Office Market Sees Vacancy Rates Rise Slightly.
Multifamily Market Closes 2017 on a High Note.At the beginning of 2017 most said it was the beginning of the inevitable slowdown; however, as we roll into a new year and look back at our forecast, the market ended up right where we expected. 2017 was not only a solid year in terms of investment activity, it was also a strong year from the owner/investor side. We experienced positive sales volume growth, positive rental growth and even managed to push the occupancy a little higher, a multifamily trifecta. Although the year started off a little shaky with many reports citing pressure on rents and occupancies, the rebound in Oklahoma’s economy was a welcome boost pressing the multifamily market forward.
Chicago’s suburban office market suffered its fair share of hits over the past few years but seems to be on an upward trend.
As 2017 closed out, Chicago’s downtown employment base was growing and the economy was largely still in expansion mode from the last serious contraction in 2010.
Lack of product for sale continues in Q4 2017. Market analysis showed that Sales Volume for industrial real estate in the Chicago market was down to $728 Million in the 4th quarter, the lowest Q4 volume since 2014.
At the end of 2017, Calgary’s overall retail market reflected the onset of the economic recovery and benefited from several corporate expansions.
The Upper Tollway Sub-Market has consistently been one of the main hubs of office real estate activity in Dallas. With relocations of large corporate campuses, such as Toyota, Fannie Mae, Liberty Mutual, and JP Morgan Chase, the area is becoming even more appealing as the influx of developers continue to attempt to capitalize on the enticing market. This recent construction has resulted in a surprisingly large vacancy rate for a market with such an “awe factor.”
This Richardson/East Plano Submarket covers the I-75 corridor from Walnut Street to Hedgcoxe Road and includes central Plano up to Sam Rayburn Tollway to the North until Alma Road when it drops down to Hedgecoxe Road and Coit Road to the West. The included statistics cover Class A and B office buildings that have more than 50,000 square feet and are either under construction or existing. With more large companies looking to relocate and consolidate to the Dallas suburbs, the Richardson/East Plano Sub-Market provides a valuable option with several large blocks of space still available.
The North Central Expressway Sub-Market is defined geographically as the area that is bordered by Hillcrest Avenue to the West, N Haskell Avenue to the South, Greenville Avenue to the East, and Forest Lane to the North. This analysis is focused on Class A and B office buildings that are existing or under construction and contain a minimum of 75,000 rentable square feet.
The Lower Tollway Sub-Market is defined by the geographic boundaries of Alpha Road on the south, President George Bush Turnpike on the north, Preston Road on the east, and Midway Road on the west.
The East LBJ Corridor Sub-Market is defined geographically as the area that is bordered by Midway Road to the West, Forest Lane to the South, TI Boulevard to the East, and Alpha Road to the North. This analysis is focused on Class A and B office buildings that are existing or under construction and contain a minimum of 50,000 rentable square feet.
The East Plano Sub-Market covers the area east of US-75, south of 14th Street, west of Northstar/Los Rios Boulevard and north of President George Bush Turnpike, until it turns south, at which point the southern border of the sub-market becomes Lookout Drive. The included statistics cover industrial and flex buildings that have more than 30,000 square feet of space. The East Plano Sub-Market is experiencing the most stable period of success in its history.
The third quarter ended with an overall office vacancy of 14.5%, which is up from 14.4% in the second quarter, and down from 14.6% in the first quarter; so, it is fair to say we have remained steady this year with vacancy.
Investors continued to demonstrate interest and confidence in the Edmonton market.
Vacancy in Calgary’s Downtown remained relatively steady over the third quarter of 2017, rising by 0.4% to 25%. Q3 proved quiet in comparison to the preceding 11 quarters, posting negative net absorption totaling Downtown Market Beltline Market 193,000 square feet (sf).
Investors continued to demonstrate confidence in the Calgary market through the third quarter of 2017.
The end of the third quarter brings healthy activity from both the sales and leasing market throughout the Calgary area.
TCN Worldwide's State of the Market: Western Edition, 3rd Quarter 2017 Prepared by Hugh F. Kelly, PhD, CRE, Consulting Economist to TCN Worldwide. In this edition: –National and Macroeconomic Overview –Regional Economic Conditions –Commercial Property Investment Trends
TCN Worldwide's State of the Market: Central Edition, 3rd Quarter 2017 Prepared by Hugh F. Kelly, PhD, CRE, Consulting Economist to TCN Worldwide. In this edition: –National and Macroeconomic Overview –Regional Economic Conditions –Commercial Property Investment Trends
TCN Worldwide's State of the Market: Eastern Edition, 3rd Quarter 2017 Prepared by Hugh F. Kelly, PhD, CRE, Consulting Economist to TCN Worldwide. In this edition: –National and Macroeconomic Overview –Regional Economic Conditions –Commercial Property Investment Trends
The North Central Expressway Sub-Market has seen a remarkable decrease in the Direct Class A vacancy from 18% at the end of second quarter 2015 to 13.1% at the end of the second quarter 2016.
The Upper Tollway Sub-Market is currently a hub of office real estate activity in Dallas and has become one of the most attractive sub-markets in the D/FW Metroplex.
TCN Worldwide's State of the Market: Central Edition, 2nd Quarter 2016 Prepared by Hugh F. Kelly, PhD, CRE, Consulting Economist to TCN WorldwideIn this edition: –National and Macroeconomic Overview –Regional Conditions in the Central States –Commercial Property Investment Trends
The LBJ Corridor has not benefitted from the same level of activity as it’s North Texas counterparts since 2013. This is largely due to the LBJ Express Project which began in early 2011, and was completed in 2015. Many of the buildings within the LBJ Corridor are outdated and inefficient, making companies hesitant to relocate into the region.
The North Central Expressway Sub-Market has seen a remarkable decrease in the Direct Class A vacancy from 20.00% at the end of first quarter 2015 to 13.9% at the end of the first quarter 2016.
The Upper Tollway Sub-Market is currently a hub of office real estate activity in Dallas and has become one of the most attractive sub-markets in the D/FW Metroplex. With relocations of large corporate campuses, like Toyota and JP Morgan Chase, the area is becoming even more appealing and has led to an increase in rental rates and construction. This recent construction has resulted in an increasing vacancy rate but the new vacancies are filling up quickly.
Class A Product along the Lower Tollway has been in high demand, with rental rates increasing 12% in the past year, and 20% in the previous two years. The Lower Tollway’s Class A vacancy is down from 12.7% in the first quarter of 2015 to 12.0% at the first quarter 2016. To put this into perspective, a market is considered to be in a “boom cycle” when vacancy rates near 15%.
This Richardson/Plano Sub-Market covers the I-75 corridor from Walnut Street to Hedgcoxe Road and includes Central Plano up to Sam Rayburn Tollway to the North until Alma Road when it drops down to Hedgecoxe Road and Coit Road to the West. The included statistics cover Class A and B office buildings that have more than 50,000 square feet and are either under construction or existing.
The Dallas/Ft. Worth Office market ended the first quarter 2016 with a vacancy rate of 14.4%. The vacancy rate was up over the previous quarter, with net absorption totaling positive 781,041 square feet in the first quarter.
Industrial vacancy rates across the combined markets of Chicago Metro, Southeast Wisconsin, and Northwest Indiana continued to improve at the start of the year. Out of nearly 1.3 billion square feet of inventory within these markets, the amount of vacant industrial product dropped to 7.27% at the end of the first quarter.
TCN Worldwide's State of the Market: Central Edition, 1st Quarter 2016 Prepared by Hugh F. Kelly, PhD, CRE, Consulting Economist to TCNIn this edition: –Overview of National Economic Context –Regional Conditions in the Central States –Commercial Property Investment Trends
With a 5.8% overall vacancy rate in East Plano, options are limited for tenants and Landlords are recognizing the opportunity to raise rates.
The Richardson/Plano Sub-Market has shown an increase in the direct Class A vacancy from 6.7% in the fourth quarter of 2014 to 10.9% at the beginning of the fourth quarter of 2015.
The North Central Expressway Sub-Market has remained closely stable with a decrease in the Direct Class A vacancy from 17.5% at the end of fourth quarter of 2014 to 15.6% at the end of the fourth quarter of 2015.
The Dallas/Ft.Worth Office Market ended the fourth quarter 2015 with a vacancy rate of 14.1%.
Across all product types, North Texas has seen skyrocketing rental rates and diminishing vacancy. Office space on the Lower Tollway is no exception.
The Upper Tollway Sub-Market is currently a hub of office real estate activity in Dallas and has become one of the most attractive sub-markets in the D/FW Metroplex.
TCN Worldwide's State of the Market: Central Edition, 4th Quarter 2015 Prepared by Hugh F. Kelly, PhD, CRE, Consulting Economist to TCNIn this edition: –Overview of National Economic Context –Regional Conditions in the Eastern States –Commercial Property Investment Trends
TCN Worldwide's State of the Market: Central Edition, 3rd Quarter 2015 Prepared by Hugh F. Kelly, PhD, CRE Consulting Economist to TCNIn this edition: –Overview of National Economic Context –Regional Conditions in the Central States –Commercial Property Investment Trends
CBD Outlook • The CBD vacancy rate will continue to decrease due to new market leases and tenant expansions. • The CBD availability rate will continue to rise as more tenants sign leases at buildings under construction and landlords market the space they are leaving years ahead of time. • Asking rates will continue to steadily increase because of sale activity and owners upgrading amenities within their buildings. • The capital markets will continue to be strong as investors are attracted to Chicago’s cap rates.