarter of the year. Riding the moderate temperature of a mild winter, consumers opened up their wallets at the fastest pace since the fourth quarter 2010.
Behind an improving economy lies a subtle uplift in consumers’ wealth. Consumers have been paying off debt over the past few years, while cutting back on discretionary spending. At the same time, household wealth tied to financial assets has been rising steadily post-recession, with the Dow recently crossing the 15,000 threshold. Household wealth tied to housing has seen a noticeable improvement in 2012 and the first quarter of 2013. Sale of existing homes rose 9.8 percent in the first quarter of this year, following the 9.0 percent rise in 2012. Due to very tight inventories, multiple bids have returned to the market, and price escalation clauses are pushing home prices up. Based on NAR data, the median sales price of existing homes jumped 11.2 percent in the first quarter of the year.
With vacancy rates falling and rents rising, market fundamentals have improved. National vacancy rates over the coming year are expected to continue declining in most property sectors. The average multifamily vacancy rate is forecast to rise 0.2 percentage point, although the sector still shows the tightest availability and largest rent increases.
Net absorption of office space is projected to total 31.7 million square feet by year end. Office vacancies are expected to decline to 15.6 percent by the end of 2013. The markets with the lowest forecasted office vacancy rates are Washington, D.C., New York and Little Rock, with availability rates of 9.4 percent, 9.9 percent and 12.0 percent, respectively. Rents for office properties are expected to increase 2.6 percent over the year.
Industrial markets are benefiting from rising international trade, which drives demand for warehouse space. Net absorption of industrial space is projected to total 107.1 million square feet by the end of 2013, driving vacancy rates to 9.3 percent. The metro areas with the lowest industrial vacancy rates are Orange County, at 3.9 percent, followed by Los Angeles with 4.1 percent, and Miami, at 5.8 percent. Rents for industrial buildings are expected to grow 2.4 percent this year.
With consumers continuing a cautiously optimistic approach to spending, retail spaces have been on the rebound. Net absorption of retail buildings is expected to total 12.5 million square feet this year. With the supply of new buildings still constrained, vacancies are expected to drop to 10.4 by year-end. Markets with the lowest retail vacancy rates are led by San Francisco, at 3.6 percent. Rounding the top three are Fairfield County, CT, at 4.1 percent, and Long Island, NY, along with Orange County, CA, both at 5.3 percent. Rent for retail properties are projected to increase 1.4 percent over the year.
The apartment market has seen the strongest demand and lowest vacancies, driven by a recovery of household formation towards long-term averages. Net absorption is expected to total 276,320 units this year. Against a supply of only 136,342 new units, vacancy rates are estimated to decline to 3.8 percent by the end of 2013. Metro areas with the lowest vacancy rates are New Haven, CT, at 2.0 percent and New York City, at 2.2 percent. Sharing the number three spot, Minneapolis and San Diego, each record 2.3 percent. Apartment rents are projected to increase 4.6 percent in 2013.
For the full Commercial Real Estate Outlook report, visit http://www.realtor.org/reports/commercial-real-estate-outlook.
Reported by George Ratiu, Research Economist
Vacancy Rates Continue Decline in Second Quarter 2013
Behind an improving economy lies a subtle uplift in consumers’ wealth. Consumers have been paying off debt over the past few years, while cutting back on discretionary spending. At the same time, household wealth tied to financial assets has been rising steadily post-recession, with the Dow recently crossing the 15,000 threshold. Household wealth tied to housing has seen a noticeable improvement in 2012 and the first quarter of 2013. Sale of existing homes rose 9.8 percent in the first quarter of this year, following the 9.0 percent rise in 2012. Due to very tight inventories, multiple bids have returned to the market, and price escalation clauses are pushing home prices up. Based on NAR data, the median sales price of existing homes jumped 11.2 percent in the first quarter of the year.
With vacancy rates falling and rents rising, market fundamentals have improved. National vacancy rates over the coming year are expected to continue declining in most property sectors. The average multifamily vacancy rate is forecast to rise 0.2 percentage point, although the sector still shows the tightest availability and largest rent increases.
Net absorption of office space is projected to total 31.7 million square feet by year end. Office vacancies are expected to decline to 15.6 percent by the end of 2013. The markets with the lowest forecasted office vacancy rates are Washington, D.C., New York and Little Rock, with availability rates of 9.4 percent, 9.9 percent and 12.0 percent, respectively. Rents for office properties are expected to increase 2.6 percent over the year.
Industrial markets are benefiting from rising international trade, which drives demand for warehouse space. Net absorption of industrial space is projected to total 107.1 million square feet by the end of 2013, driving vacancy rates to 9.3 percent. The metro areas with the lowest industrial vacancy rates are Orange County, at 3.9 percent, followed by Los Angeles with 4.1 percent, and Miami, at 5.8 percent. Rents for industrial buildings are expected to grow 2.4 percent this year.
With consumers continuing a cautiously optimistic approach to spending, retail spaces have been on the rebound. Net absorption of retail buildings is expected to total 12.5 million square feet this year. With the supply of new buildings still constrained, vacancies are expected to drop to 10.4 by year-end. Markets with the lowest retail vacancy rates are led by San Francisco, at 3.6 percent. Rounding the top three are Fairfield County, CT, at 4.1 percent, and Long Island, NY, along with Orange County, CA, both at 5.3 percent. Rent for retail properties are projected to increase 1.4 percent over the year.
The apartment market has seen the strongest demand and lowest vacancies, driven by a recovery of household formation towards long-term averages. Net absorption is expected to total 276,320 units this year. Against a supply of only 136,342 new units, vacancy rates are estimated to decline to 3.8 percent by the end of 2013. Metro areas with the lowest vacancy rates are New Haven, CT, at 2.0 percent and New York City, at 2.2 percent. Sharing the number three spot, Minneapolis and San Diego, each record 2.3 percent. Apartment rents are projected to increase 4.6 percent in 2013.
For the full Commercial Real Estate Outlook report, visit http://www.realtor.org/reports/commercial-real-estate-outlook.
Reported by George Ratiu, Research Economist
Vacancy Rates Continue Decline in Second Quarter 2013
Tuesday, May 28, 2013
Business Success Newsletter - May 2013
Check out a training opportunity for investors, what to discuss when renewing a lease, and a few other things to read and learn. Don't miss our May edition of Business Success newsletter!
https://app.verticalresponse.com/app/emails/email/view/1641840027#view_as_html
https://app.verticalresponse.com/app/emails/email/view/1641840027#view_as_html
Retail Rent Growth Finally Takes Root Across U.S. Metros
Change is on its way in Retail rent. Read about it below...
Absorption, Vacancy Benchmarks Continue to Drift Sideways As Retailers Shake Out Closed Stores
Following a recent string of relentlessly unexciting market trends in retail real estate over the past several quarters comes this distinctly positive news for retail property owners -- quoted asking rents have finally turned upward across all retail property types in the U.S. for the first time since 2008.
"This is a symbolic victory," said CoStar real estate economist Ryan McCullough, who co-presented the First-Quarter 2013 Retail Review and Outlook with Suzanne Mulvee, director of U.S. research, retail for Property and Portfolio Research (PPR), CoStar's analytics and economic forecasting company.
This reversal of bad fortune for landlords, which started with rental rate increases in higher-end institutional retail and a few scattered metros of several quarters ago, is the culmination of 2 ½ years of steady fundamentals recovery in retail, he said.
"We’re finally to the point where the average asset is showing steady rent growth again," McCullough said.
Mulvee made note that the 70% of U.S. retail markets that reported positive rent growth during the first quarter represents "a true turning point for the market" into a broad-based recovery.
Without getting too carried away, it should be clearly noted that plenty of challenges remain for owners, tenants and retailers. Rents aren't going to shoot upward and fundamentals are continuing to improve slowly or move sideways.
Muted absorption appears to be the new normal, with a light 17 million square feet in net absorption for the first quarter, down slightly from a year ago, as retailers continue to shed stores and consolidate into stronger shopping centers. Leading year-over-year demand growth are western markets such as Dallas-Fort Worth, Phoenix, Denver, Salt Lake City and San Diego.
With little new construction, vacancies continue to edge downward, with progress still slowed by about 19 million square feet of store closures tracked by CoStar - space shed by such chains as Fashion Bug and Big Lots, as well as hangover from already downsized retailers like Barnes & Noble and Blockbuster.
CoStar expects construction to pick up a bit in 2013 as shifting population opens new pockets of wealth. The first developments to come back have been outlet centers, with six centers under construction across the U.S. and another dozen in the planning stages - and some shopping centers being converted to outlet space.
Power centers and malls are at the lower end of the vacancy spectrum at about 5.9%, while neighborhood centers are starting to rebound, with total store openings exceeding closings by a fairly wide margin.
Demand for malls and especially power centers by category killer retailers such as Best Buy and Staples remains under attack by e-commerce, including the advent of Amazon.com's same-day delivery, Mulvee said. When new construction ramps up again, stronger retailers will gravitate toward the newer centers -- and power centers are like to go dark as a result, McCullough said, adding, "In 10 years, we may be saying the same thing about dead power centers as we do today about dead malls."
The broadening scope of the recovery was reflected in the sentiments of webinar attendees surveyed by CoStar following the retail market presentation:
Lisa Diehl of Diehl and Partners, LLC, of Edina, MN, said the climate for retail investment is strong in the Minneapolis market.
"We had our issues during the downturn, but we're recovering. Everyone I speak with is busier than they were last year, and have done better through May than they did in the entirety of last year. That's a positive sign of activity picking up," Diehl said.
That said, prospects are still playing it safe, she added.
"Landlords are trying to push the rents higher if they can get it. There's still some uncertainly, but things are improving," Diehl said.
John E. Crump, director with HFF in Los Angeles and an investment sales broker mainly focused on California, Arizona and Nevada markets, picked up especially on Phoenix’s relative outperformance on job growth. He found the discussion of the return of the wealth effect and positive rent growth for the first time nationally since 2008 to be of particular note.
"In the California, Nevada and Arizona markets, we are seeing much fewer distressed sales and more stabilized assets," Crump said. "There is a notable lack of product versus supply, and coupled with the ample available low price debt, pricing is at or near peak for coastal areas and improving in the Inland Empire, Las Vegas and Arizona - areas clobbered by the housing downturn."
Almost all property types are performing well with grocery/drug and top-tier malls in highest demand, and other property types following suit improved pricing.
"We foresee continued strength in the next three quarters as investor demand greatly exceeds available supply," Crump said.
"While we have room to grow, I like the favorable and consistent 'North Easterly' trends we are seeing," said Brian Capo, associate with the Marcus & Millichap office in Orlando, FL, another housing-bust market. "Lots or tenants are expanding into Florida, and this will help curb our retail vacancies."
On the investment front, the single-tenant net lease market in properties with national credit tenants is simply "white hot," with numbers surpassing even the mid-2000s boom, according to Capo.
"When a true triple-net deal is put on the market, it does not last long," Capo said. "Investors are aggressive, and meeting the seller's price points. Capitalization rate have compressed rapidly over the last 60 days, in some cases by 50 basis points, he added.
By Randyl Drummer - CoStar
Absorption, Vacancy Benchmarks Continue to Drift Sideways As Retailers Shake Out Closed Stores
Following a recent string of relentlessly unexciting market trends in retail real estate over the past several quarters comes this distinctly positive news for retail property owners -- quoted asking rents have finally turned upward across all retail property types in the U.S. for the first time since 2008.
"This is a symbolic victory," said CoStar real estate economist Ryan McCullough, who co-presented the First-Quarter 2013 Retail Review and Outlook with Suzanne Mulvee, director of U.S. research, retail for Property and Portfolio Research (PPR), CoStar's analytics and economic forecasting company.
This reversal of bad fortune for landlords, which started with rental rate increases in higher-end institutional retail and a few scattered metros of several quarters ago, is the culmination of 2 ½ years of steady fundamentals recovery in retail, he said.
"We’re finally to the point where the average asset is showing steady rent growth again," McCullough said.
Mulvee made note that the 70% of U.S. retail markets that reported positive rent growth during the first quarter represents "a true turning point for the market" into a broad-based recovery.
Without getting too carried away, it should be clearly noted that plenty of challenges remain for owners, tenants and retailers. Rents aren't going to shoot upward and fundamentals are continuing to improve slowly or move sideways.
Muted absorption appears to be the new normal, with a light 17 million square feet in net absorption for the first quarter, down slightly from a year ago, as retailers continue to shed stores and consolidate into stronger shopping centers. Leading year-over-year demand growth are western markets such as Dallas-Fort Worth, Phoenix, Denver, Salt Lake City and San Diego.
With little new construction, vacancies continue to edge downward, with progress still slowed by about 19 million square feet of store closures tracked by CoStar - space shed by such chains as Fashion Bug and Big Lots, as well as hangover from already downsized retailers like Barnes & Noble and Blockbuster.
CoStar expects construction to pick up a bit in 2013 as shifting population opens new pockets of wealth. The first developments to come back have been outlet centers, with six centers under construction across the U.S. and another dozen in the planning stages - and some shopping centers being converted to outlet space.
Power centers and malls are at the lower end of the vacancy spectrum at about 5.9%, while neighborhood centers are starting to rebound, with total store openings exceeding closings by a fairly wide margin.
Demand for malls and especially power centers by category killer retailers such as Best Buy and Staples remains under attack by e-commerce, including the advent of Amazon.com's same-day delivery, Mulvee said. When new construction ramps up again, stronger retailers will gravitate toward the newer centers -- and power centers are like to go dark as a result, McCullough said, adding, "In 10 years, we may be saying the same thing about dead power centers as we do today about dead malls."
The broadening scope of the recovery was reflected in the sentiments of webinar attendees surveyed by CoStar following the retail market presentation:
Lisa Diehl of Diehl and Partners, LLC, of Edina, MN, said the climate for retail investment is strong in the Minneapolis market.
"We had our issues during the downturn, but we're recovering. Everyone I speak with is busier than they were last year, and have done better through May than they did in the entirety of last year. That's a positive sign of activity picking up," Diehl said.
That said, prospects are still playing it safe, she added.
"Landlords are trying to push the rents higher if they can get it. There's still some uncertainly, but things are improving," Diehl said.
John E. Crump, director with HFF in Los Angeles and an investment sales broker mainly focused on California, Arizona and Nevada markets, picked up especially on Phoenix’s relative outperformance on job growth. He found the discussion of the return of the wealth effect and positive rent growth for the first time nationally since 2008 to be of particular note.
"In the California, Nevada and Arizona markets, we are seeing much fewer distressed sales and more stabilized assets," Crump said. "There is a notable lack of product versus supply, and coupled with the ample available low price debt, pricing is at or near peak for coastal areas and improving in the Inland Empire, Las Vegas and Arizona - areas clobbered by the housing downturn."
Almost all property types are performing well with grocery/drug and top-tier malls in highest demand, and other property types following suit improved pricing.
"We foresee continued strength in the next three quarters as investor demand greatly exceeds available supply," Crump said.
"While we have room to grow, I like the favorable and consistent 'North Easterly' trends we are seeing," said Brian Capo, associate with the Marcus & Millichap office in Orlando, FL, another housing-bust market. "Lots or tenants are expanding into Florida, and this will help curb our retail vacancies."
On the investment front, the single-tenant net lease market in properties with national credit tenants is simply "white hot," with numbers surpassing even the mid-2000s boom, according to Capo.
"When a true triple-net deal is put on the market, it does not last long," Capo said. "Investors are aggressive, and meeting the seller's price points. Capitalization rate have compressed rapidly over the last 60 days, in some cases by 50 basis points, he added.
By Randyl Drummer - CoStar
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