Market Reports

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.



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.


CALGARY’S SUBURBAN MARKETS EXPERIENCED AN INTERESTING SECOND QUARTER AS SEVERAL NEW OFFICE DEVELOPMENTS WERE DELIVERED.


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.


Investors continued to demonstrate interest and confidence in the Edmonton 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.


The first quarter of 2016 closed with a total office inventory in Mexico City was 5.4 M SM (58M SFT) of Class A+ & A spaces what constitutes the largest in Latin America.


Welcome to Bilfinger GVA’s central London office analysis; our detailed review of the market in Q1 2016. Activity during the first quarter of the year has been relatively strong, with take-up well above the five-year quarterly average. Nevertheless, demand seems to have been dampened slightly with some occupiers looking to ‘wait and see’ for the time being.


Fall 2015 Montreal Market Report (Terramont)

There’s never been a better time in the last 10 years to be a Montreal tenant. With new space coming on the market and large tenants such as Deloitte and Rio Tinto Alcan moving into new premises, now is the time to either trade up to better space or get equivalent to your current space for less.


AS WAS LARGELY EXPECTED, THE EFFECTS OF LOW PRICED OIL, COMBINED WITH A DRAMATICALLY CHANGED POLITICAL LANDSCAPE IN ALBERTA, affected investor sentiment and caused the investment market in Calgary to quiet significantly in 2015. In comparison to 2014 when $2.66 billion transacted across the Office, Retail, Industrial, Multi-Residential and ICI/Residential Land asset classes, approximately $1.5 billion was invested during 2015.


The Greater Calgary industrial market saw dramatic changes in 2015, with vacancy rising 53% year-over-year from 4.30% at the end of 2014 to 6.57% at the end of 2015. This marks a +15 year peak for Calgary’s industrial vacancy rate, which was previously set in Q4 2009 at 6.38%. Vacant space at the beginning of 2015 was 5,705,105 square feet, which rose to 9,079,126 square feet by the end of the year, an increase of almost 3.4 million square feet.


CALGARY’S RETAIL MARKET REMAINED RESILIENT DURING 2015, despite the drop in discretionary spending due to deteriorating economic conditions. The major impact on vacancy stemmed largely from successive retail chain store closures with Big Box space, which had been essentially zero for years, suddenly coming to market as Target Canada exited after two years of sustained losses and Best Buy began a rebranding campaign that included closing down its sister brand Future Shop. The country-wide closures included three in Calgary. By mid-year, Canadian Tire and Lowes had taken advantage of Target’s departure, purchasing all but one Target lease in Calgary but with four Big Box stores (the former Target store in Forest Lawn plus the former Futures Shop stores in Coventry Hills, Deerfoot Meadows and Sunridge) sitting vacant, Calgary’s overall retail vacancy increased year-over-year to 2.7% from 2.3% at the close of 2014.


AFTER A QUARTER-PERCENT DECREASE IN VACANCY DURING THE THIRD QUARTER, THE BELTLINE EXPERIENCED A 2.5% INCREASE IN VACANCY TO CLOSE THE YEAR. Negative absorption of 174,834 sf has driven the vacancy rate up to 17.33%.


THE FOURTH QUARTER OF 2015 REPRESENTED A CONTINUATION OF UNCERTAIN, ARGUABLY NEGATIVE, MARKET SENTIMENT IN CALGARY. The downward trend in oil prices that began in late 2014 continued – albeit at a progressively slower pace - through 2015 and negatively affected office leasing activity. The impact has been particularly dramatic in the Downtown market as it continues to represent the epicentre of energy industry headquarters.


THE OVERALL VACANCY RATE IN SUBURBAN CALGARY CONTINUED TO INCREASE OVER THE FOURTH QUARTER, RISING FROM 16.21% IN Q3 TO 18.33% IN Q4. This change is reflective of 152,609 sf of negative absorption in addition to the completion of several suburban office projects which each contain significant amounts of vacant space. The timing of new office project deliveries has been a key element of the Suburban office story. In total, more than 800,000 sf of new product was introduced over the course of 2015.


Welcome to Bilfinger GVA’s central London office analysis; a detailed account of our view of the market in Q4 2015.


Welcome to Bilfinger GVA’s central London office analysis; a detailed account of our view of the market in Q3 2015.



Despite layoffs and bankruptcies in the oil and gas sector driven by drastically lower crude oil prices, The Oklahoma City multi-tenant industrial market is reporting lower overall vacancy than at this time in 2015.


The retail market is better than it seems like it should be. Given the continued layoffs & bankruptcies in the energy market, declining sales tax revenues, and general economic uncertainties, the expectation would be that the Oklahoma economy and the retail market would be in a recession. But, leasing activity, development and interest in our market remain strong.


The Dallas/Ft. Worth Office market ended the second quarter 2016 with a vacancy rate of 14.3%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 1,760,334 square feet in the second quarter.


The Preston Center Sub-Market has seen a 13.5% increase in the Class A vacancy from 7.4% at the end of second quarter 2015 to 8.4% at the end of the second quarter 2016. Average full-service rental rates of Class A space increased per square foot, from $35.75 to $37.30 during the same timeframe. Class A direct net absorption was a negative 22,979 square feet for the second quarter of 2016.


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. Rental rates for Class A properties have climbed a staggering 8% over the past year, and 15% over the last two years, to$29.57 full service.


At the end of the second quarter of 2016, the flex market averaged a $8.84 psf triple-net rental rate, which is a significant increase from the second quarter average rental rate in 2015 of $8.16 psf triple-net. The vacancy rate for the second quarter of 2016 sits at 7.1%.


The Richardson/Plano Sub-Market has shown an increase in the direct Class A vacancy from 5.9% in the second quarter of 2016 to 21.3% at the beginning of the second quarter of 2016. Meanwhile, direct weighted average full-service rents increased per square foot from $23.20 to $25.96 per square foot during the same time.


The LBJ Corridor Sub-Market has seen an increase in the Direct Class A vacancy from 22.4% at the end of the second quarter of 2015 to 22.8% at the end of the second quarter in 2016. Average full-service rental rates of Class A space increased per square foot, from $23.98 to $26.40 during the same timeframe.


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.