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 3 Cs – Confidence, Caution and Concessions – Drive the CBD
The Manhattan office leasing market ended the third quarter with more than 9 million square feet newly leased. The average rental price was $65.70, an increase from Q2. Of note, Landlord incentives provided to Tenants have also expanded and increased.
Absorption totaled 18,745 sq. ft. in the Second Quarter 2017. Solid figures considering the run this market has enjoyed over the past several quarters.
AT THE MID-POINT OF 2017, THE EDMONTON MARKET POSTED A FOURTH CONSECUTIVE QUARTER OF RENEWED APPEAL TO COMMERCIAL REAL ESTATE (CRE) INVESTORS. AS A BONUS, 2017 IS WIDELY CONSIDERED THE YEAR ALBERTA WILL SEE ITS ECONOMY ENTER A RECOVERY STAGE. THE SENSE OF OPTIMISM THAT SET IN DURING THE LATTER PORTION OF 2016 CONTINUED AND WAS MANIFEST IN THE MORE THAN $1.08 BILLION BEING INVESTED IN COMMERCIAL PROPERTIES FROM JANUARY THROUGH JUNE.
DURING THE FIRST HALF OF 2017, RAYS OF LIGHT CONTINUED BREAKING THROUGH THE CLOUDS CAST BY A NEARLY THREE-YEAR LONG RECESSION. THOUGH THE ALBERTA ECONOMY GENERALLY CONTINUED MOVING AT A SLOWED PACE, A FEW KEY SECTORS EXPANDED AND SEVERAL LARGE FINANCIAL INSTITUTIONS MAINTAINED THEIR FORECASTS OF AN OVERALL RECOVERY THIS YEAR.
This quarter in the suburban market: Net absorption for the year was negative 824,740 square feet, down from the first quarter’s positive 661,382 square feet. The overall vacancy rate was 20.7%. Available space in large (over 100,000 square feet), true Class A properties are most prevalent in the North and Northwest markets.
This quarter in the downtown market: Net absorption for the year was positive 642,176 square feet. The overall vacancy rate was 13.2%. The West Loop continues to be the Central Business District’s darling with 7 of the 11 proposed and under construction office buildings within its confines.
VACANCY DOWN TO 11%
Regardless of High Vacancies, Construction Progresses
The Richardson/East Plano Sub-Market has shown a decrease in the direct Class A vacancy from 24.7% in the second quarter of 2016 to 22.8% for the start of second quarter 2017. Meanwhile, direct weighted average full-service rents increased from $26.91 to $27.38 per square foot during the same time. Class B vacancy decreased from 15.6% to 13.3% and as a result, full-service rental rates increased from $18.88 per square foot to $19.48 per square foot.
19% VACANCY RATE REACHES A FOUR-YEAR HIGH
The LBJ Corridor is one of the last remaining safe havens for companies that are seeking rent relief. With submarkets like Central Expressway and the Lower Tollway experiencing 10-12% vacancy rates, the East LBJ Corridor has a vacancy rate of just below 25%. We expect this to change drastically in 2017 with companies fleeing surrounding submarkets for the best valued office space in the entire DFW- Metroplex.
The second quarter ended with a vacancy of 14.3%, virtually no change from the first quarter of 14.2%. Rental rates for all property classes on a full-service basis increased marginally to $24.64 up from the first quarter of $24.52. Year-to-date absorption totaled 2,401,965, on pace for another very respectable year assuming the back half of this year reflects the first half of the year.
TCN Worldwide's State of the Market: Western Edition, 2nd 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, 2nd 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, 2nd 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 Manhattan office leasing market ended the second quarter of 2017 with a negative absorption of nearly 630,000 square feet, more than 1,000,000 square feet stronger than Q1. The vacancy rate citywide is now 8.2% having ticked downwards by 0.2% almost 1.5% stronger than the national marketplace. Average rents across the Manhattan office market fell to just below $60psf. The pricing correction and significantly lower negative absorption rate indicates a leveling of the office leasing market.
A survey of the Oklahoma City Retail market, provided by Price Edwards & Co.