Market Reports

Third quarter 2022 closed with a direct vacancy rate of 20.71%, an overall vacancy rate of 22.46%, and an average asking direct rental rate reported at $19.16 psf. In June, the Michigan unemployment rate was recorded at 4.1%, a decrease of 0.5 percentage points compared to this time last year. In August, U.S. job openings declined to 10.1 million, the lowest since June 2021, while adding 528,000 jobs, more than double economist’s original estimates of 258,000 jobs. In September, the hiring pace slightly declined due to higher rates and slower company growth with 263,000 jobs added and an unemployment rate of 3.5%, a decrease of 1.3 percentage points compared to one year ago. Year to date the Federal Reserve has increased the interest rate five times. The Federal Reserve has announced they will continue to aggressively institute rate increases until inflation declines and are confident that balance among the economy is being restored. Wall Street closed out the month of September down 9.3%, the worst month since March of 2020. Interest rate hikes have taken a toll on the housing market as home prices have decreased at an accelerated rate, long-term mortgage rates increased for 6 straight weeks by the end of September, and a 30-year rate was recorded at 6.7%, the highest in 15 years. Consumers, employers and the overall market remain aware and cautious heading into the fourth quarter as anticipation builds as the year is ready to close out.


Third quarter 2022 closed with a direct vacancy rate of 3.53%, an overall vacancy rate of 3.95%, and an average asking direct rental rate reported at $6.98 psf. In June, the Michigan unemployment rate was recorded at 4.1%, a decrease of 0.5 percentage points compared to this time last year. In August, U.S. job openings declined to 10.1 million, the lowest since June 2021, while adding 528,000 jobs, more than double economist’s original estimates of 258,000 jobs. In September, the hiring pace slightly declined due to higher rates and slower company growth with 263,000 jobs added and an unemployment rate of 3.5%, a decrease of 1.3 percentage points compared to one year ago. Year to date the Federal Reserve has increased the interest rate five times. The Federal Reserve has announced they will continue to aggressively institute rate increases until inflation declines and are confident that balance among the economy is being restored. Wall Street closed out the month of September down 9.3%, the worst month since March of 2020. Interest rate hikes have taken a toll on the housing market as home prices have decreased at an accelerated rate, long-term mortgage rates increased for 6 straight weeks by the end of September, and a 30-year rate was recorded at 6.7%, the highest in 15 years. Consumers, employers and the overall market remain aware and cautious heading into the fourth quarter as anticipation builds as the year is ready to close out.


First quarter 2022 closed with a direct vacancy rate of 3.9%, an overall vacancy rate of 4.26%, and an average asking direct rental rate reported at $7.79 psf. In March, the Michigan unemployment rate was recorded at 4.4%, a decrease of 0.7 percentage points compared to this time last year. As the U.S. job market nears full recovery, 431,000 jobs were added in March, the number of Americans applying for unemployment benefits reached a 52-year low, and the U.S. unemployment rate was recorded at 3.6%, a decrease of 2.4 percentage points compared to one year ago, the lowest rate since the beginning of the pandemic two years ago. However, U.S. inflation has surged to an increase of 7.9% over the past year currently standing at a 40-year high, long-term mortgage rates have risen to the highest they have been since 2019, while producer prices have increased 11.2% compared to one year ago due to higher energy costs leaving consumers around the country to feel the impacts, and U.S. confidence readings fell to the lowest level since 2011. The Federal Reserve announced plans to combat further inflation with increases to the interest rate, which has remained at zero since the beginning of the pandemic. In March, a 0.4% rate increase was issued with an advisory of six additional rate increases throughout 2022 totaling 1.9% and potentially 2.8% by the end of 2023 based on their median forecast, impacting higher loans for consumers and businesses.


First quarter 2022 closed with a direct vacancy rate of 20.59%, an overall vacancy rate of 22.00%, and an average asking direct rental rate reported at $19.39 psf. In March, the Michigan unemployment rate was recorded at 4.4%, a decrease of 0.7 percentage points compared to this time last year. As the U.S. job market nears full recovery, 431,000 jobs were added in March, the number of Americans applying for unemployment benefits reached a 52-year low, and the U.S. unemployment rate was recorded at 3.6%, a decrease of 2.4 percentage points compared to one year ago, the lowest rate since the beginning of the pandemic two years ago. However, U.S. inflation has surged to an increase of 7.9% over the past year currently standing at a 40-year high, long-term mortgage rates have risen to the highest they have been since 2019, while producer prices have increased 11.2% compared to one year ago due to higher energy costs leaving consumers around the country to feel the impacts, and U.S. confidence readings fell to the lowest level since 2011. The Federal Reserve announced plans to combat further inflation with increases to the interest rate, which has remained at zero since the beginning of the pandemic. In March, a 0.4% rate increase was issued with an advisory of six additional rate increases throughout 2022 totaling 1.9% and potentially 2.8% by the end of 2023 based on their median forecast, impacting higher loans for consumers and businesses.


Bringing more business activity back to Portland’s urban core will be essential for maintaining the city’s rising apartment profile. With most COVID-19 era restrictions lifted in March, dining, shopping and experiential offerings should draw more residents back to the central part of the city.


On March 12th, 2022, Oregon lifted its statewide mask mandate, marking an end to almost all of the State’s COVID-19 era business restrictions. As a result, retail demand in Portland is finally stabilizing and is positioning itself for a rebound in 2022. Barring any major setbacks from emerging variants, Portland might be heading back to a sense of normalcy in 2022.


The negative impacts of the COVID-19 pandemic continued to be felt deeply in the Portland metro office market. Demand for office space has continued to drop as a large segment of the workforce has shifted to a remote work model. Despite the drop in demand, year-over-year rent growth has returned with gains of 2.6%, while the national office rent gains are around 0.9%.


The rise in popularity of e-commerce and delivery services has greatly bolstered Portland’s industrial market during the COVID era. As a result, distribution and last-mile facilities will remain highly desired in the near- to mid-term. In order to combat supply chain issues that are impacting global markets, companies may look to shore up their domestic shipping assets. Several recent leases over 100,000 SF may be indicative of this trend.


Second quarter 2021 closed with a direct vacancy rate of 5.11%, an overall vacancy rate of 5.55%, and an average asking direct rental rate reported at $7.09 psf. In June, the Michigan unemployment rate was recorded at 5.0%, a decrease of 16.2 percentage points compared to this time last year, while the U.S. unemployment rate was recorded at 5.9%, a decrease of 5.2 percentage points from one year ago. U.S. job openings surged to a record high as available positions escalated to 9.21M in May compared to April’s 9.19M. As the economy begins to rebound, social activity begins to grow, and more individuals become vaccinated U.S. employers are in high demand to fill a growing number of positions yet continue to face challenges. Many employers have begun offering incentives and increased wages to attract new employees and retain existing ones. Despite the 5% increase in the consumer price index over the past year, the largest increase since 2008, additional indicators and resources are pointing to an improving economy. Indicators include available job openings, an increase in travel, a spike in U.S. home construction that increased from 3.6% in May to 6.3% in June, and a growth in the manufacturing sector despite issues with the supply chain.


Second quarter 2021 closed with a direct vacancy rate of 19.90%, an overall vacancy rate of 21.46%, and an average asking direct rental rate reported at $18.52 psf. In June, the Michigan unemployment rate was recorded at 5.0%, a decrease of 16.2 percentage points compared to this time last year, while the U.S. unemployment rate was recorded at 5.9%, a decrease of 5.2 percentage points from one year ago. U.S. job openings surged to a record high as available positions escalated to 9.21M in May compared to April’s 9.19M. As the economy begins to rebound, social activity begins to grow, and more individuals become vaccinated U.S. employers are in high demand to fill a growing number of positions yet continue to face challenges. Many employers have begun offering incentives and increased wages to attract new employees and retain existing ones. Despite the 5% increase in the consumer price index over the past year, the largest increase since 2008, additional indicators and resources are pointing to an improving economy. Indicators include available job openings, an increase in travel, a spike in U.S. home construction that increased from 3.6% in May to 6.3% in June, and a growth in the manufacturing sector despite issues with the supply chain.


Portland’s industrial market was better positioned than other markets to navigate the COVID-19 pandemic. This is thanks to the growth of e-commerce and delivery services in the wake of the pandemic. While vacancy and rent growth have softened by mid-year 2021, they are still at healthy levels.


The COVID-19 pandemic interrupted several years of sustained growth in the Portland market. Demand for office space in the Portland metro area remains low, as businesses continue to evaluate their space needs in the post-pandemic era. The central business district (CBD) was hit hardest by the pandemic. Many smaller businesses have sought to move out of downtown into areas such as Beaverton and Gresham, however, several major office leases have still been signed in the CBD in 2021.Portland’s office investment market has also remained slow through 2021 as a result of the pandemic. Annual sales volume exceeded $1 billion between 2015 and 2019, but that came to an end in 2020.


The COVID-19 pandemic brought immense challenges to the retail sector, which had already been struggling for years due to the growth of e-commerce. 16 months of intermittent lock downs and social distancing caused many retailers and restaurants to close. With the state officially reopened as of June 30th, Portland’s retail market could bounce back in response.


First quarter 2021 closed with a direct vacancy rate of 19.46%, an overall vacancy rate of 20.76%, and an average asking direct rental rate reported at $18.51 psf. In March, the Michigan unemployment rate was recorded at 5.1%, a decrease for the third straight month, yet still at an elevated rate compared to one year ago when recorded at 3.5%. While the U.S. unemployment rate was recorded at 6.0% in March, it continues to steadily decrease as the number of jobless claims dip as many job sectors continue to reopen. Optimism continues to grow as U.S. employers are expected to continue to add jobs as many states move towards easing business restrictions, creating confidence in paving a path toward strengthening the economic recovery in the coming months. Many other factors signal a strengthening economy including consumer spending, investing, and housing demand. Consumer spending increased at the fastest pace in 9-months and was recorded at 4.2% in March, while home prices in the U.S. increased by 11.9% in February, the fastest pace in close to 7- years as demand for housing continues to escalate. The Federal Reserve also announced they expect to keep the interest rate near zero with no rate hikes through 2023.


First quarter 2021 closed with a direct vacancy rate of 5.18%, an overall vacancy rate of 5.60%, and an average asking direct rental rate reported at $7.02 psf. In March, the Michigan unemployment rate was recorded at 5.1%, a decrease for the third straight month, yet still at an elevated rate compared to one year ago when recorded at 3.5%. While the U.S. unemployment rate was recorded at 6.0% in March, it continues to steadily decrease as the number of jobless claims dip as many job sectors continue to reopen. Optimism continues to grow as U.S. employers are expected to continue to add jobs as many states move towards easing business restrictions, creating confidence in paving a path toward strengthening the economic recovery in the coming months. Many other factors signal a strengthening economy including consumer spending, investing, and housing demand. Consumer spending increased at the fastest pace in nine months and was recorded at 4.2% in March, while U.S. home prices increased by 11.9% in February, the fastest pace in close to seven years as demand for housing continues to escalate. The Federal Reserve also announced they expect to keep the interest rate near zero with no rate hikes though 2023.


The tri-county area commercial market began the year trending positive with strong market fundamentals for all property types. Looking back at the quarter, and similarly to 2019 and 2020, the largest commercial sales in the market involved multi-family properties.


"The good news about 2020 is that the pandemic’s effect on the multifamily market doesn’t appear to be sustained, rather, more of a temporary pause."


2020 was a year for the ages. Election years are always uncertain, but this was the most contentious in recent history. Add to this a once in a century style global pandemic, a stock market crash, a recession, record job losses, civil unrest, and negative oil prices. It was a year that will be recalled for many decades to come. 2021 is welcomed with renewed optimism, some sense of clarity and stability, as well a light at the end of the Covid-19 pandemic in the form of a vaccine. In spite of all of the distractions, Texas continued to plod along, albeit at a slower pace than the previous year.


2020 was a year for the ages. Election years are always uncertain, but this was the most contentious in recent history. Add to this a once in a century style global pandemic, a stock market crash, a recession, record job losses, civil unrest, and negative oil prices. It was a year that will be recalled for many decades to come. 2021 is welcomed with renewed optimism, some sense of clarity and stability, as well a light at the end of the Covid-19 pandemic in the form of a vaccine. In spite of all of the distractions, Texas continued to plod along, albeit at a slower pace than the previous year.


The tri-county area commercial market posted strong market fundamentals during the fourth quarter of 2020 for all property types. Looking back at the year and similar to 2018 and 2019, the largest commercial sales in the market involved multifamily properties. Although office tenants are evaluating what their mid- to long-term office footprint will look like in the future, overall office rents increased throughout the year. With the growth of consumer online shopping, industrial/flex tenants are continuing to increase their warehouse/distribution space. The retail market will continue to be supported by residential development. As we move into 2021, the continued expansion of the area driven by the steady population growth will see an influx of commercial real estate activity. Read on for more of the latest in the region’s commercial real estate market.


VACANCY IN CALGARY’S DOWNTOWN REMAINED RELATIVELY STEADY AT MID-YEAR 2017, RISING BY 0.4% TO 24.6%.


Vacancy dropped to 3% following four consecutive quarters in the mid-3% range. This marks a return to Q1 2016 levels.


Investors continued to demonstrate confidence in the Calgary market through the first quarter of 2017.


At the end of the first trimester of 2017, the industrial market of the Metropolitan Area of Mexico City recorded an inventory of 8.8M Sq.M of industrial ships class A, mainly in the submarkets of Cuautitlan (32%) and Toluca (20%).


The first trimester of the year closed with a total office inventory of 5.8 million Sq.M in class A+ and A offices. This means an increase of 339 thousand Sq.M.


Interesting things happened in the Downtown market over the first three months of the year; notably in leasing trends at the smallest end of available options.


A pleasant surprise! While expectations were that CRE investment in the Edmonton market would decline, we have seen strong overall demand and spending, particularly on Retail properties over the course of 2016, shifting from ICI Land the previous year. The remaining asset classes largely remained stable and generally exceeded analysts’ expectations.


The entrance of institutional investors in the Calgary market, during a down period, demonstrates a renewed confidence in the future of the city. Adding additional appeal is the advanced process of industry diversification. The results of 2016 are of no surprise to prudent investors and to us Calgarians.


THE BELTLINE MARKET WITNESSED NET POSITIVE ABSORPTION DURING THE FOURTH QUARTER OF 2016, TOTALLING 135,000 SQUARE FEET (SF).


THE OVERALL VACANCY RATE IN SUBURBAN CALGARY WAS ESSENTIALLY FLAT DURING THE FOURTH QUARTER, RISING A FRACTION OF A PERCENT TO 22.6% FROM 22.3% IN Q3 2016.


Over the course of 2016, 2.5 million square feet (msf) of office space was returned to the market, causing the vacancy rate in downtown Calgary to increase by 6.2% year-over-year from Q4 2015. Downtown vacancy sat at 23.5%, representing 9.8 msf of space available for lease within a 41.6 msf inventory. Despite renewed activity among A Class and B Class headlease spaces, the overall trend of negative absorption continued, though as a slowed pace when compared to 2015 and early 2016. It should be noted that 3.9 msf were vacated during the previous year.


The ongoing economic downturn continued to exert pressure on Landlords and Tenants, leading to several store and restaurant closures. Therein, however, lay opportunity for others to take advantage of decreasing market rental rates, which led to the opening of multiple new franchise locations.


Investor sentiment regarding the Calgary market showed signs of renewed confidence as 2016 progressed.


Calgary’s industrial vacancy rate has slid again slightly to 7.80% as of the end of the third quarter 2016. Vacancy has steadily increased through 2015 and 2016, from 4.30% at the end of 2014. This marks the highest recorded vacancy rate for Calgary’s industrial market in the past 15+ years.


Welcome to Bilfinger GVA’s central London office analysis; our detailed view of the market in Q3 2016.


The third trimester of 2016 closed with a total office inventory of 5.7 million sq. m in offices of class A and A+. This means an increase of 563 thousand Sq. M in comparison with last year’s third trimester.


At the end of the third quarter of 2016, the industrial market Class A of Mexico City recorded an inventory of 8.3M Sq.M. with the Cuautitlan submarket covering a larger share of that inventory (33%) followed by Toluca (20%).


Since mid-year 2016, Beltline vacancy has increased by 1.4%% to end Q3 at 19.7%. Given that negative absorption occurred among headleases versus subleases at a ratio of 2:1, the distribution between headlease and sublease space was adjusted to 74% and 26%, respectively. This quarter witnessed net absorption of negative 102,878 sf.


Overall vacancy increased by 1.1% during the third quarter to 22.3%. The distribution of vacancies by suburban building class changed slightly as a result of 106,000 sf of B Class vacancies, plus approximately 158,000 sf of unleased A Class space among several new Suburban developments. An additional 159,000 of sublease space was also placed on the market.


Over the third quarter of 2016, the vacancy rate in Calgary’s Downtown market exceeded 22.%. This represents a record high, comprising 9.2 million square feet of space available for lease within a 41.6 million square foot (msf) inventory. Despite some activity among A Class and C Class sublease spaces, the overall trend of negative absorption continued at roughly the same pace as we’ve seen since the beginning of 2015.


The past twelve months have seen a rise in multi-tenant industrial vacancy from 17.63% in 2017 to 20.13% in 2018.


The second quarter saw a slight increase in vacancy from 6.3% in Q1, to 6.4% in Q2, indicating that the market continues to move forward at a healthy pace.


Bradford Allen is pleased to share with you our 2018 first quarter office market report.This quarter in the downtown market:• Office market activity in River West is officially tracked as the most recent submarket to join the CBD. • Net absorption was positive 720,640 sf. • The direct vacancy rate dropped to 11.85% from 12.1%, and the average gross asking rent decreased to $39.38psf from $40.69psf, both compared to the previous quarter.


Vacancy for Q1/2018 remains at 6.3% and rates were largely unchanged for industrial, with a slight increase from $5.88 SF in Q4/2017 up to $5.92 SF at the end of the first quarter. Demand continues to outweigh supply and the majority of submarkets continue to experience low vacancy rates.


Retail Market Forecasts Continued Growth


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.


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.


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


The 3 Cs – Confidence, Caution and Concessions – Drive the CBD


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.