The last 12 months have been marked by dramatic changes. As of this writing, these events have not seriously affected the Oklahoma City multi-tenant industrial market. Overall, multi-tenant industrial properties have continued the declining vacancy trend seen over the past two years. The bulkwarehouse sector is the exception this year.
During the first half of 2020 the market vacancy rate rose from 20.9% to 23.5% in the first half of 2020. The rise in vacancies has been market-wide with the Central Business District vacancy rate rising from 21.8% to 23.6% and the suburban submarkets rising from 20.8% to 23.4% vacant. Market-wide rental rates showed a slight dip from $19.53 per square foot to $19.45 per square foot. The market experienced negative absorption of nearly 536,000 square feet which was market-wide in nature rather than limited to one or two submarkets. The CBD experienced negative absorption of 146,000 SF and the suburban submarkets totaled nearly 390,000 SF of negative absorption.
The effects of the coronavirus outbreak on the tri-county area commercial market remain unclear. Although data from the second quarter is providing greater clarity about local conditions and the short-term real estate outlook, there remains uncertainty surrounding market dynamics and long-term effects.
The effects of the coronavirus outbreak on the tri-county area commercial market remain unclear. Prior to the coronavirus outbreak, the tri-county area had strong economic momentum, and the current report largely reflects the environment before the pandemic. It is too early to provide a quantitative assessment or forecast of the ultimate market impact of COVID-19. As with previous reports, our analysis focuses on the market activity reflected in current quarterly statistics. The overnight halt to the tourism industry will likely have repercussions for the local economy. In a year of evident political and economic uncertainty, we expect to see additional tempering in metrics — including asking rent growth and construction starts — as companies look for additional signals of where their businesses are headed this year.
Three quarters of the way through the year, 2019 has been better than expected. DFW growth has continued to increase. DFW still struggles to find labor, and that is the biggest strain on the economy at the present time. There is a true war for talent, and we continue to monitor this closely. Trade tariffs and slowed oil & gas activity continue to be a concern; however, there is enormous interest from coastal markets on the relocation & investment fronts from (New York, Boston, Los Angeles, San Francisco). The economy continues to grow, and we feel the fundamentals for Dallas-Fort Worth are positive and the 4th quarter of 2019 will be exceptional.
Three quarters of the way through the year, 2019 has been better than expected. DFW growth has continued to increase. DFW still struggles to find labor, and that is the biggest strain on the economy at the present time. There is a true war for talent, and we continue to monitor this closely. Trade tariffs and slowed oil & gas activity continue to be a concern; however, there is enormous interest from coastal markets on the relocation front and the investment from (New York, Boston, Los Angeles, San Francisco), the economy continues to grow, and we feel the fundamentals for Dallas-Fort Worth continue to be positive and the 4th quarter of 2019 is expected to be exceptional.
The Denver retail market has been a cyclical winner. Trade area demographics are supporting retail sales, with the metro's superior growth in population, employment, and income increasing buying power.
The Denver office market is in the midst of a moderate rebound. Rent growth slowed sharply throughout 2015 and 2016 as the market felt the full brunt of the collapse in oil prices, and rents at 4 & 5 Star properties briefly turned negative.
Several indicators emerged or firmed over the past year that point to rebounding demand in Denver's apartment market.
A confluence of events has led Denver to become one of the hottest industrial markets in the country. Robust demand in this regional market with a strong local economy is stemming from the growth of retail sales, employment, and industrial production in the metro area and the greater Colorado region.
The first half of 2019 showed little change in the Oklahoma City office market, but what change occurred was fairly positive. Vacancies fell from 20.1% to 19.3% and absorption of space totaled 128,000 square feet.
Oklahoma City real estate is known for its relative stability and slow but steady growth. We typically don’t see the cyclical volatility nor the overexuberance of other markets. The numbers for the first half of the year reflect this even as retail nationally and locally is undergoing transformational change.
Current multi-tenant industrial vacancy for the Oklahoma City metro area now stands at 16.96%, down from 20.31% in mid-year 2018. These swings seem to be the new normal – multi-year strong absorption and rent growth periods followed by multi-year double-digit vacancy and relative quiescence (a kinder term to use around your developer friends than “stagnation”), culminating in eight to ten-year cycles overall.
The second quarter of 2019 continues to show that the market favors the landlord. Vacancy rates held steady in Q2, while asking rents rose from $7.09 in the first quarter, to $7.17 in Q2.
The industrial vacancy rate for the first quarter of 2019 has shown a minimal increase to 5.50%, up 0.02% from Q4 2018, which was 5.48%.
“As we review and analyze 2018 Investments Sales activity and results in Calgary, one quote comes to mind: “Your big opportunity may be right where you are now.” by Napoleon Hill. Though 2018 results are better than 2017 and 2016 investment sales numbers, we still have a long way to go. The arrow, however, is pointing in the right direction.”
“Investors came back to Edmonton’s commercial real estate (CRE) investment market and liked what they saw in 2018. Total dollar volume invested exceeded $2.65 billion, driven by renewed interest in ICI Land, plus strong demand for Multi-Residential properties.”
Overall market occupancy equaled 92 percent at year-end 2018, unchanged from a year ago. This confirms that there has been little overall movement in the aggregate market but belies all the activity behind the numbers. The underlying fact is that retail continues to grow, both nationally and locally. We added 650,000 square feet of space in centers over 25,000 square feet this past year, maintained occupancy, and, for the most part, rents. Much of the pain of the last few years is over – store closings have declined, downsizing is still taking place but at a reasonable rate, and retail layoffs have leveled off.
“Investors are back and active in Edmonton’s commercial real estate (CRE) investment market in a meaningful way. Led by a resurgence of interest in ICI Land and an uptick in demand for Multi-Residential properties and Industrial assets, total dollar volume invested rose by 8% year-over-year.” -- Doug Grinde, Vice President, Barclay Street Real Estate
“Investors are back in Calgary’s commercial real estate (CRE) investment market and their wallets are open. Fuelled by a continued desire for retail assets and renewed interest in ICI and Residential Land, total dollar volume invested rose by 23% year-over- year.” -- George Larson, Vice President, Investment Sales, Barclay Street Real Estate
Year-to-date commercial real estate (CRE) investment in the Edmonton market proved resilient against the backdrop of a second recessionary year.
Since Q1 2016, Beltline vacancy has increased by approximately 0.7% to end Q2 at 18.3%. Given that sublease absorption for the quarter totaled positive 30,000 sf the current distribution between headlease and sublease space was adjusted to 75% and 25%, respectively. This quarter witnessed net absorption of negative 51,000 sf.
Vacancy in Calgary’s industrial real estate market has hit an all-time high of 7.49% at the end of the second quarter 2016. A combination of construction completion, major occupant shuffling, and a negatively impacted oil and gas manufacturing and service sector have all combined to continue vacancy’s slide upward from 4.30% at the end of 2014.
Historically speaking, office condo units have traditionally been developed in small quantities in suburban markets and geared towards professional and medical service industries. The office condo concept has created an opportunity for occupiers to own their office space with the advantages of having fixed and clear costs, full control over the design within the premises and, significantly, tax benefits not available leasing tenants.
Over the second quarter of 2016, the vacancy rate in Calgary’s Downtown market reached 21.2%. This represents a record high, comprising 8.8 million square feet of space available for lease within a 41 million square foot (msf) inventory.
THE OVERALL VACANCY RATE IN SUBURBAN CALGARY INCREASED DURING THE SECOND QUARTER TO 21.2%.
At the mid-point of 2016, Calgary’s overall retail market showed initial signs of strain against the pressures exerted by the economic downturn. Retail vacancy sat at 3.4%; slightly above the previous high water mark of 3.1% which was set in the third quarter of 2008. To place these statistics in perspective, Calgary’s retail inventory at that time was approximately 25 million square feet (msf); 63% of current volume.
A Canadian Retail Market White Paper by Barclay Street Real Estate & Primecorp Commercial Realty- National Outlook - Retail Trends in Calgary - Retail Trends in the National Capital Region
As can be 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 Edmonton to quiet significantly in 2015.
The overall vacancy rate in Suburban Calgary was essentially flat during the first quarter, rising a fraction of a percent to 18.47% from 18.33% in Q4 2015.
As the first quarter of 2016 unfolded, uncertain energy market conditions and a soft economic environment continued to effect office leasing decisions in Calgary’s downtown market.
The industrial market of Mexico City Metropolitan Area at the end of the first quarter of 2016 has 8.2M SM (88.2M SFT) in Class A industrial buildings, mainly concentrated in the Submarkets of Cuautitlan (33%) and Toluca (20%).
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.
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.
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: 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 first quarter of 2017 saw vacancy move up from 14.2% in the 4th quarter 2016, to 14.3%. Rental rates increased from $24.13 in the 4th quarter to $24.52 this quarter when considering all classes of properties.
18% VACANCY RATE REACHES A THREE-YEAR HIGH
Deliveries Outweigh Net Absorption for 4th Straight Year
TCN Worldwide's State of the Market: Central Edition, 1st 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
This quarter in the downtown market: Absorption for the quarter reached 315,000 square feet; Rental rates dropped a nominal $0.19 to $36.44; 150 North Riverside officially opened and welcomed Polsinelli, Studley and Linden Capital as tenants; In the largest deal of the quarter, Context Media signed a lease for 400,000 square feet at 515 North State Street.
The Upper Tollway Sub-Market has consistently been one of the two main hubs of office real estate activity in Dallas. With relocations of large corporate campuses, such as Toyota, FedEx, 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.”
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.
This 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 a gradual change making it a more mature and technology focused area.
TCN Worldwide's State of the Market: Central Edition, 4th Quarter 2016 Prepared by Hugh F. Kelly, PhD, CRE, Consulting Economist to TCN Worldwide In this edition: –National and Macroeconomic Overview –Regional Conditions in the Central States –Commercial Property Investment Trends
Net absorption for the year was at negative 1.9 million square feet. • Vacancy grew to 19.2%. • These dropping statistics were aided by Zurich moving into its new build to suit as well as Jim Beam and ConAgra moving from the suburbs downtown.