The effects of the coronavirus on the tri-county area commercial market remain unclear. Although data from the third 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. Office Tenants are evaluating what their mid- to long-term office footprint looks like in a post-COVID world. With the growth of consumer online shopping, Industrial/ Flex Tenants are increasing warehouse/distribution space. The retail market will continue to be supported by residential development in our tri-county area.
According to the U.S. Census Bureau, retail sales during May 2020 were up 17.7% seasonally adjusted from the prior month but down 6.1% year-over-year. That follows a record-setting 14.7% drop in April 2020 (month-over-month).
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 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.
The Upper Tollway Sub-Market has seen a spike in Class A vacancy from 18.1% in Q3 of 2015, to 22.3% in Q3 of 2016. Although full-service rents continue to climb, prices have slowly began to mellow out as rates increased from $33.53 PSF to $34.57 PSF during the same time frame. The most alarming of the Q3 statistics is the fact that Class A total net absorption for Q3 2016 was -77,093 SF, with over 200,000 SF of new sublet space arriving to market just this quarter.
The Richardson/Plano Sub-Market has shown an decrease in the direct Class A vacancy from 15.5% in the third quarter of 2016 to 12.3% at the beginning of the third quarter of 2016. Meanwhile, direct weighted average full-service rents increased from $24.16 to $26.12 per square foot during the same time. Class A net absorption in the past twelve months sits at 1,109,572 square feet. Class B vacancy remained relatively stable and sits at 20.9% with full-service rental rates jumping from $19.08 per square foot to $22.48 per square foot.
The Preston Center Sub-Market has seen an increase in the Class A vacancy from 6.6% at the end of third quarter 2015 to 6.8% at the end of the second quarter 2016. Average full-service rental rates of Class A space increased per square foot, from $37.40 to $37.67 during the same timeframe. Class A direct net absorption was at 51,053 square feet for the third quarter of 2016.
The North Central Expressway Sub-Market has seen a remarkable decrease in the Direct Class A vacancy from 17.3% at the end of third quarter 2015 to 12.4% at the end of the third quarter 2016. Average full-service rental rates of Class A space increased per square foot, from $27.67 to $29.30 during the same timeframe. Class A direct net absorption is currently at 37,268 square feet quarter to date. Meanwhile, Direct Class B vacancy has decreased by .6% since the third quarter of 2015 from 8.7% to 8.1% with full-service rental rates increasing from $23.12 per square foot to $24.81 per square foot. Direct net absorption in Class B space is negative at 9,444 square feet for this quarter.
Class A properties along the Dallas North Tollway remain full, hovering around a record-low 12% vacancy rate. We did however see a correction in Class A property rental rates, that decreased $.33 cents per square foot to settle at $29.02 at the end of the third quarter. We do not anticipate much, if any rental rate increases in the coming months. We are of the opinion that the rental rates for Class A product have topped out, and will likely decrease as companies like Fannie Mae and JP Morgan prepare to relocate to Plano.