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San Antonio, TX | 2016 Top #CRE Markets to Watch: Office

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Office Markets to Watch. Not the largest or the most actively contested markets, the 2016 Office Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Office Market to Watch: San Antonio, TX

San Antonio, like many Texas metros, has experienced significant economic growth with minimal impacts from the past recession. Overall, total employment is at near record highs and unemployment sits at 3.7% as of January ‘16, according to the Bureau of Labor Statistics. The metro’s diversified economic base from trade and manufacturing to research and finance has left the office market relatively healthy and poised to grow in 2016 and beyond. All key office sectors are growing, including Financial Activities, Professional and Business Services, and Information, at annualized rates of 2.1%, 2.0%, and 1.0%, respectively. San Antonio does have significant exposure to industries such as automobiles and energy that could come under pressure in continued global slowdowns, but overall the risk to the office market does not appear significant at this time.

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top office markets, download the full version of the 2016 Office Market Outlook report here.

2016 Office Market Outlook

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Houston, TX | 2016 Top #CRE Markets to Watch: Office

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Office Markets to Watch. Not the largest or the most actively contested markets, the 2016 Office Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Office Market to Watch: Houston, TX

Houston - top office market to watchHouston is the hub of oil and energy production in the United States and, as such, is uniquely susceptible to the recent oil price declines that appear to have near-term persistence. It is likely that the office market in Houston will experience some pain in 2016 and beyond on a relative basis. Declines are already being felt in key office sectors with Information and Professional and Business Services declining at -2.5% and -1.8% annualized rates, respectively; however, Financial Activities is growing at 2.0% and thus should balance some of the negative effects. Overall, the Houston economy is actually fairly healthy with a 4.8% unemployment rate as of January ‘16 which has stayed near constant for much of 2015; thus, fears of the oil price declines may be overblown.

Advisor Insights: SVN | HINT Advisors

SVN’s Houston-based Advisors at SVN | HINT Advisors have some office market highlights to share. Here’s what to look out for in the Houston office market in 2016:

  • A mild increase in office sublease due to a zero net job growth, following the thousands of jobs lost between December 2014 and April 2016.
  • Increase in concessions from landlords when leasing office space is ongoing.
  • Job losses appear to have stabilized with an unemployment rate at 4.8%, and a resurgence in the energy sector is expected in the future.
  • Due to Houston’s diverse economy in recession proof sectors such as healthcare, petrochemical, and international trade, employment (and demand for office space) is expected to continue.

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top office markets, download the full version of the 2016 Office Market Outlook report here.

2016 Office Market Outlook

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Dallas, TX | 2016 Top #CRE Markets to Watch: Office

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Office Markets to Watch. Not the largest or the most actively contested markets, the 2016 Office Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Office Market to Watch: Dallas, TX

Dallas - top office market to watchDallas remains one of the fastest growing employment centers in the nation, even with the energy price declines of 2015. According to the Bureau of Labor Statistics, the unemployment rate sits near record lows at 3.8% as of January ‘16, with the city creating over a half million new jobs since the recession. The office markets have fared well, as key office sectors of Financial Activities and Professional and Business Services have grown at strong annualized rates of 4.8% and 2.3%, respectively. Information has remained fairly flat at 0.4% annualized growth. As Dallas has become a modern international city with the help of the DFW airport, it is perhaps the best positioned market in the oil-producing region of the U.S. to weather any pain from the petroleum industry. The office market should remain stable and growing in 2016 and beyond.

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top office markets, download the full version of the 2016 Office Market Outlook report here.

2016 Office Market Outlook

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Dallas, TX | 2016 Top #CRE Markets to Watch: Industrial

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Industrial Markets to Watch. Not the largest or the most actively contested markets, the 2016 Industrial Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Industrial Market to Watch: Dallas, TX

Dallas - top industrial market to watchThe Dallas economy remains one of the strongest of the major metros in the nation with unemployment at 3.8% as of January ‘16 and steadily rising total employment at a 3.4% annualized rate, according to the Bureau of Labor Statistics. The fastest growing sector of employment in Dallas is an industrial space using Trade, Transport, and Utilities, which is growing at an annualized rate of 5.2%. This is the sector, where most of the 2016 and beyond gains in the industrial space market will be generated. Dallas has unparalleled airport and rail access making it an ideal business and distribution hub. In fact, the area surrounding the DFW airport is best poised to expand. Manufacturing is the weakest sector declining at a –1.6% annualized rate. This sector touches oil and gas production and exploration, and is thus most at risk for declines in 2016 and beyond.

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top industrial markets, download the full version of the 2016 Industrial Market Outlook report here.

2016 Industrial Market Outlook

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Austin, TX | 2016 Top #CRE Markets to Watch: Retail

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Retail Markets to Watch. Not the largest or the most actively contested markets, the 2016 Retail Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Retail Market to Watch: Austin, TX

Austin - top retail market to watchRetail real estate should perform well in Austin in 2016 and beyond, as this dynamic economy continues to grow and diversify. According to the Census Bureau, the population of Austin has grown 12.5% from 2010 to 2014. Not surprisingly, the economy looks stellar with a 3.2% unemployment rate as of January ‘16 and jobs are growing at 4.7% annually, according to the Bureau of Labor Statistics. The best sectors for job growth are Mining, Logging, and Construction and Leisure and Hospitality, growing at 11.0% and 9.2% annualized rates, respectively. These forces will keep new residents locating in the metro region and businesses expanding. Retail demand will follow the population and should continue expanding in 2016 with ever-increasing fundamentals.

Advisor Insights: SVN | Tamarack in Austin, TX

SVN’s Austin-based Advisors at SVN | Tamarack have some retail market highlights to share:

Gateway Cities like Austin continue to benefit from diverse job creation ranging from service jobs to higher-end STEM (science, technology, engineering and math). It remains an attractive place to live for all generations. Due to the continued numbers of people moving to Austin all property types are attractive but retail properties will continue to be the most favorable investment type.

Austin has a tight market for space so we will see most new construction in sub-markets of Austin such as Lakeway, Leander and Cedar Park.

  • With average rental rates averaging $20 – $23.50 per square foot, rates are expected to increase by more than 4% by the end of 2016.
  • Values in the retail market are expected to increase by 2% – 3.9% by year end.
  • Absorption has been positive for the previous five years and is expected to increase to an estimated 350,000 square feet within 2016. With slightly more than 300,000 square feet of retail space expected to be constructed by the end of 2016 the occupancy rate will also increase above its current 94% rate. Retail properties that are under construction, planned and proposed represent a 3% growth to the current Austin market.
  • Cap rates are currently 6.8% – 7% and are expected to stay relatively flat for the next 6 months.

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top retail markets, download the full version of the 2016 Retail Market Outlook report here.

2016 Retail Market Outlook

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Houston, TX | 2015 Top #CRE Markets to Watch: Multifamily

Sperry Van Ness International Corporation’s (SVNIC) 2015 Market Update Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2015. Today we are delving into the 2015 Top Multifamily Markets to Watch. Not the largest or the most actively contested markets, the 2015 Multifamily Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Multifamily Market to Watch: Houston, TX

Houston: 2015 Multifamily Markets to WatchThe nation’s energy capital has been rattled over the last year by lower energy prices, though experts disagree on how significant the impact will be on Houston’s increasingly well- diversified economy. Some companies in the oil exploration, production, and drilling businesses will undoubtedly make cuts in 2015. There is no avoiding that five of Houston’s top ten employers are in the oil industry.

While demand may soften, Houston’s most daunting challenge is its pipeline of new apartments. Nearly 30,000 multifamily units were under construction as of the first quarter of 2015, with completions projected to exceed 15,000 units by year’s end. Chandan Economics projects that Houston’s ratio of new jobs to units delivered will slide to below 4.5% in 2015, less than half the national average.

While higher-end construction projects clustered in Houston’s downtown neighborhoods could falter, the suburban multifamily market has a relatively thinner development pipeline and may be better positioned for further rent gains in 2015. Vacancy has evaporated in the mid-tier of the market as many Class B properties have found their way out of the inventory, sometimes through strategic repositioning. Cap rates on these assets are relatively high, affording opportunities for income-oriented investors betting on Houston’s long-run growth record.

To read more on Houston and other top multifamily markets, download the full version of the 2015 Multifamily Market Update report here.

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It’s a different world out there.

It requires a different kind of commercial real estate firm working on your behalf in order to be successful. The Lipsey Company has ranked the Sperry Van Ness® organization as one of the most recognized commercial real estate brands in the US for a reason—we know how to deliver a certainty of execution for our clients. Sperry Van Ness International Corporation is one of the largest commercial real estate franchisors with more than 180 locations in 200 markets.

Austin, TX | 2015 Top #CRE Markets to Watch: Multifamily

Sperry Van Ness International Corporation’s (SVNIC) 2015 Market Update Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2015. Today we are delving into the 2015 Top Multifamily Markets to Watch. Not the largest or the most actively contested markets, the 2015 Multifamily Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Multifamily Market to Watch: Austin, TX

Austin: 2015 Multifamily Markets to WatchFollowing sustained growth in demand from strong migration to Austin, apartment effective rents as of the first quarter of 2015 were more than 30% higher than in 2010. Developers have responded in force to the persistence of rent growth over the last half-decade. Deliveries exceeded 9,000 units in 2014 and another 8,000 are expected in 2015. Even in the context of Austin’s strong job growth numbers, the pipeline is deep. Axiometrics estimates that Austin had roughly three new jobs for every multifamily unit that came online last year; of the most active investment markets, only Washington, DC had a weaker ratio.

With significant new supply, the occupancy rate in Austin has fallen slightly and landlords in a few submarkets have increased concessions and other incentives in order to attract tenants. Local economists and real estate professionals have mixed views on what the shift in the balance of supply and demand will mean for rents in late 2015, with estimates ranging from 5% year-over-year growth to projections of short-lived flatlining or declining property income. Most prognosticators agree that centrally located neighborhoods will continue to show rental growth in spite of the concentration of new inventory in the urban core. Suburban submarkets could see smaller increases or even some effective rent decreases due to concessions. The underlying demand drivers in Austin are strong, however. The market ranked 6th in a recent Forbes list of Top 10 Labor Markets, with an unemployment rate below 4%, and a growth rate in the local economy of roughly 5%. For investors with longer time-horizons, that leaves room for rent growth to pick up again in the medium-term, offsetting the market’s current aggressive pricing.

To read more on Austin and other top multifamily markets, download the full version of the 2015 Multifamily Market Update report here.

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It’s a different world out there.

It requires a different kind of commercial real estate firm working on your behalf in order to be successful. The Lipsey Company has ranked the Sperry Van Ness® organization as one of the most recognized commercial real estate brands in the US for a reason—we know how to deliver a certainty of execution for our clients. Sperry Van Ness International Corporation is one of the largest commercial real estate franchisors with more than 180 locations in 200 markets.

San Antonio, TX | 2015 Top #CRE Markets to Watch: Retail

Sperry Van Ness International Corporation’s (SVNIC) 2015 Top Markets to Watch Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2015. Today we are delving into the 2015 Top Retail Markets to Watch. Not the largest or the most actively contested markets, the 2015 Retail Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Retail Market to Watch: San Antonio, TX

San Antonio: 2015 Top Retail MarketsContrasting national trends, San Antonio’s retail inventory grew in leaps and bounds in 2014. Developers added roughly 2 million square feet of new retail space during the year, nearly doubling the tally of deliveries from the market low point in 2012. Despite the new supply, occupancy has edged higher. CoStar reported a 5.5% vacancy rate for the fourth quarter of 2014, below San Antonio’s long-term average. Asking rents were relatively flat over the year but are expected to ramp up. Investors in the market may find that cap rates still reflect the slower rate of income gains, affording an opportunity for investment at a discount to fundamentals.

The balance of San Antonio’s retail development in 2014 came from large chain stores like Walmart and Sam’s Club. Walmart made big moves with the opening of a new Supercenter, as well as four smaller locations. Texas-based supermarket chain H-E-B also experimented with new concepts in 2014, renovating its oldest operating location on Nogalitos Street into its first two-story market in Texas. H-E-B plans to expand its corporate headquarters in downtown San Antonio, and build an adjoining 12,000-square-foot market, the only grocery store in the urban core. Once-troubled retail corridors, like Austin Highway, are seeing new life thanks to complementary multifamily development in the area.

To read more on San Antonio and other top retail markets, download the full version of the 2015 Top Retail Markets to Watch report here.

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It’s a different world out there.

It requires a different kind of commercial real estate firm working on your behalf in order to be successful. The Lipsey Company has ranked the Sperry Van Ness® organization as one of the most recognized commercial real estate brands in the US for a reason—we know how to deliver a certainty of execution for our clients. Sperry Van Ness International Corporation is one of the largest commercial real estate franchisors with more than 180 locations in 200 markets.

Dallas, TX | 2015 Top #CRE Markets to Watch: Office

Sperry Van Ness International Corporation’s (SVNIC) 2015 Market Update Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2015. Today we are delving into the 2015 Top Office Markets to Watch. Not the largest or the most actively contested markets, the 2015 Office Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Office Market to Watch: Dallas, TX

Dallas: 2015 Office Markets to WatchOffice absorption topped 2 million square feet in Dallas last year, fueled by exceptional office-use job growth, corporations relocating to the Dallas Metroplex, or expanding their operations in this business-friendly locale. Among last year’s notable moves, Toyota North America announced that it would build its $350-million, 1.8-million-square-foot corporate campus in the Legacy West mixed-use complex in West Plano. State Farm is moving into its 2.1-million-square-foot space at the sprawling CityLine campus in Richardson. Other companies, like Omnitracs and Active Network, took space for their corporate headquarters in existing central business district office towers, where the vacancy rate fell below 20% for the first time since before the recession.

Dallas’ Uptown submarket is booming with the first of several new developments pre-leasing in the range of $50 per square foot. Activity in Uptown is expected to radiate out to other submarkets, as some professional services tenants, like law firms and accountants, seek protection from the rapidly increasing rents at their current locations.

Investors should be cautious of the outlook for new supply in Dallas and the surrounding area. While two-thirds of the 6 million square feet of office space under construction in the Metroplex is pre-leased, that still leaves roughly 2 million square feet of new supply entering the competitive inventory. That new supply may slow the pace of effective rent growth and drag on occupancy levels.

To read more on Dallas and other top office markets, download the full version of the 2015 Office Market Update report here.

2015 Office Market Outlook

It’s a different world out there.

It requires a different kind of commercial real estate firm working on your behalf in order to be successful. The Lipsey Company has ranked the Sperry Van Ness® organization as one of the most recognized commercial real estate brands in the US for a reason—we know how to deliver a certainty of execution for our clients. Sperry Van Ness International Corporation is one of the largest commercial real estate franchisors with more than 180 locations in 200 markets.

Austin, TX | 2015 Top #CRE Markets to Watch: Office

Sperry Van Ness International Corporation’s (SVNIC) 2015 Market Update Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2015. Today we are delving into the 2015 Top Office Markets to Watch. Not the largest or the most actively contested markets, the 2015 Office Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Office Market to Watch: Austin, TX

Austin: 2015 Office Markets to WatchA thriving tech sector set against an otherwise well-diversified local economy has made Austin a favorite of secondary market investors. In 2014, the pace of rent gains approached the double-digits as the vacancy rate fell to one of the lowest levels of any market in the country. Exceptional momentum in the local office market carried forward into the first half of 2015, though the pace of rent growth may taper off as more than 3 million square feet of office space currently under construction comes to market. In-progress projects and those in the planning and proposal stages are projected to expand the office inventory by nearly 10% over the coming years. Pre-leasing will blunt only some of the impact of new inventory. Although several high-profile central business district office construction projects like the 370,000-square-foot Colorado Tower and 195,000-square-foot IBC Tower are nearly entirely pre-leased, enthusiastic developers have allowed projects to go forward with fewer and fewer commitments.

With cap rates below 6%, investors in the Austin market face a higher burden in growing income over their investment time horizon. Current rent growth trends speak to the market’s potential, but investors should be cautious in any case. With a significant expansion in its office inventory over the next several years and more limited pre-leasing than its peer markets, Austin is exposed should the current expansion reach its peak earlier than is widely expected.

To read more on Austin and other top office markets, download the full version of the 2015 Office Market Update report here.

2015 Office Market Outlook

It’s a different world out there.

It requires a different kind of commercial real estate firm working on your behalf in order to be successful. The Lipsey Company has ranked the Sperry Van Ness® organization as one of the most recognized commercial real estate brands in the US for a reason—we know how to deliver a certainty of execution for our clients. Sperry Van Ness International Corporation is one of the largest commercial real estate franchisors with more than 180 locations in 200 markets.