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Nashville, TN | 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: Nashville, TN

Nashville: 2015 Multifamily Markets to WatchThe Nashville metro area added more than 25,000 jobs in 2014, with the largest gains in construction (up 10.1% year-over-year) and professional services (up 7.1%). The recent announcement that Google Fiber will expand to Nashville promises to breathe additional momentum into the already hot tech industry. Unemployment sits at just 5.0% in one of the nation’s post-crisis secondary market success stories. With a healthy outlook for demand, Nashville’s challenges are overwhelmingly on the supply side. With nearly 4,500 new apartment units expected by the end of 2015, largely at the top-end of the market, rent growth is projected to slow in the near-term. For buyers with a long investment horizon, the robust outlook for Nashville’s demand drivers and its relatively higher cap rates may present opportunities to capitalize on a short-term slowdown in fundamentals that will give others pause.

Not to be ignored, there are emerging concerns about affordable housing opportunities in an area where nearly 1 in 5 residents lives below the poverty line. A grassroots affordable housing alliance is pushing for Nashville to adopt inclusionary housing measures, working to ensure that a share of new housing units are reserved for low- and middle-income tenants. The implications for market-rate multifamily development remain unclear, but the public debate bears monitoring over the next year.

To read more on Nashville 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 com

Research Triangle, NC | 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: Research Triangle, NC

Research Triangle: 2015 Office Markets to WatchThe Raleigh-Durham region is already home to the sprawling, 22.5 million square foot Research Triangle Park (RTP), the largest science campus of its kind in the United States. In spite of their established position, Raleigh and Durham are not resting on their laurels. Instead, they are embracing the “innovation district” concept with open arms and a renewed vigor is now permeating the Research Triangle’s office markets. RTP is vying to make itself more appealing as well, building residential and retail amenities on a 100-acre site within the science park. Longfellow Real Estate Partners, an innovation district veteran of Cambridge, Massachusetts’s Kendall Square, is trying to spearhead an ambitious 1.3 million square foot mixed-use innovation district in downtown Durham. The development of Raleigh’s Union Station, the new passenger train station to replace the currently overcrowded Amtrak hub, represents a commitment by the city to improve its urban core through heavily investing in its currently inadequate mass transit options and long-stalled commuter rail system for the Research Triangle area.

Office fundamentals strengthened in 2014, with vacancy falling by 200 basis points over the year. There is a flurry of new development throughout the region, with roughly 1.4 million square feet of urban core space under construction that should be reasonably well absorbed given the prevailing outlook for space demand.

To read more on the Research Triangle 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.

Minneapolis – St. Paul, MN | 2015 Top #CRE Markets to Watch: Industrial

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 Industrial Markets to Watch. Not the largest or the most actively contested markets, the 2015 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: Minneapolis – St. Paul, MN

Minneapolis: 2015 Industrial Markets to WatchMinneapolis in 2015 is a clear buy in the investor calculus. According to the Urban Land Institute’s 2015 Emerging Trends Report surveys, the Twin Cities ranks fourth in the nation for the strength of the industrial investment opportunity, behind the Southern California agglomeration of the Inland Empire, Los Angeles, and Orange County. Two-thirds of survey respondents ranked Minneapolis-St. Paul’s industrial sector as a buy this year. Another 28% rated the market a hold. Less than 6% gave the market a sell rating; only Orange County and Raleigh-Durham had a more favorable assessment. Investors can still find less relative bargains in this less aggressively priced market. Cap rates in the Minneapolis region averaging 6.8% during 2014, 100 to 150 basis points higher than other top-ranked markets.

The Twin Cities has long served as a vital economic hub for the Upper Midwest region. Distribution centers, logistics facilities, and data centers — some with elite Tier III certification, including the new CenturyLink MP2 facility — are popping up throughout the metropolitan area to match strengthening absorption. More than a million square feet of new space entered the inventory in early 2015, including nearly 500,000 square feet for furniture retailer Room & Board. The vacancy rate declined to below 7% in any case. More than 4 million square feet of projects are currently in the pipeline, representing roughly 3% of the existing inventory. While the bulk of that space is speculative, the market’s strong underlying growth drivers are expected to support healthy absorption.

To read more on Minneapolis – St. Paul and other top industrial markets, download the full version of the 2015 Industrial 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.

Miami, FL | 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: Miami, FL

Miami: 2015 Multifamily Markets to WatchIn spite of its relatively mixed economic and job market trends, the Miami region boasts some of the nation’s strongest multifamily fundamentals. The vacancy rate in the fourth quarter of 2014 was less than 4%, according to Chandan Economics’ tracking of mortgage-financed properties, and increased only slightly in the first quarter of 2015. The tight market has supported annual rent growth of more than 6%. Investors should factor slower gains in underwriting potential investments. A moderating pace of rent growth, in part reflecting new inventory of 5,000 units in 2015, characterizes the near-term outlook.

One of the key sources of capital for the renewal of Miami’s economy and real estate market has been foreign capital, from Latin America, and also from France and Russia. Unfortunately, it is unclear whether foreign investment will keep to its strong pace over the next year. If nothing else, the stronger greenback has rendered US assets significantly more expensive than just 12 or 24 months ago. Local and national players could uncover opportunities to buy value- add opportunities during a lull in cross-border capital inflows.

To read more on Miami 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.

Oakland, CA | 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: Oakland, CA

Oakland: 2015 Office Markets to WatchMimicking the dynamics of the Bay Area’s residential markets, Oakland is well-positioned to welcome tenants fleeing from the relentless expansion of tech companies as they further saturate San Francisco’s office landscape. Spillovers from San Francisco to Oakland are not new – they have been a feature of the market ever since the first tech companies decided to move up from Silicon Valley to the urban core of the city – but higher rents and limited space opposite the Bay Bridge have increased Oakland’s appeal. Outside of a few homegrown tech companies like Pandora and Ask.com, and a stream of freshly incubated tech startups, Oakland has yet to land its first big San Francisco tech migrant (as of early 2015). Brokers are reporting that several tech companies have been “kicking the tires” at the Sears Building, which is currently undergoing renovations to transform the former department store into tech-friendly office space. Other tenants, like chocolatier TCHO, advertising agency EVB, and several law firms, have taken advantage of the disparity in rental rates and taken the short BART ride over to Oakland.

For small- and mid-cap investors willing to accept lower liquidity than in San Francisco, Oakland’s higher cap rates and favorable prospects may offer compelling buying opportunities over the next year. Fundamentals are pointing in the right direction as investors keep their fingers crossed for a flurry of activity should big tech companies put their stamp of approval on the East Bay.

To read more on Oakland 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.

Tampa, FL | 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: Tampa, FL

Tampa: 2015 Top Retail MarketsLike other Florida metros hard-hit by the Great Recession, Tampa’s retail market is now recovering its momentum. Job growth and demand for space are both set to improve in 2015. Across retail subtypes, Chandan Economics reports the vacancy rate declined to 6.3% in the fourth quarter of 2014, in spite of a spike in completions. Asking rents increased by just 1.1% over the year but are projected to accelerate by late 2015.

Supermarkets are among the retailers expanding or looking to expand in the Tampa market. Trader Joe’s opened a location in Tampa in 2014 and, in early 2015, completed another in St. Petersburg that drew crowds to its grand opening. Organic and specialty grocers Whole Foods, Lucky’s Market, Sprouts Farmers Market, and Earth Fare are each rumored to be on the lookout for locations in the area. Developers have begun to answer a broader call for more development, but currently less than 2 million square feet of retail space is under construction. In the ranks of potentially catalytic projects, the owner of the Tampa Bay Lightning has proposed an ambitious redevelopment project to revitalize the waterfront district near Amalie Arena, adding close to 3 million square feet of office, restaurant, and retail space.

To read more on Tampa 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.

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.

Chicago, IL | 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: Chicago, IL

Chicago: 2015 Office Markets to WatchThe transformation of Chicago’s River North submarket echoes the metamorphoses of many up-and-coming submarkets in the United States. With an eclectic mix of industrial-era warehouses and lofts, plus plenty of bus and subway connections, effective rents in the submarket have spiked since 2012, following a path similar to Manhattan’s Midtown South tech district. Tech companies like crowd-sourced reviewer Yelp, online coupon provider Groupon, online payment processor Braintree, and the digital marketing division of McDonald’s, are located in buildings like the Reid Murdoch Center, a former food-processing plant, and the Mart, an Art Deco warehouse that formerly housed Marshall Field. Several of Chicago’s other submarkets are also recasting themselves, with the Fulton Market area leading the pack. The former Fulton Market Cold Storage warehouse (now flagged as 1kFulton) was repositioned as more than 500,000 square feet of office space, headlined by tenants like Google, tech incubator Sandbox Industries, and Chicago-based bicycle component producer, SRAM Corporation. Several projects, including boutique hotels, restaurants, and retail spaces, are now underway around 1kFulton, vying for locations proximate to Google’s Midwest regional headquarters. While traditional business stalwarts still prefer the Loop, there are many rapidly improving submarkets in downtown Chicago that are offering compelling opportunities for small- and mid-cap investors.

To read more on Chicago 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.

Orange County, CA | 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: Orange County, CA

Orange County, CA: 2015 Top Retail MarketsThe retail vacancy rate in Orange County fell below 5% in 2014, down more than 200 basis points over the last two years. Rents have moved in kind, rising 8.1% over the year, according to Chandan Economics. Supply has been restrained but will spike in 2015 as large projects come online. The market is expected to absorb the new space easily, supported by the area’s strong underlying economic and consumer spending trends. In many areas of Orange County, retail sales are back to prerecession levels, at least when measured by sales tax receipts.

Supported by a median household annual income exceeding $75,000, developers are stepping up to provide opportunities for retailers to cash in. Institutional retail property owners are pouring money into remodeling and updating Orange County malls, including South Coast Plaza, which generated $1.6 billion in sales in 2014. The Brea Mall completed its major facelift in 2014, and others, including Main Place in Santa Ana and the Laguna Hills Mall, are soon to receive major remodels as well. In the small- and mid-cap segments of the market, grocery-anchored shopping centers in Orange County have seen an impressive run of 5 straight years of positive net absorption. Developers are also turning to downtown Anaheim and downtown Santa Ana for mixed-use infill opportunities.

To read more on Orange County 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.

Chicago, IL | 2015 Top #CRE Markets to Watch: Industrial

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 Industrial Markets to Watch. Not the largest or the most actively contested markets, the 2015 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: Chicago, IL

Chicago: 2015 Industrial Markets to WatchThe nation’s largest industrial market in terms of inventory, Chicago is also one its strongest. Vacancy rates have been declining consistently for over three years, reaching 6.5% in the first quarter of 2015 according to Chandan Economics’ tracking of mortgage-financed properties. Lower vacancy rates and one of the strongest rates of asking rent growth in the country have prompted an increase in development activity. Investors should not be too concerned about the nearly 10 million square feet of space under construction as of early 2015, almost half of which is spec. While that level of activity could overwhelm a smaller market, it represents less than 1% of Chicago’s massive inventory of industrial space.

The drivers of demand for space in the Windy City and its surroundings are as varied as the region’s economy. Warehouses, logistics, distribution, and fulfillment centers, as well as flex space and data centers are all benefiting from growth in demand. Investors may be frustrated by the degree of competition for high quality assets. Prices reflect the market’s prospects, with cap rates falling to below 6% in 2014 and early 2015.

To read more on Chicago and other top industrial markets, download the full version of the 2015 Industrial 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.

#CRE Trends and Market Update 2015 | Multifamily

Multifamily Market Outlook

Apartments’ Exceptional Resilience

2015 Multifamily Market Update: Markets to WatchFlouting expectations that new supply would slow the pace of rent gains, the apartment sector over the last year has shown exceptional staying power. Strong rental demand, particularly amongst Millennials, has allowed most markets to absorb new supply without significant disruption to growth in property income. As of the first quarter of 2015, national rent growth and occupancy rates were near their cyclical highs. The former has actually accelerated, with year-over-year increases in asking rents hitting 3.8% in 2014 and 4% on a seasonally adjusted annualized basis in the first quarter.

The view that the apartment sector is benefiting from a fundamental change in how young Americans think about homeownership has factored into investors’ readiness to bid aggressively on core and non-core properties. Prices have surpassed their historic highs, lifted by apartments’ favorable risk profile and an abundance of low-cost debt and equity. Across all markets, the national average cap rate declined to 5.5% in 2014. Debt yields have also fallen to approximately 8% as borrowers assume more debt. Life companies, banks, conduit lenders, and specialty lenders are all competing on price and structure with the venerable agencies—Fannie Mae and Freddie Mac—that account for the largest share of all multifamily financing.

Investors are rightfully enthusiastic about the long-term return profile of the apartment sector but they should also be cautious in evaluating the current investment climate. Over the next year, some of the underlying conditions that have defined post-recession apartment investing are set to change. At least on the margins, older Millennials will revisit opportunities for homeownership as housing markets stabilize further. In particular for those that start families, the appeal of the suburbs will grow: in the hierarchy of amenities, new parents may find that a good elementary school will suddenly matter as much as anything on offer in the urban core.

2015 Multifamily Market Update: Multifamily Unit ConstructionApart from the demographic of cyclical factors that may influence household preferences for renting or owning, there are other risks to the apartment sector that must be considered carefully. Most obvious is the challenge of new supply. While the national numbers (and recent history) point to a level of new inventory that may be absorbed in stride, some markets will inevitably overbuild. In some markets, rent slow-downs have been concentrated in downtowns, reflecting the concentration of new development in a tight geographic area. Where the outlook for income growth is more measured, properties may also exhibit greater sensitivity to eventual changes in the interest rate environment.

Multifamily Market Statistics in 2015

Construction activity in the apartment sector continued to climb throughout 2014. Measured in terms of dollar spending, multifamily development activity reached $43.5 billion last year, up from $32.2 billion in 2013, and a low of just $14.7 billion in 2010. Though the year-over-year pace of increases in spending have slowed, there is still exceptional momentum in new development. Recent completions offer an incomplete gauge of the market’s capacity to absorb new space. As of the first quarter of 2015, units currently under construction are approaching their highest levels in thirty years, since the mid-1980s. The largest development pipelines are in the Texas market, including Austin, Dallas, and Houston, and in New York and Washington, DC. Relative to market size, however, Denver and Seattle will have to absorb their fare share as well.

2015 Multifamily Market Update: Natl Apt Construction Spending2015 Multifamily Market Update: Apt Construction Spending Change

After slowing to a still-impressive pace of 3.5% in 2013, asking rent growth jumped to 3.8% in 2014 and has kept to a  strong seasonally adjusted pace in the first quarter of 2015. Market observers had expected that new supply would push both occupancy rates and rent growth slightly lower, but those projections have not proved out. With most markets running at occupancy rates above their long-term averages, concessions have virtually disappeared, with the result that effective and asking rents are not significantly different. The leading markets for rent growth in the first quarter included in Denver, New York, San Francisco, San Jose, and Seattle. Notably absent from the top of the league tables, rent growth is now lagging in Boston and Washington, DC, one of the few gateway or primary markets to see fundamentals falter on the wave of new supply.

2015 Multifamily Market Update: Apt Asking Rents2015 Multifamily Market Update: Apt Asking Rents Change

Measured across the breadth of small suburban garden apartments at one extreme and the largest urban high-rise properties at the other, multifamily cap rates declined to a national average of 5.5% in 2014. Cap rates fell another 10 basis points to 5.4% in the first quarter of 2015, within range of their all-time lows. Cap rates in the most contested markets, including New York and San Francisco, are now typically in the range of 4% to 5%.

Investors have expressed concerns about a possible bubble in the apartment market, but that has not dissuaded buyers from pushing transaction volume to new highs. In spite of wider-than-average spreads, investors are girding for an increase in interest rates that will exert drags on value. The stronger the prospects for income growth, the more resilient properties should be in the face of higher costs of capital.

2015 Multifamily Market Update: Apt Cap Rates2015 Multifamily Market Update: Apt Cap Rate Spread

Market Cap Rates

Value-weighted national average apartment cap rates fell to 5.5% in 2014, marginally lower than a year before. Market average cap rates ranged from below 5% in selected gateways and primary markets to above 6% in secondary markets and markets where transaction activity was dominated by suburban garden apartment properties. The lowest cap rates were recorded in New York City, principally in Manhattan and the Brooklyn and Queens waterfronts, where investment demand from domestic and cross-border buyers has pushed asset prices to record-highs. Detroit was the only major market to register an average cap rate above 7% in 2014.

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 190 locations in 500+ markets.

To download the full 2015 Multifamily Market Outlook report, click here.

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Phoenix, AZ | 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: Phoenix, AZ

Phoenix: 2015 Multifamily Markets to WatchThe glut of foreclosed single-family homes now available for rent in the suburban submarkets of Phoenix has not weighed significantly on the downtown apartment scene. Reflecting the depth of the local market’s economic downturn and the challenging path to recovery, however, asking rent growth in Phoenix had been relatively slower than in gateway and other primary markets. The dynamic changed over the last year and a half as vacancy rates fell below 5% and rent growth kicked into high gear, rising nearly 7% in 2014 and at an annualized rate of 7.2% in the first quarter of 2015. The outlook for Phoenix over the next year remains bright, given a limited pipeline of new apartments and healthy job growth.

As cap rates for the best-performing assets have fallen to cyclical lows, developers in the area have more readily snapped up value-add opportunities in urban in-fill locations. Given their relatively high cap rates, property makeovers may offer a compelling buy for investors, provided they have strong operational capabilities.

To read more on Phoenix 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.

Atlanta, GA | 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: Atlanta, GA

Atlanta: 2015 Multifamily Markets to WatchAfter several years of lagging economic growth, Atlanta proved itself a late bloomer in 2014. Jobs are key to apartment demand and Atlanta is coming into its own. The metro area is generating jobs again, pushing total employment higher by 2.4% in 2014. Illinois-based insurer State Farm announced it would add 3,000 jobs in its national operations center, currently under construction in the northern suburb of Dunwoody. Medical cloud-based services provider, athenahealth, is building out a new 75,000-square-foot loft office space in Atlanta’s Old Fifth Ward neighborhood, and is reportedly looking to add 600 new positions in 2015. To the north, in Alpharetta and Cumming, where the apartment vacancy rate has slipped below 3.0%, financial services technology provider Fiserv is consolidating its 2,000 Atlanta-area employees into a new $41 million campus, and looking to add 500 additional jobs over the next five years.

Like Atlanta’s broader economy and labor market, the apartment sector is also earlier in its current expansion than other metro areas, offering selective opportunities for investors concerned about buying into a mature cycle. Effective rents increased by more than 7% in 2014 and overall vacancy dropped to 6.2%, from 6.7% in 2013. The affluent neighborhood of Buckhead has the lowest vacancy rate, estimated at 3.0%. These trends are not sustainable over the long-run, particularly as renters’ wage and salary growth rates are lower than rent increases, but it will be a soft landing for the best properties as income growth moderates.

As new construction brings an additional 6,500 units online in 2015, rent growth is expected to slow in Atlanta’s core neighborhoods. Atlanta’s apartment market also faces competition from substitution into its highly affordable housing market. According to the National Association of Realtors, qualifying income for a single-family home with 10% down is less than $33,000, compared to $43,500 nationally.

To read more on Atlanta 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.

#CRE Trends and Market Update 2015 | Industrial

Industrial Market Outlook

Industrial Sector’s Time to Shine

The prominence of industrial properties as targets for investment is on the rise. A laggard in the early stages of the commercial real estate recovery, investors now rank the industrial sector ahead of all other property types for its investment and development prospects.¹ Lenders are seeing eye-to-eye with their borrowers, anticipating that industrial property mortgage volume will grow more consistently than other property types over the next year.²

2015 Industrial Markets to WatchThe drivers of the industrial sector’s headline performance numbers are varied. Breaking a pattern of decline that began in the 1980s, increasing manufacturing activity and employment since the end of the recession have supported the absorption of a wide range of heavy and light manufacturing spaces. That trend coincides with continued growth in shipping volumes, both on a large scale at the nation’s deep-water ports and along the “last mile” where fulfillment centers are allowing online retailers to shorten delivery times in major metropolitan areas.

Across all industrial subtypes, the national vacancy rate fell below 8% in the first quarter of 2015, its lowest level since before the recession, according to Chandan Economics’ tracking of mortgage-financed properties. The pace of asking rent growth has improved in kind, rising to 2.8% in 2014 from 2.0% a year before. Rent growth is projected to surpass 3.0% in 2015 with significantly stronger results in the tightest segments of the market, including fulfillment centers and the most active ports. The situation is different for functionally obsolete warehouses and assets further afield from distribution channels. In those cases, industrial properties will see further declines in performance as leases roll, diluting cash flow.

Even in the strongest segments of the industrial sector, investors should watch supply trends in their markets closely. With the support of banks and other lenders, development activity is picking up across the full range of single-tenant build-to-suit properties, partially pre-leased multi-tenant properties, and even speculative development. Construction is concentrated in Southern California, the Mid-Atlantic, in the Dallas-Fort Worth metroplex, and Atlanta. In spite of strong demand-side drivers for space, investors in these markets may find that an observable surge in speculative development risks undercutting the performance of less competitive assets.


¹PwC and Urban Land Institute, Emerging Trends in Real Estate 2015

²RELA-Chandan Survey of Commercial Real Estate Lender Sentiment Fall 2014

2015 Industrial Market Update: Manufacturing Employment

Industrial Market Statistics in 2015

Industrial development activity increased sharply in 2014 and showed no sign of losing momentum in the first quarter of 2015. Measured in terms of dollar spending, construction activity jumped 50% between 2013 and 2014 and, on its current trajectory, will soon surpass the previous cyclical high set in 2007. Development is highly concentrated in a small number of metropolitan areas, including Los Angeles and the Inland Empire in California, Philadelphia and New Jersey in the Mid-Atlantic, and the Dallas-Fort Worth metroplex and Atlanta in the South and Southeast. Investors in other markets should still keep a careful eye on construction activity. With the shortest development timeframes of the major property types, the balance of supply and demand can shift quickly in the industrial space market.

2015 Industrial Market Update: Industrial Construction Spending2015 Industrial Market Update: Change in Industrial Spending

Asking rents for industrial space nationally increased by 2.6% in 2014, surpassing the previous cycle’s high of 2.5%, recorded in 2007. Across virtually all of the major investment markets, lease rollovers in the first quarter of 2015 were accretive to property cash flow. The strongest rent gains are in close-in fulfillment centers, which have experienced a surge in tenant demand as online retailers have pushed towards the “last mile” with consumers. Lifted by the rapid expansion of cloud storage needs, data centers also registered healthy rent gains.

Differences in rent trends were pronounced across markets. In San Francisco and San Jose, demand from tech firms and others pushed asking rent increases into the double-digits. Denver and Chicago followed Northern California. In the case of the former, the legalization of marijuana production has been a primary driver of new demand for space, pushing vacancy rates to their lowest levels on record.

2015 Industrial Market Update: Industrial Asking Rents2015 Industrial Market Update 2015: Change in Industrial Rents

In spite of improving fundamentals, the national average cap rate for industrial property sales and refinancing declined only slightly in 2014, to 6.2%. Significantly below its long-term average, the cap rate still affords a relatively wide spread over benchmark treasuries. Along with the most important industrial hubs, including the Southern California markets and Chicago, cap rates edged closer to 5% in San Francisco and San José, Seattle, and Miami. Aside from Chicago’s healthy valuations, the highest cap rate markets in 2014 were concentrated in the Midwest, including Cincinnati, Cleveland, Detroit, and Indianapolis. With relatively slow rent growth, weaker assets in these markets are also amongst the most exposed to downward pressure on values once interest rates begin a sustained rise.

2015 Industrial Market Update 2015: Industrial Cap Rates2015 Industrial Market Update:  Cap Rate Spread

Market Cap Rates

Value-weighted national average industrial cap rates fell to 6.2% in 2014, marginally lower than a year before. Market average cap rates ranged from just over 5% in the Southern California agglomeration of Los Angeles, Long Beach, and Orange County to above 7% in some Midwestern and Southern markets. Detroit was the only major market to register an average cap rate above 8% in 2014.

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 190 locations in 500+ markets.

To download the full 2015 Industrial Market Outlook report, click here.

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Boston, MA | 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: Boston, MA

Boston: 2015 Office Markets to WatchBy almost any measure, 2014 was a banner year for the Boston office market. Overall vacancy in the Boston metro area dropped to its lowest level since the dot-com boom. Asking rents in East Cambridge reached all-time record highs, with biotech companies and tech giants competing for space near the academic heart of the submarket. Across the metro area, asking rents in the office sector increased by just over 10% during 2014, and are on track for a comparable result in 2015. Contrasting its peer markets, leasing and rent growth was particularly strong in the suburban submarkets.

Boston has nearly 5 million square feet of office space under construction, but a significant share of those projects are single-tenant build-to-suit. In the multi-tenant market, the current balance of supply and demand echoes the frenzied pace of leasing in San Francisco’s office market. For small- and mid-cap investors making price comparisons with Manhattan and San Francisco, Boston offers investors comparatively cheap opportunities with average cap rates in the upper-end of the 5.5% to 6.0% range.

To read more on Boston 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.

Indianapolis, IN | 2015 Top #CRE Markets to Watch: Industrial

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 Industrial Markets to Watch. Not the largest or the most actively contested markets, the 2015 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: Indianapolis, IN

Indianapolis: 2015 Industrial Markets to WatchThe industrial fundamentals for the Indianapolis market remain relatively strong despite the delivery of more than 5.5 million square feet in 2014. Those new properties helped drive Indianapolis to the top-tier of markets for rent growth. Bucking the national trend, however, the vacancy rate for the metro area jumped at the same time from a historically low 7% in the first quarter of 2014 to nearly 8% in the first quarter of 2015. Amongst the additions to the industrial landscape in 2014, online computer parts retailer NewEgg opened up a state-of-the-art fulfillment center that will service the Midwest region, processing up to an estimated 12,000 orders per day. Other large deliveries included a 1.1 million square foot distribution facility for Johnson & Johnson and a 545,000 square foot regional distribution facility for Omaha, Nebraska-based retailer Gordmans. While there are millions of square feet still under development, most of that product is build-to-suit, including a 1.2 million square foot distribution facility for Walmart and a 600,000 distribution facility for mattress manufacturer Tempur Sealy.

Occupancy rates are expected to recover some of their lost ground in late 2015 and 2016. Until those expectations are reflected in prices, investors in search of good values will find cap rates in the range of 7%, higher than in other markets with similar rent growth records in 2014.

To read more on Indianapolis and other top industrial markets, download the full version of the 2015 Industrial 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.

Denver, CO | 2015 Top #CRE Markets to Watch: Industrial

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 Industrial Markets to Watch. Not the largest or the most actively contested markets, the 2015 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: Denver, CO

Denver: 2015 Industrial Markets to WatchThe Denver industrial market is reaping the dividends of the state’s move to legalize marijuana production. Demand for space in Denver itself, where production is permitted, pushed the vacancy rate below 3% in late 2014, the lowest level on record. The surge in demand amounts to a positive shock of between 3.5 and 5 million square feet, according to different sources. Developers are responding slowly, with roughly 1 million square feet of space currently under development. That imbalance augurs continued strength in rent gains; the sector’s greater liquidity, borne out by higher transaction volumes, suggests resilience in asset values once interest rates begin their upward hike.

In spite of its visibility, marijuana production represents a tiny fraction of industrial space leases in the Denver area. The strength of the local economy — the unemployment rate is below 4% as of early 2015 — is supporting demand across light manufacturing, distribution and logistics, and warehousing. Investors will find the market’s rosy outlook commands a high price. Cap rates in Denver declined to an average of 5.7% in 2014 across property sales and refinancing activity, lower than some coastal gateways including Washington, DC and Boston.

To read more on Denver and other top industrial markets, download the full version of the 2015 Industrial 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.

Denver, CO | 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: Denver, CO

Denver: 2015 Office Markets to WatchFor both employers and high-skilled workers, few markets exert the same pull as Denver. The convergence of low costs of living, appealing amenities, and a business-friendly environment has allowed Denver to expand over time beyond its historical base in the energy sector. While business migration to the urban core has dominated activity and pushed the submarket vacancy rate below 10%, not every firm is headed to the CBD. In particular, some technology companies are eschewing the central business district for more flexible, open floor-plan spaces in the Lower Downtown (LoDo) and South Denver neighborhoods. LoDo is home to a disproportionate share of current office construction, though new inventory has yet to weigh on rent trends. Across the metro area, development activity is roughly 2% of in-place inventory – limited, when compared to the surge in projects underway in markets like Houston and Dallas.

While better diversified than smaller energy markets, Denver is still exposed to the vagaries of oil industry booms and busts. With about 20% of Denver’s CBD occupied by oil and gas companies, there was some worry in early 2015 that slumping oil prices could lead to instability in the office market. Most market observers agree that this will only become a major issue for Denver’s long-term outlook if a prolonged period of depressed oil prices leads to significant restructuring in the industry.

To read more on Denver 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.

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.

Orlando, FL | 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: Orlando, FL

Orlando, FL: 2015 Top Retail MarketsInvestors frustrated by rock-bottom yields in gateway markets may find the right balance of lower asset prices and improving market performance in Orlando. Investment activity has picked up, but the recovery in prices has lagged, reflecting a slow rebound in occupancy and rent growth. While retail rents were flat in 2014, CoStar projects that rent growth will accelerate past an annual rate of 5% by 2016.

Downtown Orlando is sometimes criticized for a lack of weekend activity, but plans are in the works to enliven the city center and introduce new live–work–play opportunities to this Central Florida market. Investors are adding more entertainment draws to the tenant mix. Orlando Fashion Square, sold in 2013 for $35 million, added a bowling alley last August and will become the home of Orlando’s first Element by Westin hotel. The Artegon Marketplace is adding a mix of specialty draws like International Hot Glass, a DIY glass-blowing studio and art gallery, and Gods & Monsters, a 19,000-square-foot comic book concept. A new mall is in the works, as DDR broke ground on the new Lee Vista Promenade in December, despite Target pulling out as one of its proposed anchor tenants.

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


retail_thumbnail_WEB

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.

Brooklyn, NY | 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: Brooklyn, NY

Brooklyn: 2015 Office Markets to WatchA large swathe of Downtown Brooklyn was rezoned in 2004 with the intention of transforming the neighborhood into a back-office haven rivaling that of Jersey City. Over the following decade, developers instead jumped at the chance to reposition defunct industrial space as new luxury condominium offerings. More recently, the burgeoning tech sector has fueled demand for flexible office space with less traditional formats. The structured suit-and-tie regimes of Manhattan’s Midtown office submarket have been ill-suited to the preferences of these prospective tenants. Capitalizing on the opportunity, building owners in and around DUMBO, Brooklyn Heights, and the Brooklyn Navy Yard have branded their area as the Brooklyn Tech Triangle. The Dumbo Heights complex (housed in the old Watchtower buildings which once served as the headquarters for the Jehovah’s Witnesses) is currently being refurbished, but already has major leases with e-commerce site Etsy, and co-working front-runner WeWork. The Brooklyn Navy Yard houses manufacturers of parachutes and bullet-proof vests, but now increasingly is attracting architectural and design firms for use of its office space. The downtown Brooklyn office vacancy currently sits at less than 4% with TAMI tenants (technology, advertising, media and information) clamoring for more space. Developers are looking to other neighborhoods in order to service the demand, and are making bets on offices in Fort Greene, near Pacific Park (formerly Atlantic Yards), and industrial space in Sunset Park as the next hopeful TAMI magnets.

To read more on Brooklyn 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.

Northern Virginia | 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: Northern Virginia

Northern Virginia: 2015 Top Retail Markets to WatchThe Northern Virginia retail market has long been dominated by traditional shopping malls, but today’s retail developers are working to recast the area in a more urban mold. Among the most notable projects, the Springfield Town Center, a wholesale redevelopment of the Springfield Mall, opened in late 2014 with more outdoor and community spaces, a movie theater, and play options for children. Development activity has not crimped fundamentals. Northern Virginia ended 2014 with a retail vacancy rate of 6% according to Chandan Economics, down 30 basis points from a year earlier.

Supporting the long-term outlook for the local retail scene, Tysons Corner is due to receive a boost with the long-awaited extension of the DC Metro’s Silver Line. Office leasing in the area is picking up, which will increase the number of riders through the Tysons Corner station. Several new mixed-use retail and apartment developments have broken ground since the Silver Line opened in July. By 2018, the Silver Line will be extended further to serve the Reston Town Center and link up with Dulles International Airport.

The possibility of federal belt-tightening has local economists in the Northern Virginia market warning of a possible medium-term contraction, but there is little evidence of a drop-off in activity thus far. Supermarkets and their developers seem to shrug off these worries as New York–based Wegmans and North Carolina–based Harris Teeter, now a subsidiary of Kroger, are among the retailers expanding into the area.

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


retail_thumbnail_WEB

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.

Nashville, TN | 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: Nashville, TN

Nashville: 2015 Top Retail Markets to WatchNashville’s road to recovery has been longer than for most other markets. In the immediate aftermath of the recession, vacancy rates trended above 10%, according to Chandan Economics, and have only recently narrowed the gap. Heading into 2015, the vacancy rate across all retail property subtypes was 6.6%, according to CoStar, approaching the long-term market average of 6.4%.

As property income trends have improved, new development is getting underway. Current projects include mixed-use development with street-level retail, such as developments by local grocer-cum-real estate developer H.G. Hill in Hillsboro Village and Sylvan Heights. Additionally, the opening of First Tennessee Park, the new 10,000-seat ballpark for the Triple-A affiliate Nashville Sounds, is expected to spur new retail investment into the Sulphur Dell neighborhood, just north of the Capitol. As competition for space in established retail hot spots like the Gulch, Green Hills, and Belle Meade intensifies, local retail investors are turning to the Main Street and Gallatin Avenue corridor of East Nashville for lower prices and a burgeoning local retailer scene that could support upside appreciation. Florida-based supermarket chain Publix has reportedly shown interest in a smaller urban concept near Music Row, satisfying growing demand for grocery store options from residents of newly built downtown submarket apartments and condos.

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


retail_thumbnail_WEB

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.

Miami, FL | 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: Miami, FL

Miami: 2015 Top Retail Markets to WatchMiami’s retail sector has never been healthier. Across all subtypes, CoStar reports the market vacancy was just 3.6% in the fourth quarter of 2014. Malls and power centers circled out the year with sub-2% vacancy rates; neighborhood and community shopping centers, at a still-enviable 5.1%. Spurred by limited availability, rent growth in Miami has hit double digits, rising by 11.2% in 2014 according to Chandan Economics’ tracking of mortgage-financed properties.

Luxury brands from across the globe are clamoring for footholds in the rejuvenated Design District and some of Miami’s large-scale retail construction sites. The westerly suburb of Doral is also heating up, as IKEA opened its only Miami–Dade County location there in August 2014, and giant mixed-use projects Downtown Doral and Doral CityPlace are expected to deliver hundreds of thousands of square feet of retail in 2015. As Doral retail opportunities come online and centrally located mega-projects like Brickell CityCentre add plenty of supply, it remains to be seen how rapidly the pent-up demand for retail will absorb these new additions.

While the relative strength of the dollar compared to most foreign currencies could mean that international travel to Southern Florida will recede slightly, domestic tourism may well increase with cheap gas prices driving Americans to hit the road. For long-term investors, both are issues for the short-term and should not alter the long-term outlook for Miami’s retail sector.

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


retail_thumbnail_WEB

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.

#CRE Trends and Market Update 2015 | Office

Office Market Outlook

Employment Gains Drive Office Outlook

Solid gains in office-using employment are driving renewed demand for space, pushing occupancy rates and effective rents higher across a wide range of US markets. Prospective tenants have shown a clear preference for centrally located properties, but demand for suburban office space is showing signs of improvement as its cost advantages over the urban core become more pronounced. Investors in the sector may balk at record-low cap rates for large trophy properties; however, in the small- and mid-cap segments of the market, buyers will find less aggressive pricing and improving access to mortgages through regional and community banks and conduit lenders. In exploring those opportunities, entrepreneurial investors will encounter a growing class of tenants preferring flexible lease structures and co-working arrangements in addition to more traditional long-term lease rolls.

Long-Awaited Job Gains

Office Markets to Watch 2015Never in the recent history of the American economy has it taken so long to recover the jobs lost over the course of a downturn. That milestone was reached in 2014, more than 6 years after the Great Recession first took hold. Employers added more than 3 million jobs over the year, finally recouping losses from the crisis-era cull in the strongest showing for job creation since the dot-com boom.

Until recently, the lagging recovery in jobs — specifically in office-using employment — has been one of the primary drags on office sector fundamentals. Momentum in leasing activity had been concentrated in urban cores, often at the expense of suburban office properties, and in a subset of markets with high exposure to the energy and technology sectors. Leasing has also picked up as job gains have broadened and firms have grown more confident in their expectations of business activity. As a share of the office inventory, net absorption in 2014 was nearly double its long-term average. The national vacancy rate fell below 15% for the first time in 7 years, owing primarily to an uptick in leasing in central business districts (CBDs). Topping the list of the strongest CBDs, the vacancy rate in Manhattan trended below 10% in early 2015, contesting San Francisco for the title of tightest gateway office market. In Midtown South, one of New York’s tech and new media hubs, the vacancy rate has fallen below 5%, driving the largest rent gains of any submarket in the country.

While national leasing activity moderated in the early part of 2015, the medium-term outlook for space demand is healthy. Returning to the underlying drivers of space demand in the labor market, job openings climbed above 5 million positions in the early part of the year – the highest level since 2001. A large percentage of those new jobs fall into office-using occupations, including key subsets of professional and business services, supporting the overall outlook for the sector. Investors are naturally concerned that place-of-work trends and more modern space layouts will undermine the traditional relationship between employment and space demand. While those are credible concerns, limited construction in most markets means the balance of supply and demand is projected to weigh in favor of occupancy and rent gains for the immediate future.

Office Market Statistics in 2015

Office development activity is on the rise, albeit still at a restrained pace when compared to the apartment sector. Measured in terms of spending, investment in new office properties jumped nearly 25% in 2014 to $36.9 billion. While that is substantially lower than the pre-crisis peak in spending, some gateway markets are seeing a boom in activity unprecedented in recent history. At the leading edge of investment in New York City, Hudson Yards will introduce more than 17 million square feet of new commercial and residential space to the West Side of Manhattan. As the largest private development in US history, its 5 new office towers will redefine the Manhattan skyline.

In addition to New York, other leading markets for office construction include Austin, Dallas, Houston, San Francisco, San Jose, and Seattle. In each case, properties under construction represent more than 5% of the in-place inventory. The drop in oil prices over the last year offers a stark reminder that the relative success of new office projects depends critically on factors outside the immediate control of investors. In Houston – which accounts for nearly 20% of all current office construction in the United States, and an even larger share of spec development – demand conditions have softened appreciably in late 2014 and early 2015.

Office Construction SpendingOffice Spending Change

Asking rents in the office sector increased nationally by 5.2% in 2014, nearly twice the pace of the prior year. Gains were generally stronger in central business districts and weaker for suburban properties, where lease rollovers remain dilutive to cash flow in many locales.

The top markets for rent growth included Austin, New York, San Francisco, and San Jose. In the strongest submarkets, including those catering most directly to technology and new media companies, rent growth rates climbed to double-digits last year, and show few signs of losing momentum midway through 2015.

Office Asking RentsOffice Rent Change

Anticipating continued improvement in fundamentals, the office sector reached a milestone in 2014 as values in gateway and primary markets surpassed pre-crisis levels. Nationally, value-weighted cap rates based on underwriting of property sales and mortgage refinancings declined to an average of 5.8%, and were often substantially lower for trophy central business district properties. New York and San Francisco both reported CBD cap rates just below 5%, followed closely by Los Angeles, Boston, Washington, DC, and Orange County. Suburban cap rates were generally between 30 and 100 basis points higher. Detroit was among the notable exceptions, with CBD office cap rates 40 basis points higher than cap rates outside the urban core.

Office Cap RatesOffice Cap Rates Spread

Market Cap Rates

Value-weighted national average office cap rates fell to 5.8% in 2014, pushed lower by record pricing in New York City and other gateway markets. Cap rates varied significantly across a wider range of primary and secondary markets, urban, and suburban locales. Not weighted by transaction size, the national average for central business district properties was 70 basis points higher, at 6.5%. Suburban cap rates were generally higher, averaging 6.9%. The highest suburban office cap rates were in the Midwest, capping out in Detroit at 8.7%.

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 190 locations in 500+ markets.

To download the full 2015 Office Market Outlook report, click here.

2015 Office Market Outlook

Manhattan, NY | 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: Manhattan, NY

Manhattan: 2015 Top Retail Markets to WatchRetail is booming, as it always seems to be, in the major shopping districts of Manhattan. The Fifth Avenue corridor below Central Park has stolen Hong Kong’s Causeway Bay crown as the most expensive retail market, with rents for the top deals exceeding $3,000 per square foot. Even when incumbents leave the luxury corridor, their spaces are not vacant for long. Microsoft announced it would take over the space vacated by Fendi, which moved to a no-less-swanky Madison Avenue location in 2014. Microsoft’s new location will be its first flagship to compete with the ubiquitous Apple retail stores.

New York City neighborhoods are seeing an increase in demand for space driven by a strong local economy and large-scale infrastructure and development projects that will transform entire submarkets. In Lower Manhattan, several national tenants are actively in search of spaces near the World Trade Center as the full vision for the neighborhood reaches fruition. Saks Fifth Avenue announced that it would take 90,000 square feet in the adjacent Brookfield Place center as well as open a Saks Off 5th store in 1 Liberty Plaza, the first of its kind in Manhattan. Additionally, Neiman Marcus announced plans to open its first Manhattan location in 2018 at the Shops at Hudson Yards, currently under construction. Not every part of the borough can boast runaway success in retail leasing. While residential investors are betting on the opening of the Second Avenue Subway in East Harlem and the Upper East Side, retail leasing activity has not picked up significantly in anticipation of the new line.

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


retail_thumbnail_WEB

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.

Las Vegas, NV | 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: Las Vegas, NV

Las Vegas, NV: 2015 Top Retail Markets to WatchBrick-and-mortar retailers across the country are struggling against competition from online commerce. In downtown Las Vegas, however, e-retailer Zappos, along with other tech firms, is creating jobs and helping to diversify the market away from its traditional gaming base. In 2013, the online shoe seller acquired the former City Hall building, transforming it into its corporate headquarters. The company’s chairman additionally purchased about 100 surrounding parcels and has invested nearly $350 million in The Downtown Project, backing everything from the development of an elementary school and a healthcare clinic to establishing a tech start-up incubator. While these are not retail investments, per se, they are essential elements of the complementary live–work–play environment that is proving ever more important for the success of retail spaces.

Across the Las Vegas market, CoStar reports an unenviable retail vacancy rate of 9.6% as of the fourth quarter of 2014. Malls boast much lower vacancy rates but are balanced against a 14.8% vacancy rate for neighborhood centers. Vacancy rates are projected to trend lower in 2015 and 2016, owing largely to limited new supply, but rent growth will remain subdued in the near term.

In the realm of retail spaces catering to tourists, the draw of Las Vegas remains on the Strip, and, in recent years, casino operators have been investing in retail and restaurant opportunities. New York, New York added several storefronts along the Strip near the Brooklyn Bridge replica, including the 12,000-square-foot Hershey’s Chocolate World flagship store. In 2014, the LINQ Hotel & Casino opened its 300,000-square-foot open-air retail center, anchored by the High Roller, a 550-foot observation wheel. Other retail additions at Treasure Island, Bally’s, and the new Tropicana are at various levels of completion. Investor interest in Sin City had slumped in the aftermath of the housing bust; however, led by the Blackstone acquisition of The Cosmopolitan hotel complex late last year, many investors now have Las Vegas back in their sights.

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


retail_thumbnail_WEB

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.

Charlotte, NC | 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: Charlotte, NC

Charlotte, NC | 2015 Retail Markets to WatchCharlotte is generally well-regarded for its healthy office market and, having recovered substantially from the financial crisis, is drawing retailers with an eye for its improving employment and consumer outlook. With falling retail vacancy rates and only modest levels of construction, market fundamentals are poised to strengthen through 2015 and 2016. Across all retail subtypes, Chandan Economics reports the market vacancy rate for mortgage-financed properties fell below 7% in the fourth quarter of 2014. As compared to a year earlier, the pace of rent growth nearly doubled during 2014.

A burgeoning supermarket war is being waged in the Charlotte region, as Florida-based Publix is rapidly snapping up market share in Harris Teeter’s backyard. Walmart locations are proliferating throughout the region, and Whole Foods announced in early 2015 that it will open its second Charlotte location in the First Ward. Restaurants are also looking toward Charlotte and its hungry workers for expansion. New York–based salad purveyor Chop’t chose the Charlotte neighborhood of Myers Park for its first location outside of New York or DC. Another newcomer to the region is personal shoppers at malls, which are now available at Simon’s SouthPark Mall for a sizeable fee. Investor appetite for the region’s retail is very strong, as most institutional investors have already become comfortable with Charlotte’s fundamentals through office assets. The largest retail transactions of 2014 were closed by Connecticut-based Starwood Capital and Los Angeles–based CIM Group, both of which also own substantial office towers in the CBD.

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


retail_thumbnail_WEB

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.

#CRE Trends and Market Update 2015 | Retail

Retail Market Outlook

Stronger Economy and Job Trends Drive Retail Outlook

Retail property investors have waited patiently for signs of 2015 Top Retail Markets to Watchmomentum in the sector’s otherwise prodding recovery. Over the next year, many of those investors will see their patience rewarded. A stronger consumer and a healthy uptick in lease signings, a dearth of new supply, and a growing appreciation for shoppers’ changing tastes are poised to lift occupancy rates and rents for well-located, well-tenanted, and well-managed properties. Risks remain, most clearly from shoppers’ substitution into online commerce for an ever-widening range of quickly delivered products. In managing those risks, the shift to destination “shop and play” retail models — and the emergence of new models including urban outlet centers — are taking on new urgency as competition for consumer dollars intensifies.

Improving Fundamentals and Investment Opportunities

Vacancy rates at neighborhood and community shopping centers extended their slow decline, falling 20 basis points in 2014 to 10.5 % for mortgage-financed properties tracked by Chandan Economics. Data from the International Council of Shopping Centers (ICSC) and the National Council of Real Estate Investment Fiduciaries (NCREIF) show even stronger trends, with shopping center vacancy rates falling to 7.3% at the end of last year, the lowest level in more than six years, since the early days of the recession. Mall performance proved that traditional retail models are far from obsolete; vacancy rates fell to a 27-year low of 5.8%, while asking rents registered double-digit increases.

As compared to apartments and central business district office buildings, where values have surpassed their pre-crisis peaks, retail cap rate spreads remain elevated across a wide spectrum of neighborhood and community shopping centers. Investors in the small- and mid-cap segments of these retail markets are not yet faced with a shortfall of secondary market properties trading at discounts to fundamental value. Even as prices rise for stabilized assets, the investment opportunity set may grow over the next two years as billions of dollars of mortgages bundled into pre-crisis commercial mortgage-backed securities (CMBS) come due. Smaller retail properties are overrepresented in those maturities and will stretch the market’s refinancing capacity, favoring cash-rich investors with the capacity to recapitalize distressed borrowers.

Grocery-anchored centers and retail net lease properties with credit tenants and long remaining lease terms are proving more challenging spaces for investors in search of discounts. The bond-like characteristics of the latter allowed them to emerge as investor favorites in the aftermath of the recession. Buyers now cite a dearth of product in the market as a source of frustration and upward pressure on prices. Even as investors have migrated to riskier products, bank branches, the stronger national pharmacy chains, and quick-service fast-food establishments have seen cap rate spreads fall substantially lower than historic norms for net lease assets. Investors should be cautious in gauging the possibility of disruptions in safe haven tenant classes. In the grocery space, online retailers that have failed thus far to penetrate the market are watching Amazon Fresh for insights into shoppers’ willingness to try new things. Needless to say, traditional grocery owners and their landlords are watching closely as well.

 

Household Debt Retail 2015 Markets to Watch

Retail Market Statistics in 2015

Back to Work and Back to the Mall

At the heart of the improving retail picture, the labor market has improved substantially over the last year. Employers added more than 3 million jobs in 2014, the strongest performance since 1999. The unemployment rate, admittedly an imperfect measure of labor market health, fell to 5.6% at the end of the year, the lowest level since mid-2008. Even though early 2015 job numbers have been softer and labor participation remains depressed, the overall trends reflect an important dynamic in the job market. The rate at which businesses are hiring is trending toward normal levels; more important, the rate at which workers are voluntarily quitting their jobs, an indicatorPersonal Consumption Retail Market Trends 2015 of their prospects in the job market, is also on the upswing.

Even as the headline job numbers improve, growth in wages remains sluggish. Among the countervailing forces putting money back in consumers’ pocketbooks, spending on debt service fell below 10% of disposable personal income during the fourth quarter of 2014. More recently, Americans have been spending less on their gas and oil heating bills, a net positive for the economy even though energy markets like Houston and Oklahoma City have suffered. In terms of headwinds, a larger share of renter households’ income is going to housing costs as apartment rent growth continues to outpace wages. Households are spending more on consumer goods in any case, driving year-over-year increases in personal consumption expenditures on the order of 4% in late 2014 and Ecommerce Retail Market Updates 2015early 2015.

Brick-and-mortar retailers will have to work harder to capture their share of new spending, whether through enhancements to the tangible in-store experience or the development of truly effective omnichannel strategies. Online retail spending growth has increasingly outpaced traditional retail channels, growing year-over-year by nearly 15% in the fourth quarter of 2014. In contrast, retail spending excluding e-commerce increased by only 1.2%.

 

Construction Remains in Check

Investment in new retail space remains subdued as compared to pre-crisis peaks. Retail property development spending increased to $18.6 billion in 2014, up to 15% from a year earlier, but barely more than half its 2007 level. Factoring also for the rising cost of construction, the tally of projects underway across neighborhood and community shipping centers, big box retailers, and shopping malls is still early in its recovery.

Construction Spending Retail Market Updates 2015Construction Spending Retail Market Update 2015

New project announcements will be increasingly frequent in 2015, with an emphasis on growing and under-amenitized residential neighborhoods and malls that can effectively meet the “shop and play” paradigm. Difficulties in obtaining financing for smaller projects will persist as constraints over this cycle, particularly as heightened regulatory capital requirements at banks come into effect.

 

Rent Growth Improves Slowly

Measured across all property subtypes, retail rents are rising slowly but consistently. Average asking rents increased by 2.8% in 2014 according to Chandan Economics’ tracking of mortgage-financed properties, improving on the prior year’s 2 % increase. The aggregate numbers mask wide differences across geography and subtype. Dominant superregional malls and urban street-front retail have seen relatively larger increases; setting the bar, Fifth Avenue below Central Park in Manhattan is now, at roughly $3,400 per square foot, the most expensive retail corridor in the world.

Retail Rent Change Market Update 2015Retail Asking Rents Market Update 2015

Measures from ICSC and NCREIF show stronger trends than themortgage data. Shopping center rents increased by 6.5% in 2014, the best result since 2008. For malls, base rents increased by 17.2%, the fastest pace in the 14 years of available history. Mall net operating income (NOI) registered an exceptional year-over-year increase of 21.3%.

 

Long Term Cap Rate Retail Market Update 2015

Cap Rates Have Room to Decline 

Well below its long-term average of 7.7%, the national average cap rate across all retail property types declined by less than 10 basis points during 2014, to just under 6.4%. Values increased even though cap rates were relatively flat, as improving rents and occupancy rates more than offset higher expenses. As compared to its long-term average of 320 basis points, cap rate spreads over ten-year Treasury yields held onto an additional cushion of 60 basis points. The largest regional malls commanded cap rates below 5 %, as did high street retail in gateway cities. Neighborhood and community shopping center cap rates trended between 7.0% 7.5% during 2014.

National Cap Rate Spreads Retail Market Update 2015While the impact of e-commerce on retailers has varied dramatically across product types, there is no segment of the market that is fully immune to the fundamental changes in the way Americans shop. Properties that are perceived as more resilient to substitution out of brick-and-mortar, including the most urban locations and grocery- and pharmacy-anchored properties, commanded a larger price premium and lower cap rates in 2014. That divergence in retail property values may narrow in 2015 as a better job market and rising discretionary spending lift some weaker segments of the market.

 

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.

Download the full report here. retail_thumbnail_WEB

Market Cap Rates

Across all retail subtypes, the national average cap rate on mortgage-financed property sales was 6.4% in 2014, well below the 20-year average of 7.7%. Cap rates reflect historically low Treasury yields and spreads that remain elevated as compared to long-term norms. Across markets, cap rates for anchored shopping centers ranged from 8.1% in Detroit to 6% in the Bay Area. In gateway markets, cap rates for high street retail reflect aggressive bidding by domestic and foreign buyers. Driven by property trades along their major tourist corridors, San Francisco and Manhattan boasted high street retail cap rates of 4% and 3.9%, respectively, on par with the best-positioned apartment and office buildings.

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 190 locations in 500+ markets.

2015 Commercial Real Estate Market Outlook

2015 Commercial Real Estate Market Outlook

As we look forward to 2015, I am pleased to share my perspective on the exceptional year now behind us and to offer an updated outlook for the economy and commercial real estate marketplace. Before I do that, I would be remiss if I did not thank our Sperry Van Ness® clients, Advisors, staff, and fellow brokers for their contributions in driving our organization’s continued growth and commitment to innovation. I know that I speak for all SVN Advisors and staff when I wish you a happy and prosperous year ahead.

From Recovery to Expansion

Commercial real estate investors begin 2015 in their strongest position since before the financial crisis. Across a broadening swath of the nation’s cities and regions, property fundamentals and values are rising, drawing a wider range of buyers, sellers, and lenders back from the sidelines. This convergence of market participants pushed commercial real estate property sales volume to nearly $425 billion in 2014, according to Real Capital Analytics, up 17 percent from a year earlier. In the multifamily sector alone, Chandan Economics reports that new lending approached $100 billion.

Of course, commercial real estate’s momentum is not building in isolation. Supporting demand for space and investment, underlying conditions have improved in the domestic economy and labor market, as well. The firming trends are captured in the numbers: while not evenly distributed, corporate profits set new record highs in 2014; as more profitable businesses have returned to hiring and household balance sheets have been further repaired, consumer sentiment has climbed to its highest level in more than a decade.

The transition from recovery to expansion has clearly taken longer than in previous business cycles. A shifting regulatory environment and dislocations in the financial system have been among the reasons for the lag. Subsuming both of these, the tenuous path of the job market has persisted as a source of concern for central bankers, investors, and everyday Americans. At least by economists’ reckoning, this summer will mark the sixth anniversary of the end of the Great Recession and the beginning of a slow recovery in economic output. Employment gains have come later and at a more modest pace. For the families whose jobs fill the nation’s office buildings and whose salaries and spending support our retailers and industrial fulfillment centers, it hardly feels like a long-established recovery.

The job market has been called the weakest link of this recovery and not without good reason. In the depths of the financial crisis, employers shed more of their payrolls than during any prior American recession. From its trough in 2010, the count of employed Americans has taken more than four years to recoup its losses fully. The job market reached and surpassed that milestone last year. Not only did we surpass the pre-crisis peak in employment, 2014 was the best year for job growth since 1999. Employers added nearly 3 million new jobs in 2014 and seem poised to go even further in 2015. As the labor market tightens and businesses find themselves competing more aggressively for talented workers, healthier wage growth should also take hold.

Investment Milestones

Even as economic and job trends have improved in the United States, institutional investors’ drive to safe havens has been reinforced by a challenging global outlook. Reflecting the divergence of momentum in the United States from the troubled near- and medium-term prognosis for Europe and the world’s oil-exporting nations, the global appetite for high-quality American assets has defied expectations. This is most apparent in the Treasury market, where low rates have contributed to higher property prices and eased the stress of maturing loans from the heady days of 2006 and 2007. The 10-year yield fell below 2 percent in January, trumping economists’ expectations as it has tumbled to within 30 basis points of its all-time low.

Top Market for Property Sales in 2014
Manhattan
Los Angeles
Chicago
San Francisco
Dallas
Boston
Atlanta
Houston
New York Boroughs
Seattle
Source: Real Capital Analytics

Balancing the aversion to risk with a need for higher yields, investors have continued to channel capital into core multifamily and commercial real estate. In the largest gateway markets, including Los Angeles, New York, San Francisco, and their coastal peers, inflows of domestic and foreign capital have lifted prices further and pushed nominal cap rates to new cyclical lows. Across all property types, Real Capital reports that transaction volume in Manhattan alone surpassed $42 billion in 2014. Los Angeles, Chicago, San Francisco, and Dallas followed Manhattan. The foreign share of that investment activity is increasing. Among the year’s cross-border highlights, China’s Anbang Insurance Group purchased the Waldorf Astoria hotel in New York for $1.95 billion, the highest price ever paid for an American hotel. As foreign investors with more complex investment objectives focus their attention on large American properties, competition for trophies has intensified.

The intensity of competition in primary markets has enabled stronger capital flows to secondary and tertiary markets, narrowing the pricing and volume gap between the largest and most liquid metro areas and their relatively smaller peers. Even among large institutional investors that historically have ring fenced themselves along the coasts, attentions are shifting. Capital has also flowed with increasing ease to non-core property types and value-add assets. In a marked contrast with just a few years ago, there are few corners of the property market that still remain starved for either equity or debt. If transaction activity has rebounded more slowly than buyers’ readiness to expand their portfolios, a dearth of high quality properties for sale has been the culprit.

Market momentum is expected to carry well into 2015 and 2016, particularly outside the gateways. According to the Urban Land Institute’s Real Estate Consensus Forecast, commercial real estate transaction volume will edge higher this year. Supporting smaller deals and private investors dependent on secured financing, it is widely believed that CMBS issuances will surpass $100 billion in 2015. Just as important for private buyers in the mid-cap property market, Chandan Economics reports that commercial real estate loans held by banks reached a new high in 2014 and will climb further. Banks are also returning to construction lending in larger numbers, anticipating higher land prices and an uptick in development activity.

Real Estate’s New Geography

The rebalancing of the primary and secondary market bifurcation is not the only change in the geography of commercial real estate activity. Multifamily investors can attest to a new generation of urban renters with a strong preference for access to amenities, transportation infrastructure, and a better balance of work, life, and play. Those preferences are also factoring into the location decisions of businesses that want to compete for talented labor and service- and experience-oriented retailers seeking proximity to their customers. Beyond the handful of truly around-the-clock cities, this downtown co-location of renters, jobs, retailers, and fulfillment centers will see 18-hour cities take on greater relevance for investors this year.

These trends coincide with larger disruptions in the ways that American households and businesses use space and the ways buyers invest in it. In the workplace as in the real estate business at large, collaboration and open platforms are replacing outdated models that rely on fragmentation and information asymmetry as sources of advantage. Market participants that are not adapting and are instead guarding information and relationships run the risk of irrelevance. At the other extreme, the extraordinary potential of new technologies is apparent in startups that are crowdsourcing both data and financing. The early success of the newest generation of entrepreneurs underscores that real estate can be a breeding ground for innovation and that adaptability will be critical to success for all market participants.

Concluding Thoughts

Whether in terms of fundamentals or investment, the prospects for the economy and commercial real estate over the next year are bright. There are risks to the outlook, primarily from the global slowdown and geo-political instability. So far, there is little evidence of spillovers into the United States. Instead, the American economy and industry are on the move, bearing enormous opportunities. Advisors who are also innovators will play a critical role in seizing those opportunities and in bridging the gaps between buyers and sellers and between tenants and landlords.

Portland, OR | 2014 Top CRE Markets to Watch : Apartment

Sperry Van Ness International Corporation’s (SVNIC) 2014 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 2014. Today we are delving into the 2014 Top Apartment Markets to Watch. Not the largest, or the most actively contested markets, the 2014 Apartment 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 APARTMENT MARKET TO WATCH : Portland, Oregon

portland-415957_1280Multifamily construction has ramped up gradually in Portland, enabling landlords to grow rents even as new supply comes closer to matching the demand for apartments. After two years of adding some 2,000 multifamily units annually to the local inventory, and with a vacancy rate falling to near 3 percent, developers have stepped up the pace and will likely deliver 3,000 apartments in 2014. That accelerated construction activity will be enough to stabilize the vacancy rate and slow rent growth at existing properties. Portland’s enviable quality of life, including outdoor attractions and an expanding cluster of amenities catering to an urban lifestyle, continues to support outpaced job growth. Technology employers, and the service industry jobs that grow around the technology workforce, will help Portland to add about 30,000 jobs in 2014, similar to 2013’s employment growth. With only modest rent growth likely as apartment construction gains momentum, Portland offers opportunities for income investors, and some value-add plays remain for investors willing to invest in significant property upgrades.

To read more on Portland, and other top multifamily markets, download the full version of the Top Apartment Markets to Watch report below.

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 franchisers with more than 180 locations in 200 markets.

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Las Vegas, NV | 2014 Top CRE Markets to Watch : Apartment

Sperry Van Ness International Corporation’s (SVNIC) 2014 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 2014. Today we are delving into the 2014 Top Apartment Markets to Watch. Not the largest, or the most actively contested markets, the 2014 Apartment 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 APARTMENT MARKET TO WATCH : Las Vegas, Nevada

las-vegas-411190_1280Apartment developers are playing a game of chance in Las Vegas. Encouraged by the first increase in average rents since the Great Recession and a recent improvement in the vacancy rate, projects in the pipeline could deliver as many as 3,000 multifamily units in 2014, a tenfold increase from the previous year. Granted, the local population will increase by 2.7 percent this year alone, making it one of the fastest growing U.S. cities. Yet this market must dig itself out of a deeper housing hole than most, and still has a ways to go. The apartment vacancy rate of 9 percent is more than 10 basis points above the historical average. Average rents have only recovered to 80 percent of the pre-recession peak, and thousands of single-family homes remain on the rental market. The nascent recovery merits some development but is unlikely to float all boats in 2014.

To read more on Las Vegas, and other top multifamily markets, download the full version of the Top Apartment Markets to Watch report below.

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 franchisers with more than 180 locations in 200 markets.

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Salt Lake City, UT | 2014 Top CRE Markets to Watch : Office

Sperry Van Ness International Corporation’s (SVNIC) 2014 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 2014. Today we are delving into the 2014 Top Office Markets to Watch. Not the largest, or the most actively contested markets, the 2014 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 : Salt Lake City, Utah

salt-lake-city-485867_1280One of the nation’s job-growth leaders since the end of the recession, Salt Lake City boasts a diverse economy with rapid hiring in high tech, finance and other office-using jobs. The unemployment rate of 3.5 percent is one of the lowest in the nation. In 2013, the expanding economy resulted in more than 1 million square feet of net office absorption. A 12 percent vacancy rate at the start of 2014 was the lowest point since 2007, and although rental rates haven’t found a bottom, landlords have gained sufficient pricing power to slash concessions in recent months. Developers appear confident of future demand, however: A 144,000-square-foot tower is already under construction in downtown and a project breaking ground later this year will measure 450,000 square feet. All told, Salt Lake has roughly 1.7 million square feet in the pipeline for the CBD alone, equivalent to a quarter of the downtown inventory. That volume of additional space should raise a red flag among investors, especially since the vacancy rate is already higher downtown than in outlying submarkets.

To read more on Salt Lake City, and other top office markets, download the full version of the Top Office Markets to Watch report below.

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 franchisers with more than 180 locations in 200 markets.

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Indianapolis, IN | 2014 Top CRE Markets to Watch : Office

Sperry Van Ness International Corporation’s (SVNIC) 2014 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 2014. Today we are delving into the 2014 Top Office Markets to Watch. Not the largest, or the most actively contested markets, the 2014 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 : Indianapolis, Indiana

IndianapolisA growing technology cluster has put Indianapolis on many investors’ watch lists. Employment growth is occurring in key office-using sectors, with professional and business services jobs expanding by 5.5 percent year-over-year in 2013, and financial services growing 1.9 percent over the same period. Unemployment stood at 5.8 percent at the end of the year, slightly better than Boston’s jobless rate and on a par with San Jose. That employment growth hasn’t translated into significant office absorption for Indianapolis, however. Occupancy gains in the suburbs in 2013 were largely offset by a contraction in occupied space downtown, and downtown properties will likely lose more tenants before tightening in the suburbs drives users into the CBD. Submarkets enjoying the greatest demand are the Keystone and North/Carmel suburbs. Those neighborhoods have seen their vacancy rates drop into the middle to lower teens while West Indianapolis grapples with a vacancy rate well over 30 percent.

To read more on Indianapolis, and other top office markets, download the full version of the Top Office Markets to Watch report below.

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 franchisers with more than 180 locations in 200 markets.

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Sacramento, CA | 2014 Top CRE Markets to Watch : Office

Sperry Van Ness International Corporation’s (SVNIC) 2014 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 2014. Today we are delving into the 2014 Top Office Markets to Watch. Not the largest, or the most actively contested markets, the 2014 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 : Sacramento, California

bridge-67773_1280The economic recovery in California’s capital city has lagged those in Los Angeles, Phoenix and other markets that it has followed more closely in the past. The jobless rate ended 2013 at 8 percent, better than the statewide rate of 8.3 percent, but Sacramento hasn’t yet recovered the number of jobs it lost in the last recession. An office vacancy rate in the middle teens has been falling slowly and began 2014 down about 300 basis points from its peak in 2011. Mildly positive absorption over the past two years contributed to a bottoming out in rental rates in 2013 and the beginnings of a turnaround in rent levels in early 2014. Developers have shown restraint in adding new supply, and fundamentals should improve incrementally this year. While its slow job growth elevates risk, Sacramento offers investment opportunities at higher cap rates than are available in many California markets experiencing a more rapid recovery.

To read more on Sacramento, and other top office markets, download the full version of the Top Office Markets to Watch report below.

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 franchisers with more than 180 locations in 200 markets.

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Richmond, VA | 2014 Top CRE Markets to Watch : Office

Sperry Van Ness International Corporation’s (SVNIC) 2014 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 2014. Today we are delving into the 2014 Top Office Markets to Watch. Not the largest, or the most actively contested markets, the 2014 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 : Richmond, Virginia

RichmondHiring that pushed Richmond’s jobless rate to a post-recession low of 5.2 percent in December 2013 also fueled brisk absorption of office space during the second half of 2013. The citywide office vacancy rate, which peaked at more than 24 percent in 2008, has returned to single-digit territory after years of methodical recovery in the market. Even in the central business district, where vacancies increased slightly in the early quarters of 2013, the supply of available offices tightened in the second half of the year. Rents have been flat for Class B office space, but average Class A rents have climbed above $20 per square foot and will likely go higher by the end of 2014. Office buildings downtown and in Northwest Richmond are outperforming the overall market, largely at the expense of landlords in the southwest, who have been losing tenants. Nearly a half million square feet of new space under construction, mostly in the CBD, will do little to undermine the current trajectory. Value-add investors are more likely to find bargain pricing in the southwest.

To read more on Richmond, and other top office markets, download the full version of the Top Office Markets to Watch report below.

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 franchisers with more than 180 locations in 200 markets.

Download the Top Trends and Markets to Watch Reports

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Seattle & Tacoma, WA | 2014 Top CRE Markets to Watch : Industrial

Sperry Van Ness International Corporation’s (SVNIC) 2014 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 2014. Today we are delving into the 2014 Top Industrial Markets to Watch.  Not the largest, or the most actively contested markets, the 2014 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 : Seattle and Tacoma, Washington

seattle-416065_1280Seattle’s port handled 3 million TEUs of containerized cargo in 2013, placing it among the nation’s top five ports for finished goods. The port is PPMX-ready, meaning it has the required channel depth and cranes to handle the largest, fully loaded cargo ships that will be in common use following the reopening of the expanded Panama Canal in 2015. The nearby Port of Tacoma, too, has been PPMX-ready since 2011, after having dredged its channels to the necessary depth and adding massive gantry cranes. Tacoma’s containerized cargo volume has surged to more than 1 million TEUs per year as a result, and helped to fuel additional demand for industrial space. Falling market-wide vacancy is nearing 5 percent and demand for space is generating build-to-suits as well as accelerating absorption, which spiked to 1.5 million square feet in the fourth quarter of 2013 alone. The market added more than 1 million square feet of new space in 2013 and has more than twice that amount under construction. A strong employment base, rooted in energy and technology and enjoying a boost in aerospace manufacturing, has helped Seattle to more than recover the number of jobs it lost in the Great Recession. Projected household growth near 5 percent bodes well for the market’s distribution centers. While the newly refitted Port of Tacoma is expanding its market share of cargo traffic, Seattle is also feeling increased competitive pressure from Prince Rupert, a Canadian seaport in British Columbia that is also PPMX-ready following recent upgrades to its facilities.

To read more on Seattle and Tacoma, and other top industrial markets, download the full version of the Top Industrial Markets to Watch report below. 

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 franchisers with more than 180 locations in 200 markets.

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Inland Empire, CA | 2014 Top CRE Markets to Watch : Industrial

Sperry Van Ness International Corporation’s (SVNIC) 2014 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 2014. Today we are delving into the 2014 Top Industrial Markets to Watch.  Not the largest, or the most actively contested markets, the 2014 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 : Inland Empire, California

Inland EmpireDemand is mushrooming in this vital industrial market. Companies absorbed nearly 15 million square feet of space in 2013, almost double the roughly 8 million square feet of absorption in 2012. Construction introduced almost 6 million square feet of new supply in the past year, and another 16 million square feet are nearing completion in 2014. Users have already committed to more than a third of the buildings currently under construction. The Inland Empire’s vacancy rate of a little more than 4 percent, although tight, offers greater flexibility and lower average lease rates than users can find closer to the ports of Los Angeles and Long Beach. Developers are depending on those competitive advantages to help lease the tremendous volume of new space in the works. As new projects come online, however, the average lease rate of will increase, narrowing the rent rate differential that has helped to offset the added cost of transporting shipped goods between the ports and distribution centers in the Inland Empire.

To read more on Inland Empire, and other top industrial markets, download the full version of the Top Industrial Markets to Watch report below. 

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 franchisers with more than 180 locations in 200 markets.

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Phoenix, AZ | 2014 Top CRE Markets to Watch : Retail

Sperry Van Ness International Corporation’s (SVNIC) 2014 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 2014. Today we are delving into the 2014 Top Retail Markets to Watch. Not the largest or the most actively contested markets, the 2014 Retail Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that are driving the economy and commercial real estate performance in markets across the country.

TOP RETAIL MARKET TO WATCH : Phoenix, Arizona

phoenix-lake-489023_1280Phoenix’s jobless rate fell to 6.2 percent at the end of 2013 from 6.8 percent a year earlier, driven by gains in financial services, construction, insurance and healthcare jobs. Already one of the fastest-growing cities in the nation, Phoenix will see its population expand by more than 2.4 percent in 2014, with a commensurate rise in retail sales and even greater demand for retail space. Overall vacancy fell to near 10 percent in late 2013 in a year when retailers absorbed approximately 3.5 million square feet of new retail space, far outpacing construction that added roughly 1.5 million square feet to the market in that period. Three years of positive absorption will likely bring rental rates to an inflection point in 2014, ending a protracted decline as landlords gain greater pricing control. Already a strong market for discount and necessity retailers, Phoenix’s growth in high-paying professions will fuel sales for middle- and high-end retailers in the years ahead.

To read more on Phoenix, and other top retail markets, download the full version of the Top Retail Markets to Watch report below. 

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 franchisers with more than 180 locations in 200 markets.

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Oklahoma City, OK | 2014 Top CRE Markets to Watch : Retail

Sperry Van Ness International Corporation’s (SVNIC) 2014 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 2014. Today we are delving into the 2014 Top Retail Markets to Watch. Not the largest or the most actively contested markets, the 2014 Retail Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that are driving the economy and commercial real estate performance in markets across the country.

TOP RETAIL MARKET TO WATCH : Oklahoma City, Oklahoma

downtown-188848_1280Oklahoma City’s retail real estate fundamentals are curiously fragile for a market with strong job growth. The metro area has created jobs in numbers well in excess of those lost during the downturn, and although the jobless rate showed volatility in 2013, the rate stood at 4.8 percent in December, one of the lowest in the nation. Retail space absorption is improving, registering stronger results in 2013 than in 2012. That annual gain masked a poor third quarter in which retailers gave back more than 100,000 square feet in neighborhood shopping centers. Mall vacancies have come down from more than 30 percent in 2012, but roughly a quarter of mall space remains dark, and single-digit lease rates at those properties are the lowest of any retail product type in the city. A drawback to the city’s low unemployment rate is a limited labor pool that has hampered corporate growth and recruitment of new employers, contributing to the slow recovery in retail. Job growth should top 2.2 percent in 2014, however, and with above-trend annual population growth of 1.6 percent, the metro has good prospects for increasing retail demand.

To read more on Oklahoma City, and other top retail markets, download the full version of the Top Retail Markets to Watch report below. 

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 franchisers with more than 180 locations in 200 markets.

Download the Top Trends and Markets to Watch Reports

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Louisville, KY | 2014 Top CRE Markets to Watch : Retail

Sperry Van Ness International Corporation’s (SVNIC) 2014 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 2014. Today we are delving into the 2014 Top Retail Markets to Watch. Not the largest or the most actively contested markets, the 2014 Retail Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that are driving the economy and commercial real estate performance in markets across the country.

TOP RETAIL MARKET TO WATCH : Louisville, Kentucky

LouisvilleThe retail hub for a 16-county region, Louisville is slowly recovering from the downturn with employment growth that exceeds Kentucky’s overall performance but lags the national average. The market’s year-end employment rate was 7.5 percent, down from a peak of 10.5 percent in January 2010. In 2013, Cabela’s opened an 88,000 square foot store in the Old Brownsboro Crossing development, alongside Norton Brownsboro Hospital, Lowe’s and Costco. This year, Horizon Group Properties and CBL & Associates will open The Outlet Shoppes of the Bluegrass, an outlet mall in Simpsonville on the eastern edge of the Louisville metro. Downtown Louisville welcomed six new retail shops last year and will soon join in the renaissance of mixed-use development taking shape across the nation: a $261 million development in the CBD will bring a 600-room Omni convention hotel, 200 apartments, retail shop space and an upscale grocery. Across the market, healthy absorption at neighborhood retail centers has offset negative absorption in most other retail property types. Completion of new projects in 2013 increased overall vacancy slightly, but the vacancy rate remained in the single digits at year-end, with no major space in the pipeline other than CBL’s outlet project. The slow pace of absorption may not call for large-scale retail construction in the near term, but Louisville offers numerous opportunities to meet existing pockets of unmet demand with infill, value-add plays. Louisville will get a new four-diamond hotel along with a much-anticipated downtown grocery, retail shops and 200 apartments under a $261 million downtown development plan announced by Mayor Greg Fischer and Governor Steve Beshear.

To read more on Louisville, and other top retail markets, download the full version of the Top Retail Markets to Watch report below. 

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 franchisers with more than 180 locations in 200 markets.

Download the Top Trends and Markets to Watch Reports

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Los Angeles & Long Beach, CA | 2014 Top CRE Markets to Watch : Industrial

Sperry Van Ness International Corporation’s (SVNIC) 2014 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 2014. Today we are delving into the 2014 Top Industrial Markets to Watch.  Not the largest, or the most actively contested markets, the 2014 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 : Los Angeles and Long Beach, California

long-beach-198911_1280Moves by two shipping companies from the Port of Los Angeles to the Port of Long Beach in late 2012 contributed to an 11.3 percent year-over-year increase in cargo traffic at Long Beach in 2013, while LA’s volume for the year declined by only 2.6 percent. The twin ports have invested billions of dollars in capital improvements to avoid losing shipping volume to East Coast ports following the opening of the expanded Panama Canal in late 2015. Nearer on the horizon, the West Coast longshoremen’s labor agreement will expire in June 2014, bringing elevated risk levels for port-related industrial users until the sides forge a new agreement. Nearly four years of positive absorption have filled portions of the Los Angeles Basin industrial market, with a vacancy rate of less than 3 percent in the San Gabriel Valley, Central L.A. and the South Bay submarkets. Other submarkets offer only slightly more vacancy, with Orange County topping the list at just over 4 percent. Average rents have been on the rise since the first quarter of 2011 and now top 50 cents per square foot in most submarkets, with landlords in the South Bay and Orange County quoting rent of 60 cents or more per square foot. More than half of the developed space in Los Angeles County and Orange County is 20 years old or older, creating some redevelopment opportunities, while a dearth of large, Class A distribution buildings is accelerating rent growth for that segment. Development activity is brisk with more than 20 million square feet under construction, but is unlikely to fully satisfy the growing demand for industrial space due to the limited availability of buildable sites and a faster pace of absorption.

To read more on Los Angeles and Long Beach, and other top industrial markets, download the full version of the Top Industrial Markets to Watch report below. 

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 franchisers with more than 180 locations in 200 markets.

Download the Top Trends and Markets to Watch Reports

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Industrial Trends and Markets to Watch

Retail Trends and Markets to Watch

Commerical Real Estate Trends and Markets to Watch

Apartment Trends and Markets to Watch

Office Trends and Markets to Watch

 

 

 

Houston, TX | 2014 Top CRE Markets to Watch : Apartment

Sperry Van Ness International Corporation’s (SVNIC) 2014 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 2014. Today we are delving into the 2014 Top Apartment Markets to Watch. Not the largest, or the most actively contested markets, the 2014 Apartment 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 APARTMENT MARKET TO WATCH : Houston, Texas

houston-499802_1280Houston’s multifamily market has been on a two-year high—and lenders are ready to take it down a notch. Construction will add nearly 11,000 units in the Energy City by the end of 2014, more than 6,000 of which will be in a handful of high-end urban submarkets, growing inventory in those neighborhoods by more than 6 percent. With the remaining 5,000 or so units to be completed elsewhere in the city, however, the overall vacancy rate of about 6 percent is unlikely to shift appreciably until 2015 or beyond, and remains low for this market. Houston’s appetite for apartments is growing nearly twice as fast as the pace of construction, which is expected to add 10,000 units annually in 2015 and 2016. Nevertheless, some lenders concerned over the recent volume of development in Houston have tightened underwriting for construction loans, which could create a competitive advantage for investors with other sources of capital.

To read more on Houston, and other top multifamily markets, download the full version of the Top Apartment Markets to Watch report below.

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 franchisers with more than 180 locations in 200 markets.

Download the Top Trends and Markets to Watch Reports

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Industrial Trends and Markets to Watch
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Florida Tech Corridor | 2014 Top CRE Markets to Watch : Retail

Sperry Van Ness International Corporation’s (SVNIC) 2014 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 2014. Today we are delving into the 2014 Top Retail Markets to Watch. Not the largest or the most actively contested markets, the 2014 Retail Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that are driving the economy and commercial real estate performance in markets across the country.

TOP RETAIL MARKET TO WATCH : Florida Tech Corridor – Orlando to Tampa

florida-67890_1920In addition to boasting some of the top tourist destinations in the United States, Central Florida has cultivated a thriving technology cluster in a 23-county region spanning the breadth of the state. Joint programs by regional universities and community colleges cover a wide range of technology fields, from microelectronics to biotechnology, modeling and robotics, aerospace, wireless technology and digital media. The growing workforce of highly skilled, young professionals is attracting tech employers and fostering startups, adding a significant and expanding source of well-paid residents to help drive retail sales. Tampa and Orlando share a similar overall retail vacancy rate of about 9.5 percent, but Tampa’s malls have outperformed with a vacancy rate below 4 percent and average mall rents of $25 or more per square foot. In Orlando, mall vacancy is 200 basis points higher and average rent is closer to $15. Tampa’s weak spot since the recession has been excess vacancy at strip and neighborhood centers, but falling rents in those subsets showed signs of flattening in late 2013. Orlando in particular has benefited from resurgent tourism that will increase as the economic recovery takes a firmer hold in U.S. markets this year. Investor confidence in Central Florida’s outlook has driven strong demand for net-leased retail since 2011, and would-be buyers are now showing greater interest in multi-tenant properties with below-market rents that offer good upside potential.

To read more on the Florida Tech Corridor, and other top retail markets, download the full version of the Top Retail Markets to Watch report below. 

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 franchisers with more than 180 locations in 200 markets.

Download the Top Trends and Markets to Watch Reports

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Commerical Real Estate Trends and Markets to Watch

Apartment Trends and Markets to Watch

Office Trends and Markets to Watch

Industrial Trends and Markets to Watch

 

 

Denver, CO | 2014 Top CRE Markets to Watch : Apartment

Sperry Van Ness International Corporation’s (SVNIC) 2014 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 2014. Today we are delving into the 2014 Top Apartment Markets to Watch. Not the largest, or the most actively contested markets, the 2014 Apartment 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 APARTMENT MARKET TO WATCH : Denver, Colorado

denver-69207_1280Denver will add nearly 50,000 jobs in 2014, with much of the growth occurring in high-paying energy, financial services, health care and bioscience industries. Employment growth of almost 4 percent in 2013 and a similar gain expected this year make Denver one of the nation’s fastest-growing job markets. Multifamily rent grew at a remarkable 6 percent in 2013. The addition of 10,000 new units this year will expand the apartment inventory by more than 3 percent, however, enough to slow annual rent growth to a more modest 4 percent. Nearly half of the apartments under construction are in the central business district, where the renovated Union Station is set to open later this year. Existing and planned light rail lines offer development opportunities, as well as value-add plays for investors able to upgrade and reposition existing, older properties in these growth corridors.

To read more on Denver, and other top multifamily markets, download the full version of the Top Apartment Markets to Watch report below.

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 franchisers with more than 180 locations in 200 markets.

Download the Top Trends and Markets to Watch Reports

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Industrial Trends and Markets to Watch
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Charlotte, NC | 2014 Top CRE Markets to Watch : Office

Sperry Van Ness International Corporation’s (SVNIC) 2014 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 2014. Today we are delving into the 2014 Top Office Markets to Watch. Not the largest, or the most actively contested markets, the 2014 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 : Charlotte, North Carolina

banks-216156_1280As the second-largest U.S. banking center after New York, Charlotte suffered a severe contraction in office demand following the onset of the financial crisis and is still in the early stages of recovery. Financial services is again a dominant sector, and rapid hiring has driven total employment beyond its pre-recession peak, while the 6.6 percent jobless rate reflects a steady arrival of new workers. The metro’s population of Millennials, ages 20 to 34, will increase by nearly 15 percent over the next five years, or four times the national average. Office vacancy is declining but was still more than 13 percent at the end of 2013. A below-average cost of doing business, coupled with a large and growing pool of educated workers, promises to attract new employers and fuel hiring and office absorption as the national economy accelerates. Downside risks include potential impacts from consolidation in financial services. Properties able to provide flexible, high-density space with rich amenities—favored by Millennials—will be better positioned to attract tenants and grow net operating income.

To read more on Charlotte, and other top office markets, download the full version of the Top Office Markets to Watch report below.

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 franchisers with more than 180 locations in 200 markets.

Download the Top Trends and Markets to Watch Reports

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Industrial Trends and Markets to Watch
Retail Trends and Markets to Watch
Apartment Trends and Markets to Watch
Commercial Real Estate Trends to Watch

Philadelphia, PA | 2014 Top CRE Markets to Watch : Industrial

Sperry Van Ness International Corporation’s (SVNIC) 2014 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 2014. Today we are delving into the 2014 Top Industrial Markets to Watch.  Not the largest, or the most actively contested markets, the 2014 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 : Philadelphia, Pennsylvania

philadelphia-493829_1280The Philadelphia industrial market has been overshadowed by its faster-growing peers but to its advantage, the market’s fundamentals remain largely unchanged and stable in 2014. Philadelphia County’s more than 360,000 square feet of absorption in 2013, in the absence of major construction, helped to push down the industrial vacancy rate to near 8 percent, on par with the Philadelphia suburbs and lower than the vacancy rates in most of the region’s other markets. Companies seeking space for their own use have taken out more buildings here in the past few years than those leasing space. The population count has decreased by more than 14,000 since 2008 but is back on a moderate growth track. Investors that see Philly’s lack of growth as stagnation may be willing to sell at attractive prices, and those sellers will find potential buyers attracted to the market’s incrementally improving industrial fundamentals.

To read more on Philadelphia, and other top industrial markets, download the full version of the Top Industrial Markets to Watch report below. 

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 franchisers with more than 180 locations in 200 markets.

Download the Top Trends and Markets to Watch Reports

Chandan-Industrial-Cover

Industrial Trends and Markets to Watch

Retail Trends and Markets to Watch

Commerical Real Estate Trends and Markets to Watch

Apartment Trends and Markets to Watch

Office Trends and Markets to Watch