Archives for August 2014

After several false starts, the economy is finally gaining ground, and stronger growth is boosting the outlook for all of the major commercial real estate sectors, according to the National Association of REALTORS®’ quarterly commercial real estate forecast.
“The job market has been the bright spot of the economy this year, as employers are feeling more confident about their growth prospects and adding to their payrolls,” says Lawrence Yun, NAR’s chief economist. “This gradual turnaround from being overly cautious to more optimistic should slightly boost the demand for leasing and purchase activity as well as new-construction projects in the upcoming year. … The economy can handle the inevitable rise in interest rates as long as commercial rents steadily rise to generate investor returns.”
Here’s an overview of the four major commercial real estate sectors from NAR’s latest quarterly Commercial Real Estate outlook.
Office Markets
Vacancy rates for the office market is expected to remain unchanged at 15.7 percent in the third quarter of 2015. Office rents are forecasted to rise 2.6 percent this year and 3.2 percent next year.
Markets with the lowest office vacancy rates (third quarter 2014): Washington, D.C. (9.3%); New York City (9.6%); Little Rock, Ark. (11.5%); San Francisco (12.4%); and New Orleans (12.7%).
Industrial Markets
The industrial vacancy rate is projected to drop from 8.9 percent in the third quarter of this year to 8.5 percent in the third quarter of 2015. Annual rents are expected to rise 2.4 percent this year and 2.8 percent next year.
Markets with lowest industrial vacancy rates: Orange County, Calif. (3.5%); Los Angeles (3.8%); Seattle (5.9%); Miami (6.1%); and Palm Beach, Fla. (6.6%).
Retail Markets
The retail vacancy rate is forecasted to fall from 9.8 percent currently to 9.6 percent in the third quarter of 2015. Retail rents are projected to increase 2 percent this year and another 2.4 percent next year.
Markets with the lowest retail vacancy rates: San Francisco (3.5%); Fairfield County, Conn. (3.9%); San Jose, Calif. (4.6%); Long Island, N.Y. (5.2%); and Orange County, Calif. (5.3%).
Multifamily Markets
The apartment rental market is expected to see vacancy rates decline from 4.1 percent today to 4 percent in the third quarter of 2015. (Vacancy rates below 5 percent are considered a landlord’s market, and the high demand often justifies the higher rents.) Average apartment rents are forecasted to increase 4 percent this year as well as in 2015.
“New construction for multifamily housing has picked up in recent months and looks to be alleviating the short supply,” says Yun. “However, the demand for rental housing continues to show strength. As a result, rent growth will outpace broad consumer inflation in upcoming years.”
Markets with lowest multifamily vacancy rates: Orange County, Calif. (2.2%); Providence, R.I. (2.2%); Sacramento, Calif. (2.2%); New Haven, Conn. (2.5%); and Hartford, Conn. (2.5%).
 
By: (REALTORMag)
Click here to view source article.

Pedestrians cross Marquette near Civic Plaza. A city consultant recommends converting Marquette to a two-way street, which he says would slow traffic and make the street more friendly to pedestrians. (Roberto E. Rosales/Albuquerque Journal)
Copyright © 2014 Albuquerque Journal
Jeff Speck spent hours looking at traffic counts and walking around Downtown Albuquerque this year.
Civic Plaza is way too big, he says, and so are the traffic lanes on some streets – overbuilt for the volume of cars that actually travel on them.
Downtown could do without 19 of its traffic lights, he said, which can be replaced by all-way stop signs. The one-way streets of Marquette and Tijeras, meanwhile, should be converted to allow traffic in both directions.
And the city shouldn’t let the fear of attracting homeless people scare it away from creating “green” space Downtown.
These are just some of the ideas Speck – a Washington, D.C.-based planner and designer – has for making Downtown a more “walkable” and bicycle-friendly environment. He evaluated the city’s core under a $50,000 contract paid for through the discretionary fund set aside for City Councilor Isaac Benton’s district.
Speck, a former director of design at the National Endowment for the Arts, is still compiling his final report, but he delivered a two-hour talk earlier this summer to planners, neighborhood leaders and others. The full report is expected next month.
Downtown could use some “green” space and similar urban amenities, Speck said, despite concerns about attracting homeless people.
“Any nice place you make, homeless people will come, and the way to get around that is just to have them outnumbered by” other people out walking, Speck said. “… The reason homelessness seems like such a problem here is because you have so few non-homeless people walking.”
He also contends that many Downtown streets have a lane or two more than necessary, given their traffic volume. The lanes are often too wide, as well, encouraging higher speeds, he said.

Urban Lofts faces west along Broadway near Downtown Albuquerque. A planning consultant has said the city should use every incentive available to attract housing Downtown. (Albuquerque Journal File Photo)
Narrowing the lanes slightly and getting rid of the excess lanes would create more space for on-street parking and bicycle lanes – some of which can be “buffered,” a design in which parked cars are moved off the curb far enough to leave a path for cyclists. Under that system, parked cars serve as a buffer between the cyclists and moving cars.
Many of these changes can be carried out simply through re-striping, or “for the price of paint,” as Speck puts it. One recommendation he came back to over and over again – reduce the city’s standard 12-foot lanes to 10 feet, leaving more room for on-street parking or bike lanes and paths.
“This extra (lane) width does nothing except to encourage speeding,” he said. “It doesn’t improve the flow.”
Benton, whose district includes Downtown, said he likes that Speck’s recommendations don’t require tearing up curbs and doing expensive re-construction.
“Most of them are fairly simple and low-cost solutions,” Benton said. “… I’d be inclined to try to adopt some of these as a policy, not that we’re going to immediately do all of it this year – but over the long term, we adopt his recommendation as a policy for improving Downtown.”
Michael Riordan, Albuquerque’s director of municipal development, said the city will evaluate Speck’s recommendations carefully after the final report is issued. Some ideas, such as changing one-way streets to two-ways, could be challenging or expensive, he said. Others are easier to follow up on.
“We believe a lot of them have merit,” he said.
Other observations and recommendations from Speck:
Too many curbs are painted to prohibit on-street parallel parking. Pedestrians like having parked cars next to the sidewalk, he said, because they add a natural barrier between them and vehicle traffic.
Tijeras and Marquette can be converted to two-way streets. One-way roads encourage cars to jockey from lane to lane and pick up speed, he said.
“One-way streets feel much less safe to pedestrians because of that sheer momentum of all those cars in one direction,” Speck said.
Vehicle traffic is light enough along one section of Lomas – around the courthouses at Fourth Street – to reduce it from seven to five lanes. Adding on-street parking in the area would help protect people on the sidewalk.
Nineteen traffic signals aren’t warranted. Three- or four-way stop signs would save money, he said.
Civic Plaza is too big. It’s also isolated because the north and south edges are walled off from surrounding buildings. Speck recommends cutting it in half and offering some of the land to developers.
“No one uses it, for good reason,” he said of the current design. “… You might as well have had a subdivision gate around your plaza.”
Use every incentive available to attract housing Downtown. There are only 645 housing units on 313 acres Downtown, he said, a density more fit for “sprawl” subdivisions far from the city core.
“The more people you have living Downtown, the better your tax rolls are going to be,” Speck said. “… You’re just going to be much healthier financially.”
By: Dan McKay (Albuquerque Journal)
Click here to view source article.

Click here to view video related to the article below.
WASHINGTON – The strong rebound in economic growth during the second quarter and ongoing job creation are gradually improving the outlook for all of the major commercial real estate sectors, according to the National Association of Realtors® quarterly commercial real estate forecast.
Lawrence Yun, NAR chief economist, says after many false starts, the economy finally appears to be turning a corner to firmer ground. “The job market has been the bright spot of the economy this year as employers are feeling more confident about their growth prospects and adding to their payrolls,” he said. “This gradual turnaround from being overly cautious to more optimistic should slightly boost the demand for leasing and purchase activity as well as new construction projects in the upcoming year.”
Yun adds, “The economy can handle the inevitable rise in interest rates as long as commercial rents steadily rise to generate investor returns.”
National office vacancy rates are forecast to remain unchanged over the coming year, mostly due to added inventory entering the market. Rising exports and a shrinking trade deficit should lead to a declining vacancy rate for industrial space (0.4 percent), while retail space is forecast to decline 0.2 percent behind favorable gains in personal income and consumer spending.
“New construction for multifamily housing has picked up in recent months and looks to be alleviating the short supply,” said Yun. “However, the demand for rental housing continues to show strength. As a result, rent growth will outpace broad consumer inflation in upcoming years.”
NAR’s latest Commercial Real Estate Outlook1 offers overall projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas were provided by REIS Inc., a source of commercial real estate performance information.
Office Markets
Office vacancy rates are forecast to remain unchanged at 15.7 percent through the third quarter of 2015. Currently, the markets with the lowest office vacancy rates in the third quarter are Washington, D.C., at 9.3 percent; New York City, 9.6 percent; Little Rock, Ark., 11.5 percent; San Francisco, 12.4 percent; and New Orleans, at 12.7 percent. Office rents are projected to increase 2.6 percent in 2014 and 3.2 percent next year. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is likely to total 36.2 million square feet this year and 50.7 million in 2015.
Industrial Markets
Industrial vacancy rates are expected to fall from 8.9 percent in the third quarter to 8.5 percent in the third quarter of 2015. The areas with the lowest industrial vacancy rates currently are Orange County, Calif., with a vacancy rate of 3.5 percent; Los Angeles, 3.8 percent; Seattle, 5.9 percent; Miami, 6.1; and Palm Beach, Fla., at 6.6 percent. Annual industrial rents should rise 2.4 percent this year and 2.8 percent in 2015. Net absorption of industrial space nationally is seen at 107.6 million square feet in 2014 and 104.9 million next year.
Retail Markets
Vacancy rates in the retail market are expected to decline from 9.8 percent currently to 9.6 percent in the third quarter of 2015. Currently, the markets with the lowest retail vacancy rates include San Francisco, at 3.5 percent; Fairfield County, Conn., 3.9 percent; San Jose, Calif., 4.6 percent; Long Island, N.Y., 5.2 percent; and Orange County, Calif., at 5.3 percent. Average retail rents are forecast to rise 2.0 percent in 2014 and 2.4 percent next year. Net absorption of retail space is likely to total 11.2 million square feet this year and 19.3 million in 2015.
Multifamily Markets
The apartment rental market – multifamily housing – should see vacancy rates slightly decline from 4.1 percent currently to 4.0 percent in the third quarter of 2015. Vacancy rates below 5 percent are generally considered a landlord’s market, with demand justifying higher rent. Areas with the lowest multifamily vacancy rates currently are Orange County, Calif., Providence, R.I., and Sacramento, Calif., at 2.2 percent; and two Connecticut cities (New Haven and Hartford) at 2.5 percent. Average apartment rents are projected to rise 4.0 this year and in 2015. Multifamily net absorption is expected to total 223,400 units in 2014 and 171,000 next year.
The Commercial Real Estate Outlook is published by the NAR Research Division. NAR’s Commercial Division, formed in 1990, provides targeted products and services to meet the needs of the commercial market and constituency within NAR. The NAR commercial community includes commercial members; commercial real estate boards; commercial committees, subcommittees and forums; and the NAR commercial affiliate organizations – CCIM Institute, Institute of Real Estate Management, Realtors® Land Institute, Society of Industrial and Office Realtors®, and Counselors of Real Estate.
Approximately 70,000 NAR and institute affiliate members specialize in commercial brokerage and related services, and an additional 283,000 members offer commercial real estate services as a secondary business.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
By: Adam DeSanctis (National Association of REALTORS®)
Click here to view source article.