2012 Global Market report - NAI Global
2012 Global Market report - NAI Global
2012 Global Market report - NAI Global
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<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> <strong>report</strong><br />
Values, trends & opportunities in 200+ property markets worldwide.<br />
Investment Office Industrial Retail Land<br />
Horizon<br />
Commercial Real Estate Services, Worldwide.
® tel +1 609 945 4000<br />
fax +1 609 945 4001<br />
www.naiglobal.com<br />
4 Independence Way<br />
Suite 400<br />
Princeton NJ 08540<br />
January <strong>2012</strong><br />
Jeffrey M. Finn<br />
President &<br />
Chief Executive Officer<br />
Dear Real Estate Executive:<br />
2011 was a year of transition for commercial real estate markets. While the year started off on a positive note with broad<br />
based market improvements, by mIdyear choppy waters once again emerged and yet by year-end markets are slowly but<br />
steadily improving. While the level of optimism varies from market to market, and economies in some parts of the world still<br />
face significant challenges, commercial real estate market fundamentals are generally improving. While substantial uncertainty<br />
remains in Europe, the dearth of new development combined with even slow economic growth will result in tight real estate<br />
markets over the next 2-3 years.<br />
Corporations once again are moving forward on plans, releasing pent-up demand and in most cases taking advantage of a<br />
tenants’ market worldwide to reduce their overall occupancy costs. The massive wave of foreclosures expected over two<br />
years ago are finally beginning to materialize. “Wholesale” buyers are scooping up large portfolios of loans and REO with<br />
product coming to the “retail” market in a controlled manner. Investors are beginning to chase yield as they move beyond<br />
core trophy assets to the quality opportunistic plays in strong secondary markets. There continues to be a tremendous<br />
amount of capital amassed on the sidelines with a <strong>report</strong>ed shortage of quality assets offered for sale. We expect more assets<br />
to transact as pricing continues to hold steady.<br />
<strong>NAI</strong> <strong>Global</strong> is pleased to present its <strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report. Now in its 26th year, the <strong>Global</strong> <strong>Market</strong> Report provides<br />
comprehensive market data and overviews on over 200 property markets around the world. This year’s edition is our most<br />
comprehensive <strong>report</strong> ever, with coverage of all primary markets and most secondary and tertiary markets worldwide. Using<br />
both narrative market <strong>report</strong>s and statistical charts, we provide you with market highlights, trends, demographic and business<br />
profiles, rental rates, vacancy rates and land prices. The <strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report puts a wealth of market intelligence<br />
at your fingertips in a succinct and consistent market profile format.<br />
Dr. Peter Linneman, <strong>NAI</strong> <strong>Global</strong>’s Chief Economist and Principal of Linneman Associates, the leading real estate economics<br />
consulting firm, worked with us again this year to prepare the <strong>Global</strong> Outlook. Linneman Associates has added its expert<br />
economic analysis and insights to the detailed local market information from <strong>NAI</strong> professionals worldwide to deliver the information<br />
you need on commercial real estate costs and market conditions around the world. We are proud of our relationship<br />
with Dr. Linneman and are pleased to be able to share his insights with you.<br />
All of the market information in the <strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report is available online at www.naiglobal.com and major markets are<br />
updated periodically throughout the year. For the latest in commercial real estate industry news and trends, <strong>Global</strong> Economic<br />
Outlook briefings, market updates and much more, visit www.naiglobal.com.<br />
Just as <strong>NAI</strong> <strong>Global</strong> provides you with in-depth knowledge and insight into markets around the world, our global managed network<br />
can help you achieve your real estate objectives no matter how large or small, anywhere in the world. Our clients come<br />
to us for our deep local knowledge, which leads to results that are tangible, measurable and visible on their bottom line.<br />
We welcome the opportunity to serve you. If we may assist you with a current or future real estate requirement anywhere in<br />
the world, please contact us at + 1 609 945 4000 or call your local <strong>NAI</strong> professional.<br />
Sincerely,<br />
Jeffrey M. Finn<br />
President & Chief Executive Officer<br />
Build on the power of our network. TM Over 350 offices worldwide. www.naiglobal.com<br />
1
n n n table of contents<br />
General InformatIon<br />
<strong>NAI</strong> <strong>Global</strong> President’s Letter...........................................................1<br />
Table of Contents ...........................................................................2<br />
Note from Dr. Peter Linneman.........................................................3<br />
About The <strong>Global</strong> <strong>Market</strong> Report......................................................3<br />
<strong>Global</strong> outlook<br />
US Year in Review ..........................................................................4<br />
reGIonal HIGHlIGHts<br />
Northeast Highlights.....................................................................24<br />
Southeast Highlights ....................................................................25<br />
Midwest Highlights.......................................................................26<br />
Southwest Highlights....................................................................27<br />
West Highlights............................................................................28<br />
asIa PacIfIc<br />
australia<br />
Adelaide...................................................................................30<br />
Brisbane ..................................................................................30<br />
Melbourne................................................................................31<br />
Perth........................................................................................31<br />
Sydney.....................................................................................32<br />
china<br />
Beijing .....................................................................................32<br />
Guangzhou...............................................................................33<br />
Hong Kong ...............................................................................33<br />
Shanghai..................................................................................34<br />
Shenzhen.................................................................................34<br />
Xi’an ........................................................................................35<br />
Guam..........................................................................................35<br />
India<br />
Chennai ...................................................................................36<br />
Mumbai ...................................................................................36<br />
Pune, Maharashtra ...................................................................37<br />
Punjab .....................................................................................37<br />
Jakarta, Indonesia........................................................................38<br />
Tokyo, Japan ...............................................................................38<br />
Kuala Lumpur, Malaysia................................................................39<br />
new Zealand<br />
Auckland..................................................................................39<br />
Christchurch.............................................................................40<br />
Wellington................................................................................40<br />
Singapore....................................................................................41<br />
Seoul, South Korea.......................................................................41<br />
Taipei, Taiwan ..............................................................................42<br />
Ho Chi Minh City, Vietnam.............................................................42<br />
canada<br />
alberta<br />
Calgary ....................................................................................44<br />
Edmonton ................................................................................44<br />
british columbia<br />
Vancouver................................................................................45<br />
Victoria ....................................................................................45<br />
nova scotia<br />
Halifax .....................................................................................46<br />
ontario<br />
Ottawa.....................................................................................46<br />
Toronto ....................................................................................47<br />
Quebec<br />
Montreal ..................................................................................47<br />
saskatchewan<br />
Regina......................................................................................48<br />
euroPe, mIddle east, afrIca<br />
The Baltics (Latvia/Estonia/Lithuania) ............................................50<br />
Brussels, Belgium ........................................................................50<br />
Sofia, Bulgaria .............................................................................51<br />
Prague, Czech Republic................................................................51<br />
Helsinki, Finland...........................................................................52<br />
Paris, France ...............................................................................52<br />
Frankfurt am Main, Germany ........................................................53<br />
Athens, Greece ............................................................................53<br />
Tel Aviv, Isreal ..............................................................................54<br />
Almaty, Kazakhstan ......................................................................54<br />
Kuwait.........................................................................................55<br />
Luxembourg City, Luxembourg......................................................55<br />
Amsterdam, The Netherlands........................................................56<br />
Oslo, Norway ...............................................................................56<br />
Warsaw, Poland ...........................................................................57<br />
Doha City, Qatar...........................................................................57<br />
Moscow, Russia ...........................................................................58<br />
St. Petersburg, Russia ..................................................................58<br />
Belgrade, Serbia ..........................................................................59<br />
Johannesburg, South Africa ..........................................................59<br />
Madrid, Spain ..............................................................................60<br />
Stockholm, Sweden......................................................................60<br />
switzerland<br />
Geneva ....................................................................................61<br />
Zürich ......................................................................................61<br />
Istanbul, Turkey............................................................................62<br />
Kiev, Ukraine................................................................................62<br />
united kingdom<br />
Birmingham, England................................................................63<br />
Edinburgh, Scotland..................................................................63<br />
Leeds, England.........................................................................64<br />
Manchester, England.................................................................64<br />
London, England.......................................................................65<br />
latIn amerIca and tHe carIbbean<br />
Buenos Aires, Argentina................................................................67<br />
Nassau, The Bahamas..................................................................67<br />
brazil<br />
Rio de Janeiro ..........................................................................68<br />
Sao Paulo.................................................................................68<br />
Santiago, Chile.............................................................................69<br />
Bogotá, Colombia.........................................................................69<br />
San Jose, Costa Rica....................................................................70<br />
Santo Domingo, Dominican Republic .............................................70<br />
Kingston, Jamaica........................................................................71<br />
mexico<br />
Ciudad Juarez, Chihuahua.........................................................71<br />
Guadalajara, Jalisco..................................................................72<br />
Guanajuato...............................................................................72<br />
Matamoros, Tamaulipas ............................................................73<br />
Mexicali, Baja California ............................................................73<br />
Mexico City ..............................................................................74<br />
Monterrey, Nuevo Leon .............................................................74<br />
Querétaro.................................................................................75<br />
Reynosa, Tamaulipas.................................................................75<br />
Saltillo, Coahuila .......................................................................76<br />
San Luis Potosi.........................................................................76<br />
Tijuana, Baja California..............................................................77<br />
Panama City, Republic of Panama .................................................77<br />
Lima, Peru...................................................................................78<br />
Caracas, Venezuela ......................................................................78<br />
unIted states<br />
alabama<br />
Birmingham ..............................................................................80<br />
Huntsville/Decatur County ..........................................................80<br />
arizona<br />
Phoenix ....................................................................................81<br />
arkansas<br />
Jonesboro.................................................................................81<br />
Little Rock.................................................................................82<br />
california<br />
Bakersfield..............................................................................82<br />
Inland Empire (Riverside/San Bernardino)..................................83<br />
Los Angeles ............................................................................83<br />
Oakland..................................................................................84<br />
Orange County........................................................................84<br />
Sacramento ............................................................................85<br />
San Diego...............................................................................85<br />
San Francisco .........................................................................86<br />
Ventura County .......................................................................86<br />
colorado<br />
Colorado Springs.....................................................................87<br />
Denver....................................................................................87<br />
connecticut<br />
Hartford..................................................................................88<br />
delaware<br />
Wilmington & Cecil County, Maryland........................................88<br />
district of columbia<br />
Washington, DC ......................................................................89<br />
florida<br />
Bradenton...............................................................................89<br />
Fort Lauderdale.......................................................................90<br />
Ft. Myers/Naples/Port Charlotte/Bonita Springs .........................90<br />
Jacksonville ............................................................................91<br />
Martin/St. Lucie Counties.........................................................91<br />
Miami.....................................................................................92<br />
Ocala/Gainesville.....................................................................92<br />
Orlando ..................................................................................93<br />
Palm Beach County .................................................................93<br />
Tampa Bay..............................................................................94<br />
Georgia<br />
Atlanta....................................................................................94<br />
Savannah ...............................................................................95<br />
Hawaii<br />
Honolulu .................................................................................95<br />
Idaho<br />
Boise......................................................................................96<br />
Southeast (Idaho Falls/Pocatello) ..............................................96<br />
Illinois<br />
Chicago .................................................................................97<br />
Springfield ..............................................................................97<br />
Indiana<br />
Fort Wayne .............................................................................98<br />
Indianapolis ............................................................................98<br />
Iowa<br />
Cedar Rapids/Iowa City............................................................99<br />
Davenport/Bettendorf, Iowa & Rock Island/Moline, Illinois...........99<br />
Des Moines...........................................................................100<br />
Sioux City .............................................................................100<br />
kansas<br />
Wichita .................................................................................101<br />
kentucky<br />
Lexington..............................................................................101<br />
louisiana<br />
Baton Rouge .........................................................................102<br />
Lake Charles.........................................................................102<br />
Monroe.................................................................................103<br />
New Orleans .........................................................................103<br />
maine<br />
Greater Portland/Southern Maine ...........................................104<br />
maryland<br />
Baltimore..............................................................................104<br />
Suburban Maryland ...............................................................105<br />
massachusetts<br />
Boston..................................................................................105<br />
Greater Springfield ................................................................106<br />
michigan<br />
Detroit ..................................................................................106<br />
Grand Rapids ........................................................................107<br />
Lansing ................................................................................107<br />
minnesota<br />
Minneapolis/St. Paul..............................................................108<br />
mississippi<br />
Jackson................................................................................108<br />
missouri<br />
Kansas City...........................................................................109<br />
St. Louis ...............................................................................109<br />
montana<br />
Billings .................................................................................110<br />
Bozeman ..............................................................................110<br />
Missoula...............................................................................111<br />
nebraska<br />
Lincoln .................................................................................111<br />
Omaha .................................................................................112<br />
nevada<br />
Las Vegas .............................................................................112<br />
Reno ....................................................................................113<br />
new Hampshire<br />
Manchester...........................................................................113<br />
Portsmouth...........................................................................114<br />
new Jersey<br />
Atlantic County......................................................................114<br />
Middlesex/Somerset Counties ................................................115<br />
Northern New Jersey .............................................................115<br />
Ocean/Monmouth Counties (“Shore <strong>Market</strong>”) ..........................116<br />
Princeton/Mercer County .......................................................116<br />
Southern New Jersey.............................................................117<br />
new mexico<br />
Albuquerque .........................................................................117<br />
Las Cruces ...........................................................................118<br />
new York<br />
Albany ..................................................................................118<br />
Long Island ...........................................................................119<br />
New York City........................................................................119<br />
Westchester..........................................................................120<br />
north carolina<br />
Asheville...............................................................................120<br />
Charlotte...............................................................................121<br />
Greensboro/High Point/Winston-Salem ...................................121<br />
Raleigh/Durham ....................................................................122<br />
north dakota<br />
Fargo....................................................................................122<br />
ohio<br />
Akron ...................................................................................123<br />
Canton .................................................................................123<br />
Cincinnati .............................................................................124<br />
Cleveland..............................................................................124<br />
Columbus .............................................................................125<br />
Dayton..................................................................................125<br />
oklahoma<br />
Oklahoma City.......................................................................126<br />
Tulsa ....................................................................................126<br />
oregon<br />
Portland................................................................................127<br />
Pennsylvania<br />
Allentown/Bethlehem/Easton..................................................127<br />
Berks County ........................................................................128<br />
Bucks County........................................................................128<br />
Harrisburg/York/Lebanon .......................................................129<br />
Lancaster .............................................................................129<br />
Philadelphia ..........................................................................130<br />
Philadelphia Suburbs.............................................................130<br />
Pittsburgh.............................................................................131<br />
Schuylkill County ...................................................................131<br />
Wilkes-Barre/Scranton/Hazleton.............................................132<br />
south carolina<br />
Charleston ............................................................................132<br />
Columbia ..............................................................................133<br />
Greenville/Spartanburg/Anderson Counties .............................133<br />
south dakota<br />
Sioux Falls ............................................................................134<br />
tennessee<br />
Chattanooga .........................................................................134<br />
Clarksville .............................................................................135<br />
Knoxville ...............................................................................135<br />
Memphis ..............................................................................136<br />
Nashville...............................................................................136<br />
texas<br />
Austin...................................................................................137<br />
Beaumont.............................................................................137<br />
Corpus Christi .......................................................................138<br />
Dallas...................................................................................138<br />
El Paso .................................................................................139<br />
Fort Worth.............................................................................139<br />
Houston................................................................................140<br />
Rio Grande Valley (McAllen/Mission/Brownsville/Harlingen) ......140<br />
San Antonio ..........................................................................141<br />
Texarkana (Bowie County, Texas/Miller County, Arkansas).........141<br />
utah<br />
Salt Lake City........................................................................142<br />
Washington County ...............................................................142<br />
Vermont<br />
Burlington.............................................................................143<br />
Virginia<br />
Lynchburg.............................................................................143<br />
Northern Virginia ...................................................................144<br />
Washington<br />
Seattle/Puget Sound..............................................................144<br />
Spokane ...............................................................................145<br />
Tri-Cities...............................................................................145<br />
Wisconsin<br />
Madison ...............................................................................146<br />
Milwaukee ............................................................................146<br />
Northeastern Wisconsin (Fox Valley/Green Bay) .......................147<br />
Wyoming<br />
Casper..................................................................................147<br />
Glossary....................................................................................148<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 2
n a note from<br />
n dr. Peter linneman<br />
n about the<br />
n <strong>Global</strong> market <strong>report</strong><br />
Once again, Linneman Associates is pleased to join<br />
<strong>NAI</strong> <strong>Global</strong> in the production of the <strong>2012</strong> <strong>Global</strong> <strong>Market</strong><br />
Report. For years, <strong>NAI</strong> <strong>Global</strong> has created this annual <strong>report</strong>,<br />
the industry’s source for in-depth market-by-market<br />
data, at a level of detail unavailable from other resources.<br />
Since our two organizations forged a strategic alliance<br />
in 2003, we have provided <strong>NAI</strong> professionals and clients<br />
with comprehensive market analyses, customized <strong>report</strong>s<br />
and our perspective on macroeconomic indicators as they<br />
pertain to real estate markets.<br />
By combining <strong>NAI</strong> <strong>Global</strong>’s local market data with our real<br />
estate economics expertise and proprietary projections,<br />
we jointly provide the reader with unmatched insight into<br />
the state of local, regional, national and international real<br />
estate markets. Linneman Associates and <strong>NAI</strong> <strong>Global</strong> continue<br />
to jointly offer customized real estate market analyses<br />
and <strong>report</strong>s. Enrich your business and investment efforts by<br />
utilizing this combination of real estate expertise, including<br />
the Linneman Associates and <strong>NAI</strong> market analyses and real<br />
estate decision making tools. For more information, call<br />
your local <strong>NAI</strong> office.<br />
The <strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report is a unique tool that reviews<br />
and summarizes the real estate activities of the past year on<br />
more than 200 property markets worldwide. As a reference<br />
tool, it reviews values, economies, social factors and other<br />
conditions that impact a market.<br />
Each analysis was completed by the <strong>NAI</strong> <strong>Global</strong> Member<br />
representing the given market. These local professionals are<br />
expert at reviewing their markets, identifying trends and <strong>report</strong>ing<br />
market activity. The <strong>NAI</strong> <strong>Global</strong> Member making the<br />
analysis for each market is identified and may be contacted<br />
for additional information. Most of the data in the <strong>Global</strong> <strong>Market</strong><br />
Report was collected during the fourth quarter of 2011.<br />
Rental rates for Class A and Class B office space, retail and<br />
new construction are expressed in gross costs per unit area,<br />
indicating the landlord pays all expenses, except for Europe,<br />
where rental rates are <strong>report</strong>ed as net. Industrial space rents<br />
are quoted in terms of net rental rates, meaning the tenant<br />
pays for most of the operating costs, such as utilities, maintenance,<br />
repairs and cleaning. On all charts, N/A means the information<br />
was not applicable or not available at press time.<br />
For more information about this <strong>report</strong>, or to order your own<br />
copy for $695, please call 609 945 4000. Additional research<br />
<strong>report</strong>s and whitepapers are available at www.naiglobal.com.<br />
Visit the <strong>NAI</strong> <strong>Global</strong> blog for real time commentary on industry<br />
news and trends at blogs.naiglobal.com<br />
Dr. Peter Linneman, Chief Economist<br />
<strong>NAI</strong> <strong>Global</strong><br />
Dr. Linneman holds both Masters and Doctorate degrees<br />
in economics from the University of Chicago and is the<br />
Principal of Linneman Associates. For over 25 years he<br />
has provided strategic and financial advice to leading<br />
corporations. Dr. Linneman is the author of the leading<br />
real estate finance textbook, Real Estate Finance and<br />
Investments: Risks and Opportunities. His teaching and<br />
research focus on real estate and investment strategies,<br />
mergers and acquisitions and international markets. He<br />
has published over 60 articles during his career. He is<br />
widely recognized as one of the leading strategic thinkers<br />
in the real estate industry.<br />
The <strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report is a copyrighted publication<br />
of <strong>NAI</strong> <strong>Global</strong>, published in December 2011, and should not<br />
be reproduced without full permission. Additional copies are<br />
available from <strong>NAI</strong> <strong>Global</strong>.<br />
© <strong>2012</strong> <strong>NAI</strong> <strong>Global</strong>. All rights reserved.<br />
Demographic data supplied by Applied Geographic Solutions<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com<br />
3
<strong>Global</strong> Outlook<br />
US Year in Review<br />
As 2011 comes to a close, commercial real estate markets across<br />
the United States are continuing to struggle as high unemployment,<br />
deficit and debt crises in the United States and Europe, and political<br />
gridlock in Washington have heightened concerns about the strength<br />
of the economic recovery and created a highly uncertain business<br />
environment. While there was positive momentum and strong leasing<br />
activity in most markets for the first half of 2011, market fundamentals<br />
stagnated in the second half as the uncertain economic climate<br />
weighed on demand. Vacancy rates remain high but have declined<br />
in many markets, though most of the improvement took place in the<br />
first half of the year. Asking rents also remain low, though there have<br />
been improvements in some markets.<br />
Office occupiers are taking advantage of low rental rates to upgrade<br />
to Class A office properties in central business districts. However, while<br />
leasing activity has been strong, many organizations are consolidating<br />
operations by embracing efficient space design and reducing their<br />
office footprint, resulting in negative absorption. Vacancy rates for CBD<br />
Class A office increased by 4% to 13.8% in 2011. National average<br />
asking rents slipped from $32.51 in 2010 to $29.59 in 2011.<br />
The proverbial flight to quality is also taking place in suburban office<br />
markets, with the national vacancy rate for Class A suburban office<br />
declining 2.6% to 16.6%, as tenants upgrade from Class B and C<br />
properties. High vacancy rates continue to place downward pressure<br />
on rents, with the national average asking rent declining by 6.4% to<br />
$23.03.<br />
Office markets will continue to be weighed down by slow economic<br />
growth and uncertainty from the global financial crisis. Improvement<br />
is unlikely until there is sustainable employment growth and a more<br />
certain business climate. However, with record corporate profits and<br />
limited new construction, market conditions will tighten rapidly with<br />
economic growth, as many organizations will have to expand to<br />
accommodate new employees.<br />
Retail markets improved slightly, though many retail centers continue<br />
to cope with large big box vacancies. Many markets have had new<br />
entries with local retailers taking advantage of low rents to backfill<br />
vacancies left by national chains, especially in better locations. The<br />
power center vacancy rate declined to 8.7%, a 6.5% decrease from<br />
2011, while average asking rents declined by 5.1% to $17.58. The CBD<br />
retail vacancy rate declined to 7.4%, a 10.1% decrease from 2010 with<br />
CBD retail average asking rents declining by $6.77 to $33.02.<br />
Industrial markets across the country are increasingly bifurcated, with<br />
strong demand for well-located Class A industrial properties and little<br />
demand for outmoded Class B and C properties. With limited new<br />
construction, vacancy rates for bulk warehouse space stabilized at<br />
10.6%, a modest 10 basis-point decrease from 2011. Bulk warehouse<br />
rents weakened by $.041 to $4.14. However, much of the decline in<br />
asking rents reflects the low rents of subpar Class B and C properties.<br />
United States capital markets soared in 2011. According to Real<br />
Capital Analytics, investment sales volume stood at $178.8 billion as<br />
of November 2011, easily surpassing the $116 billion mark set in<br />
2010. Cap rates continued to compress in virtually every market, with<br />
national average cap rates for all property types below 8%. Strong<br />
investment sales activity is likely to continue as historically low interest<br />
rates and high investor demand is driving fierce competition for<br />
assets, especially in core US markets.<br />
national average rental rates<br />
2006 2007 2008 2009 2010 2011<br />
Office<br />
Downtown-Class A $36.02 $41.93 $47.31 $37.11 $32.51 $29.59<br />
Suburban-Class A $24.49 $25.87 $26.32 $25.48 $25.45 $23.83<br />
Industrial<br />
Bulk Warehouse $4.66 $4.66 $4.63 $4.60 $4.55 $4.14<br />
Manufacturing $5.14 $5.57 $5.30 $4.89 $4.42 $4.41<br />
Hi-Tech/R&D $9.87 $10.03 $11.11 $8.56 $8.43 $6.69<br />
Retail<br />
Downtown Retail $47.70 $48.09 $51.28 $39.90 $39.79 $33.02<br />
Service Centers $20.56 $20.53 $18.55 $17.50 $16.48 $15.94<br />
Power Centers $22.33 $22.54 $20.77 $19.15 $18.53 $17.58<br />
Regional Malls $44.97 $46.26 $36.66 $32.27 $30.15 $26.07<br />
Source: <strong>NAI</strong> <strong>Global</strong><br />
national average rental rates<br />
2006 2007 2008 2009 2010 2011<br />
national average Vacancy rates<br />
2006 2007 2008 2009 2010 2011<br />
Office<br />
Downtown-Class A 9.9% 9.6% 10.3% 13.8% 13.3% 13.8%<br />
Suburban-Class A 13.2% 12.9% 13.0% 16.6% 17.1% 16.6%<br />
Industrial<br />
Bulk Warehouse 10.7% 9.1% 7.4% 10.9% 10.7% 10.6%<br />
Manufacturing 8.7% 7.6% 7.8% 10.9% 10.9% 11.6%<br />
Hi Tech/R&D 11.9% 11.4% 11.2% 12.3% 12.2% 10.6%<br />
Retail<br />
Downtown Retail 7.4% 6.6% 7.5% 8.9% 8.2% 7.4%<br />
Service Centers 7.8% 7.2% 8.4% 11.7% 12.7% 11.1%<br />
Power Centers 6.0% 5.3% 5.9% 9.9% 9.3% 8.7%<br />
Regional Malls 5.4% 4.8% 5.6% 7.0% 6.5% 7.8%<br />
Source: <strong>NAI</strong> <strong>Global</strong><br />
national average Vacancy rates<br />
2006 2007 2008 2009 2010 2011<br />
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US Overview<br />
The US is well over two years into the most anemic recovery in post-WW II history, and<br />
the recovery continues to weaken. Everyone, including bearish forecasters, has been<br />
shocked by the weakness of the recovery to date. After a burst of growth surrounding<br />
the November 2010 elections, weakness returned as the fundamental collapse of stable<br />
and predictable rules for the economy resumed. It became clear within a few months<br />
after the November 2010 elections that politicians of both parties were more interested<br />
in rhetoric than predictability. As government shutdowns and defaults were threatened<br />
by leaders of both parties, unpredictability soared. Meanwhile, the Obama administration<br />
issued new regulations and interventions in the belief that bureaucrats, not entrepreneurs,<br />
create growth.<br />
Absent leadership in any branch of government, this malaise will continue. We recall that<br />
20 to 25 years ago, many in the US wanted to become more like Japan; sadly, we have<br />
succeeded and have the anemic economic growth to prove it. In the meantime, our growth<br />
is largely dragged forward by population growth rather than entrepreneurial activity.<br />
There is some good news in the economy. Real GDP, though far below historic trends,<br />
has risen to new heights and is growing about 1.5% annually. However, this means that<br />
two thirds of economic growth is driven by population growth and only one third via<br />
productivity growth.<br />
Total payroll employment peaked in January 2008 at nearly 138 million jobs, bottoming<br />
two years later at 8.75 million fewer jobs. We have regained 2.3 million jobs through<br />
October 2011, or only about 25% of the 8.8 million jobs lost during the recession. Only<br />
the major MSAs of Texas have essentially regained all of their lost jobs, while most<br />
markets have regained less than 20% of their job losses. As a result, most markets have<br />
achieved only about one third of the job recovery anticipated by even pessimistic<br />
forecasters. The job gains which have occurred have been primarily concentrated among<br />
well educated, older adults. Meanwhile the recession continues largely unabated among<br />
the young and poor educated.<br />
After peaking in October 2009 at 10.1%, the US unemployment rate declined to 8.8%<br />
in March 2011, but stood at 9% in October 2011 as population growth driven labor force<br />
expansion surpassed job formation. The median unemployment duration stands at 20.8<br />
weeks, a decline from the 25.5 week high in June 2010, but still significantly higher than<br />
the 8.4 weeks seen in 2007-2008. The percent unemployed 27 weeks or more edged<br />
down over the last quarter, and stood at 42.3 % in October 2011 — significantly higher<br />
than the low of 17.3% in December 2007, but on par with the 45.8% high in June 2010.<br />
At the same time, short-term (five weeks or less) unemployment spells account for 19.4%<br />
of the unemployed, compared to 37% at the beginning of the recession.<br />
The “marginally attached” labor force stood at 2.6 million in October, about the same as<br />
one year earlier. The Bureau of Labor Statistics defines the “marginally attached” as<br />
individuals who are not part of the labor force, but wanted work and were available for<br />
work, having looked for a job in the last 12 months, but not in the last four weeks.<br />
Due to the absence of a stable political environment, we have dramatically lowered our<br />
forecasts to 1.6 million jobs in 2011, 1.8 million in <strong>2012</strong>, and 2.9 million in 2013, well<br />
below the 3-3.5 million a year which would otherwise occur. The estimate of 2.9 million<br />
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On the Road to Recovery<br />
% of Loss Std. Dev.<br />
Pre-Recession Best Recessionary Worst Current* Recovered from Trend<br />
Real Per Capita GDP (2011 $ billions) $15,245.5 $14,462.2 $15,183.5 92.1 -3.01<br />
Real Retail Sales (2011 $ millions) $363,544.5 $310,706.7 $345,700.1 66.2 -1.67<br />
Real Median Home Price Index 224.4 179.6 179.6 0.0 -2.84<br />
Durable Industrial Output Index 102.2 75.6 92.9 65.2 -1.19<br />
Non-Durable Industrial Output Index 100.6 85.6 90.9 35.2 -2.34<br />
Real Per Capita HH Net Worth $237,462.6 $170,277.9 $186,466.7 24.1 -2.01<br />
Payroll Employment (000s) 137,996.0 129,246.0 131,132.0 21.6 -2.41<br />
Unemployment Rate 4.4 10.1 9.1 17.5 1.71<br />
University of Michigan Consumer Sentiment 96.9 55.0 55.7 1.7 -1.93<br />
Median Weeks Unemployed 7.5 25.5 21.8 20.6 2.51<br />
Capacity Utilization 79.7 64.4 75.0 69.0 -0.16<br />
SA Auto & Light Truck Sales - Thousands 1,427.1 777.1 1,017.0 36.9 -1.46<br />
Median Sales Price/Disposable Income per Capita 7.8 5.5 5.9 17.5 -0.86<br />
Profits after tax (Real 2011 $) billions $1,273.8 $780.6 $1,506.8 147.2 0.86<br />
Percent of industries adding workers; 12-Month Moving Average 67.5 21.7 62.5 89.1 1.36<br />
Multifamily Starts (SAAR 000s) 350.0 53.0 170.0 39.4 -0.29<br />
Single Family Starts (SAAR 000s) 1,823.0 360.0 425.0 4.4 -2.94<br />
Real Home Prices 2011 $ $265,498.6 $193,351.5 $204,191.2 15.0 -1.77<br />
*Quarterly data through 2Q11; latest monthly through Sept 2011.<br />
jobs for 2013 assumes that we will see some degree of sanity return after the election. If<br />
that does not occur, our estimate is just 2 million new jobs in 2013. Assuming political<br />
sanity overtakes political vanity post-election, these estimates imply that by the end of<br />
2013, total jobs will be on par with the level at the end of 2006 (before the peak), even<br />
though the population will be larger by 20 million. These estimates also mean that the<br />
unemployment rate at year-end 2013 will still be approximately 8.5%. Hence our mantra<br />
remains: an employment recovery to uninspiring mediocrity.<br />
Early cyclical growth has followed the money. The distinguishing factor of this recovery is<br />
that job growth has been weak in most industry sectors and MSAs because unlike previous<br />
cycles, this cycle saw widespread governmentally targeted capital allocations. Hence, most<br />
of the private sector remained capital-starved far longer than normal, as limited capital was<br />
allocated away from Main Street to Wall Street. Only as capital flows again to Main Street<br />
will Main Street employment growth occur, though with a 6 12-month lag.<br />
With the official end of the recession recorded in June 2009, the US economy is already<br />
in the third year of a seven year recovery. With the exception of home prices, all of the key<br />
economic indicators are on the ascent from their respective low points, but are at multiple<br />
standard deviations from historical norms. After nine consecutive quarters of positive<br />
growth through the third quarter of 2011, real per capita GDP has regained 92% of what<br />
was lost during the recession, but remains three standard deviations from the historical<br />
trend. US total net wealth has regained 24.1% of what was lost during the recession, and<br />
is 2.3 standard deviations from the historical trend. And despite low consumer sentiment<br />
levels, retail sales are also making a comeback with a 66.2% rebound from the bottom.<br />
At the corporate level, durable and non-durable industrial output levels are 65.2% and<br />
35.2% of the way back to pre-recession levels, but are below trend by 1.2 and 2.3<br />
standard deviations, respectively. Payroll employment has recovered 2.3 million jobs or<br />
26% through October. The unemployment rate of 9% in October is stubbornly high,<br />
though 110 bps below the peak.<br />
Of the metrics in figure [On the Road to Recovery], only real after-tax profits have surpassed<br />
pre-recessionary levels, while home prices and single family construction starts are lagging<br />
in the recovery. However, while profits are up 17.5% from the bottom, they are still 0.9<br />
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standard deviations from the norm. Multifamily starts are staging a comeback, while single<br />
family construction is lagging, as much excess inventory still needs to be absorbed.<br />
Even as the affordability of single family ownership is at an all time high due to the<br />
combination of low home prices and astoundingly low mortgage rates, housing<br />
production remains at record lows, a mere 40% of historic production rates. In fact, we<br />
are experiencing the longest period of low housing production in post-war history. Even<br />
as homebuilders have reduced their inventory of unsold home to all time lows, the<br />
inventory of unsold homes remains high as the limited household formations created by<br />
a weak job market slows the absorption of homes going through the agonizingly slow<br />
foreclosure process. Absent a robust job market, first time buyers are unable to save<br />
enough for the once again requisite 20% down payment.<br />
A lack of confidence in the economy continues to plague our housing markets. This is<br />
particularly true for the less educated and unskilled workers in our society. Historically,<br />
the lowest-skilled workers are hit the hardest during recessions, and this cycle was no<br />
different. Interestingly, the recovery to date has largely benefited the relatively skilled in<br />
our society, leaving the unskilled to endure prolonged periods of unemployment.<br />
Through Q3 2011, the National Association of Realtors Home Price Index declined by 4.7%<br />
year-over-year and by 1.4% quarter-over-quarter. While the declines are not nearly as bad<br />
as they were in 2009, it is clear that home prices have not yet garnered any momentum.<br />
From 1970 to 2010, the average annual number of single-family and multifamily home<br />
starts was nearly 1.5 million and 355,000, respectively. In comparison, October 2011<br />
run rates were just 430,000 for single-family and 183,000 for multifamily home starts.<br />
Household Formation<br />
The US no longer has too much housing; it has too few households. On a cumulative<br />
basis from 2004 through the end of 2007, the historical norm for household formations<br />
held true. Namely, for every 2.28 people coming into the economy, a new household<br />
was formed, with each new household consuming a housing unit. However, over the<br />
course of the recession, the historical marginal household size of 2.28 people roughly<br />
tripled to over 6.0. Therefore, households that we would have expected to form were<br />
not created because of the lack of jobs.<br />
We view the housing market as a problem of excess (relative to historic norms) vacant<br />
units relative to pent-up households. We examined historical vacancy rates for both<br />
single-family and multifamily and compared current vacancy rates to the respective 25-<br />
year historical averages. The difference between the existing vacancy rates and the<br />
historical norms determine whether the sector has an excess or shortage of vacant units.<br />
Why are households not forming? Quite simply, absent jobs, households do not form. In<br />
Q3 2011, the US had an excess vacant inventory of approximately 1.2 million housing<br />
units (634,000 rental + 535,000 owned units) versus 1.9 million unformed households.<br />
Thus, if pent-up households were to form, a shortage of about 700,000 housing units<br />
would exist, demonstrating the magnitude of pent-up demand.<br />
Outlook<br />
As jobs are created over the next three years, pent-up households will form, with almost<br />
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55% (1.1 million) owning and 45% (865,000) renting. The rental proportion for the pentup<br />
households is relatively high, due to the relatively young age of pent-up households.<br />
This is on top of the 3.95 million households that will form as the result of population<br />
growth of 9 million over the next three years (based upon the historical marginal<br />
household size of 2.28 people per household). Of these households, about two-thirds<br />
(2.6 million households) will be single-family buyers and one third (1.3 million) will rent.<br />
Hence, over the next three years, we anticipate 3.8 million new single family households<br />
and 2.3 million renter households.<br />
Based upon our statistical forecasts, we anticipate that about 1.8 million (~600,000 per<br />
year) single-family and about 800,000 (~270,000 per year) multifamily home starts will<br />
occur over the next three years. The net result will be that we burn through the excess<br />
inventory, even if household formation rates remain muted. Low single-family inventory<br />
levels will create strong upward pressure on home values, restoring some lost confidence<br />
in homes as an investment. In fact, a crazy but true research result is that many people<br />
use the past year’s home price increase to estimate future annual appreciation. This<br />
means that as home prices stabilize, so too will the belief in long-term appreciation.<br />
Office<br />
In Q3 2011, the national office vacancy rate dropped to 14.6%, 50 and 90 bp decreases<br />
from the previous quarter and year, respectively, according to NCREIF. However, this puts<br />
US office vacancy above the “natural rate” of roughly 10%. Severe job losses have<br />
resulted in increasing shadow or sublease space, along with tenant inducements. These<br />
availabilities are expected to increase through 2011.<br />
The Linneman Real Estate Index (LREI), which compares the fundamental demand for<br />
space with the supply of real estate capital, reversed course in Q3 2009, after a 12-<br />
year run-up. The supply of real estate capital (the numerator) is proxied by the<br />
aggregate flow of commercial real estate debt, while the demand for space (the<br />
denominator) is proxied by nominal GDP. Excluding the net real estate equity flows<br />
from the numerator slightly understates an oversupplied market and overstates an<br />
undersupplied market. That is, this index tends to understate capital oversupply<br />
situations. The index equaled 100 in 1982, when the supply of real estate capital was<br />
roughly in balance with demand.<br />
In Q2 2011 (latest available at print), the Linneman Real Estate Index (LREI) declined<br />
to 145, from its Q1 level of 147. This was also a year-over-year decrease from 156 in<br />
Q2 2010. The current LREI level indicates that the balance of commercial mortgage<br />
debt in the market exceeds demand for the space financed by that debt by 45%. The<br />
LREI indicates that commercial real estate debt is still significantly above historical<br />
standards. Since 1985, CRE mortgage debt to GDP averaged 18%. Today it stands<br />
at 21%. Depending on GDP growth assumptions, this 300-bp spread indicates that<br />
the industry should deleverage by $300 to $500 billion.<br />
We have long said that property markets are over-leveraged on a national level. The index<br />
has been increasing steadily since 1997, when it stood at 91. At that time, the market<br />
had a capital shortage and vacancies were declining steadily. Previously, we indicated<br />
that the LREI would fall in the face of the current credit crisis. In fact, commercial debt<br />
outstanding has fallen precipitously, but given the weak economy, corresponding GDP<br />
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declined at a faster rate. As a result, the LREI continued to increase through Q2 2009,<br />
but then finally reversed as GDP strengthened. We expect the LREI to continue to decline,<br />
as the rebound in GDP growth outpaces commercial mortgage lending. Historically,<br />
opportunistic investment periods have occurred while the LREI is declining. That is, when<br />
deleveraging occurs in the industry, as in the early 1990s, well-capitalized investors can<br />
benefit significantly. This is occurring now and will continue for another two to three years,<br />
as the economy grows more quickly than commercial mortgage debt.<br />
Industrial<br />
According to NCREIF, the US industrial vacancy rate (primarily representing institutionalquality<br />
properties) declined from 12.4% in Q1 2011 to 12.3% in Q2 2011. Industrial<br />
construction peaked in early 2009 at a seasonally-adjusted annual rate of $81.6 billion,<br />
but precipitously declined by 57% through January 2011. Activity reversed course, gaining<br />
back 23% from the bottom and standing at about $43 billion as of September 2011.<br />
Multifamily<br />
The Census Bureau’s quarterly Housing Vacancy Survey indicates that the US multifamily<br />
vacancy rate increased by 60 bps in Q3 2011 to 9.8%. This series has generally been<br />
hovering around 10% since late 2003. For NCREIF’s more institutional properties,<br />
vacancy rate decreased by 50 bps, from 5.5% in Q2 to 5.0% in Q3 2011. This<br />
discrepancy in vacancy rates is due to the fact that the NCREIF properties are generally<br />
of higher quality than the Census properties. Thus, better-quality properties are exhibiting<br />
better fundamentals. The Census vacancy rate has been relatively flat during the<br />
recession, but it increased 100 bps in Q2 and Q3 2009. In contrast, the NCREIF series<br />
exhibited a sharp increase from early 2006, as unsold high-end condos were converted<br />
to rental units. The decline starting in early 2009 indicated that the condo market<br />
overhang began to subside.<br />
Multifamily starts (5+ units) hit a low of 53,000 (annualized) in December 2010, but have<br />
since increased to 183,000 as of October 2011. Despite improving conditions, this level<br />
is in sharp contrast to the 20 and 40-year averages of 395,000 and 429,000 units,<br />
respectively. This reflects the confluence of weak recessionary demand (due to doubling<br />
up of households), an absence of construction financing, and a 9.8% Q3 2011 vacancy<br />
rate based on Census data. We anticipate that multifamily starts will remain weak through<br />
2011 and increase in <strong>2012</strong>, as lower vacancy rates, increased effective rents, and low<br />
cap rates spur development. The lack of construction has resulted in improved vacancy<br />
rates, as it means that excess inventory is being absorbed.<br />
To a large degree, the sector’s vacancy rates still reflect the fact that as the economy<br />
weakened, household formation rates plunged, as young people doubled up with family<br />
or friends. In 2008-2011, household formations averaged 650,000 per annum, versus a<br />
norm of 1.1 to 1.2 million. The result is a pent-up housing demand of roughly 1.9 million<br />
households, of which 50% will flow into multifamily housing. In <strong>2012</strong>, we expect about<br />
1.3 million households to form, consisting of both pent-up demand and normal<br />
population growth.<br />
As consumer confidence rebounds and job formation resumes, these people will form<br />
households, leading to a surge in housing demand. As a result, we are bullish on the<br />
long-term investment prospects for multifamily housing. In addition, given the sector’s<br />
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short-term leases, the multifamily sector will be able to best combat rising debt costs<br />
should the economy experience a severe inflationary spike.<br />
Through 2014, we expect aggregate demand growth to be about 850,000 units, with<br />
no net increase in supply. Thus, the current excess vacancy of 634,000 multifamily units<br />
will fall to a shortage of about one million units.<br />
Retail<br />
At 10.28%, NCREIF’s Q3 2011 retail vacancy rate increased from 10.1% in the second<br />
quarter, and was 68 bps lower than the same period one year earlier. The vacancy rate<br />
broke 6% in the second quarter of 2008, for the first time since 1999.<br />
The Conference Board Consumer Confidence Index stood at 39.8 in October 2011,<br />
close to an all-time low. In the first quarter of the year, it climbed to 72, but has since lost<br />
ground as the global economic uncertainty dominates the news. Real retail sales peaked<br />
at $363 billion in November 2007, dropped to $311 billion in March 2009, and have since<br />
regained lost ground, ending October 2011 at $352 billion (real 2011 $). Retail construction<br />
has been declining steadily on a monthly annualized basis, and was recorded at just $26<br />
billion as of September 2011, down from its October 2007 high of $65 billion.<br />
The International Council of Shopping Centers (ICSC) publishes the Weekly Leading<br />
Indicator of Shopping Center Sales, which has shown modest improvement over the last<br />
six months. Prior to the recession, the index peaked at 309 in July 2007, but declined to<br />
a low of 293 in April 2011. It has subsequently risen by 1.9% to 299 as of September<br />
2011. However, the ICSC-Goldman Sachs Weekly Chain Store Sales Index has been flat<br />
for the first nine months of 2011. ICSC’s Shopping-Center Executive Barometer of Future<br />
Business is a compilation of components including sales, customer traffic, occupancy<br />
rates, rent spreads and capitalization rates, where a reading over 50% indicates a growth<br />
sentiment. This index hit a low of 26.3% in December 2008, rose to 60.7% in May 2011,<br />
and stood at 52.2% in August 2011.<br />
Hotel<br />
Smith Travel Research <strong>report</strong>s that the 12-month rolling average US hotel occupancy<br />
rate declined from 1995-2002. Occupancy peaked again in June of 2006 at 63.7%, but<br />
declined to 55% in late 2009 and stood at 59.6% through September 2011, still<br />
historically low. The 12-month rolling average revenue per available room (RevPAR)<br />
ceased its 5-year ascent, peaking in May 2008 at $66.20 and then falling to $60.07 as<br />
of September 2011. STR also <strong>report</strong>ed that the change in the nation’s supply of rooms<br />
lagged the change in demand for those rooms on a 12-month rolling average basis. US<br />
hotel markets have begun to strengthen slightly through Q3 2011.<br />
Seniors Housing<br />
Stabilized occupancy rates for the independent living segment increased 40 bps in Q3<br />
2011 at 87.9%, while the average occupancy for majority assisted living properties<br />
improved by just 10 bps in Q3 to 88.6%. The correlations between employment and IL<br />
and AL occupancy rates between 2005 and Q2 2009 were 95% and 92%, respectively.<br />
However, when the last nine quarters of data are included in the analysis, the correlations<br />
decline significantly to 37% for IL and 59% for AL, primarily because even as jobs have<br />
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een added, occupancies are increasing at a slower pace than job creation. As<br />
employment grows and housing markets improve, we expect to see modest<br />
improvements in the senior housing sector. The lower correlations are a sign that<br />
improvements in the sector will lag job growth.<br />
Canadian Overview<br />
The Canadian economy, led by exports and a strong commodity cycle, performed well<br />
through 2011. Anchored by a stable banking sector, the Canadian economy out-performed<br />
most other developed economies. GDP growth declined slightly from 2010 and is<br />
expected to be about 2.1% for 2011. But the overall economy continues to face head<br />
winds going forward. In particular, a weak US dollar has driven the Canadian dollar towards<br />
parity, slowing Canada’s trade with its largest trading partner. And the faltering recovery in<br />
the US will temper Canadian growth prospects for <strong>2012</strong>, now forecast at 1.9 %.<br />
The Canadian economy has gained back all the jobs lost during 2008 and 2009, but the<br />
unemployment rate remains stubbornly high at 7.1%, down 90 basis points from 8% at<br />
the same time last year. There is modest employment growth forecast for <strong>2012</strong>, but also<br />
considerable slack in the economy. As we enter <strong>2012</strong>, the supply-demand characteristics<br />
of the real estate sector appear balanced in most markets and asset classes. Liquidity<br />
has returned, as evidenced by REITs and other publicly traded real estate investors having<br />
raised substantial amounts of equity capital in 2011. There is increased investment and<br />
construction activity, which bodes well for a slow, but steady recovery continuing through<br />
<strong>2012</strong> and more robust growth in 2013.<br />
The ownership of commercial real estate in Canada, especially the best located<br />
properties, is concentrated among pension funds, REITs and large domestic corporate<br />
investors. The best assets remain in relatively strong financial hands with conservative<br />
leverage employed. With the Canadian dollar close to par with the US, there is increasing<br />
interest by these investors in US real estate assets. In addition, these pools of capital are<br />
looking to Europe and Asia to satisfy the demand for high quality real estate.<br />
Land prices firmed throughout 2011 in most markets across the country. Generally, cap<br />
rates and interest rates remained stable through the year. Transaction volumes are<br />
constrained only by lack of supply of good quality product.<br />
Western Region (British Columbia, Alberta, Saskatchewan and Manitoba). The western<br />
region of the country possesses abundant natural resources and is performing well, driven<br />
by resource exports. Overall the British Columbia economy is forecast to grow by 2.3%<br />
in <strong>2012</strong>. The Vancouver office market has a vacancy rate of 7%, but has little new product<br />
coming online in <strong>2012</strong>-2013. Positive absorption is resulting in increasing net rents. The<br />
Victoria office market, which is heavily dependent on the provincial government, has seen<br />
increasing vacancies as fiscal deficits are addressed. But a recovery is evident.<br />
Industrial real estate in Vancouver is stable, with an average vacancy rate of 4.5%,<br />
unchanged from year-end 2010. In Victoria, industrial vacancy stands at about 2%, and<br />
rents are stable due to a lack of new supply. Investment in commercial real estate in<br />
British Columbia has been resilient, with cap rates of 6-7% in the major urban centers.<br />
The Greater Vancouver investment market has normalized and is now characterized by<br />
shortages in supply of good quality product.<br />
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Alberta is home to Canada’s oil and gas industry, with Edmonton and Calgary serving<br />
as the two main business centers. Edmonton, the provincial capital, benefits from its<br />
proximity to the infrastructure related to tar-sands development. Meanwhile, Calgary is<br />
home to most of Canada’s energy companies. Alberta’s recovery will continue to be<br />
impaired by low natural gas prices which are projected to persist. Despite this, the<br />
Alberta economy has rebounded and is forecast to grow by 3.9% in <strong>2012</strong>. The overall<br />
fundamentals of Alberta’s real estate market are solid and the prospects for <strong>2012</strong> look<br />
promising, with tightening vacancy rates, upward pressure on rental rates and continued<br />
positive absorption.<br />
Saskatchewan and Manitoba are smaller, resource and agriculture based economies.<br />
Saskatchewan is the provincial leader in economic growth as its GDP is forecast to grow<br />
4.3% in <strong>2012</strong>. The two largest cities are Regina and Saskatoon, with a combined<br />
population over 500,000. The unemployment rate is below 5%, and as a result, industrial<br />
market vacancies remain at an all-time low, while rental rates continue to hold up due to<br />
limited new construction. Industrial land prices remain steady at $225,000 per acre.<br />
The Regina office market is experiencing positive absorption, and vacancy rates remain<br />
extremely low at 2.0%, a 100-bp decrease from the same time last year. New office<br />
product totaling 200,000 square feet is expected to come online in <strong>2012</strong>.<br />
Finally, the Saskatchewan investment market remains strong with continued interest from<br />
local investors. Cap rates remain between 7.5–8.0% for well-located, well-tenanted projects.<br />
Eastern Canada (Ontario, Quebec and Atlantic provinces). Eastern Canada is the<br />
country’s manufacturing base. Both the Ontario and Quebec economies are experiencing<br />
higher than normal unemployment (at 7.6% and 7.3%, respectively).<br />
Toronto is Canada’s largest city and its financial and manufacturing center. The surrounding<br />
area in southwest Ontario is home to Canada’s auto manufacturing sector. Greater Toronto<br />
is a multi-cultural mega-city with 5.6 million residents and a broad economic base.<br />
The Toronto office market has been healthy and active, absorbing over 5 million square feet<br />
of office product in 2011, compared to 3 million square feet in 2010. The vacancy rate in<br />
downtown Toronto is 5.5%, a 200-bp year-over-year decline. Most suburban markets now<br />
have high single-digit vacancy. More new office product is expected to come online in <strong>2012</strong>.<br />
Toronto’s industrial market has not made a full recovery and shadow vacancy abounds.<br />
There is little new supply coming to market, so we expect rental rates will firm up and<br />
vacancy rates will decline in <strong>2012</strong>. Current vacancy rate is about 6.5%.<br />
Montreal has a diverse economy and a mature real estate sector. The greater Montreal<br />
area accounts for more than 21% of the Canadian office market. This market remains<br />
healthy with an office vacancy rate of 7.9%, a 140-bp decrease over the same time last<br />
year. Similarly, the industrial vacancy rate of 7% is also expected to decline during the<br />
coming year, as business confidence improves resulting in tenant expansions.<br />
Like many centers of government, Ottawa remains a steady market even in these tough<br />
economic times. The federal government has ongoing space needs and continues to<br />
refurbish and redevelop its properties.<br />
Halifax is the capital city of Nova Scotia and the economic center for Canada’s Atlantic<br />
provinces. The Halifax shipyard just received a $25 billion military contract, which will generate<br />
thousands of jobs and anchor the economic development for the region for years to come.<br />
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Overall, the Canadian economy is proving resilient in a challenging and volatile global<br />
environment, making Canadian cities a attractive place to do business or invest in the<br />
commercial real estate sector.<br />
European Overview<br />
The European economies, particularly those in the eurozone, continue to face unresolved<br />
problems relating to the debt crisis and the imbalance between national economies. As<br />
the year progressed, the eurozone stumbled from crisis to crisis: prospects of default by<br />
the Greek government, ultimately resulting in the appointment of a coalition government;<br />
quickly followed by the announced resignation of the Italian Prime Minister and a more<br />
severe package of austerity measures. Concern continues with respect to the underlying<br />
stability of the economies of Portugal, Italy, Ireland, Greece and Spain (PIIGS). Through<br />
November, the latest ‘Grand Plan’ produced by the eurozone leaders has been criticized<br />
by the US Treasury and the International Monetary Fund (IMF) and is inadequate to solve<br />
the debt crisis. There is a widespread feeling that the politicians’ solutions are too little,<br />
too late. The limited austerity measures introduced to date have led to civil unrest in<br />
several European countries, and Europe’s politicians are nervous that the necessary<br />
measures will not garner electoral support. The general uncertainty has led to significant<br />
equity market volatility in Europe. There is continued speculation that the eurozone could<br />
break up with the attendant chaos which would ensue.<br />
Economic forecasting against this background is challenging at best. The Economist’s poll<br />
of forecasters currently shows growth of 1.6% in the eurozone area for 2011, and 0.6%<br />
for <strong>2012</strong>. Growth in the two largest economies is expected to decline sharply in <strong>2012</strong><br />
(Germany from 2.8% in 2011 to 1% in <strong>2012</strong>, France from 1.6% to 0.8%) with the UK<br />
effectively flat-lining (1% in 2011 to 1.3% in <strong>2012</strong>). Inflation continues to increase (eurozone<br />
2010: 1.9%; 2011: 2.6%; current UK figure: 5.2%) and unemployment has risen to 10%<br />
across the eurozone. On a more positive note, the latest industrial production figures for<br />
the eurozone show a year-over-year increase of 5.3% (August 2011). Interest rates remain<br />
low, with the European repo rate of 1.25%. The UK base rate is 0.5%, but quantitative<br />
easing is still deemed necessary by the UK, even after £200 billion has been ‘printed.’<br />
The property investment markets in Europe, with few exceptions, reflect the macro<br />
economic uncertainties. The damaging affect of inflation remains a concern across the<br />
eurozone with many investors worried that, on average, property rents will be unable to<br />
exceed inflation rates over the next five years. Generally, investors have sought security,<br />
and activity has focused on prime properties (i.e. the best buildings in the best locations<br />
with long-term leases to financially strong tenants). Such assets are in short supply while<br />
the weight of money has led to pricing at boom levels. Europe’s secondary and tertiary<br />
markets remain weak with low levels of activity. However, generally raising new equity<br />
remains a concern and challenge for many investors.<br />
Investment activity across the continent has remained broadly flat in EMEA on a yearon-year<br />
basis despite significant increases in Germany and Scandinavia. Yields have<br />
been stable reflecting the strong German and Nordic volume combined with select UK<br />
trophy acquisitions. Central and Eastern Europe has attracted yield-seeking investment.<br />
The most popular targets for cross-border investment are London and Paris where prime<br />
yields are 4% and 4.75%, respectively.<br />
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Office<br />
The sovereign debt crisis and the resultant uncertainty in the investment markets, coupled<br />
with the sharp distinction between prime and secondary property, are reflected in<br />
Europe’s office occupational markets. Not surprisingly, Europe’s office tenants are<br />
reluctant to commit to new space at a time of such turbulence. Take-up in the first half<br />
of 2011 was slightly (approximately 5%) lower than in the same period in 2010 and 10%<br />
lower than in the second half of 2010. Those deals which have occurred were for higher<br />
quality (well located, well specified) stock which, due to very restricted new development,<br />
meaning that the quality and location of vacant space is increasingly secondary.<br />
Rents are generally either static or falling. London and Paris continue to be most popular<br />
with investors due to strong tenant demand, low vacancy rates and high investment<br />
liquidity. Outside of these key areas, demand in Germany, particularly in Hamburg and<br />
Frankfurt, remained strong. Otherwise few European cities are seeing significant<br />
development starts likely subduing the supply of new accommodation for the next two<br />
to three years. The shortage of development finance will exacerbate this trend. Exceptions<br />
to the rule include Moscow and Oslo, which have seen rental increases while rents in<br />
Athens, Dublin and Madrid have continued to fall. Tenants are generally opting to<br />
negotiate with existing landlords rather than incur the costs of moving. The continued<br />
uncertainties overhanging the markets, coupled with fears of a double-dip recession, will<br />
lead to expansion plans being put on hold until some clarity emerges.<br />
Industrial<br />
While leasing activity in the industrial market picked up during 2010, the overall European<br />
take-up in the first quarter of 2011 was down 23% compared to the fourth quarter of<br />
2010. Take-up improved as the year progressed though market conditions remain<br />
challenging. The economic climate has led to markedly reduced development activity<br />
which, in turn, is leading to a relative shortage of new or modern warehouse space across<br />
Europe. Vacancy rates in Q1 2011 were generally lower. In those locations where vacancy<br />
rates remain high, there is generally an oversupply of secondary property. Major<br />
international developers remain cautious with few speculative starts, though development<br />
activity has resumed in locations where a firm commitment from an occupier has been<br />
secured. The trend for occupiers, developers and investors to focus their activities on<br />
the established and more traditional distribution locations that have excellent connectivity<br />
and good access to labor has continued. Despite the recession demand from retailers,<br />
food retailers and internet business suppliers continue to dominate the market.<br />
Retail<br />
The latest (July/August) retail sales figures from The Economist show retail sales in the<br />
eurozone down 1% from the same period last year. There are some variations within this<br />
average – e.g. Greece and Spain at -4.3% and -4.6%, respectively, but Norway at +3.6%.<br />
While wage growth across the eurozone remained above the inflation rate in the first two<br />
quarters, additional fiscal restraints are likely to adversely affect these markets in <strong>2012</strong>.<br />
Nevertheless, strong demand from international retailers has led to rental increases in<br />
prime locations in London and major German cities. Rents in Paris have remained flat<br />
while rents in Madrid continue to fall. While prime locations in London have performed<br />
well, this is not true for the rest of the UK with a number of major household names going<br />
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ankrupt. Large retailers continue to close significant numbers of stores nationwide due<br />
to current and forecasted consumer sentiment.<br />
Asia Pacific Overview<br />
Asia Pacific investment markets have not been immune to the global volatility, most<br />
recently with the eurozone debt crisis. In the Asia Pacific region, Hong Kong, Singapore,<br />
Japan, and Australia all saw transactions slow in Q3 2011, although China’s volume for<br />
both commercial property and land continued to increase, but at a far slower pace.<br />
There have been some major governmental interventions through tighter property<br />
regulations over the last 12 months in places like Singapore, Hong Kong and China. These<br />
regulations have primarily been directed to control spiraling residential values and reduce<br />
speculation. Such policies include restrictions on the number of properties one family can<br />
own in one city, larger down payment requirements, higher stamp duty (tax) on the seller<br />
if the property is traded within three to five years of acquisition, as well as the introduction<br />
of annual property taxes. As a result, there has been some cooling on the transactional<br />
volumes of residential properties in all three markets. Anecdotally, there is some evidence<br />
of residential prices beginning to drop in China and there have been several cases of early<br />
buyers protesting developer price discounts to newer buyers. Hong Kong is beginning to<br />
see some softening in residential values, albeit after the last two years of major rises in<br />
value, and Singapore has been able to basically hold values to date. None of these<br />
government regulations have been directed toward the commercial property sector, which<br />
in markets like China, has residential developers moving into commercial development.<br />
Aside from residential and commercial markets, key hotel markets in Asia have seen<br />
excellent growth. Best performing markets in Asia, which are projected to achieve double<br />
digit growth in RevPAR for 2011, include Singapore, Beijing and Hong Kong with<br />
continued but slower growth in <strong>2012</strong>.<br />
Singapore has seen some of the highest levels of supply growth in the region with a lot more<br />
in the pipeline. Beijing is forecasted to have the highest level of demand growth in 2011,<br />
whereas Hong Kong is expected to finish the year with the highest level of ADR growth. The<br />
ability to get debt financing for new hotel construction is becoming more difficult in China.<br />
Office<br />
As the eurozone sovereign debt crisis has evolved, rapid rental rate increases have<br />
ceased in Singapore and Hong Kong and are now in a downward mode, with these<br />
markets having clearly peaked.<br />
Tokyo, Kuala Lumpur, Seoul, Ho Chi Minh City and Taipei are at or approaching the<br />
bottom of declining rent phases and will start to see higher rates. Jakarta, Manila,<br />
Shanghai and Beijing have already seen healthy rental increases but are forecast to see<br />
slower growth in <strong>2012</strong>.<br />
Retail<br />
There are early signs of rental growth in Singapore and Hong Kong. Tokyo, Jakarta and<br />
Shanghai have reached the bottom and should start to see stronger, rising rents. Manila,<br />
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Area Type Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011<br />
Asia Pac Commercial $ 17,192,943,561 $ 14,039,182,064 $ 20,051,078,142 $ 25,251,218,789 $ 21,503,391,516 $ 20,492,011,589 $ 18,388,955,819<br />
Land $ 73,723,342,403 $ 41,127,619,910 $ 56,985,104,261 $ 91,517,897,184 $ 82,438,288,775 $ 57,254,175,662 $ 74,415,868,629<br />
Europe Commercial $ 27,064,359,069 $ 27,054,246,831 $ 25,839,117,962 $ 42,661,539,095 $ 37,379,631,966 $ 35,722,913,615 $ 34,843,975,506<br />
Land $ 2,107,758,023 $ 2,061,090,749 $ 2,264,360,265 $ 3,017,932,542 $ 1,801,765,383 $ 1,945,274,100 $ 2,350,726,612<br />
Americas Commercial $ 11,986,348,608 $ 17,283,088,673 $ 23,856,108,169 $ 39,425,246,472 $ 21,643,962,766 $ 37,944,154,803 $ 31,802,368,075<br />
Land $ 1,177,306,212 $ 1,378,077,610 $ 1,587,973,681 $ 2,157,422,220 $ 1,846,346,110 $ 1,852,157,503 $ 1,931,185,948<br />
Kuala Lumpur and Beijing retail rents have already seen reduced growth in recent<br />
quarters, and we expect further slowing.<br />
Industrial<br />
Rental rates in Singapore and Hong Kong appear to have peaked, with a softening of rates<br />
forecast for <strong>2012</strong>. In contrast, Tokyo industrial rates are close to the bottom with some<br />
increases anticipated over the coming quarters. Beijing and Shanghai have achieved some<br />
good rental growth and will likely see growth projection scale back in the coming period.<br />
Investment<br />
While the Americas and Europe still have higher annual transaction volumes for<br />
commercial property sales above US $10 million, there is a rising trend in commercial<br />
property transaction volumes in Asia and a sleeping giant (land sale transactions) that is<br />
not reflected in commercial building sales figures.<br />
The chart above displays transaction volumes in recent years. The high land transaction<br />
volumes in Asia reflect the high cost of land in major, developed, urban centers in Asia as<br />
well as the land sale activity to meet the urbanization of populations and the resulting huge<br />
demand for new real estate developments in growing, developing countries like China.<br />
Source RCA<br />
All Property Types - <strong>Global</strong>ly<br />
<strong>Market</strong> Volume (in $mil) Cap Rate<br />
NYC Metro 39,679 6.30%<br />
London Metro 34,479 5.81%<br />
Beijing 31,397<br />
Shanghai 25,528<br />
Tokyo 24,047 5.54%<br />
Singapore 22,642 6.68%<br />
Hong Kong 22,555 3.27%<br />
DC Metro 19,404 6.45%<br />
Paris 18,388 6.32%<br />
Seoul 17,533 6.68%<br />
LA Metro 16,024 6.29%<br />
SF Metro 12,678 6.42%<br />
Wuhan 11,698<br />
Chicago 11,291 7.06%<br />
Kunming 10,716<br />
Tianjin 10,323<br />
Suzhou 10,112<br />
Dalian 9,272<br />
Chongqing 9,244<br />
Hangzhou 8,931<br />
Source RCA<br />
In addition, Asia grabs 13 of the top 20 spots for the most active global property markets<br />
in the last 12 months (as of November 2011).<br />
Major Trends in China<br />
China now has the highest annual GDP growth rate of any major global economy (9.1%),<br />
the largest foreign currency reserves in the world (US $3.2 trillion), the second largest<br />
economy in the world (almost US $7 trillion), the largest standing military in the world<br />
(2.25 million), the largest population in the world (almost 1.34 billion) and was the winner<br />
of the most gold medals in the 2008 Olympics (51 gold medals).<br />
European financial ministers must now kowtow to China for Chinese financial support to<br />
invest in the €1 trillion European Financial Stability Fund (EFSF) bond fund, needed to<br />
rescue Greece and the eurozone. US Treasury Secretary Timothy Geithner traveled to<br />
China to encourage the Chinese government to purchase US debt. It is difficult to miss<br />
how dramatically the global economic cards have turned in favor of the Chinese in the<br />
last few years.<br />
The Chinese economy is predicted to grow 8.5% in <strong>2012</strong>, the slowest growth rate in a<br />
decade. The world’s second biggest economy is cooling as weakness in developed<br />
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nations softens exports, the property market cools and smaller businesses experience a<br />
credit squeeze. Unrest in the eurozone spells trouble for China, as Europe is now China’s<br />
largest overseas export market.<br />
The Indian Subcontinent<br />
The global economic turmoil has had a ripple effect on the Indian commercial property<br />
market in the past year. The commercial office markets in India have shown mixed trends.<br />
Overall, rental and capital values have been stagnant with a downward bias. Chennai<br />
remains an exception, where office rents for Class A buildings have shown an upward<br />
trend.<br />
The employment market in India has picked up for the IT/ITeS sector, pharmaceuticals,<br />
retail and hospitality sectors, whereas sectors such as real estate, infrastructure,<br />
manufacturing, engineering etc. remain subdued for 2011–<strong>2012</strong>.<br />
With inflation currently hovering above 12%, ever growing fuel prices and high lending<br />
rates, the general sentiment for both real estate investors and corporations is negative.<br />
Bank deposit rates were at an all time high of 10%+, discouraging real estate investors.<br />
Office<br />
The office market in Mumbai has witnessed oversupply. This, coupled with lower demand<br />
from corporations across all sectors, has negatively impacted rental values. Rental values<br />
have dipped in Andheri SBD by about 15-20% as compared to 2009-2010, while capital<br />
values are stable. This has resulted in lower yields. In certain pockets, such as Goregaon<br />
SBD and Thane SBD, both rental values and capital values have risen by about 10-15%.<br />
The Pune office market remains active due to expansions by IT companies. Rental values<br />
have remained stable, as have capital values, effectively offering stable yields for investors.<br />
Pune remains one of the preferred options for IT companies due to the availability of a<br />
good talent pool and improving infrastructure. In spite of fresh supply hitting the market,<br />
there has been a drop in vacancy rates compared to year-end 2010.<br />
Chennai has emerged as a preferred location for IT and manufacturing companies due<br />
to its political stability, attractive rental values and availability of good infrastructure.<br />
Chennai Class A rental values are the cheapest of all the major cities.<br />
The Hyderabad market continues to see weak demand due to the ongoing political<br />
turmoil, coupled with oversupply and the global economic uncertainty. Rental and capital<br />
values have remained stagnant except for retail (both High Street and malls), where the<br />
rental values have increased by about 10-15% year-over-year.<br />
Kolkata has experienced weaker demand as its suburban office market inventory has<br />
increased substantially, driving up vacancy levels and holding rental and capital values in<br />
check. However, there has been significant speculative office space investment<br />
transactions concluded in the past year. These investments have been done in the hope<br />
that demand will surge with the passage of time and improved political stability. The state<br />
policy initiatives promoting industry and investments are expected to be rolled out soon.<br />
Chandigarh (Punjab) is witnessing strong demand from IT/BPO companies due to the<br />
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obust telecom infrastructure and availability of skilled labor. Supply remains low in the<br />
medium term due to the levies introduced by the state government on new<br />
developments. This has led to an increase in rental rates, and has increased the capital<br />
values by about 12-15%. Industrial rental rates in Chandigarh are increasing due to strong<br />
demand from manufacturing and logistics companies.<br />
The <strong>2012</strong> expectation across the aforementioned cities is that Class A rental rates will<br />
remain muted, especially in Mumbai and Hyderabad, due to large inventory and relatively<br />
weak demand. Class A rents in Pune and Chennai will rise marginally. Kolkata has no<br />
real demand growth and only speculative buying. Kolkata office market rent values will<br />
either remain stable or may drop slightly in the near to medium term.<br />
Retail and Industrial<br />
Since the beginning of 2011, the retail sector displayed stable to upward movement of<br />
rents across the aforementioned cities, largely due to the limited supply of quality retail<br />
spaces. The industrial sector exhibited an upward rental and capital value trend in<br />
Chandigarh, Pune and Kolkata on the back of robust demand. In other cities, there is a<br />
downward trend for <strong>2012</strong>. The retail and industrial sectors are expected to have similar<br />
trends in <strong>2012</strong> as they had in 2011. The exception will be for Chennai, where plant<br />
announcements give a fillip to the sluggish demand pushing up the industrial land and<br />
warehouse rents and capital values.<br />
Australia and New Zealand<br />
Australia. Economic uncertainty in Australia and New Zealand has negatively impacted<br />
market confidence in the property sector. The office sector remains the strongest<br />
performing commercial property sector along with hotels. Western Australia (WA) is<br />
currently the best performing of the Australian office property markets in the country, with<br />
New South Wales expected to also perform well.<br />
Pricing expectations for office properties have been scaled back in all states, with Victoria<br />
and New South Wales maintaining the strongest outlook. Chinese investors continue to<br />
be active buyers in the office sector.<br />
With rental rates trending downward, landlord concessions are ubiquitous in all office<br />
markets, except WA. The national vacancy rate fell slightly in September 2011 and will<br />
continue to do so until market fundamentals come into balance. While job postings are<br />
at a 12-month low, employment remains strong, particularly for white collar jobs. In the<br />
retail sector, rents are falling and lease concessions are on the rise. Vacancy rates are<br />
low, despite recent increases. Weak property fundamentals are expected to persist over<br />
the next 12 months, particularly in NSW.<br />
The strong Australian dollar has negatively impacted the industrial and manufacturing<br />
sector. One notable industrial sale in Sydney recently reflected a 22% price decline,<br />
compared to what it traded for in mid-2007. Conditions in the industrial property market<br />
are forecasted to bottom in 2011, with the greatest recovery expectations in WA and<br />
Victoria.<br />
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New Zealand. Auckland continues to the be the strongest of the office markets, with<br />
vacancy rates below 5% for prime space, limited new supply, and stable values.<br />
Fundamentals are expected to weaken in Wellington, as new supply is nearing<br />
completion in the face of limited demand. In contrast, plans to rebuild the Christchurch<br />
CBD are progressing, with both investors and tenants are showing interest in the market.<br />
Conditions in the retail property market deteriorated in September, with economic<br />
uncertainty causing consumers to scale back discretionary spending. Retail markets are<br />
expected to be negative through much of <strong>2012</strong>, before rising modestly in 2013.<br />
The industrial sector is experiencing similarly low vacancy rates in Auckland, sustained<br />
by significant pre-leasing and build-to-suit projects. As a result, value expectations remain<br />
stable for <strong>2012</strong>. In Wellington, industrial property continues to be the best performing<br />
asset class, supported by stronger than expected manufacturing output.<br />
Latin America and the Caribbean Overview<br />
The region continued to grow and expand throughout 2011, despite the sluggish US<br />
recovery and turmoil in the eurozone. The initial Latin American growth estimate for 2011<br />
was about 5%. However, due to the US and the European economic problems, it was<br />
adjusted down to 4.3% by mid-year. Even so, the region’s leaders all <strong>report</strong>ed healthy<br />
growth figures and real estate markets grew unabated.<br />
At the outset of 2011, there was fear that strong growth in the region would lead to<br />
economic overheating, increased inflation and subsequently higher real estate values.<br />
Most likely due to the slow recovery in the US and economic “congestion” in Europe,<br />
these fears did not materialize. In fact, even the precipitous climb in Brazilian real estate<br />
values over the last three years slowed considerably. The region benefitted from a<br />
significant increase in property investment by domestic funds, which had previously been<br />
deploying capital overseas.<br />
Although the Latin American countries grew in 2011, growth in the Caribbean region was<br />
mixed. Cuba, Anguila, Curaçao and the Cayman Islands experienced a strong tourism<br />
recovery with close to double digit growth rates, while many other island countries<br />
experienced zero or negative growth. The region failed to exceed an overall growth rate<br />
of 2% due to declines in remittances and tourism.<br />
In South America and Mexico, real estate development saw a strong resurgence in all<br />
sectors, while Central America witnessed moderate development. Panama, in particular,<br />
has continued to experience strong construction activity even during the height of the<br />
financial crisis. New construction in the Caribbean region was minimal in 2011, with the<br />
exception of the Dominican Republic. During the 2009 financial crisis, the Dominican<br />
Republic registered a growth rate of 3.5% and experienced significant development<br />
activity in 2010, primarily in the residential sector.<br />
Projections for the region in <strong>2012</strong> are optimistic, but tempered with latent concern for<br />
the USA’s and Europe’s potential negative influence. Latin America is expected to<br />
continue its healthy growth, while the Caribbean is expected to see a slow recovery. Both<br />
demand and supply will increase further in <strong>2012</strong>, with a landlord’s market in most of the<br />
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egion’s cities. Nevertheless, lease and sale rates for office and industrial product are not<br />
expected to increase drastically. In Brazil, the growth trend has slowed significantly<br />
compared to when office rates were climbing by 15-25% per annum in major cities. The<br />
retail sector may see lease rates increase markedly for shopping malls and High Street<br />
locations in major markets (Brazil, Mexico, Colombia and Peru), due to continued strong<br />
consumer demand.<br />
Strong growth in real estate supply will continue to occur in the larger economies such<br />
as Brazil, Chile, Peru, Panama, Mexico and Colombia. The smaller economies of Central<br />
America, such as Costa Rica and Guatemala, will experience lower growth recoveries.<br />
Growth in resort and hotel development will lag the other sectors. Greenfield development<br />
in the industrial and office sectors will continue, due to the lack of Class A product<br />
throughout the region (with the exception of Mexico). Class A office vacancy rates are<br />
expected to remain below 5% in Buenos Aires, Bogota, Rio de Janeiro and Sao Paulo.<br />
The notable exception to the regional vigor is Venezuela, which will continue to suffer<br />
inflation above 25% with stifled economic growth. The challenge remains for governments<br />
to provide adequate infrastructure to meet the ever-growing needs of industries and a<br />
prospering population that has a growing appetite for cars.<br />
An interesting trend to note is the source of investment capital, since debt financing for<br />
development has been largely unavailable. For the first time in the last 40 years (and<br />
perhaps ever), a great deal of local capital was invested domestically instead of being<br />
expatriated. In addition, a significant amount of capital that had been previously invested<br />
in foreign markets was repatriated and directed to local development opportunities. This<br />
tendency is expected to continue through the coming year.<br />
Argentina. In 2011, the economy showed healthy growth, which is expected to continue<br />
in <strong>2012</strong>. The Argentine peso weakened from 3 ARS to the dollar to about 4.9, helping<br />
the country to maintain a strong export base. <strong>Global</strong> exports are expected to continue<br />
to increase in <strong>2012</strong>, primarily in the agricultural, textile and service sectors, while inflation<br />
is expected to stay high, possibly hitting 20%.<br />
There is a shortage of available Class A product in the office, industrial and retail sectors.<br />
Office, industrial and downtown vacancy rates all stand at 3-4%, with demand outpacing<br />
supply. Most industrial projects in the pipeline are build-to-suit, with lease rates expected<br />
to increase to keep pace with inflation. The market will see an increase in speculative<br />
construction over the next several years.<br />
The Bahamas. Both the tourism and banking industries, the two key economic drivers,<br />
should see a stronger recovery in <strong>2012</strong>, as US and European tourist travel to the islands<br />
increases. Construction of new hotel, resort and residential projects remain slow, except<br />
for the 1,000 acre, US $2 billion Baha Mar resort on New Providence Island. The<br />
projected slow and steady <strong>2012</strong> recovery in the US will help the country’s tourism growth.<br />
Downtown retail and office market absorption is slow, but improving. Due to abundant<br />
parking and better access, suburban markets continue to be the most desirable for new<br />
construction and expansion. In 2011, robust demand kept vacancy rates low, stabilized<br />
suburban retail rents and spurred rare build-to-suit opportunities. Demand for industrial<br />
space and Class A office product in the suburban submarket is especially strong. Interest<br />
in residential development and hotels is expected to rebound slightly, with several new<br />
projects in the pipeline.<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com<br />
20
Brazil. Brazil has proven to be one of the world’s most active economies, experiencing<br />
a growth rate of about 5% in 2011. The expectations of a continued economic boom<br />
can be attributed to the country’s large offshore oil deposits, strong and growing domestic<br />
consumption, Brazil’s hosting of the World Cup in 2014 and of the Olympics in 2016<br />
(causing public investment in infrastructure projects), alternative energy sources (e.g.,<br />
ethanol) and continued policy and bureaucratic reforms. In the short term, high business<br />
loan rates and bureaucracy will limit the country’s growth, but risk perception among<br />
international investors is declining. The Brazilian real continues to strengthen against the<br />
US dollar, from its low of 2.16 in late 2008 to 1.75 in late 2011.<br />
During 2011, the Brazilian real estate market grew at a faster pace than 2010. The<br />
country remains an attractive target for Greenfield Class A office, retail and particularly<br />
industrial development and speculative real estate acquisition. Lease rates for all product<br />
types increased while cap rates hover between 9-11%.<br />
Colombia. Colombia was finally granted free trade status with the US, which will further<br />
benefit the economy. Several sectors including agriculture, retail, services and BPO will<br />
gain the most. Over the last 15 years, the country has steadily grown and improved its<br />
democratic credentials, and the peso has been relatively stable, with a government target<br />
of about 1,800 COP to the dollar.<br />
Both real estate development and pricing were relatively strong in 2011, with demand<br />
exceeding supply. International investment funds have yet to venture strongly into<br />
Colombia, but the domestic capital sources are investing actively in Greenfield projects<br />
and are fueling development growth. Given the lack of a transparent investment market<br />
for existing product and a shortage of investment sales, cap rates are difficult to identify,<br />
but are estimated to be 12% or greater.<br />
Chile. Chile continues to serve as a benchmark for most emerging economies in the region<br />
as the Chilean economy recorded another respectable year of growth. Inflation was stable,<br />
while the 7% unemployment rate is among the lowest in Latin America. The recovering<br />
prices for copper and other commodities, paired with an increase in global demand, helped<br />
the Chilean economy prosper in 2011. Continued attempts to decrease dependence on<br />
imports of natural gas, by developing hydroelectric projects in the Andes, has been hindered<br />
by ecological challenges. Therefore, Chile is currently building its first LNG terminal to secure<br />
a supply for existing and upcoming gas-fired thermal plants, and has engaged in the<br />
construction of several new hydropower and coal-fired thermal plants. Chilean companies,<br />
profiting from their strong domestic economy, have moved from the cautious international<br />
expansion mode to an aggressive one. Their targets are primarily Peru, Colombia,<br />
Argentina, and Brazil, with Costa Rica, Panama and the US also recently added to the list.<br />
Demand for quality commercial real estate continued to be strong, with vacancies remaining<br />
below 3%. Rental rates remained stable, with cap rates at about 8-10%.<br />
Costa Rica. The market is now stable and almost fully recovered from the global financial<br />
crisis. Demand is increasing and existing supply is being absorbed. Developments that<br />
were on hold are now proceeding to construction. Real estate activity was strong during<br />
2011 with resort, hotel, and second home sectors on the Pacific Coast still awaiting a<br />
rebound. In the municipal area of San José, leasing and sale activity increased in the office<br />
and industrial sectors, and rental rates were stable. The retail sector showed a stronger<br />
recovery in demand, with upward pressure on shopping malls and High Street rents.<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com<br />
21
For <strong>2012</strong>, absorption in the commercial sectors is expected to increase, with a stronger<br />
uptake in retail. Rental rates are expected to be stable for the office and industrial sectors,<br />
but should experience a slight increase in the retail sector as absorption increases. Along<br />
the Pacific Coast, recovery and renewed investor interest should increase by mid-year<br />
<strong>2012</strong>. Land prices are expected to remain weak as development activity remains very<br />
low and some owners try to cash out. Cap rates are above 9% and project IRRs are<br />
above 18%.<br />
Dominican Republic. The Dominican Republic is the bright star among the sea of<br />
struggling economies in the Caribbean. It achieved a growth rate of 3.7% in 2010, 4.7%<br />
in 2011, and is expected to follow the trend in <strong>2012</strong>. Real estate development in Santo<br />
Domingo, the country’s capital, has been strong, particularly in the residential sector, with<br />
numerous condominium towers now decorating the skyline. The retail and office sectors<br />
have also witnessed strong activity. Two office towers will be completed in <strong>2012</strong>, as well<br />
as the Sambil Santo Domingo Shopping Center with 195,000 square meters of total retail<br />
area. Tourism development, although largely with smaller projects, is continuing primarily<br />
in Puerto Plata and other outlying cities. A major thoroughfare is currently under<br />
construction to connect the Samana area with Santo Domingo by year-end <strong>2012</strong>.<br />
Mexico. Mexico continued to recover during 2011, achieving growth rates above 3.5%.<br />
The Mexican peso to US dollar exchange rate increased throughout 2011 to about 13.5<br />
pesos to the dollar at year-end 2011. The demand for maquiladora product continued<br />
to increase in response to rising labor and transport costs from Asian operations. Asian<br />
companies from Korea, Japan and China showed increased interest for installing<br />
manufacturing operations in northern Mexico.<br />
As noted above, real estate activity was healthy across Mexico, with Mexico City faring<br />
the best. The office and industrial sectors experienced strengthening positive absorption,<br />
despite the negative news about the drug trafficking violence along the border. Leasing<br />
and sales demand increased in almost all asset classes, especially retail. Lease rates in<br />
Mexico City for all product types have been stable, in spite of some inflationary pressure,<br />
and should be stable in <strong>2012</strong> as concern for a prolonged US recovery shapes landlord<br />
sentiment. Sale prices across the country should also remain relatively stable, and cap<br />
rates will likely remain at about 9% for quality product, with IRRs in the 15-20% range.<br />
Panama. The strong growth cycle in Panama continued unabated in 2011, with a GDP<br />
growth rate above 10%. Strong real estate development continued, primarily in the<br />
residential, office and business hotel sectors. Absorption for all product types remained<br />
very active with lease and sale prices for commercial properties relatively stable. For <strong>2012</strong>,<br />
the country’s growth rate is expected to achieve 8%.<br />
In the commercial real estate sector, both supply for the office and industrial markets will<br />
expand, but the office sector inventory is expected to increase by 35% (about 300,000<br />
square meters of Class A product). However, given the stability of the office rates during<br />
2011 and landlords’ increasing confidence in the economy, we do not expect office lease<br />
rates to decline during <strong>2012</strong>.<br />
Peru. Peru enjoyed another strong year with a growth rate of 6.7%, after achieving 8.7%<br />
in 2010. This occurred even with the election of a potentially worrisome left-wing<br />
presidential candidate, who caused investors and companies to largely halt projects for<br />
several months until they could determine the new president’s pragmatism (or lack<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com<br />
22
thereof). Slowed real estate activity during Q2 2011 was quite strong overall, with rent<br />
and sale prices increasing by about 8%. For <strong>2012</strong>, rental and sale activity should remain<br />
strong in all sectors, especially retail. Numerous retail projects are under construction<br />
and will be available in <strong>2012</strong>, with many already significantly pre-leased. In the Lima office<br />
market, demand should remain active and vacancy rates are not expected to drop as<br />
new office product is delivered. Due to the expansion of the city’s core, industrial<br />
development is being pushed further out beyond the residential and commercial areas,<br />
primarily to Huachipa in the East zone, Lurin and Chilca in South Lima; and Ventanilla in<br />
West Lima.<br />
Venezuela. 2011 proved to be a difficult year again for Venezuela as the Chavez<br />
administration’s macro and microeconomic policies continued to chastise the domestic<br />
companies and markets. Additionally, lower oil prices and falling production reduced the<br />
government’s revenues, as the petroleum industry remains the most important and<br />
profitable economic engine. <strong>2012</strong> will continue to be difficult with shortages expected in<br />
many sectors, due to the administration’s nationalization of numerous companies and<br />
its continued threats to strategic industries, such as food processing and agriculture.<br />
Except for activity from political bedfellows such as Iran, China, Libya and Russia, there<br />
is virtually no new foreign investment in Venezuela outside of the petroleum industry, as<br />
the country’s administration and policy environment hamper recovery.<br />
Vacancy rates are still near zero in the office, industrial and retail sectors, and rental rates<br />
are rising sharply due to high inflation rates and artificially low dollar-to-bolivar currency<br />
exchange rates. Landlords determine sale and rental rates based on the US dollar.<br />
Although investors and developers remain extremely cautious due to the lack of<br />
transparency and political risks, there is some new development and investment in real<br />
estate, particularly in retail. Firms operating in Venezuela cannot expatriate their earnings<br />
at a realistic dollar value, and are therefore looking for an alternative way to protect the<br />
value of their capital, which could bode well for commercial property markets.<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com<br />
23
n us Highlights – northeast region<br />
n Connecticut<br />
Delaware<br />
Maine<br />
Maryland<br />
Massachusetts<br />
New Hampshire<br />
office<br />
New Jersey<br />
New York<br />
Pennsylvania<br />
Northern Virginia<br />
Washington, DC<br />
Overall net absorption in baltimore’s CBD was positive, boosted by several pre-leased deliveries<br />
and relatively steady leasing activity. Although the Class A vacancy rate, at 16.9%, is down over<br />
the past year, it remained elevated enough to put pressure on asking rents with Class A rents<br />
declining to $25.50/SF.<br />
At 14%, boston’s vacancy rate is virtually unchanged from last year. However, there are pockets<br />
of activity where demand, especially from the biotech, high-tech and medical sectors, is meeting<br />
a lack of new supply, which will put pressure on rents in select submarkets in <strong>2012</strong>.<br />
The economic recovery spurred historically high levels of leasing activity in manhattan in the<br />
first half of 2011, with asking rents increasing and vacancy rates declining in most submarkets.<br />
However, continuing economic uncertainty is impacting demand for office space, decelerating<br />
growth in asking rents. Investors continue to seek out Manhattan office properties with, investment<br />
sales transaction volume is up over 148% from 2010.<br />
The northern Virginia office market experienced another year of modest improvement in almost<br />
all leasing categories in 2011. However, corporate downsizing and federal government uncertainty<br />
has caused government and government affiliated tenants to slow down leasing decisions,<br />
resulting in an increase in vacancy rates and a decline in net absorption for 2011.<br />
Washington dc’s continued its strong performance in 2011, recording 1.3 million SF of positive<br />
net absorption year-to-date and Class A asking rents rising to $54.00/SF. The recovery is expected<br />
to continue at a slower pace in <strong>2012</strong>, as government leasing will probably slow.<br />
Industrial<br />
boston’s industrial market performed well, driven by demand for quality med/tech, flex,<br />
warehouse and distribution space. Asking rents are in the $6/SF range, and overall vacancy<br />
around 11.6% for warehouse, 12.5% for manufacturing and 13.4% for high-tech / R&D space.<br />
The northern new Jersey industrial sector was active throughout 2011. Modern facilities are<br />
in demand as a result of growth in international import/export businesses, while less modern<br />
buildings are aggressively competing for deals or being converted into data centers. Overall<br />
vacancies stand in the 9.0% to 9.5% range.<br />
Philadelphia continues to attract global attention from heavy manufacturing, tech, drug, alternative<br />
energy companies seeking labor, power, rail, port, and economic incentives offered specifically<br />
within The Philadelphia Naval Yard and other industrial sites under the control of the Philadelphia<br />
Industrial Development Corporation. Asking rents for warehouse space stands at $4/SF.<br />
Demand for industrial space in Westchester remains flat, with the vacancy rate rising in the<br />
12.5% to 15% range. Pricing has dropped to early 2000 rates.<br />
retail<br />
The northern new Jersey retail sector has been slow to recover. Retailers are cautious to open<br />
new stores while others vacate. Vacancies have leveled to 6.5%. Malls continue to do well while<br />
downtown locations suffer. There is minimal new construction.<br />
Retail in Philadelphia experienced little change and remained resilient in 2011. Food related<br />
business openings continue to lead the market and several national retailers and local entrepreneurs<br />
have turned vacant locations into successful business locations in Center City. Asking rents and<br />
vacancy levels remain virtually unchanged from 2010.<br />
manhattan’s retail market was strong throughout <strong>2012</strong>, especially in the city’s high-end retail<br />
corridors, where luxury retailers are attracting tourists flocking to New York City to take advantage<br />
of the US dollar’s depreciating value. At over $100/SF, Manhattan’s average retail rents are the<br />
highest in the country.<br />
long Island’s huge buying power has resulted in improvement in the retail sector. Equity One<br />
broke ground on a 330,000 SF retail project in Westbury, the largest development in the region,<br />
scheduled for completion in late <strong>2012</strong>. Retailers are aggressively looking for locations with LA<br />
Fitness, Shop-Rite and BJ’s Warehouse opening new locations in 2011.<br />
The retail investment sales market in Washington improved significantly in 2011with cap rates<br />
averaging 7.20% compared to the same period in 2010 when they averaged 8.25%.<br />
Many national retailers left Westchester a few years back, with 99-cent stores and seasonal<br />
businesses taking spaces previously occupied by high-end retailers. With Borders, Blockbuster,<br />
Pathmark and A & P recently vacating large spaces in 2011, this trend will likely continue into<br />
<strong>2012</strong>.<br />
leading Price class a markets<br />
Downtown Office<br />
Class A<br />
Suburban Office<br />
Class A<br />
leading Price retail markets<br />
Downtown Retail Office<br />
Class Downtown A<br />
Suburban Retail Office<br />
Service Class Centers A<br />
Retail Retail<br />
Power Power Centers<br />
Retail Retail<br />
Regional Regional Malls Malls<br />
Industrial Industrial<br />
Bulk Bulk Warehouse<br />
Industrial Industrial<br />
Manufacturing<br />
Industrial Industrial<br />
High Tech/R&D Flex<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
New York City-Midtown $ 64.48 $ 145.00 13.00%<br />
Washington DC $ 54.00 $ 82.00 11.50%<br />
New York City-Downtown $ 39.81 $ 72.00 8.20%<br />
Boston, Massachusetts $ 38.00 $ 45.00 12.70%<br />
Philadelphia, Pennsylvania $ 27.00 $ 32.00 12.00%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Northern Virginia $ 55.00 $ 32.00 14.00%<br />
Princeton/Mercer County, New Jersey $ 30.00 $ 32.00 18.00%<br />
Suburban Maryland/DC Suburbs $ 29.73 $ 50.00 16.00%<br />
Northern New Jersey $ 28.00 $ 35.00 12.50%<br />
Bucks County, Pennsylvania $ 24.87 $ 33.00 32.00%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
New York City-Midtown $ 146.00 $2,500.00 4.60%<br />
Washington, DC $ 52.00 $ 62.50 8.80%<br />
Boston, Massachusetts $ 47.75 $ 91.29 2.60%<br />
Westchester, New York $ 45.00 $ 70.00 15.00%<br />
Philadelphia, Pennsylvania $ 35.00 $ 80.00 9.00%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Westchester, New York $ 37.50 $ 50.00 15.00%<br />
Washington, DC $ 35.00 $ 50.00 4.00%<br />
Berks County, Pennsylvania $ 24.50 $ 30.00 16.00%<br />
Baltimore, Maryland $ 24.00 $ 50.00 n/a<br />
Suburban Maryland/DC Suburbs $ 21.17 $ 60.00 9.00%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Westchester, New York $ 37.50 $ 50.00 15.00%<br />
Southern New Jersey $ 28.00 $ 40.00 7.00%<br />
Philadelphia, Pennsylvania $ 27.00 $ 38.00 10.00%<br />
Suburban Maryland/DC Suburbs $ 20.48 $ 45.00 6.00%<br />
Greater Springfield, Massachusetts $ 14.00 $ 16.00 10.00%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Washington, DC $ 40.00 $ 65.00 4.40%<br />
Westchester, New York $ 37.50 $ 50.00 15.00%<br />
Long Island, New York $ 30.00 $ 40.00 5.00%<br />
Boston, Massachusets $ 26.94 $ 51.86 3.60%<br />
Middlesex/Somerset Counties, New Jersey $ 19.00 $ 24.00 13.00%<br />
leading Price Industrial markets<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Westchester, New York $ 10.00 $ 12.00 12.50%<br />
Washington DC $ 8.50 $ 16.50 13.40%<br />
Northern Virginia $ 6.75 $ 18.00 10.50%<br />
Suburban Maryland/DC Suburbs $ 6.72 $ 22.28 15.00%<br />
Northern New Jersey $ 4.75 $ 6.00 9.00%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Westchester, New York $ 10.00 $ 12.00 12.50%<br />
Suburban Maryland/DC Suburbs $ 7.94 $ 9.75 9.00%<br />
Boston, Massachusetts $ 5.90 $ 8.40 12.50%<br />
Albany, New York $ 5.00 $ 6.00 8.00%<br />
Northern New Jersey $ 4.25 $ 5.50 8.00%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Washington, DC $ 16.00 $ 27.00 10.10%<br />
Westchester, New York $ 13.50 $ 15.00 15.00%<br />
Northern Virginia $ 11.50 $ 23.00 15.00%<br />
Boston, Massachusetts $ 9.11 $ 15.87 13.40%<br />
Princeton/Mercer County, New Jersey $ 4.75 $ 5.50 12.00%<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com<br />
24
n us Highlights – southeast region<br />
n Alabama<br />
Florida<br />
Georgia<br />
Kentucky<br />
Mississippi<br />
office<br />
North Carolina<br />
South Carolina<br />
Tennessee<br />
The atlanta office market recorded positive absorption in 2011 with vacancy rates averaging<br />
19% and rental rates continuing on a downward trend. Concessions reached a plateau, impacting<br />
small-to-midsized firms seeking space. Larger tenants continue to secure favorable terms as<br />
building owners are reluctant to subdivide bigger blocks of existing vacant space.<br />
The overall vacancy in the charlotte office market increased from 17.1% to 17.9% over the past<br />
year. In Ballantyne Corporate Park, the Bissell Companies continue to defy odds and is building<br />
three speculative buildings totaling 790,000 SF. The three premier submarkets in Charlotte -<br />
Downtown, Southpark and Ballantyne - continue to attract the majority of newer, higher end<br />
tenants.<br />
The office sector In miami remains divergent with vacancy in CBD, Brickell and other submarkets<br />
exceeding 20%. However, rental rates are stabilizing, though landlord concession package remain<br />
generous. The only new construction, Coral Gables’ 396 Alhambra Circle, is nearing completion<br />
with few leases signed.<br />
Expansions and a lack of new construction has led to five straight quarters of positive absorption<br />
in memphis’ office market. The direct vacancy rate is 19.7%, down from 20.4% at the same<br />
time last year.<br />
The orlando office market is improving with an overall vacancy rate of 13.7% and positive<br />
absorption of 811,570 SF as of Q3 2011. Rental rates are virtually unchanged from last year.<br />
Office cap rates have averaged 8.4%.<br />
Industrial<br />
atlanta’s industrial market, with over 10.7 million SF of leasing activity (as of Q3 2011) is on<br />
track to finish the year with the largest occupancy gains in several years. The increases are due<br />
to expansions, regional consolidations and some small new business growth. Vacancy rates<br />
dropped slightly to 13.6% while rental rates are down slightly from 2010.<br />
Jacksonville’s industrial warehouse leasing was notably stronger in 2011. Leasing and absorption<br />
are up but rental rates are down. Research/high tech space has lagged, but not enough to put a<br />
damper on the positive absorption over the past year.<br />
The memphis industrial market, a pillar of the region, has had two consecutive quarters of positive<br />
absorption putting direct vacancy at 14.3%. The market has been bolstered by large new leases<br />
for Trane, CEVA Logistics, Nike, Newegg and Cummins as well as several build-to-suit projects<br />
from Electrolux Home Products and Mitsubishi Electric Power Products.<br />
Industrial markets in miami improved, led by export growth with Brazil, Miami’s largest trading<br />
partner, with vacancies declining and rates increasing. The industrial market is also benefiting<br />
from the Port of Miami’s expansion, which includes increased capacity to accommodate new<br />
super container ships and a new cargo tunnel to improve vehicular access to the port.<br />
The orlando industrial market vacancy rate stands at 12% with annual positive net absorption<br />
totaling 1.2 million square feet as of Q3. Absorption has been strongest among warehouse and<br />
distribution buildings. Asking rents remained flat at $5.36/SF.<br />
retail<br />
atlanta’s retail market has seen some positive momentum with shopping centers seeing a<br />
majority of the activity as well as retailers backfilling some of the empty big-boxes. Vacancy<br />
remains in the 10% range and no new construction projects are on the horizon. Modest activity<br />
should continue to keep the market positive and slowly reduce the amount of vacant space<br />
available throughout <strong>2012</strong>.<br />
After rising for three years, charlotte retail vacancies declined a modest 0.3%. Some of the larger<br />
shopping centers traded hands, with the new owners able to entice tenants by lowering lease<br />
rates and offering generous concessions.<br />
Many new grocers entered the knoxville retail market including Whole Foods, Trader Joe’s, Publix<br />
and Costco. Other noteworthy transactions include a new 100,000 SF Kroger’s, and Target’s<br />
110,000 SF store at the new NorthShore Town Center.<br />
Demand for retail in miami is balanced and vacancy rates remain low. Well-capitalized retailers<br />
continue to expand and large national retailers are adding stores for the first time. Strong demand<br />
should result in rental rates in preferred markets growing over 10% and vacancy rates declining<br />
in <strong>2012</strong>.<br />
Improvements continue in the orlando retail market with an overall vacancy rate of 7.3% and<br />
positive absorption of 807,900 SF. Asking rents trended lower over the year. New tenants are<br />
gradually filling formerly vacant big box space as Borders closed its Orlando area stores.<br />
leading Price class a markets<br />
Downtown Office<br />
Class A<br />
Suburban Office<br />
Class A<br />
leading Price retail markets<br />
Retail<br />
Downtown<br />
Retail<br />
Service Centers<br />
Retail<br />
Power Centers<br />
Retail<br />
Regional Malls<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Miami, Florida $ 40.93 $ 46.50 27.89%<br />
Palm Beach County, Florida $ 37.52 $ 50.00 19.40%<br />
Charleston, South Carolina $ 30.00 $ 32.00 4.90%<br />
Charlotte, North Carolina $ 27.00 $ 34.00 10.20%<br />
Tampa Bay, Florida $ 25.00 $ 28.00 30.00%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Palm Beach County, Florida $ 30.86 $ 35.00 18.20%<br />
Miami, Florida $ 29.37 $ 42.66 22.30%<br />
Memphis, Tennessee $ 22.34 $ 28.75 11.10%<br />
Asheville, North Carolina $ 22.00 $ 26.00 16.50%<br />
Tampa Bay, Florida $ 18.00 $ 21.00 30.00%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Miami, Florida $ 34.90 $ 45.00 3.49%<br />
Charleston, South Carolina $ 26.00 $ 34.00 8.10%<br />
Charlotte, North Carolina $ 25.00 $ 35.00 22.80%<br />
Palm Beach County, Florida $ 24.06 $ 40.00 4.97%<br />
Orlando, Florida $ 23.25 $ 32.50 4.10%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Miami, Florida $ 22.46 $ 45.00 5.90%<br />
Palm Beach County, Florida $ 19.17 $ 36.31 3.80%<br />
Chattanooga, Tennessee $ 18.00 $ 20.00 10.00%<br />
Greensboro/High Point/Winston-Salem, North Carolina $ 18.00 $ 20.00 20.00%<br />
Birmingham, Alabama $ 12.80 $ 17.35 13.50%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Miami, Florida $ 39.71 $ 50.00 1.50%<br />
Chattanooga, Tennessee $ 24.00 $ 30.00 10.00%<br />
Charlotte, North Carolina $ 17.44 $ 23.00 8.50%<br />
Orlando, Florida $ 16.30 $ 26.00 7.20%<br />
Memphis, Tennesseee $ 11.80 $ 22.00 16.20%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Chattanooga, Tennessee $ 37.00 $ 50.00 10.00%<br />
Columbia, South Carolina $ 35.00 $ 45.00 16.40%<br />
Savannah, Georgia $ 35.00 $ 50.00 1.00%<br />
Greenville/Spartanburg, South Carolina $ 32.00 $ 38.00 2.00%<br />
Charleston, South Carolina $ 30.00 $ 40.00 9.00%<br />
leading Price Industrial markets<br />
Industrial<br />
Bulk Warehouse<br />
Industrial<br />
Manufacturing<br />
Industrial<br />
High Tech/R&D<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Palm Beach County, Florida $ 7.41 $ 9.50 9.20%<br />
Miami, Florida $ 6.89 $ 18.85 8.20%<br />
Orlando, Florida $ 4.76 $ 6.50 12.30%<br />
Tampa Bay, Florida $ 4.00 $ 6.00 25.00%<br />
Jacksonville, Florida $ 3.70 $ 7.29 10.40%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Tampa Bay, Florida $ 5.00 $ 6.50 25.00%<br />
Birmingham, Alabama $ 4.50 $ 6.50 13.00%<br />
Asheville, North Carolina $ 4.25 $ 6.00 14.00%<br />
Savannah, Georgia $ 3.95 $ 4.35 15.50%<br />
Memphis, Tennessee $ 2.65 $ 5.00 10.00%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Orlando, Florida $ 30.00 $ 30.00 5.20%<br />
Knoxville, Tennessee $ 12.50 $ 20.00 6.00%<br />
Miami, Florida $ 11.98 $ 23.00 10.80%<br />
Birmingham, Alabama $ 10.20 $ 12.50 8.00%<br />
Raliegh/Durham, North Carolina $ 7.50 $ 10.00 17.00%<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com<br />
25
n us Highlights – midwest region<br />
n<br />
office<br />
Illinois<br />
Indiana<br />
Iowa<br />
Michigan<br />
Minnesota<br />
Missouri<br />
Nebraska<br />
North Dakota<br />
Ohio<br />
South Dakota<br />
Wisconsin<br />
Conditions in chicago’s downtown office market have been improving for the past year, the beginning<br />
of a modest recovery following a nearly two year period of rising vacancy rates. Asking<br />
rents for Downtown Class A office space have increased to $42/SF and vacancy rates have declined<br />
to 15.4%. Suburban vacancy rates, typically higher and more volatile than downtown, have<br />
not responded as favorably to the recovery as downtown rates have. This is especially true of<br />
Class B and C space, which are still witnessing climbing vacancy rates amid weak demand.<br />
cleveland’s overall office vacancy rate ended the year at 13%. Leasing rates were flat and net<br />
absorption was slightly positive. The completion of the new medical mart and Horseshoe Casino<br />
will help increase activity downtown. The landscape will also change as Eaton Corporation, Ernst<br />
& Young and American Greetings will all move into new facilities.<br />
The leasing environment remains soft throughout the detroit suburbs but has shown improvement<br />
throughout the CBD primarily because Quicken Loans, DTE and Blue Cross Blue Shield have all<br />
completed relocations to Downtown. This momentum is attracting other corporations to follow suit.<br />
The kansas city office market worsened in 2011 as vacancy increased to 19.1% from 18.6% in<br />
2010. Incentives from states and municipalities drove shifts from Missouri to Kansas, and to lesser<br />
extent, vice versa. Flight to quality continued, placing pricing pressure in all classes with larger<br />
submarkets seeing improvements in Class A vacancy, and declines in Class B vacancy and asking rents.<br />
st. louis office vacancy rates rose 1% in 2011 while rental rates are still declining slightly. The<br />
high-end Class A market is the brightest spot in St. Louis’ office market, with positive growth<br />
seen in the delivery of the 100% leased National Records & Archives building (474,690 SF), and<br />
the fully pre-leased BJC Healthcare HQ (300,000 SF) currently under construction.<br />
Industrial<br />
chicago, the second largest industrial market and the most important transportation hub in the<br />
country, has now been in a recovery phase for more than a year, evidenced by the absorption of<br />
vacant space and a declining vacancy rate, improving to 10.5%. The area’s intermodal developments<br />
continue to play an active role in the recovery, and now provide service with both BNSF and Union<br />
Pacific Railroads.<br />
Bolstered by steady improvement across the automotive, construction and transportation<br />
segments, cleveland’s industrial sector was stable in 2011. Rents were slightly softer, overall<br />
vacancy was under 10%, which is relatively unchanged from 2010, and new construction was<br />
limited to a small handful of build-to-suit projects.<br />
Continuing last year’s positive momentum, detroit’s industrial net absorption remained positive<br />
(6 million SF), signaling continued improvement and stability. Well located warehouse and flex<br />
space in Wayne and Oakland counties remains in demand. Michigan’s technology and alternative<br />
energy investments are a catalyst for the industrial markets, with start-up companies finding<br />
favorable tax incentives and a qualified labor pool.<br />
st. louis industrial vacancy rates climbed to 8.8% during 2011. Absorption for the year is negative<br />
912,892S SF. This has placed further downwards pressure on asking rates which have dropped<br />
by nearly 4%.<br />
leading Price class a markets<br />
Downtown Office<br />
Class A<br />
Suburban Office<br />
Class A<br />
leading Price retail markets<br />
Retail<br />
Downtown<br />
Retail<br />
Service Centers<br />
Retail<br />
Power Centers<br />
Retail<br />
Regional Malls<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Chicago, Illinois $ 42.00 $ 55.00 15.40%<br />
Milwaukee, Wisconsin $ 30.00 $ 32.00 10.00%<br />
Detroit, Michigan $ 21.00 $ 23.00 18.00%<br />
St. Louis, Missouri $ 19.25 $ 23.00 14.40%<br />
Indianapolis, Indiana $ 19.06 $ 27.00 17.00%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Chicago, Illinois $ 26.00 $ 33.00 21.30%<br />
Omaha, Nebraska $ 24.80 $ 30.81 6.50%<br />
St. Louis, Missouri $ 23.25 $ 30.00 10.50%<br />
Kansas City, Missouri $ 21.80 $ 32.00 15.20%<br />
Lincoln, Nebraska $ 20.64 $ 23.00 7.20%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Madison, Wisconsin $ 20.00 $ 35.00 11.50%<br />
Detroit, Michigan $ 17.00 $ 35.00 14.00%<br />
Kansas City, Missouri $ 13.59 $ 24.25 5.80%<br />
Indianapolis, Indiana $ 13.40 $ 24.25 32.00%<br />
Omaha, Nebraska $ 10.27 $ 25.00 5.00%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Milwaukee, Wisconsin $ 15.00 $ 25.00 8.00%<br />
Davenport, Iowa $ 14.50 $ 16.50 7.00%<br />
Akron, Ohio $ 13.50 $ 30.00 14.00%<br />
St. Louis, Missouri $ 12.60 $ 22.00 10.70%<br />
Grand Rapids, Michigan $ 8.50 $ 10.00 15.00%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Kansas City, Missouri $ 17.35 $ 23.65 6.80%<br />
Milwaukee, Wisconsin $ 16.00 $ 24.00 7.00%<br />
Sioux City, Iowa $ 16.00 $ 22.00 11.00%<br />
Indianapolis, Indiana $ 13.76 $ 28.00 17.00%<br />
St. Louis, Missouri $ 13.40 $ 20.00 8.90%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Milwaukee, Wisconsin $ 32.00 $ 60.00 5.00%<br />
Sioux City, Iowa $ 30.00 $ 40.00 7.50%<br />
Madison, Wisconsin $ 27.00 $ 50.00 1.00%<br />
Kansas City, Missouri $ 25.75 $ 35.00 6.60%<br />
Cedar Rapids, Iowa $ 17.00 $ 18.00 5.00%<br />
leading Price Industrial markets<br />
retail<br />
The cleveland retail sector’s leasing activity showed some improvement amid flat rents and<br />
limited new construction. The market has both good news and bad news. The good: large-scale<br />
retail development projects announced by First Interstate in Cleveland Heights and South Euclid,<br />
and by the Jacobs Group in Avon. The bad: continuing struggles among many retailers headlined<br />
by the bankruptcy filings of Borders Books and Blockbuster Video.<br />
Retail asking rents in columbus remain stagnant with the exception of several newly announced<br />
boutique centers that are asking and getting net effective rents in the mid $20/SF range.<br />
Retail leasing in detroit remains slow, with many power and strip centers suffering from the<br />
continued reduction in consumer spending. Average retail rents remained flat in the $15/SF to<br />
$20/SF range across the region.<br />
The kansas city retail market has improved, somewhat buoyed by continued repositioning of<br />
several centers and arrival of new retailers. The Legends Center near the Kansas Speedway was<br />
converted to an outlet format. New retailers to the area include Trader Joe’s, Nordstrom Rack,<br />
and Buy Buy Baby.<br />
The milwaukee retail market has had a slow, steady decline in vacancy rates with lease rates<br />
remaining relatively flat. Walmart and Target remains on a very aggressive expansion pace and<br />
is working through approvals for numerous new sites throughout the market. Traditional grocers<br />
are also continuing to expand their operations.<br />
Industrial<br />
Bulk Warehouse<br />
Industrial<br />
Manufacturing<br />
Industrial<br />
High Tech/R&D<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Fargo, North Dakota $ 5.40 $ 6.25 8.50%<br />
Detroit, Michigan $ 4.50 $ 9.00 13.00%<br />
Chicago, Illinois $ 4.10 $ 6.00 10.50%<br />
Milwaukee, Wisconsin $ 3.50 $ 3.50 7.90%<br />
Omaha, Nebraska $ 3.00 $ 4.66 7.30%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Fargo, North Dakota $ 6.50 $ 7.00 7.00%<br />
Madison, Wisconsin $ 5.85 $ 9.50 1.40%<br />
Lansing, Michigan $ 4.50 $ 5.50 15.00%<br />
Chicago, Illinois $ 4.40 $ 6.25 10.50%<br />
Detroit, Michigan $ 3.25 $ 6.00 20.00%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Fargo, North Dakota $ 6.50 $ 7.00 7.00%<br />
Madison, Wisconsin $ 5.85 $ 9.50 1.40%<br />
Lansing, Michigan $ 4.50 $ 5.50 15.00%<br />
Chicago, Illinois $ 4.40 $ 6.25 10.50%<br />
Detroit, Michigan $ 3.25 $ 6.00 20.00%<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com<br />
26
n us Highlights – southwest region<br />
n Arkansas<br />
Kansas<br />
Louisiana<br />
office<br />
Oklahoma<br />
Texas<br />
The austin office market continued to improve as limited speculative construction and relatively<br />
strong demand has resulted in lower vacancy and higher rents, with average asking rents at<br />
$35.08/SF for Downtown Class A space.<br />
dallas/ft. Worth’s office market had positive absorption as companies leased up CBD office<br />
space, including a number of relocations from suburban markets. Class A office tenants are willing<br />
to pay a premium for modern, green buildings as rents, at $35/SF, are still a fraction of those in<br />
other major markets.<br />
Houston’s office market continued to gain momentum in 2011, as an emphasis on international<br />
trade and a growing energy industry resulted in overall vacancy declining to 13.3% and average<br />
asking rents rising to $22.77/SF. Major energy companies including Chevron, BG Group and<br />
Nexen continue to sign large leases in the CBD.<br />
new orleans’ office market remains resilient and stable, with downtown Class A office offices<br />
roughly 89% leased at rates of $17-20/SF. The suburban market is at 90.6% occupancy, with<br />
rates of $22-24. A combination of new developments, a unique local culture, and a reviving<br />
tourism market have kept the city somewhat insulated from the national economic trends.<br />
Recent consolidations coupled with a migration of tenants away from multi-tenant space to buildto-suit<br />
facilities (including NuStar and Nationwide Insurance) softened the san antonio office vacancy<br />
rate to 19.9%. Restrained speculative construction and increased demand for space is<br />
expected to result in improving market conditions in <strong>2012</strong>.<br />
Industrial<br />
Activity within austin’s industrial leasing market was marked by tenant expansions and a handful<br />
of new relocations, generating healthy positive net absorption and tightening of the citywide<br />
vacancy rate. Rental rates have remained stable and landlord concessions are declining.<br />
The baton rouge industrial market has performing well with Westlake Chemical, Georgia Pacific,<br />
Honeywell and Formosa Plastics expanding their petro-chemical plants and others like Nucor<br />
building new plant along the Mississippi River. Bulk warehouse has a relatively high vacancy of<br />
15.3%, although demand for stand-alone buildings is increasing.<br />
Rental rates for Class A industrial space in dallas are increasing, as the majority of new space<br />
has been absorbed or is about to be leased. The 11% vacancy rate is a bit misleading, as most<br />
of the vacant product is less desirable Class B and Class C space.<br />
Rental rates for bulk warehouse space in the oklahoma city industrial market has remain at<br />
constant $3.86/SF. Demand is increasing with warehouse space options tightening, especially<br />
for large users. There will be upward pressure on rental rates as no new construction is taking<br />
place.<br />
retail<br />
Demand remains strong for well-located retail space in austin contributed to improved occupancy<br />
levels as tenants such as Nordstrom Rack and Sears Outlet are backfilling big box space vacated<br />
by Borders and Lack’s furniture. The restaurant market continued to perform well as new restaurant<br />
concepts expand in the area.<br />
Retail expansion in dallas/ft. Worth continues to be led by discount stores and fast food. Increasing<br />
demand and lack of new construction is leading to lower vacancy rates. The area has received a<br />
shot in the arm from Wal-Mart, ALDI and Kroger which have together opened over 20 stores in the<br />
past 12 months.<br />
The overall retail market in Houston is stable with a 12.4% vacancy rate and average asking<br />
rental rates at $19.20/SF. A total of 48 buildings have been delivered to the market totaling<br />
937,858 SF, with an additional 851,924 SF under construction.<br />
The oklahoma city retail market remains active with new entries into the market, especially for<br />
food service. Whole Foods opened their first Oklahoma store and a 300,000 SF outlet mall also<br />
opened this year. Retail vacancy is below 8% and rental rates have upward momentum.<br />
san antonio retail market remained stable with a vacancy rate of 13% and average rental rate<br />
of $18.21/SF. With the exception of the expansion of locally-based grocer H-E-B, development<br />
has been limited but large retailers are starting to get active in the area with a new Target currently<br />
under construction.<br />
leading Price class a markets<br />
Downtown Office<br />
Class A<br />
Suburban Office<br />
Class A<br />
leading Price retail markets<br />
Retail<br />
Downtown<br />
Retail<br />
Service Centers<br />
Retail<br />
Power Centers<br />
Retail<br />
Regional Malls<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Houston, Texas $ 36.20 $ 41.95 12.00%<br />
Austin, Texas $ 35.08 $ 46.00 15.50%<br />
Fort Worth, Texas $ 24.00 $ 28.00 9.00%<br />
Baton Rouge, Louisiana $ 22.00 $ 23.00 20.00%<br />
San Antonio, Texas $ 20.80 $ 23.00 17.40%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Houston, Texas $ 27.23 $ 40.73 14.00%<br />
Austin, Texas $ 25.81 $ 33.00 20.60%<br />
San Antonio, Texas $ 25.30 $ 28.00 15.90%<br />
Dallas, Texas $ 24.00 $ 45.00 16.00%<br />
New Orleans, Louisiana $ 22.30 $ 23.00 8.10%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Houston, Texas $ 35.41 $ 49.74 5.00%<br />
New Orleans, Louisiana $ 27.50 $ 40.00 1.00%<br />
Austin, Texas $ 26.50 $ 41.00 5.00%<br />
San Antonio, Texas $ 23.08 $ 36.00 16.10%<br />
Fort Worth, Texas $ 18.75 $ 38.00 1.25%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Dallas, Texas $ 33.00 $ 60.00 8.00%<br />
Corpus Christi, Texas $ 19.00 $ 28.00 14.00%<br />
McAllen/Mission, Texas $ 17.73 $ 27.00 0.15%<br />
San Antonio, Texas $ 16.32 $ 28.00 16.20%<br />
New Orleans, Louisiana $ 15.00 $ 18.00 1.50%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
McAllen/Mission, Texas $ 25.53 $ 36.00 0.20%<br />
Baton Rouge, Louisiana $ 25.00 $ 30.00 4.00%<br />
San Antonio, Texas $ 24.68 $ 40.00 8.10%<br />
Austin, Texas $ 22.25 $ 36.00 9.80%<br />
Houston, Texas $ 15.25 $ 30.00 7.00%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
McAllen/Mission, Texas $ 50.00 $ 75.00 0.06%<br />
Dallas, Texas $ 45.00 $ 60.00 12.00%<br />
New Orleans, Louisiana $ 41.25 $ 62.50 5.00%<br />
Baton Rouge, Louisiana $ 35.00 $ 80.00 n/a<br />
Jonesboro, AR $ 25.00 $ 32.00 10.00%<br />
leading Price Industrial markets<br />
Industrial<br />
Bulk Warehouse<br />
Industrial<br />
Manufacturing<br />
Industrial<br />
High Tech/R&D<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
McAllen/Mission, Texas $ 6.98 $ 12.00 0.25%<br />
Austin, Texas $ 5.56 $ 5.76 19.70%<br />
Houston, Texas $ 5.16 $ 7.14 5.00%<br />
Corpus Christi, Texas $ 4.80 $ 6.00 6.00%<br />
Baton Rouge, Louisiana $ 4.00 $ 5.15 15.13%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Houston, Texas $ 6.60 $ 9.00 5.70%<br />
Austin, Texas $ 5.25 $ 7.20 15.00%<br />
Oklahoma City, Oklahoma $ 4.25 $ 5.00 14.00%<br />
Wichita, Kansas $ 4.25 $ 5.00 10.00%<br />
El Paso, Texas $ 3.60 $ 4.25 17.00%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
San Antonio, Texas $ 9.36 $ 16.75 15.70%<br />
Austin, Texas $ 9.20 $ 11.40 17.80%<br />
Corpus Christi, Texas $ 9.00 $ 12.00 9.00%<br />
Tulsa, Oklahome $ 6.43 $ 9.00 14.00%<br />
Fort Worth, Texas $ 4.50 $ 6.00 12.00%<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com<br />
27
n us Highlights – West region<br />
n Arizona<br />
California<br />
Colorado<br />
Hawaii<br />
Idaho<br />
Montana<br />
office<br />
Nevada<br />
New Mexico<br />
Oregon<br />
Utah<br />
Washington<br />
Wyoming<br />
The denver office market is slowly continuing its recovery with vacancy rates declining by 7.5%<br />
to 14% and positive absorption of 1,874,287 SF. Average rental rates remain flat, declining by<br />
1% to $19.74/SF.<br />
Conditions in the los angeles office market remain soft due to high unemployment in the region.<br />
Downtown Class A vacancy rates remain high at 15.8% and asking rents are flat with Class A<br />
rents Downtown declining to $30.61/SF.<br />
Portland’s CBD office market has remained fairly healthy, with vacancy between 12% and 13%<br />
throughout 2011. The suburban office submarkets have not fared as well, with vacancy above<br />
23% in 2011. Historic buildings with higher vacancies are being converted into LEED-certified<br />
creative space to lure tenants.<br />
Increasing asking rates, downward pressure on vacancy, and positive shifts in employment continue<br />
to be the story regarding the san francisco office market. Vacancy rates declined improved<br />
by 15% to 12.1%. Submarkets south of the Financial District are attracting major tech companies<br />
including Google, Salesforce and Zynga.<br />
seattle’s office market is enjoying higher occupancy both in the Seattle CBD and Bellevue, the<br />
two core downtown areas. <strong>2012</strong> will show gradual reducing of inventory and has the potential of<br />
rapidly shifting to a strong landlord market if one of the large employers decides they need space<br />
quickly. Current asking rents for Class A office space is $23/SF.<br />
Industrial<br />
The denver industrial market is still sluggish, with a slight rise in vacancy to 6.1% and negative<br />
absorption of 335,752 SF. Overall industrial rental rates declined 2.8% to $4.47/SF.<br />
los angeles’ industrial market is rebounding due in large part to increased activity at the Port of<br />
Long Beach resulting from a strengthening import/export market. However, onerous government<br />
regulation is causing some businesses to leave the area. Industrial rents remained flat at around<br />
$6.25/SF.<br />
The Portland industrial market saw considerable improvement in 2011 led by increased activity<br />
at the Port of Portland and big deals by Subaru and SoloPower. Technology and renewable energy<br />
companies continue to expand and invest in the area.<br />
Total availability in the salt lake city industrial market decreased to 5.90% this year, down from<br />
6.16% in 2010. Rental rates have remained stable in the $4.08/SF since 2009. Leasing activity<br />
is strong with the aggregate SF leased in increasing 8.62% from 2010.<br />
Demand for industrial space in seattle remains stable with vacancy rates continuing to slowly<br />
decline in <strong>2012</strong>. Boeing is adding jobs and increasing capacity in order to keep up with new<br />
plane orders, which has a huge positive effect on the entire region.<br />
retail<br />
Overall retail rental rates in denver declined by 2.8% to $14.46 while vacancy rates declined<br />
7.5% to 7.3%. Leasing activity is static, as the region has yet to see any significant growth in<br />
employment.<br />
Hawaii’s retail sector posted modest gains in occupancy throughout 2011 with statewide vacancy<br />
approximating 5%. Nevertheless, lease rates softened as weak gross sales continue to mirror<br />
prevailing economic conditions.<br />
Retail vacancy in las Vegas decreased to 10.9% while asking rents fell to $17.63 amid anemic<br />
demand from retailers. There is a flight-to-quality in some areas, with retailers taking advantage<br />
of weak conditions to upgrade to better-located, higher quality properties.<br />
Some downward pressure remains in the los angeles retail market with relatively high vacancy<br />
rates and average rental rates, currently in the $20/SF to $25/SF declining. With high regional<br />
unemployment and a shrinking labor force, leasing activity is likely to remain weak in <strong>2012</strong>.<br />
The retail market in Portland was flat during 2011, with vacancy hovering around 6.3%. Grocers<br />
from Walmart to WinCo to New Seasons, a local chain, are seeking new locations around the<br />
Portland area.<br />
The san diego retail market experienced little change in 2011. The overall vacancy rate is 5%<br />
and average asking rents are $21.30/SF. Cap rates declined in 2011 to approximately 7.75%<br />
from 8.27% in 2010.<br />
leading Price class a markets<br />
Downtown Office<br />
Class A<br />
Suburban Office<br />
Class A<br />
leading Price retail markets<br />
Retail<br />
Downtown<br />
Retail<br />
Service Centers<br />
Retail<br />
Power Centers<br />
Retail<br />
Regional Malls<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
San Francisco County, California $ 38.26 $ 59.87 12.0%<br />
Los Angeles County, California $ 33.32 $ 40.75 15.8%<br />
Honolulu, Hawaii $ 33.00 $ 34.80 13.2%<br />
San Diego, California $ 28.36 $ 29.88 16.0%<br />
Portland, Oregon $ 25.20 $ 31.61 14.1%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
San Francisco, California $ 38.40 $ 86.01 14.00%<br />
San Diego, California $ 31.80 $ 48.36 13.00%<br />
Los Angeles County, California $ 30.61 $ 60.00 17.6%<br />
Ventura County, California $ 26.05 $ 35.40 17.40%<br />
Orange County, California $ 25.62 $ 54.07 19.00%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Seattle/Puget Sound, Washington $ 45.00 $ 75.00 5.50%<br />
San Francisco, California $ 37.80 $ 120.00 4.00%<br />
Honolulu, Hawaii $ 28.80 $ 36.00 3.40%<br />
Los Angeles, California $ 24.31 $ 120.00 5.20%<br />
San Diego, California $ 13.32 $ 53.76 5.00%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Honolulu, Hawaii $ 33.00 $ 42.00 3.00%<br />
Seattle/Puget Sound, Washington $ 24.00 $ 36.00 8.30%<br />
Los Angeles County, California $ 23.48 $ 72.00 7.00%<br />
San Diego, California $ 20.88 $ 60.00 8.00%<br />
Portland, Oregon $ 12.30 $ 35.00 7.38%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Honolulu, Hawaii $ 48.60 $ 55.80 5.00%<br />
San Francisco, California $ 30.22 $ 66.00 6.00%<br />
Colorado Springs, Colorado $ 23.00 $ 30.00 7.30%<br />
San Diego, California $ 22.92 $ 48.00 5.00%<br />
Los Angeles County, California $ 21.74 $ 63.00 6.90%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Honolulu, Hawaii $ 73.80 $ 114.00 1.00%<br />
Seattle/Puget Sound, Washington $ 42.00 $ 75.00 5.80%<br />
Albuquerque, New Mexico $ 30.00 $ 40.00 12.60%<br />
Los Angeles County, California $ 19.93 $ 65.00 4.00%<br />
Phoenix, Arizona $ 18.97 $ 40.00 18.90%<br />
leading Price Industrial markets<br />
Industrial<br />
Bulk Warehouse<br />
Industrial<br />
Manufacturing<br />
Industrial<br />
High Tech/R&D<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Honolulu, Hawaii $ 13.20 $ 15.60 4.80%<br />
San Francisco, California $ 9.39 $ 38.50 6.00%<br />
San Diego, California $ 8.04 $ 30.00 10.00%<br />
Ventura County, California $ 6.80 $ 15.00 9.20%<br />
Portland, Oregon $ 5.20 $ 11.34 14.35%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
Honolulu, Hawaii $ 12.04 $ 12.60 6.80%<br />
San Diego, California $ 8.16 $ 19.20 9.00%<br />
Phoenix, Arizona $ 6.73 $ 15.00 12.80%<br />
Las Vegas, Nevada $ 5.10 $ 6.00 14.70%<br />
Salt Lake City, Utah $ 3.48 $ 7.56 7.52%<br />
<strong>Market</strong> Effective Avg. High Rent Vacancy<br />
San Francisco, California $ 20.80 $ 36.00 15.00%<br />
Honolulu, Hawaii $ 13.20 $ 15.60 4.80%<br />
Phoenix, Arizona $ 11.01 $ 18.00 23.40%<br />
San Diego, California $ 8.16 $ 48.84 8.00%<br />
Denver, Colorado $ 4.47 $ 17.00 6.00%<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com<br />
28
Asia Pacific<br />
sectIon contents<br />
Adelaide, Australia<br />
Brisbane, Australia<br />
Melbourne, Australia<br />
Perth, Australia<br />
Sydney, Australia<br />
Beijing, China<br />
Guangzhou, China<br />
Hong Kong, SAR, China<br />
Shanghai, China<br />
Shenzhen, China<br />
Xi’an, China<br />
Guam<br />
Chennai, India<br />
Mumbai, India<br />
Pune, India<br />
Punjab, India<br />
Jakarta, Indonesia<br />
Tokyo, Japan<br />
Kuala Lumpur, Malaysia<br />
Auckland Central, New Zealand<br />
Christchurch, New Zealand<br />
Wellington, New Zealand<br />
Singapore<br />
Seoul, South Korea<br />
Taipei, Taiwan<br />
Ho Chi Minh City, Vietnam
Adelaide, Australia<br />
Brisbane, Australia<br />
Contact<br />
<strong>NAI</strong> Harcourts<br />
Brock Commercial<br />
+61 8 8203 1399<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
2,969,907<br />
3.5%<br />
$1,297.83<br />
$57,661.88<br />
3.0%<br />
5.1%<br />
4.8%<br />
22.508<br />
The global economic woes continue to influence the<br />
economic growth in Australia. The uncertainty of the<br />
resolution of global issues, which includes the European<br />
crisis, US rating downgrade and <strong>report</strong>s of a slow down in<br />
China, have had a significant influence on the confidence<br />
of Australian banks and buyers alike.<br />
The South Australian economy reflects the national in terms<br />
of much discussed two tiered economy, i.e. businesses<br />
related to mining and those not. South Australian and<br />
Federal Governments’ recent announcement to support mining<br />
Olympic Dam in SA is genuinely positive, although BHP and<br />
partners still need to fund this with an announcement expected<br />
in <strong>2012</strong>. This mine has the potential to make a significant<br />
positive impact on the economy for the next 20 years or more.<br />
Interest rates are expected to remain at 4.75% or slightly<br />
less for 6 to12 months on the basis of ongoing global<br />
financial uncertainty. Buyers and tenants are looking<br />
carefully at moving and purchasing. The banking sector, with<br />
limited funds to lend, is being selective. Opportunistic buyers<br />
are looking more intently at the property investment market<br />
for attractive acquisitions. The number of listings is<br />
beginning to increase but there is still a shortage of major<br />
investment opportunities to gauge market. There is a<br />
continued appetite for investment properties with proven<br />
tenants. Lenders are comfortable providing funding for<br />
properties that offer more secure cash flow but this is stock<br />
tightly held and investors tend to release only marginal<br />
property. CBD office leasing market continues to experience<br />
historically low vacancies.<br />
There is one new building being developed that is not<br />
pre-committed before construction. Current vacancy of approx.<br />
7.8% is expected to decrease in short to medium term. There<br />
is limited new office supply over medium term and positive<br />
absorption, although low take-up rates due to limited supply.<br />
Refurbishment opportunities exist for B and C grade buildings<br />
over the next two to three years as the new ATO tower is<br />
completed. Vacancy is expected to remain above 5% until at<br />
least 2013. The recent announcement of Adelaide Bendigo<br />
Bank pre-commitment for 18,000 plus SM has been the most<br />
significant leasing in the Adelaide market for some time.<br />
The sub-lease market, as a result of a lack of new development,<br />
has tightened. Frame office market continues to attract demand<br />
from office space users with 400 King William Street now 100%<br />
occupied. Fringe office market continues to experience low<br />
vacancies with limited incentives available to tenants.<br />
Contact<br />
<strong>NAI</strong> Harcourts Brisbane<br />
+61 7 3839 3100<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
2,969,907<br />
3.5%<br />
$1,297.83<br />
$57,661.88<br />
3.0%<br />
5.1%<br />
4.8%<br />
22.508<br />
After serious flooding in the first quarter of the year in<br />
many parts of the state including the Brisbane CBD, the<br />
Queensland economic forecast was revised downwards. The<br />
Australian Dollar strength has had an adverse effect on the<br />
international tourism market. The resources sector has<br />
brought some relief to an otherwise lackluster economy<br />
and corporations continue to take a cautious approach to<br />
investment as they wait for a recovery in the global economy.<br />
The office leasing market in Brisbane has proven many<br />
forecasters wrong with strong demand stemming from<br />
the resource sector and associated services companies.<br />
Vacancies have fallen from 11% at the end of last year to<br />
less than 8% across the city and less than 5% for premium<br />
space in the CBD. Rents have remained stable with<br />
new supply coming on stream next year, while mostly<br />
pre-committed, it will mean some substantial pockets in<br />
secondary buildings. Incentives for new commitments also<br />
have remained stable although there are some early<br />
signs of some reductions at year end. During <strong>2012</strong> these<br />
incentives are expected to fall with continued demand<br />
gradually reducing vacancies.<br />
The Investment market has remained relatively active with<br />
international funds showing strong interest in Brisbane along<br />
with other capital cities in Australia. Good buildings with<br />
realistic expectations of price are selling with interest from<br />
several different sectors.<br />
The Industrial market, especially in the lower investment end<br />
under $5 million remains active with local funds and private<br />
investors. Larger industrial property is harder to move as<br />
investors at this end play a waiting game.<br />
The retail sector was slow in the first half of the year but<br />
showed signs of improvement coming to year end. Any retail<br />
development was mostly at the low end of a smaller nature<br />
in the suburbs with some refurbishment activity in the city.<br />
Cairns, the Sunshine Coast and the Gold Coast have all been<br />
adversely affected by the downturn in overseas tourist<br />
arrivals which has had a knock on effect on the overall<br />
economies of these three centers.<br />
Lack of investor interest in all market sectors in these<br />
centers means prices continue to soften. Investment sales<br />
volumes in general are down and are expected to remain<br />
slow until we see signs of the global economy improving.<br />
Adelaide At A Glance<br />
conversion 0.97 aud = 1 us$ RENT/M 2 /YR US$ RENT/SF/YEAR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
AUD425.00<br />
AUD450.00<br />
AUD250.00<br />
AUD350.00<br />
AUD530.00<br />
AUD520.00<br />
AUD350.00<br />
AUD420.00<br />
$<br />
$<br />
$<br />
$<br />
40.70<br />
43.10<br />
23.94<br />
33.52<br />
$<br />
$<br />
$<br />
$<br />
50.76<br />
49.80<br />
33.52<br />
40.23<br />
2.10%<br />
7.20%<br />
9.80%<br />
N/A<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
AUD 280.00<br />
AUD 100.00<br />
AUD<br />
AUD<br />
350.00<br />
250.00<br />
$<br />
$<br />
26.82<br />
9.58<br />
$<br />
$<br />
33.52<br />
23.94<br />
N/A<br />
N/A<br />
Bulk Warehouse<br />
AUD 80.00 AUD 110.00 $ 7.66 $ 10.54 N/A<br />
Manufacturing<br />
AUD 60.00 AUD 80.00 $ 5.75 $ 7.66 N/A<br />
High Tech/R&D<br />
retaIl<br />
AUD 80.00 AUD 120.00 $ 7.66 $ 11.49 N/A<br />
Downtown<br />
AUD 700.00 AUD 1,500.00 $ 67.04 $ 143.66 N/A<br />
Neighborhood Service Centers<br />
Community Power Center<br />
AUD350.00<br />
N/A<br />
AUD450.00<br />
N/A<br />
$ 33.52<br />
N/A<br />
$ 43.10<br />
N/A<br />
N/A<br />
N/A<br />
Regional Malls<br />
Solus Food Stores<br />
AUD 400.00<br />
N/A<br />
AUD 700.00<br />
N/A<br />
$ 38.31<br />
N/A<br />
$ 67.04<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
AUD 2,500.00 AUD 3,000.00 $10,430,058.43 $ 12,516,070.11<br />
AUD 2,000.00 AUD 3,000.00 $ 8,344,046.74 $ 12,516,070.11<br />
AUD 300.00 AUD 450.00 $ 1,251,607.01 $ 1,877,410.52<br />
AUD 300.00 AUD 400.00 $ 1,251,607.01 $ 1,668,809.35<br />
AUD 800.00 AUD 1,000.00 $ 3,337,618.70 $ 4,172,023.37<br />
AUD 900.00 AUD 1,200.00 $ 3,754,821.03 $ 5,006,428.05<br />
Brisbane At A Glance<br />
conversion 0.97 aud = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
AUD 550.00 AUD 700.00 $ 52.68 $ 67.04 5.00%<br />
AUD 500.00 AUD 700.00 $ 47.89 $ 67.04 5.00%<br />
AUD 400.00 AUD 450.00 $ 38.31 $ 43.10 9.00%<br />
AUD 375.00 AUD 550.00 $ 35.92 $ 52.68 8.00%<br />
AUD 400.00 AUD 500.00 $ 38.31 $ 47.89 7.00%<br />
AUD 270.00 AUD 370.00 $ 25.86 $ 35.44 9.00%<br />
AUD 100.00 AUD 120.00 $ 9.58 $ 11.49 N/A<br />
AUD 100.00 AUD 110.00 $ 9.58 $ 10.54 N/A<br />
AUD 100.00 AUD 120.00 $ 9.11 $ 11.49 N/A<br />
AUD 1,500.00 AUD 4,000.00 $ 143.66 $ 383.10 N/A<br />
AUD 400.00 AUD 800.00 $ 38.31 $ 76.62 N/A<br />
N/A N/A N/A N/A N/A<br />
AUD 1,100.00 AUD 1,700.00 $ 105.35 $ 162.82 N/A<br />
N/A N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
AUD 100,000.00 AUD 2,000,000.00 $ 417,202,337.08 $ 8,344,046,741.68<br />
N/A N/A N/A N/A<br />
AUD 200,000.00 AUD 1,000,000.00 $ 834,404,674.17 $ 4,172,023,370.84<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 30
Melbourne, Australia<br />
Perth, Australia<br />
Contact<br />
<strong>NAI</strong> Harcourts Melbourne<br />
+61 3 9621 3300<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
2,969,907<br />
3.5%<br />
$1,297.83<br />
$57,661.88<br />
3.0%<br />
5.1%<br />
4.8%<br />
22.508<br />
Melbourne is said to be the most active commercial market<br />
in Australia and the most attractive to offshore investors,<br />
with new clients trying to get into the market everyday.<br />
Commercial property sales throughout Australia over the Q2<br />
2011 have jumped significantly with offshore buyers<br />
accounting for approximately 42% of the investment capital.<br />
More than half of this investor money has flowed into<br />
Melbourne.<br />
The vacancy rate within the Melbourne CBD has continued<br />
to reduce as office supply is not readily available yet the<br />
demand still remains high. No new office supply is expected<br />
to be delivered throughout the remainder of 2011. The<br />
effects of the global credit crisis on development have<br />
started to abate with new supply scheduled from <strong>2012</strong><br />
onwards. Solid tenant demand is expected to support<br />
rents around current levels over the next twelve months.<br />
Unemployment sits at 5.1% in Victoria, which is in line with<br />
the Australian percentage.<br />
Melbourne currently leads the retail property market in<br />
Australia. The CBD remains the most favored location<br />
for retail property, with most categories in Melbourne<br />
outperforming the other cities. Melbourne’s retail market<br />
has maintained its status quo during the first half of 2011,<br />
however, improvement throughout the remainder of 2011<br />
is unlikely. June retail figures show consumers have<br />
remained cautious which has led to a slight rise in vacancy<br />
levels, particularly with strip shops heavily fashion<br />
orientated. There will be a limit on new supply available for<br />
the remainder of 2011 with the majority of new centers<br />
opening in <strong>2012</strong> – 2013. Although strip shops have<br />
managed to keep their yields and rents stable for the first<br />
half of 2011, the second half will see the retail market come<br />
under increasing pressure as consumers opt to maintain a<br />
cautious approach towards discretionary spending.<br />
Over the past twelve months the industrial market has<br />
remained stable and is likely to firm towards the end of<br />
2011. There is currently a limit on the availability of quality<br />
stock as little development is currently taking place due<br />
to financial constraints. With a limited amount of stock<br />
available and high demand from tenants, this should result<br />
in a further decrease in vacancy rates keeping the pressure<br />
on rents to increase for prime assets.<br />
Contact<br />
<strong>NAI</strong> Harcourts<br />
Metropolitan Perth<br />
+61 8 9388 6600<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
2,969,907<br />
3.5%<br />
$1,297.83<br />
$57,661.88<br />
3.0%<br />
5.1%<br />
4.8%<br />
22.508<br />
While the global economy continues to display nervousness<br />
in the US and European regions, the west Australian<br />
economy continues to grow on the back of the resources<br />
boom. Perth commercial property owners have experienced<br />
falling vacancy rates as rents continue to rise. The market<br />
continues to be active as companies battle for space<br />
particularly on St. Georges Terrace.<br />
The office leasing market in the CBD, particularly in the<br />
premium sector, has continued to tighten and vacancies are<br />
more or less non existent at the top end of the market. There<br />
is a reasonable level of new stock coming on stream but<br />
much of this will be pre-committed before it is completed.<br />
Rents are rising and vacancies falling and tenants with<br />
leases expiring in the next 24 months and who require<br />
more space need to start their search well in advance. This<br />
tightness at the top end of the market is having a knock<br />
on effect to lower tiers as some tenants are having to<br />
compromise on quality to stay within budgets. The suburban<br />
market is of course equally as active and vacancy levels are<br />
also tightening significantly as activity continues. It is<br />
expected that more tenants will look to pre-committing to<br />
suburban stock as rents rise in the CBD, fueling office<br />
development in the suburbs.<br />
On the investment front, institutions, foreign funds and<br />
private buyers are all active although change in yields in this<br />
sector have not been noticed at this stage, possibly a sign<br />
of the weakness in the global economy and the new supply<br />
expected in the next 12 to 24 months to enter the market.<br />
The industrial investment sector remains relatively buoyant<br />
and activity levels in all price ranges continue to be well<br />
supported. Industrial leasing also remains stable and small<br />
and large requirements come to the market consistently.<br />
The retail market should be seen to be the most fragile<br />
where there is more evidence of shoppers looking rather<br />
than spending and this is affecting the turnover and<br />
therefore performance of many of the retailers. This<br />
has translated into affecting rental levels, and the retail<br />
investment market also would be considered quieter than<br />
the office and industrial sectors.<br />
Melbourne At A Glance<br />
conversion 0.97 aud = 1 us$ RENT/M 2 /YR US$ RENT/SF/YEAR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
deVeloPment land<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
AUD 500.00 AUD 550.00 $ 47.89 $ 52.68 3.00%<br />
AUD 400.00 AUD 500.00 $ 38.31 $ 47.89 4.00%<br />
AUD 300.00 AUD 350.00 $ 28.73 $ 33.52 4.00%<br />
AUD 270.00 AUD 300.00 $ 25.86 $ 28.73 3.00%<br />
AUD 270.00 AUD 280.00 $ 25.86 $ 26.82 2.00%<br />
AUD 220.00 AUD 220.00 $ 21.07 $ 21.07 5.00%<br />
AUD 150.00 AUD 160.00 $ 14.37 $ 15.32 5.00%<br />
AUD 130.00 AUD 140.00 $ 12.45 $ 13.41 8.00%<br />
AUD 160.00 AUD 160.00 $ 15.32 $ 15.32 2.00%<br />
AUD 800.00 AUD 900.00 $ 76.62 $ 86.20 3.00%<br />
AUD 550.00 AUD 600.00 $ 52.68 $ 57.47 4.00%<br />
N/A N/A N/A N/A N/A<br />
AUD 700.00 AUD 750.00 $ 63.76 $ 68.31 3.00%<br />
N/A N/A N/A N/A N/A<br />
low/m 2 High/m 2 low/acre High/acre<br />
N/A N/A N/A N/A<br />
AUD 150.00 AUD 160.00 $ 595,126.86 $ 634,801.99<br />
AUD 130.00 AUD 150.00 $ 515,776.61 $ 595,126.86<br />
AUD 120.00 AUD 130.00 $ 476,101.49 $ 515,776.61<br />
AUD 1,000.00 AUD 1,200.00 $ 4,172,023.37 $ 5,006,428.05<br />
AUD 1,300.00 AUD 1,400.00 $ 5,423,630.38 $ 5,840,832.72<br />
Perth At A Glance<br />
conversion 0.97 aud = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
AUD<br />
AUD<br />
AUD<br />
AUD<br />
AUD<br />
AUD<br />
550.00 AUD<br />
500.00 AUD<br />
450.00 AUD<br />
500.00 AUD<br />
400.00 AUD<br />
300.00 AUD<br />
850.00<br />
750.00<br />
500.00<br />
600.00<br />
500.00<br />
350.00<br />
$ 52.68<br />
$ 47.89<br />
$ 43.10<br />
$ 47.89<br />
$ 38.31<br />
$ 28.73<br />
$ 81.41<br />
$ 71.83<br />
$ 47.89<br />
$ 57.47<br />
$ 47.89<br />
$ 33.52<br />
8.00%<br />
6.00%<br />
10.00%<br />
5.00%<br />
5.00%<br />
6.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
AUD<br />
AUD<br />
90.00 AUD<br />
90.00 AUD<br />
100.00<br />
100.00<br />
$<br />
$<br />
8.62<br />
8.62<br />
$<br />
$<br />
9.58<br />
9.58<br />
N/A<br />
N/A<br />
High Tech/R&D<br />
retaIl<br />
AUD 100.00 AUD 110.00 $ 9.58 $ 10.54 N/A<br />
Downtown<br />
AUD1,000.00 AUD3,500.00 $ 95.78 $ 335.21 N/A<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
AUD<br />
AUD<br />
350.00 AUD<br />
N/A<br />
250.00 AUD<br />
N/A<br />
600.00<br />
N/A<br />
400.00<br />
N/A<br />
$ 33.52<br />
N/A<br />
$ 23.94<br />
N/A<br />
$ 57.47<br />
N/A<br />
$ 38.31<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A N/A N/A N/A<br />
AUD 350.00 AUD 500.00 $ 1,460,208.18 $ 2,086,011.69<br />
AUD 160.00 AUD 550.00 $ 667,523.74 $ 2,294,612.85<br />
AUD 300.00 AUD 550.00 $ 1,251,607.01 $ 2,294,612.85<br />
AUD 1,500.00 AUD 3,000.00 $ 6,258,035.06 $12,516,070.11<br />
N/A N/A N/A N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 31
Sydney, Australia<br />
Beijing, China<br />
Contact<br />
<strong>NAI</strong> Harcourts Sydney<br />
+61 2 9380 8665<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
2,969,907<br />
3.5%<br />
$1,297.83<br />
$57,661.88<br />
3.0%<br />
5.1%<br />
4.8%<br />
22.508<br />
The Reserve Bank of Australia is expected to keep cash<br />
rates unchanged in the last quarter of 2011 and has<br />
indicated the cash rate may fall moving into <strong>2012</strong> due to<br />
the uncertainty in global markets having a knock on effect<br />
in Australia. The New South Wales local economy may<br />
provide some resilience to the downturn with the new state<br />
government attempting to stimulate the economy particularly<br />
in Sydney through infrastructure spending.<br />
Office leasing activity in the CBD and metropolitan areas has<br />
been stable throughout the year without being spectacular.<br />
With 160,000 SM of new space coming on to the market<br />
this year in the CBD, vacancies will probably increase but<br />
with little new supply next year this increase will be short<br />
lived. More concerning will be strength of demand on the<br />
back of the weakening in economic conditions. Unemployment<br />
has risen slightly during 2011 but most notably in the<br />
manufacturing sector. While job advertisement no’s are<br />
down universally with limited supply before 2014, the<br />
Sydney CBD office market is expected to see growing<br />
returns for inventors as a result of improving effective rents.<br />
Industrial markets continue to see reasonable levels of<br />
activity but again concerns stem from the immediate<br />
economic downturn more than other factors affecting the<br />
market. New supply in the west and south west will mean<br />
activity is likely to be centered there with a trend towards<br />
warehouse activity as manufacturing has significantly<br />
contracted, largely as a result of the high value of the Aussie<br />
currency. Activity is generally favored in leasing transactions,<br />
perhaps related to more generic requirements of warehousing<br />
versus manufacturing.<br />
Investment activity has remained steady, with the biggest<br />
impediment to investment and new construction still being<br />
the availability of credit. The Outlook remains steady<br />
however with the NSW government focusing $66.5 billion<br />
dollars on infrastructure spending which will enhance<br />
transport links for better movement around the metropolitan<br />
areas for private and business users alike.<br />
Retail leasing markets continue to struggle on the back of<br />
weaker economic conditions; this trend is likely to continue<br />
into <strong>2012</strong> with the expected continued economic slowing<br />
down. 2011 has seen households focus on mortgage<br />
repayments and savings over retail spending. On a positive<br />
note, unemployment remains at low levels, the economy is<br />
still predicted to grow and interest rates cuts will deliver<br />
more discretional spending capacity.<br />
Contact<br />
<strong>NAI</strong> Curzon<br />
+852 2180 6308<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
2,969,907<br />
3.5%<br />
$1,297.83<br />
$57,661.88<br />
3.0%<br />
5.1%<br />
4.8%<br />
22.508<br />
Beijing’s real estate investment increased by 14.5% yearon-year<br />
in the first eight months of 2011 to RMB 188.17<br />
billion (US $29.40 billion). With strong investment and<br />
speculative demand from institutional investors, the capital<br />
value of office and retail properties recorded double-digit<br />
growth in 2011. However, with a number of cooling measures<br />
imposed by the government on both the commercial and<br />
residential property market, it is expected momentum in the<br />
property sales market may be subdued in <strong>2012</strong>.<br />
The commercial leasing market was strong in Beijing in<br />
2011, triggered by office expansion from international<br />
corporations. During Q3 2011, new office space was quickly<br />
absorbed by companies with aggressive expansion plans in<br />
Beijing. Class A office prices increased by 11% in Q3 2011,<br />
quarter-on-quarter, to RMB 330/SM per month (US $51.6).<br />
Sale prices of Class A office space increased 7% to RMB<br />
46,951/SM (US $7,340) during the same period. Vacancy<br />
rates are expected to remain level between 5% and 10% in<br />
<strong>2012</strong>. Available office space is mainly in high-end properties,<br />
which is a driving force to increase the average asking rental<br />
rate. Lack of affordable office space is expected to continue<br />
until 2013, increasing further throughout <strong>2012</strong>.<br />
To stimulate consumers to spend money, market intelligence<br />
believes the government is planning to reduce tariffs for luxury<br />
products in China up to 15%. Demand for retail space remained<br />
sustainable. From January to August 2011, sales of consumer<br />
goods amounted to RMB 437.48 billion (US $ 69.5), an increase<br />
of 11.1% year-on-year. At the end of Q3 2011, the overall<br />
shopping center inventory provided up to 5.4 million SM of retail<br />
space to the market. The overall average vacancy reached 11%<br />
in Q3 2011, dropping 2.3% quarter-on-quarter. Continued<br />
growing demand from retailers and international brands drove<br />
the asking rental rate to between RMB 600 and RMB 1,200/SM<br />
per month (US $93.8 to $187.5) as of September 2011.<br />
In the residential market, tightening of government control<br />
is expected to continue for the long run, particularly in highend<br />
residential markets. The average rental rate for residential<br />
properties reached RMB 160/SM per month (US $25) in Q3<br />
2011, representing a decrease of 4.3% quarter-on-quarter.<br />
The vacancy rate declined from Q1 2011 to 8.4% in Q3<br />
2011, representing a decrease of 4.2% quarter-on-quarter.<br />
The average price of luxury residential properties was at<br />
RMB 41,700/SM (US $6,520) as of Q3 2011. In <strong>2012</strong>, both<br />
the rental and capital value of luxurious residential properties<br />
is expected to maintain at a steady level.<br />
Sydney At A Glance<br />
conversion 0.97 aud = 1 us$ RENT/M 2 /YR US$ RENT/SF/YEAR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
AUD<br />
AUD<br />
AUD<br />
AUD<br />
AUD<br />
AUD<br />
AUD<br />
AUD<br />
AUD<br />
900.00<br />
600.00<br />
420.00<br />
400.00<br />
370.00<br />
220.00<br />
85.00<br />
78.00<br />
180.00<br />
AUD<br />
AUD<br />
AUD<br />
AUD<br />
AUD<br />
AUD<br />
AUD<br />
AUD<br />
AUD<br />
1,300.00<br />
800.00<br />
620.00<br />
550.00<br />
450.00<br />
340.00<br />
145.00<br />
180.00<br />
275.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
86.20<br />
57.47<br />
40.23<br />
38.31<br />
35.44<br />
21.07<br />
8.14<br />
7.47<br />
17.24<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
124.51<br />
76.62<br />
59.38<br />
52.68<br />
43.10<br />
32.56<br />
13.89<br />
17.24<br />
26.34<br />
2.60%<br />
6.00%<br />
9.00%<br />
N/A<br />
7.00%<br />
9.00%<br />
N/A<br />
N/A<br />
N/A<br />
Downtown<br />
AUD 6,100.00 AUD 13,000.00 $ 584.23 $ 1,245.08 N/A<br />
Neighborhood Service Centers AUD 400.00 AUD 2,000.00 $ 38.31 $ 191.55 N/A<br />
Community Power Center AUD150.00 AUD 700.00 $ 14.37 $ 67.04 N/A<br />
Regional Malls<br />
Solus Food Stores<br />
AUD 1,100.00<br />
N/A<br />
AUD 3,800.00<br />
N/A<br />
$ 105.35<br />
N/A<br />
$ 363.95<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
Beijing At A Glance<br />
conversion 6.83 rmb = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA) RMB 350.00 RMB 540.00 $ 57.13 $ 88.14 7.50%<br />
Class A (Prime)<br />
RMB 300.00 RMB 360.00 $ 48.97 $ 58.76 6.40%<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
RMB 250.00<br />
RMB 120.00<br />
RMB 100.00<br />
RMB<br />
RMB<br />
RMB<br />
300.00<br />
180.00<br />
140.00<br />
$<br />
$<br />
$<br />
40.81<br />
19.59<br />
16.32<br />
$<br />
$<br />
$<br />
48.97<br />
29.38<br />
22.85<br />
4.30%<br />
11.90%<br />
6.30%<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
RMB<br />
RMB<br />
RMB<br />
RMB<br />
60.00<br />
76.00<br />
60.00<br />
25.00<br />
RMB<br />
RMB<br />
RMB<br />
RMB<br />
100.00<br />
131.00<br />
80.00<br />
60.00<br />
$<br />
$<br />
$<br />
$<br />
9.79<br />
12.41<br />
9.79<br />
4.08<br />
$<br />
$<br />
$<br />
$<br />
16.32<br />
21.38<br />
13.06<br />
9.79<br />
14.50%<br />
30.00%<br />
18.00%<br />
20.00%<br />
Downtown<br />
RMB 1,100.00 RMB 1,800.00 $ 179.55 $ 293.81 10.00%<br />
Neighborhood Service Centers RMB 250.00 RMB 750.00 $ 40.81 $ 122.42 22.00%<br />
Community Power Center RMB 200.00 RMB 800.00 $ 32.65 $ 130.58 20.00%<br />
Regional Malls<br />
RMB 1,000.00 RMB 2,800.00 $ 163.23 $ 457.03 24.00%<br />
Solus Food Stores<br />
RMB 182.00 RMB 730.00 $ 29.71 $ 119.15 10.00%<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
RMB 5,000.00 RMB 30,000.00 $ 2,962,564.18 $ 17,775,385.08<br />
RMB 3,700.00 RMB 26,000.00 $ 2,192,297.49 $ 15,405,333.74<br />
RMB 700.00 RMB 1,300.00 $ 414,758.99 $ 770,266.69<br />
RMB 4,157.00 RMB 9,500.00 $ 2,463,075.86 $ 5,628,871.94<br />
RMB 5,500.00 RMB 40,000.00 $ 3,258,820.60 $ 23,700,513.44<br />
RMB 5,500.00 RMB 13,500.00 $ 3,258,820.60 $ 7,998,923.29<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 32
Guangzhou, China<br />
Contact<br />
<strong>NAI</strong> Curzon<br />
+852 2180 6308<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
3,722,029<br />
Real estate investment increased 2% from January to August<br />
2011 to RMB179.1 billion. The economy is experiencing<br />
steady growth with inspired entrepreneurs executing<br />
business expansion plans in Guangzhou. The government is<br />
<strong>report</strong>ing encouraging signs for property development.<br />
In June 2011, the Government announced ratios for<br />
commercial and residential land supply will be adjusted to<br />
2:3. Government support for commercial property development<br />
is expected and an increase in development for office and<br />
retail facilities could be seen in <strong>2012</strong>.<br />
Momentum for new office building construction was strong<br />
in 3Q 2011. A total of seven new office buildings provided<br />
approximately 0.97 million SM of new space that was<br />
introduced to the market, and 1.9 million SM office/<br />
commercial projects in the pipeline in Q3 2011. Future office<br />
supply leasing interest become more active after the Asian<br />
Games. Demand was generated by high-end office users<br />
from financial, insurance, manufacturing, IT and trading<br />
industries. The overall Class A office rental in secondary<br />
markets realized up to RMB153/SM per month in Q3 2011,<br />
representing a 14.7% increase quarter-on-quarter. Due to<br />
the large amount of new office buildings entering the<br />
market, the overall vacancy rate reached 13.1%, an<br />
increase of 2.9% quarter-on-quarter in Q3 2011. However,<br />
unconcerned by the strong expansion demand from financial<br />
and insurance enterprises, the market generally believes<br />
that Class A office rentals will stay on an upward track in<br />
<strong>2012</strong>. The average office rental expects to increase 5% to<br />
10% in <strong>2012</strong>.<br />
From January to August 2011, total sales of consumer goods<br />
in Guangzhou amounted to RMB 326.3 billion (US $51),<br />
representing an increase of 3% year-on-year. At the end of<br />
Q3 2011, the overall inventory of shopping centers included<br />
up to 1.10 million SM of retail space in the market. The overall<br />
average vacancy rate reached 10.1% in Q3 2011, dropping<br />
by 0.85% quarter-on-quarter. Rental values for retail space<br />
ranged from RMB 600 to RMB 1,200/SM per month,<br />
depending on the distance from major transportation hubs<br />
and tourist attractions. Prime rent for retail space could bring<br />
as much as RMB 1,800/SM per month. In <strong>2012</strong>, new retail<br />
facilities available in Zhujiang New Town and Huanshidong<br />
districts will provide up to 160,000 SM of retail space. On<br />
the back of sustainable demand from retailers who whish to<br />
expand their footprint in major cities and set up flagship<br />
stores in new tourist attraction points, average retail rent is<br />
expected to see an upward trend in <strong>2012</strong>.<br />
Guangzhou At A Glance<br />
conversion 6.83 rmb = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
RMB<br />
RMB<br />
190.00<br />
280.00<br />
RMB 260.00 $ 31.01<br />
RMB 330.00 $ 45.70<br />
$<br />
$<br />
42.44<br />
53.86<br />
8.00%<br />
2.70%<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
RMB<br />
RMB<br />
110.00<br />
103.00<br />
RMB 180.00 $ 17.95<br />
RMB 163.00 $ 16.81<br />
$<br />
$<br />
29.38 13.10%<br />
26.61 11.00%<br />
Class A (Prime)<br />
RMB 90.00 RMB 180.00 $ 14.69 $ 29.38 5.70%<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
RMB<br />
RMB<br />
40.00<br />
35.00<br />
RMB<br />
RMB<br />
60.00 $<br />
45.00 $<br />
6.53<br />
5.71<br />
$<br />
$<br />
9.79 12.40%<br />
7.35 10.00%<br />
Manufacturing<br />
RMB 16.00 RMB 32.00 $ 2.61 $ 5.22 5.00%<br />
High Tech/R&D<br />
retaIl<br />
RMB 40.00 RMB 50.00 $ 6.53 $ 8.16 15.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
RMB<br />
RMB<br />
600.00<br />
600.00<br />
RMB 1,800.00 $ 97.94<br />
RMB 750.00 $ 97.94<br />
$ 293.81<br />
$ 122.42<br />
5.00%<br />
8.00%<br />
Community Power Center<br />
RMB 500.00 RMB 800.00 $ 81.61 $ 130.58 10.00%<br />
Regional Malls<br />
RMB 1,000.00 RMB 1,750.00 $ 163.23 $ 285.64 4.00%<br />
Solus Food Stores<br />
RMB 300.00 RMB 1,000.00 $ 48.97 $ 163.23 3.00%<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
9.6%<br />
$6,422.28<br />
$4,763.87<br />
2.7%<br />
4.0%<br />
6.6%<br />
1,348.12<br />
RMB 2,000.00 RMB 8,000.00 $ 1,185,025.67 $ 4,740,102.69<br />
RMB 1,100.00 RMB 3,000.00 $ 651,764.12 $ 1,777,538.51<br />
RMB 300.00 RMB 600.00 $ 177,753.85 $ 355,507.70<br />
RMB 1,300.00 RMB 3,500.00 $ 770,266.69 $ 2,073,794.93<br />
RMB 3,300.00 RMB 12,000.00 $ 1,955,292.36 $ 7,110,154.03<br />
RMB 1,500.00 RMB 5,000.00 $ 888,769.25 $ 2,962,564.18<br />
Hong Kong, SAR, China<br />
Contact<br />
<strong>NAI</strong> Asia Pacific<br />
Properties<br />
+852 2281 7800<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
3,722,029<br />
Strong rental and price rebounds early in the year yielded to<br />
an abrupt turnaround and mild retraction by year-end. <strong>Global</strong><br />
uncertainties, surprise inflation and residential related cooling<br />
policies dampened the overall market. However this bodes<br />
well for prospective investors and corporate tenants seeking<br />
to enter or grow their presence, since fundamentals including<br />
China’s ongoing growth and the global focus on China’s<br />
consumer market, all support Hong Kong’s longer term<br />
position as the business center for Asia.<br />
Hong Kong economic growth slowed from 7.0% in 2010 to<br />
approximately 5% in 2011. However during this period inflation<br />
surged from 2.4% to approximately 6%. Although prime interest<br />
rates have remained stable at 5% and unemployment rates<br />
have remained low at approximately 3%, the trends of slowing<br />
growth and rising costs have impacted market confidence,<br />
consumer spending and real estate in general. The commercial<br />
real estate market performed in line with the economic growth.<br />
Office rents rose about 13% in the first three quarters before<br />
leveling abruptly in Q4 2011. Vacancies dropped from 6.5%<br />
to 5.0% over the same period, and a very active leasing<br />
market in 1H 2011 saw vacancies decline in the prime CBD<br />
to a record low of sub-3%. Decentralization to secondary<br />
business districts was a prevalent theme in 2H 2011.<br />
The retail sector remained the best performer among all<br />
commercial segments. Powered by the affluent shoppers<br />
from mainland China, total retail sales grew by approximately<br />
20%. Intense competition for prime locations from both<br />
local and international retailers is increasingly evident, with<br />
prominent new entries by Abercrombie & Fitch and Gap.<br />
Prime street-level rents in Central and Causeway Bay<br />
increased by 30% to 50% while average sale prices climbed<br />
by 13%.<br />
The industrial sector saw rents increase by approximately 10%<br />
while investment values jumped by about 25%, driven by<br />
rezoning and redevelopment opportunities. The government<br />
announced a new plan to transform the aging industrial district<br />
of East Kowloon into a new CBD. Older industrial blocks will be<br />
converted into office, commercial and hotel developments, a<br />
process that is expected to take place over the next two decades.<br />
The investment market continued its rapid recovery and was<br />
extremely active in the first half of the year with yields<br />
sub-3%, though essentially halted in Q3 and Q4 as global<br />
uncertainty increased. It is expected that investment volumes<br />
will recover with greater clarity on the global situation as the<br />
divide between purchasers and sellers contracts.<br />
Hong Kong At A Glance<br />
conversion 7.80 Hkd = 1 us$ RENT/SF/MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
HKD<br />
HKD<br />
125.00<br />
85.00<br />
HKD 190.00 $ 192.31<br />
HKD 150.00 $ 130.77<br />
$ 292.31<br />
$ 230.77<br />
2.00%<br />
4.00%<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
HKD<br />
HKD<br />
45.00<br />
48.00<br />
HKD<br />
HKD<br />
80.00 $ 69.23<br />
70.00 $ 73.85<br />
$ 123.08<br />
$ 107.69<br />
5.00%<br />
5.00%<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
HKD<br />
HKD<br />
HKD<br />
HKD<br />
HKD<br />
35.00<br />
25.00<br />
10.00<br />
12.00<br />
20.00<br />
HKD<br />
HKD<br />
HKD<br />
HKD<br />
HKD<br />
45.00 $ 53.85<br />
28.00 $ 38.46<br />
12.00 $ 15.38<br />
15.00 $ 18.46<br />
25.00 $ 30.77<br />
$<br />
$<br />
$<br />
$<br />
$<br />
69.23<br />
43.08<br />
18.46<br />
23.08<br />
38.46<br />
6.00%<br />
8.00%<br />
6.00%<br />
6.00%<br />
6.00%<br />
Downtown<br />
HKD 350.00 HKD 1,800.00 $ 538.46 $ 2,769.23 2.00%<br />
Neighborhood Service Centers HKD 60.00 HKD 100.00 $ 92.31 $ 153.85 10.00%<br />
Community Power Center<br />
HKD 50.00 HKD 70.00 $ 76.92 $ 107.69 10.00%<br />
Regional Malls<br />
HKD 120.00 HKD 300.00 $ 184.62 $ 461.54 5.00%<br />
Solus Food Stores<br />
N/A N/A N/A N/A N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
9.6%<br />
$6,422.28<br />
$4,763.87<br />
2.7%<br />
4.0%<br />
6.6%<br />
1,348.12<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 33
Shanghai, China<br />
Shenzhen, China<br />
Contact<br />
<strong>NAI</strong> Asia Pacific<br />
Properties<br />
+86 21 6288 7333<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
3,722,029<br />
9.6%<br />
$6,422.28<br />
$4,763.87<br />
2.7%<br />
4.0%<br />
6.6%<br />
1,348.12<br />
While cites around the world have struggled to recover from<br />
the world financial crisis and government debt, in 2011<br />
Shanghai experienced quite the opposite. The market has<br />
turned to favor landlords once again, with excessive retail,<br />
office and industrial demand in key areas. Subsequently, the<br />
government has been forced to cool the market by repeatedly<br />
raising interest rates and imposing tighter regulations.<br />
The office market remains tight in Shanghai, with general<br />
forecasts for continued upward pressure on rentals. Despite<br />
several new office projects, including ICC T1, IFC T2, Taiping<br />
Finance Center and Eco City, amounting to some 1 million<br />
SM, demand has been such that prime buildings have still<br />
either reached full occupancy or enough for rental rates to<br />
increase by up to 10% quarter-over-quarter and overall<br />
average vacancy rates to reach 5%. Such buoyant demand<br />
has been attributed to the increased activity from MNCs<br />
alongside existing demand from SOEs. Although additional<br />
buildings are set to launch in <strong>2012</strong>, current market<br />
conditions are unlikely to change much.<br />
Driven by government restrictions on land supply and bullish<br />
demand, the industrial and logistics market in Shanghai<br />
continued to show an uptrend in rents and sales prices<br />
(particularly for single story properties) of some 14% and<br />
10% year-over-year, respectively. Logistics developers have<br />
been forced to build multi-story warehouses, though these<br />
will not be ready until well into <strong>2012</strong>.<br />
Average prices for prime land (often the only source of new<br />
potential supply) are again the highest on record at RMB<br />
1,600/SM, an increase of 5% year-on-year.<br />
Following accelerated growth in both rental performance<br />
and market absorption, prime retail rates have reached their<br />
highest level ever at more than RMB 50/SM per day, as<br />
numerous retailers continue to expand, including H&M’s<br />
largest store in China (3,000 SM), and Apple’s and Ikea’s<br />
largest in Asia (2,500 SM and 49,400 SM respectively).<br />
While tightened liquidity has restricted some, for others it<br />
has presented opportunities. Cash rich developers remain<br />
optimistic and have taken advantage of favorable conditions,<br />
such as SOHO, whose CEO plans to invest RMB 10 billion<br />
every year in Shanghai and aggressively targeted RMB 15<br />
billion in 2011. By way of strata sales, the SWFC and Soho’s<br />
Exchange have now sold numerous floors (for around RMB<br />
80,000/SM) in a market that rarely sees strata opportunities.<br />
Contact<br />
<strong>NAI</strong> Curzon<br />
+852 2180 6308<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
3,722,029<br />
9.6%<br />
$6,422.28<br />
$4,763.87<br />
2.7%<br />
4.0%<br />
6.6%<br />
1,348.12<br />
From January to August 2011, fixed asset investment was<br />
RMB 117.43 billion (US $18.35 billion), representing an<br />
increase of 17.4% year-on-year. Shenzhen’s import and<br />
export value in the first eight months amounted to US<br />
$271.01 billion with a yearly growth of 31.6%. Export values<br />
reached US $159.63 billion, up 32.8% year-on-year while<br />
the import value increased 29.8% year-on-year to US<br />
$111.38 billion. These economic fundamentals indicate that<br />
Shenzhen’s economic growth has continued at a steady<br />
pace.<br />
The overall office rate from January to August 2011<br />
increased by 15% compared to the same period as last year,<br />
due to escalating inflation and office space demand which<br />
was generated by small, start-up companies. A number of<br />
Class A offices in the Luohu and Futian districts have<br />
remained 100% occupied since the beginning of 2011. The<br />
office expansion demand was generated from the finance,<br />
investment, logistics and manufacturing industries. The<br />
prime rent for office space could be as much as RMB<br />
200/SM per month in Q3 2011, representing an increase<br />
of 4% quarter-on-quarter. It is expected that the overall<br />
capital value for office space in Shenzhen will record a<br />
double digit increase in <strong>2012</strong> due to escalating inflation and<br />
sustainable space demand.<br />
From January to August of 2011, total retail sales in<br />
Shenzhen grew by 17.6% year-on-year to reach RMB<br />
2,261.88 billion (US $35.41 billion). The demand for<br />
retail space has been generated by the catering and food<br />
industries which targeted wealthy individuals who started to<br />
pursue a higher standard of living. As of Q3 2011, most<br />
shopping malls in the traditional shopping areas were fully<br />
occupied and had been since the beginning of 2011. Strong<br />
leasing activity encouraged developers to quickly launch<br />
new shopping facilities to the market, but with an increase<br />
in asking rents. In early March 2011, the government<br />
mandated that non-Shenzhen residents could only purchase<br />
residential properties if they have paid personal income tax<br />
and made contributions to social security to the city for at<br />
least one year and if their payments were in good standing.<br />
This act put a complete stop to any speculative activity made<br />
by non-Shenzhen residents, causing developers to become<br />
more cautious when launching their new residential<br />
projects. The capital value for residential properties expects<br />
to remain stable in <strong>2012</strong>.<br />
Shanghai At A Glance<br />
conversion 6.83 rmb = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
RMB 2,737.50 RMB 4,745.00 $ 39.99<br />
RMB 2,920.00 RMB 5,110.00 $ 42.65<br />
RMB 1,850.00 RMB 2,737.50 $ 27.02<br />
RMB 1,095.00 RMB 1,825.00 $ 15.99<br />
RMB 1,168.00 RMB 1,825.00 $ 17.06<br />
$ 69.31<br />
$ 74.64<br />
$ 39.99<br />
$ 26.66<br />
$ 26.66<br />
15.00%<br />
5.00%<br />
5.00%<br />
30.00%<br />
10.00%<br />
Class B (Secondary)<br />
IndustrIal<br />
RMB 547.50 RMB 1,095.00 $ 8.00 $ 15.99 15.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
RMB<br />
RMB<br />
255.50 RMB<br />
219.00 RMB<br />
547.50 $<br />
438.00 $<br />
3.73<br />
3.20<br />
$<br />
$<br />
8.00<br />
6.40<br />
7.00%<br />
10.00%<br />
High Tech/R&D<br />
retaIl<br />
RMB 474.50 RMB 1,095.00 $ 6.93 $ 15.99 15.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
RMB 3,600.00 RMB 18,240.00 $ 52.59<br />
RMB 1,800.00 RMB 7,200.00 $ 26.29<br />
$266.44<br />
$105.17<br />
3.00%<br />
7.00%<br />
Community Power Center<br />
RMB 720.00 RMB 1,800.00 $ 10.52 $ 26.29 10.00%<br />
Regional Malls<br />
RMB 1,800.00 RMB 7,200.00 $ 26.29 $105.17 5.00%<br />
Solus Food Stores<br />
N/A N/A N/A N/A N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
RMB 4,750.00 RMB 192,850.00 $ 3,022,421.02 $ 122,710,293.37<br />
RMB 1,425.00 RMB 7,600.00 $ 906,726.31 $ 4,835,873.63<br />
RMB 420.00 RMB 2,100.00 $ 267,245.65 $ 1,336,228.24<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
RMB 4,500.00 RMB 35,500.00 $ 2,863,346.23 $ 22,588,620.25<br />
Shenzhen At A Glance<br />
conversion 6.83 rmb = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
RMB<br />
RMB<br />
RMB<br />
RMB<br />
150.00 RMB<br />
120.00 RMB<br />
65.00 RMB<br />
70.00 RMB<br />
220.00 $ 24.48<br />
301.00 $ 19.59<br />
110.00 $ 10.61<br />
120.00 $ 11.43<br />
$ 35.91<br />
$ 49.13<br />
$ 17.95<br />
$ 19.59<br />
9.70%<br />
8.00%<br />
14.80%<br />
15.00%<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
RMB<br />
RMB<br />
RMB<br />
RMB<br />
RMB<br />
60.00 RMB<br />
45.00 RMB<br />
20.00 RMB<br />
32.00 RMB<br />
39.00 RMB<br />
105.00 $<br />
80.00 $<br />
40.00 $<br />
42.00 $<br />
78.00 $<br />
9.79<br />
7.35<br />
3.26<br />
5.22<br />
6.37<br />
$ 17.14<br />
$ 13.06<br />
$ 6.53<br />
$ 6.86<br />
$ 12.73<br />
18.00%<br />
16.00%<br />
4.00%<br />
2.00%<br />
6.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
RMB<br />
RMB<br />
900.00 RMB 2,000.00 $ 146.90<br />
300.00 RMB 1,100.00 $ 48.97<br />
$326.45<br />
$179.55<br />
5.00%<br />
11.00%<br />
Community Power Center<br />
RMB 500.00 RMB 900.00 $ 81.61 $146.90 10.00%<br />
Regional Malls<br />
RMB 1,800.00 RMB 2,300.00 $ 293.81 $375.42 2.00%<br />
Solus Food Stores<br />
RMB 90.00 RMB 1,500.00 $ 14.69 $244.84 6.00%<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
RMB 3,300.00 RMB 8,000.00 $ 1,955,292.36 $ 4,740,102.69<br />
RMB 1,400.00 RMB 6,000.00 $ 829,517.97 $ 3,555,077.02<br />
RMB 700.00 RMB 3,000.00 $ 414,758.99 $ 1,777,538.51<br />
RMB 1,800.00 RMB 5,000.00 $ 1,066,523.10 $ 2,962,564.18<br />
RMB 6,000.00 RMB 11,000.00 $ 3,555,077.02 $ 6,517,641.20<br />
RMB 1,500.00 RMB 10,000.00 $ 888,769.25 $ 5,925,128.36<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 34
Xi’an, China<br />
Guam<br />
Contact<br />
<strong>NAI</strong> Curzon<br />
+852 2180 6308<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
3,722,029<br />
9.6%<br />
$6,422.28<br />
$4,763.87<br />
2.7%<br />
4.0%<br />
6.6%<br />
1,348.12<br />
Xi’an is regarded as a world famous cultural city and an<br />
international tourist destination. From January to August<br />
2011, fixed asset investment was RMB 167.5 billion (US<br />
$26.2 billion), representing an increase of 29% yearon-year.<br />
The industrial output value reached RMB 52.7<br />
billion (US $8.2 billion), up 15.7% year-on-year. Economic<br />
fundamentals indicated that Xi’an’s industrial growth is<br />
steady. Xi’an has been supported by the Government’s “go<br />
west” policy, therefore we expect commercial and retail<br />
activities to continue to be strong in <strong>2012</strong>.<br />
Xi’an, as a second-tier city in China after the likes of Beijing<br />
and Shanghai, has a track record in the business process<br />
outsourcing field. The local government is using taxes and<br />
other incentives to encourage companies and professionals<br />
to relocate there. In recent years, the service outsourcing<br />
industry in Xi'an has maintained a robust growth. The<br />
outstanding contractor enterprises, rich human resources<br />
and preferential policies have paved a solid foundation for<br />
Xi'an to becoming a capital for service outsourcing.<br />
Xi’an’s principal strategic industry is IT and high-tech. There<br />
are more than 800 high-tech enterprises in Xi'an, with<br />
heavyweight firms like Intel, Sybase, SPSS, Fujitsu, NEC,<br />
Sorun and Platform all having a presence in the Xi’an<br />
National Hi-tech Industrial Development Zone. Other industries<br />
driving Xi’an’s growth are equipment manufacturing, tourism,<br />
service industries and cultural industries.<br />
At the end of March 2011, retail sales of consumer goods<br />
reached RMB 46.24 billion (US $7.11 billion), up by 10.1%<br />
compared with the same period last year. The average rental<br />
of prime retail space reached RMB 1,500/SM per month<br />
(US $234.40) in Q3 2011, representing a decrease of 8%<br />
quarter-on-quarter.<br />
The average rental of prime office properties reached RMB<br />
130/SM per month (US $20.30) in Q3 2011, representing<br />
a decrease of 11.7% quarter-on-quarter. As of September<br />
2011, no new Class A office buildings had been launched<br />
in the market resulting in the total inventory remaining the<br />
same at 489,200 SM. There have been no signs to indicate<br />
that economic activities have seen a slow down in Xian. It is<br />
expected that rental levels for office space will move<br />
with an upward trend in <strong>2012</strong> due to limited supply and<br />
sustainable demand generated by occupiers who are in the<br />
need of office relocation.<br />
Contact<br />
<strong>NAI</strong> ChaneyBrooks<br />
+671 649 8742<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population<br />
212<br />
1.8%<br />
$2.7<br />
$15,000.00<br />
2.5%<br />
13.3%<br />
N/A<br />
183,286<br />
Guam is one of five unincorporated territories of the US that<br />
includes Puerto Rico, American Samoa, Northern Mariana<br />
Islands and the US Virgin Islands. Its westernmost location<br />
and proximity to the major Asian economies makes Guam a<br />
strategic outpost for US military presence in the Pacific. It<br />
is staged to see an economic boom that rests on the political<br />
will of Tokyo and Washington DC.<br />
Guam’s economy remains positive with moderate aggregate<br />
growth expected both in the public and private sectors. The<br />
pace and magnitude of growth will be chiefly determined by<br />
the timing of military construction projects, the recovery of<br />
Japan, and the sustained growth of visitors from Korea,<br />
Taiwan and China. Tourism and military expenditures remain<br />
the chief drivers of Guam’s economy.<br />
The visitor industry saw impressive growth in 2010 when<br />
air service to Guam was expanded. Tourist arrivals were<br />
up 11.2% and hotel occupancy tax receipts also increased<br />
by 11.9%. However, the Great East Japan Earthquake of<br />
March 11, 2011 reversed all gains, dropping arrivals by<br />
more than 20%. Although the market has since returned to<br />
pre-disaster statistics, the wild swing is testament to its<br />
reliance on Japan.<br />
Construction companies wait in great anticipation for the<br />
start of the relocation of US Marine Corp forces from<br />
Okinawa. Since the Record of Decision (ROD) was<br />
announced in September of 2010 to proceed with the<br />
relocations plans, political indecisiveness by the Japanese<br />
government has stalled the process making it difficult for<br />
stakeholders to decide on employment and building supply<br />
deployments. The future of Guam’s military build-up was<br />
further clouded with the announcement of cutbacks in<br />
military expenditures by the US Congress as part of its<br />
austerity programs. Until the US military build-up and the<br />
correlating construction start dates are ascertained, the<br />
economic growth scenario for Guam ranges from flat to<br />
modest growth. If however, the newly elected Japan Prime<br />
Minister Noda is successful in his attempts to garner support<br />
in Okinawa for the military relocation plans, Guam is clearly<br />
positioned to see a boom period unlike any it has witnessed<br />
in the past.<br />
Xi’an At A Glance<br />
conversion 6.83 rmb = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
RMB<br />
RMB<br />
100.00 RMB<br />
110.00 RMB<br />
120.00 $ 16.32<br />
150.00 $ 17.95<br />
$ 19.59<br />
$ 24.48<br />
11.00%<br />
8.00%<br />
Class B (Secondary)<br />
suburban offIce<br />
RMB 60.00 RMB 80.00 $ 9.79 $ 13.06 12.00%<br />
New Construction (AAA)<br />
RMB 75.00 RMB 90.00 $ 12.24 $ 14.69 20.00%<br />
Class A (Prime)<br />
RMB 50.00 RMB 90.00 $ 8.16 $ 14.69 10.00%<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
RMB<br />
RMB<br />
RMB<br />
RMB<br />
15.00 RMB<br />
10.00 RMB<br />
8.00 RMB<br />
3.00 RMB<br />
40.00 $<br />
20.00 $<br />
18.00 $<br />
10.00 $<br />
2.45<br />
1.63<br />
1.31<br />
0.49<br />
$<br />
$<br />
$<br />
$<br />
6.53<br />
3.26<br />
2.94<br />
1.63<br />
8.00%<br />
15.00%<br />
18.00%<br />
23.00%<br />
Downtown<br />
RMB 1,300.00 RMB 1,700.00 $ 212.19 $277.48 10.00%<br />
Neighborhood Service Centers<br />
Community Power Center<br />
RMB<br />
RMB<br />
175.00 RMB<br />
150.00 RMB<br />
400.00 $ 28.56<br />
500.00 $ 24.48<br />
$ 65.29<br />
$ 81.61<br />
16.00%<br />
13.00%<br />
Regional Malls<br />
RMB 800.00 RMB 1,250.00 $ 130.58 $204.03 8.00%<br />
Solus Food Stores<br />
RMB 70.00 RMB 800.00 $ 11.43 $130.58 9.00%<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
RMB 2,800.00 RMB 5,000.00 $ 1,659,035.94 $ 2,962,564.18<br />
RMB 900.00 RMB 4,000.00 $ 533,261.55 $ 2,370,051.34<br />
RMB 400.00 RMB 2,000.00 $ 237,005.13 $ 1,185,025.67<br />
RMB 1,000.00 RMB 3,500.00 $ 592,512.84 $ 2,073,794.93<br />
RMB 1,500.00 RMB 7,000.00 $ 888,769.25 $ 4,147,589.85<br />
RMB 1,200.00 RMB 6,500.00 $ 711,015.40 $ 3,851,333.43<br />
Guam At A Glance<br />
US$ RENT/SF/YR low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$<br />
N/A<br />
N/A<br />
26.50<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 42.80<br />
N/A<br />
N/A<br />
$<br />
N/A<br />
N/A<br />
34.65<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
14.00%<br />
N/A<br />
N/A<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
15.12<br />
8.42<br />
8.42<br />
N/A<br />
$ 38.88<br />
$ 19.44<br />
$ 19.44<br />
N/A<br />
$ 34.56<br />
$ 18.14<br />
$ 18.14<br />
N/A<br />
18.00%<br />
9.00%<br />
11.00%<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
$<br />
$<br />
$<br />
$<br />
35.64<br />
14.04<br />
10.36<br />
38.88<br />
N/A<br />
$ 116.64<br />
$ 64.80<br />
$ 16.20<br />
$ 77.76<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
93.96<br />
46.44<br />
18.46<br />
77.76<br />
N/A<br />
14.00%<br />
12.00%<br />
11.00%<br />
7.00%<br />
N/A<br />
deVeloPment land<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
Low/Acre<br />
High/Acre<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 815,000.00 $ 1,163,200.00<br />
$ 815,000.00 $ 1,163,200.00<br />
$ 1,285,000.00 $ 2,480,000.00<br />
$ 116,640.00 $ 734,400.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 35
Chennai, India<br />
Mumbai, India<br />
Contact<br />
<strong>NAI</strong> Hemdev's<br />
International Realty<br />
Services<br />
+91 44 2822 9595<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
1,269,219<br />
8.4%<br />
$1,598.39<br />
$1,296.68<br />
6.7%<br />
9.4%<br />
7.3%<br />
1,232.68<br />
Chennai’s economy, known for its broad base in the<br />
automobile, computer, technology, hardware manufacturing,<br />
financial services, telecom and health care industries, has<br />
continued its growth momentum of 2010 through the first<br />
half of 2011.The IT/ITES sectors continue to be the major<br />
driver of demand for good quality office space in Chennai.<br />
Over 3.5 million SF has been leased in Chennai in the first<br />
three quarters of 2011. The most prominent transactions<br />
were Cognizant Technology Solutions (650,000 SF), Hewlett<br />
Packard (350,000 SF), Infosys (100,000 SF), Verizon<br />
(140,000 SF), HSBC (170,000 SF) and IBM (140,000 SF).<br />
The cautious optimism that was witnessed in the real estate<br />
market in Chennai in the first half of 2011 has taken a hit<br />
with the news of a possible slowdown in the economies of<br />
North American and European countries in Q3 2011. The<br />
IT/ITES industry is largely dependant on the well being and<br />
expansion of the North American and European economies.<br />
There could be an impact on the take up of large space<br />
going forward if there is a contraction in these economies.<br />
With rental values correcting, a plethora of opportunity is<br />
represented for occupiers. Companies looking at owning<br />
properties will be well positioned to take advantage of the<br />
availability of good, quality supply with correction in the<br />
prices.<br />
The demand for return on investment properties i.e.,<br />
purchase of office/commercial premises with tenants for<br />
rental returns, continues to be strong in Chennai given the<br />
ROI coupled with property appreciation. Demand from the<br />
hospitality, education and health care sectors will continue<br />
to grow given the opportunities being created by a growing<br />
economy.<br />
Chennai’s High Street continues to remain a favorite location<br />
for retailers due to better conversion rates. Proximity to the<br />
city center, instant recall, premium residential catchments<br />
and easy access are some of the key drivers for high-end<br />
streets. The suburbs of Chennai which are witnessing<br />
significant residential activity have made way for more retail<br />
activity which has prompted developers like PS Srijan,<br />
Prestige, Phoenix <strong>Market</strong> City and Marg to develop malls.<br />
Large catchments, reasonable rentals and a one stop<br />
destination will drive retailers to increase their presence in<br />
the suburbs.<br />
Contact<br />
<strong>NAI</strong> Sure Shot Suggestions<br />
+91 022 26126105<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
1,269,219<br />
8.4%<br />
$1,598.39<br />
$1,296.68<br />
6.7%<br />
9.4%<br />
7.3%<br />
1,232.68<br />
Mumbai seems to be, yet again, the costliest city for real<br />
estate in the country with speculation that it might remain<br />
so for some time to come. Mumbai is likely to witness an<br />
appreciation of 5% to 8% in the city with the suburbs seeing<br />
a rise of 7% to 11%. Population is yet another influencing<br />
factor for the rise in demand to match the supply.<br />
More buyers are coming forward to invest in properties<br />
fitting their specific needs. Nariman Point is certainly feeling<br />
the pressure, with its capital and rental rates dropping<br />
substantially over the past several years. Another commercial<br />
area, which has been developing slowly, is the mill area in<br />
Worli and Lower Parel, but this is mainly a retail sector.<br />
Nariman Point is making a come back. More buyers are<br />
coming forward to invest in properties fitting their needs in<br />
that market as well.<br />
Mumbai is quickly being recognized across the globe as an<br />
IT and ITES hub. High literacy levels, easy availability of<br />
intellectual talent at 50% to 60% lower costs compared to<br />
other international cities, better productivity and a time zone<br />
difference of eight to10 hours making it possible for offshore<br />
corporations to respond quickly since processing is done in<br />
Mumbai during the night, are some factors that have made<br />
Mumbai the most favored destination to China, Singapore,<br />
Philippines, Ireland and UK.<br />
Several companies have closed down their offices all over<br />
Mumbai and consolidated under one roof in the Bandra-<br />
Kurla complex. Prime examples of this are ICICI, IL & FS and<br />
Citibank. The Bandra-Kurla complex has succeeded in<br />
attracting some major financial institutions and companies.<br />
The S.T.P.I (Software technology parks India) is encouraging<br />
more and more IT parks. These buildings are specifically<br />
customized for IT and ITES corporate users.<br />
The commercial market in Kalyan is also picking up. The<br />
areas adjacent to the roads near the Kalyan railway station<br />
are an important commercial area. It is a boom time for real<br />
estate markets in the suburbs of Mumbai. Worli is the second<br />
largest commercial area in South Mumbai. Worli has<br />
several key institutions including the National Stock<br />
Exchange (NSE) and Nehru Science Center. It is also home<br />
to the famous Worli Dairy. Worli boasts good connectivity for<br />
markets throughout Mumbai. All business areas in Mumbai<br />
can be easily accessed from Worli.<br />
Chennai At A Glance<br />
conversion 52.49 Inr = 1 us$ RENT/SF/MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
INR 65.00<br />
INR 60.00<br />
INR 70.00<br />
INR 70.00<br />
$ 15.00<br />
$ 13.85<br />
$ 16.15<br />
$ 16.15<br />
N/A<br />
N/A<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
INR 35.00<br />
INR 25.00<br />
INR 30.00<br />
INR 50.00<br />
INR 45.00<br />
INR 45.00<br />
$<br />
$<br />
$<br />
8.08<br />
5.77<br />
6.92<br />
$ 11.54<br />
$ 10.38<br />
$ 10.38<br />
N/A<br />
N/A<br />
N/A<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
INR 20.00<br />
INR 15.00<br />
INR 15.00<br />
INR 18.00<br />
INR 30.00<br />
INR 22.00<br />
INR 20.00<br />
INR 25.00<br />
$<br />
$<br />
$<br />
$<br />
4.62<br />
3.46<br />
3.46<br />
4.15<br />
$<br />
$<br />
$<br />
$<br />
6.92<br />
5.08<br />
4.62<br />
5.77<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
INR 100.00<br />
INR 50.00<br />
N/A<br />
INR 150.00<br />
INR 80.00<br />
N/A<br />
$ 23.08<br />
$ 11.54<br />
N/A<br />
$ 34.62<br />
$ 18.46<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Regional Malls<br />
Solus Food Stores<br />
INR 35.00<br />
N/A<br />
INR 60.00<br />
N/A<br />
$ 8.08<br />
N/A<br />
$ 13.85<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/acre High/acre low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
INR 4,500.00 INR 7,500.00 $ 86.54 $ 144.23<br />
N/A N/A N/A N/A<br />
INR 3,200,000.00 INR 10,000,000.00 $ 61,538.46 $ 192,307.69<br />
N/A N/A N/A N/A<br />
INR 594,000,000.00 INR 11,000,000.00$11,423,076.92 $ 211,538.46<br />
INR300,000,000.00 INR 7,000,000,000.00 $ 5,769,230.77 $ 13,461,538.46<br />
Mumbai At A Glance<br />
conversion 52.49 Inr = 1 us$ NET RENT/SF/MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
INR<br />
INR<br />
INR<br />
INR<br />
INR<br />
INR<br />
225.00<br />
200.00<br />
175.00<br />
100.00<br />
90.00<br />
80.00<br />
INR 350.00<br />
INR 275.00<br />
INR 225.00<br />
INR 175.00<br />
INR 125.00<br />
INR 100.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
51.44<br />
45.72<br />
40.01<br />
22.86<br />
20.58<br />
18.29<br />
$ 80.02<br />
$ 62.87<br />
$ 51.44<br />
$ 40.01<br />
$ 28.58<br />
$ 22.86<br />
20.00%<br />
35.00%<br />
40.00%<br />
N/A<br />
N/A<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
INR 8.00<br />
N/A<br />
N/A<br />
INR 13.00<br />
N/A<br />
N/A<br />
$ 1.83<br />
N/A<br />
N/A<br />
$ 2.97<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Downtown<br />
Suburban Malls<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Solus Food Stores<br />
INR<br />
INR<br />
250.00<br />
125.00<br />
N/A<br />
N/A<br />
N/A<br />
INR 450.00<br />
INR 250.00<br />
N/A<br />
N/A<br />
N/A<br />
$<br />
$<br />
57.15<br />
28.58<br />
N/A<br />
N/A<br />
N/A<br />
$ 102.88<br />
$ 57.15<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/acre High/acre low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
INR 800,000,000.00 INR1,000,000,000.00 $15,240,998.29 $19,051,247.86<br />
INR 500,000,000.00 INR 750,000,000.00 $ 9,525,623.93 $14,288,435.89<br />
INR 250,000,000.00 INR 400,000,000.00 $ 4,762,811.96 $ 7,620,499.14<br />
INR 100,000,000.00 INR 200,000,000.00 $ 1,905,124.79 $ 3,810,249.57<br />
INR 500,000,000.00 INR 750,000,000.00 $ 9,525,623.93 $14,288,435.89<br />
INR 250,000,000.00 INR 500,000,000.00 $ 4,762,811.96 $ 9,525,623.93<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 36
Pune, India<br />
Punjab, India<br />
Contact<br />
<strong>NAI</strong> Property Terminus<br />
+91 20 2563 5551<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
1,269,219<br />
8.4%<br />
$1,598.39<br />
$1,296.68<br />
6.7%<br />
9.4%<br />
7.3%<br />
1,232.68<br />
Pune witnessed more than 2.3 million SF of absorption in<br />
just the first two quarters of 2011 compared to 3.54 million<br />
SF in 2010. This is expected to jump to about 10 million SF<br />
in <strong>2012</strong>. The micro markets witnessed an increase in<br />
absorption levels, largely in the secondary spaces vacated<br />
by companies relocating to areas outside of the CBD. Overall<br />
vacancy rates remained stable at 15.7% and 15.8% in Q1<br />
2011 and Q2 2011 respectively.<br />
The most active regions in terms of absorption and leasing<br />
activity were Hinjewadi located in the suburban micro-market,<br />
and Yerwada, Hadapsar and Kharadi in the secondary<br />
business district. Hinjewadi alone accounted for approximately<br />
50% (1.12 million SF) of the total space absorbed thus far<br />
in 2011, as the majority of the active and under-construction<br />
IT SEZs are in this region. The markets outside of the CBD<br />
micro market observed an increase in the number of<br />
occupier inquiries which are expected to lead to transaction<br />
closures over the next several quarters. Almost 300,000 SF<br />
of fresh supply came on to the market.<br />
The peripheral business district continued to be the<br />
preferred destination for IT/ITES companies. Numerous<br />
companies that had made inquiries for space last year<br />
transacted for the same in mid to late 2011. Approximately<br />
1.37 million SF of fresh supply was added to the market.<br />
Pune witnessed an addition of almost 4.5 million SF of new<br />
Grade A supply by the end of 2011. With various IT<br />
occupiers as well as non-IT companies expanding their<br />
presence across the city, an increase in demand is likely to<br />
be observed over the next several quarters.<br />
In the industrial market, leasing activity remained in line with<br />
expectations and is anticipated to increase in the coming<br />
months. Rents and yields are stable and not expected to<br />
change to any significant degree as new supply remains<br />
soft.<br />
Pune’s retail market witnessed completion of the long<br />
awaited In orbit Mall, Pulse Mall and Phoenix <strong>Market</strong> City.<br />
With these three completions totaling up to a leasable area<br />
of 1.7 million SF, Pune’s total stock of organized retail space<br />
was 3.25 million SF at the end of Q2 2011. Net absorption<br />
in the micro-market is expected to be 2.2 million SF of the<br />
total 2.6 million SF expected by the end of 2011.<br />
Contact<br />
<strong>NAI</strong> Space Alliance<br />
+91 98 1183 4000<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
1,269,219<br />
8.4%<br />
$1,598.39<br />
$1,296.68<br />
6.7%<br />
9.4%<br />
7.3%<br />
1,232.68<br />
The real estate sector in Punjab provided sustainable and<br />
profitable capital growth through the last six months of<br />
2011. As the demand has risen, the rate of land and built<br />
up properties increased by 10% to 20% over the last<br />
several months of 2011. The imposition of a new levy by<br />
the local government for approval of upcoming commercial<br />
projects within the municipal area, however, will affect the<br />
builder’s margins.<br />
There is a growing demand for office space due to the<br />
sustained economic activity driven mostly by demand from<br />
software companies. In the retail sector, once again retailers<br />
are leasing retail space in the malls rather than only<br />
considering High Street locations. Punjab is also emerging<br />
as a preferred destination for investment in real estate for<br />
the information technology industry, owing to its strong<br />
telecom infrastructure and availability of qualified<br />
manpower at a lower cost compared to other cities of north<br />
India. The fresh supply of Class A office space in and<br />
around the CBD area is negligible. Recent office space<br />
take-up has kept a check on the vacancy rates. The capital<br />
values of the properties have increased recently by 12%<br />
to 18%, but the rentals have increased by only 5% to 7 %.<br />
This compression has affected yields for new investors who<br />
now can buy pre-leased properties at 5% to 7%, which<br />
were previously trading at 6% to 9% depending on the size<br />
and location.<br />
The share of organized retail markets in Punjab is growing<br />
as many domestic and global players have already entered<br />
this sector. Fuelled by active retailer interest, the rental<br />
values are increasing across all High Street destinations<br />
and better performing mall properties.<br />
In the industrial sector, the local companies have shown a<br />
trend of leasing spaces rather than buying properties as<br />
the industrial rentals are low compared to the existing<br />
capital values.<br />
The Punjab real estate market expects to see an upward<br />
trend in the second half of <strong>2012</strong> as Q1 <strong>2012</strong> figures will<br />
be sluggish due to a wait and watch policy that will be<br />
adopted by the investors as well as the industrial houses,<br />
waiting on the budget announcement for the new fiscal<br />
year.<br />
Pune At A Glance<br />
conversion 52.49 Inr = 1 us$ RENT/SF/MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
INR 40.00 INR 75.00 $ 9.14 $ 17.15 18.00%<br />
Class A (Prime)<br />
INR 55.00 INR 75.00 $ 12.57 $ 17.15 20.00%<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
INR<br />
INR<br />
INR<br />
40.00<br />
28.00<br />
40.00<br />
INR<br />
INR<br />
INR<br />
55.00<br />
45.00<br />
50.00<br />
$<br />
$<br />
$<br />
9.14<br />
6.40<br />
9.14<br />
$ 12.57<br />
$ 10.29<br />
$ 11.43<br />
15.00%<br />
18.00%<br />
15.00%<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
INR<br />
INR<br />
30.00<br />
18.00<br />
INR<br />
INR<br />
40.00<br />
35.00<br />
$<br />
$<br />
6.86<br />
4.12<br />
$<br />
$<br />
9.14<br />
8.00<br />
20.00%<br />
5.00%<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
INR<br />
INR<br />
20.00<br />
20.00<br />
INR<br />
INR<br />
45.00<br />
45.00<br />
$<br />
$<br />
4.57<br />
4.57<br />
$ 10.29<br />
$ 10.29<br />
0.50%<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
INR<br />
INR<br />
INR<br />
INR<br />
INR<br />
80.00<br />
70.00<br />
70.00<br />
60.00<br />
90.00<br />
INR<br />
INR<br />
INR<br />
INR<br />
INR<br />
140.00<br />
120.00<br />
120.00<br />
100.00<br />
110.00<br />
$ 18.29<br />
$ 16.00<br />
$ 16.00<br />
$ 13.72<br />
$ 20.58<br />
$ 32.01<br />
$ 27.43<br />
$ 27.43<br />
$ 22.86<br />
$ 25.15<br />
15.00%<br />
20.00%<br />
20.00%<br />
25.00%<br />
20.00%<br />
deVeloPment land low/acre High/acre low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
INR 2,500.00 INR 6,000.00 $ 47.63 $ 114.31<br />
INR 2,000.00 INR 3,500.00 $ 38.10 $ 66.68<br />
INR 400.00 INR 650.00 $ 7.62 $ 12.38<br />
INR 300.00 INR 650.00 $ 5.72 $ 12.38<br />
INR 3,000.00 INR 10,000.00 $ 57.15 $ 190.51<br />
INR 1,000.00 INR 6,000.00 $ 19.05 $ 114.31<br />
Punjab At A Glance<br />
conversion 52.49 Inr = 1 us$ RENT/SF/MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
INR<br />
INR<br />
INR<br />
35.00<br />
34.00<br />
17.00<br />
N/A<br />
N/A<br />
N/A<br />
INR 53.00<br />
INR 50.00<br />
INR 25.00<br />
N/A<br />
N/A<br />
N/A<br />
$<br />
$<br />
$<br />
8.00<br />
7.84<br />
3.90<br />
N/A<br />
N/A<br />
N/A<br />
$ 12.00<br />
$ 11.43<br />
$ 7.06<br />
N/A<br />
N/A<br />
N/A<br />
11.00%<br />
14.00%<br />
18.00%<br />
N/A<br />
N/A<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
INR 12.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
INR 21.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 2.74<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 4.80<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
14.00%<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
INR 98.00<br />
INR 88.00<br />
N/A<br />
INR 143.00<br />
INR 133.00<br />
N/A<br />
$ 22.40<br />
$ 20.11<br />
N/A<br />
$ 32.69<br />
$ 30.40<br />
N/A<br />
8.00%<br />
17.00%<br />
N/A<br />
deVeloPment land low/acre High/acre low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 37
Jakarta, Indonesia<br />
Tokyo, Japan<br />
Contact<br />
<strong>NAI</strong> Indonesia<br />
+6221 5795 7599<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
737,815<br />
6.2%<br />
$776.98<br />
$3,270.01<br />
5.5%<br />
7.0%<br />
6.5%<br />
237.606<br />
Indonesia is one of the few countries to have been least<br />
affected by the rest of the world’s economic woes with a slight<br />
slowdown in 2009 but a regained momentum in 2010. The<br />
country has a growing economy, a large population and relative<br />
political stability. The Indonesian economy continued making<br />
progress, growing at 6.5% year-on-year in Q2 2011, in line<br />
with expectations. Strong export, rising investment activity and<br />
tamed inflation supported the consistent growth.<br />
In general, office inquires remained active during Q3 2011,<br />
with most space requirements between 100 SM and 300 SM,<br />
mainly as a result of existing tenants planning for expansion.<br />
The occupancy rate of the Jakarta CBD office market<br />
increased by 0.5% to 89.4% with approximately 448,000 SM<br />
of space remaining vacant. Net take up of 83,100 SM<br />
was realized over the final quarter of 2011, and although it<br />
represented a 10% decrease from the previous quarter’s<br />
take-up of 92,300 SM, the year-to-date take up was 26%<br />
higher than the entire 2010 absorption. Average gross rental<br />
is expected to remain stable until the end of the year before it<br />
is expected to increase at the beginning of <strong>2012</strong> in anticipation<br />
of the increase of the utility tariffs.<br />
The Jakarta prime retail market should continue to see positive<br />
trends on the back of robust consumption and improving<br />
lifestyles, particularly in the growing middle class. Potential<br />
high demand over the next few years is indicated by positive<br />
absorption in proposed retail developments. The additional<br />
retail supply through the end of 2011 came from retail centers,<br />
namely Kuningan City, Ancol Beach City, Tebet Green and<br />
Kalibata City Square. Most of this supply is in retail centers or<br />
supporting retail facilities within the mixed-use developments.<br />
Rental growth is expected to continue, reaching a peak within<br />
the next two years before slowing down. On an annual basis,<br />
the quarterly net demand grew by almost 60% from about<br />
Ha 113 during the same quarter last year. With the above<br />
activities, the cumulative sales rate continued to increase to<br />
77.9% from 76.4% in the previous quarter.<br />
Most industrial real estate developers have been enthusiastic<br />
about performance this year, and many of them believe that<br />
this trend will continue in the short-term. More transactions<br />
occurred during the end of 2011, particularly because<br />
investors were anticipating price increases going into <strong>2012</strong>.<br />
In <strong>2012</strong>, industries actively looking for land will come from<br />
the automotive, food, chemical, steel and pharmaceutical<br />
segments.<br />
Contact<br />
<strong>NAI</strong> Japan<br />
+65 9270 8051<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
145,920<br />
1.5%<br />
$5,683.29<br />
$42,820.00<br />
-0.3%<br />
4.1%<br />
0.3%<br />
128.056<br />
The Japanese economy is bound for a recovery from a sharp<br />
downturn caused by the March 2011 earthquake, with swift<br />
restoration of the supply chain and an increase in demand<br />
from reconstruction activities. Economic statics show a trend<br />
towards recovery. Worldwide uncertainties, such as the<br />
European debt issue, recessionary conditions in the US<br />
economy and floods in Thailand, cast a shadow over the<br />
Japanese economy. The negative affects have been felt<br />
through a decrease in production and exports, and with an<br />
appreciation of the Japanese currency.<br />
The property investment market has been relatively quiet<br />
since the earthquake. Investors, especially from overseas,<br />
have maintained a wait and see position. Looking at actual<br />
transactions, cap rates have seen little movement in any of<br />
the sectors (office, residential and retail) in Tokyo except for<br />
a minor fluctuation in logistic properties in the coastal<br />
area. New buildings standing in good condition are most<br />
attractive.<br />
At the end of October 2011, the vacancy rate in the office<br />
market showed a slight increase in the central five wards of<br />
Tokyo for the first time in four months. In the meantime, it<br />
appears that office rents are close to hitting the bottom, as<br />
they continue to show signs of flattening.<br />
A negative impact from the earthquake was observed on<br />
sales of multifamily residential units. Up to a 10% reduction<br />
was observed in the price of large units newly built in Tokyo,<br />
compared to prices before the earthquake. Buyers are more<br />
selective about ground conditions and building resistance.<br />
On the other hand, its impact on the residential leasing<br />
market is comparatively limited. Rents have seen only a<br />
slight downturn. Retail rents in Ginza rose 10% on average<br />
in the first half of 2011, while other major shopping districts<br />
remain relatively stable. Since June, retail sales have<br />
continued their recovery with few negative impacts<br />
experienced from the earthquake.<br />
Jakarta At A Glance<br />
conversion 9040 Idr = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
IDR 220,000.00 DR 235,000.00 $ 27.13 $ 28.98 N/A<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
IDR 180,000.00<br />
IDR 125,000.00<br />
IDR 180,000.00<br />
IDR 160,000.00<br />
IDR 125,000.00<br />
IDR 200,000.00<br />
IDR 175,000.00<br />
IDR 200,000.00<br />
IDR 180,000.00<br />
IDR 150,000.00<br />
$ 22.20<br />
$ 15.42<br />
$ 22.20<br />
$ 19.73<br />
$ 15.42<br />
$ 24.66<br />
$ 21.58<br />
$ 24.66<br />
$ 22.20<br />
$ 18.50<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
IDR<br />
IDR<br />
IDR<br />
80,000.00<br />
80,000.00<br />
80,000.00<br />
IDR 500,000.00<br />
IDR 500,000.00<br />
IDR 500,000.00<br />
$<br />
$<br />
$<br />
9.87<br />
9.87<br />
9.87<br />
$ 61.66<br />
$ 61.66<br />
$ 61.66<br />
N/A<br />
N/A<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
deVeloPment land<br />
IDR 200,000.00<br />
IDR 200,000.00<br />
IDR 175,000.00<br />
IDR 200,000.00<br />
N/A<br />
low/acre<br />
IDR 400,000.00<br />
IDR 300,000.00<br />
IDR 500,000.00<br />
IDR 350,000.00<br />
N/A<br />
High/acre<br />
$ 24.66<br />
$ 24.66<br />
$ 21.58<br />
$ 24.66<br />
N/A<br />
low/acre<br />
$ 49.33<br />
$ 37.00<br />
$ 61.66<br />
$ 43.16<br />
N/A<br />
High/acre<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
IDR 20,000,000.00 IDR 50,000,000.00 $8,953,235.99 $22,383,089.99<br />
IDR 15,000,000.00 IDR 50,000,000.00 $6,714,927.00 $22,383,089.99<br />
IDR 1,000,000.00 IDR 4,000,000.00 $ 447,661.80 $ 1,790,647.20<br />
IDR 1,000,000.00 IDR 20,000,000.00 $ 447,661.80 $ 8,953,235.99<br />
IDR 10,000,000.00 IDR 40,000,000.00 $4,476,618.00 $17,906,471.99<br />
IDR 10,000,000.00 IDR 30,000,000.00 $4,476,618.00 $13,429,853.99<br />
Tokyo At A Glance<br />
conversion: 77.87 JPY = 1 US$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
JPY 6,000.00 JPY 14,000.00 $ 85.90 $ 200.43 N/A<br />
JPY 5,000.00 JPY 13,500.00 $ 71.58 $ 193.27 5.20%<br />
JPY 3,000.00 JPY 5,000.00 $ 42.95 $ 71.58 12.30%<br />
JPY 4,000.00 JPY 5,500.00 $ 57.27 $ 78.74 N/A<br />
JPY 3,000.00 JPY 5,500.00 $ 42.95 $ 78.74 9.80%<br />
JPY 2,000.00 JPY 3,000.00 $ 28.63 $ 42.95 12.50%<br />
JPY 1,200.00 JPY 4,000.00 $ 17.18 $ 57.27 7.00%<br />
N/A N/A N/A N/A N/A<br />
N/A N/A N/A N/A N/A<br />
JPY 6,000.00 JPY 50,000.00 $ 85.90 $ 715.83 N/A<br />
N/A N/A N/A N/A N/A<br />
N/A N/A N/A N/A N/A<br />
N/A N/A N/A N/A N/A<br />
N/A N/A N/A N/A N/A<br />
deVeloPment land low/m 2 Highm 2 low/acre High/acre<br />
Office in CBD<br />
JPY 651,000.00 JPY 27,500,000.00 $ 33,832,125.31 $ 1,429,160,439.41<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Retail/Commercial Land JPY 510,000.00 JPY 27,600,000.00 $ 26,504,429.97 $ 1,434,357,386.47<br />
Residential<br />
JPY 435,000.00 JPY 2,830,000.00 $ 22,606,719.68 $ 147,073,601.58<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 38
Kuala Lumpur, Malaysia<br />
Contact<br />
<strong>NAI</strong> Zerin Properties<br />
+603 209222008<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
127,724<br />
Malaysia’s economy continued to grow albeit at a slower<br />
rate than originally forecasted. In Q2 2011, GDP expanded<br />
by 4.4% driven by the services sector as the main contributor.<br />
Real estate and business services recorded robust growth<br />
(8.2%) during the first half of 2011 driven by stock market<br />
trading and computer services. Malaysia is confident it will<br />
achieve a moderate 5.0% economic growth in 2011 despite<br />
worsening external conditions, with domestic demand<br />
expected to contribute to economic growth under ETP and<br />
the 10th Malaysia Plan.<br />
The global financial crisis and large supply of office space that<br />
is currently in the pipeline is expected to deter any significant<br />
increases in office rents. Nevertheless, new buildings with<br />
MSC status or green building certification are expected to<br />
perform better in securing tenants and attracting higher rents.<br />
The government’s initiative to attract 100 multinational<br />
companies will subsequently increase the overall net absorption<br />
rate of office space. The average rents for newer Class A<br />
buildings in Kuala Lumpur city range from MYR 8.00 to MYR<br />
11.00/SF. Current office vacancy rates stand at 13%. Office<br />
transactions in 2011 included the sale of One Mont’ Kiara<br />
(completed by Zerin Properties), Menara Multi Purpose, Wisma<br />
Goldhill and Putra Place for a total of 1.1734 billion SF.<br />
The industrial property sector picked up with strong demand<br />
from foreign investors. Vacancy rates remain very low while<br />
rents have been stable. There is a new trend for clean,<br />
boutique type industrial facilities.<br />
The retail sector was strong in 2011, largely driven by<br />
consumer spending and improved economic conditions.<br />
Overall, the retail subsector grew by an average of 7%.<br />
A retail mall, One Mont Kiara, sold for MYR 219 million<br />
(completed by Zerin Properties) with three other malls sold,<br />
namely Klang Parade, Ipoh Parade and Seremban Parade for<br />
MYR 450 million.<br />
Development land transactions have been active with average<br />
land prices in the city ranging from MYR 1,500 to MYR<br />
3,000/SF.<br />
The Kuala Lumpur hospitality sector performed well during<br />
Q3 2011. All the three categories (3-Star, 4-Star and 5-<br />
Star), recorded marginal increase for both occupancy and<br />
average room rates. The average occupancy rates for 3-<br />
Star, 4-Star and 5-Star hotels were recorded at 70%, 61%<br />
and 69% respectively. Average room rates for 3-Star, 4-Star<br />
and 5-Star hotels during Q3 2011 were RM 162, RM 240<br />
and RM 380 respectively.<br />
Kuala Lumpur At A Glance<br />
conversion 3.18 mYr = 1 us$ RENT/SF/MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
MYR 8.00<br />
MYR 6.00<br />
MYR 3.50<br />
MYR 4.50<br />
MYR 4.00<br />
MYR 11.00<br />
MYR 15.00<br />
MYR 4.50<br />
MYR 8.00<br />
MYR 5.00<br />
$ 30.19<br />
$ 22.64<br />
$ 13.21<br />
$ 16.98<br />
$ 15.09<br />
$ 41.51<br />
$ 56.60<br />
$ 16.98<br />
$ 30.19<br />
$ 18.87<br />
N/A<br />
95.00%<br />
85.00%<br />
N/A<br />
95.00%<br />
Class B (Secondary)<br />
IndustrIal<br />
MYR 2.50 MYR 3.50 $ 9.43 $ 13.21 85.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
MYR 1.00<br />
MYR 1.30<br />
MYR 1.80<br />
MYR 1.60<br />
MYR 2.00<br />
MYR 2.50<br />
$<br />
$<br />
$<br />
3.77<br />
4.91<br />
6.79<br />
$<br />
$<br />
$<br />
6.04<br />
7.55<br />
9.43<br />
N/A<br />
N/A<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
MYR 14.00<br />
MYR 7.00<br />
MYR 20.00<br />
MYR 30.00<br />
$ 52.83<br />
$ 26.42<br />
$ 75.47<br />
$ 113.21<br />
90.00%<br />
95.00%<br />
Community Power Center<br />
MYR 2.50 MYR 15.00 $ 9.43 $ 56.60 95.00%<br />
Regional Malls<br />
Solus Food Stores<br />
MYR 30.00<br />
N/A<br />
MYR 50.00<br />
N/A<br />
$ 113.21<br />
N/A<br />
$ 188.68<br />
N/A<br />
99.00%<br />
N/A<br />
deVeloPment land low/acre High/acre low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
5.0%<br />
$236.56<br />
$8,238.51<br />
2.5% - 2.7%<br />
3.2%<br />
3.0%<br />
28.713<br />
MYR 65,340,000.00 MYR 130,680,000.00 $20,547,169.81 $ 41,094,339.62<br />
MYR 8,712,000.00 MYR 17,424,000.00 $2,739,622.64 $ 5,479,245.28<br />
MYR 3,484,800.00 MYR 5,227,200.00 $1,095,849.06 $ 1,643,773.58<br />
MYR 1,306,800.00 MYR 2,178,000.00 $ 410,943.40 $ 684,905.66<br />
MYR 15,246,000.00 MYR 21,780,000.00 $4,794,339.62 $ 6,849,056.60<br />
MYR 6,534,000.00 MYR 87,120,000.00 $2,054,716.98 $27,396,226.42<br />
Auckland Central, New Zealand<br />
Contact<br />
<strong>NAI</strong> Harcourts Auckland<br />
Regional Office<br />
+64 9 520 5569<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
104,428<br />
Auckland’s commercial real estate market is suffering from<br />
a severe shortage of investment properties, however, the<br />
forthcoming general election and potential double dip global<br />
recession has not dampened investor demand. Recent<br />
auctions of industrial investments below $1.5 million with<br />
term leases showed yields of 7.0% to 7.6%; this is an<br />
improvement of 50 basis points compared to the same time<br />
in 2010.<br />
New development for non-speculative industrial and retail<br />
projects are showing some green shoots. New projects are<br />
underway in the industrial areas of Albany, West Auckland<br />
and South Auckland and industrial vacancies have fallen to<br />
around 5% with the three year hiatus on development<br />
activity and increased leasing activity keeping the vacancy<br />
rates stable.<br />
The retail sector has low vacancies across the region, but<br />
tenant demand remains relatively flat in competitive trading<br />
conditions. There is an increase of fixed rent reviews enabling<br />
landlords to maximize income returns and tenants to fix<br />
operating costs. The influx of around 100,000 tourists for the<br />
Rugby World Cup has produced significant spending in the<br />
hospitality sectors but little impact on other retail spending.<br />
Prime retail rentals are stable but the recession has seen store<br />
closures in secondary retail locations however, Westfield<br />
continues to expand their malls in Newmarket and Albany.<br />
Tight lending conditions and the time taken to obtain<br />
resource consent have slowed land sales with prices falling<br />
up to 50% and sales ranging from $150 to $350/SM across<br />
the industrial sector.<br />
Office vacancies across the CBD remain around 12% with<br />
the highest vacancy in Class B & C office buildings. Class A<br />
space has been taken up in the sublease market and<br />
vacancy is less than 5% with total vacancy approximately<br />
140,000 SM. Premium rentals are around $480/SM and<br />
incentives range from 10% to 17%. Auckland office supply<br />
is expected to increase an additional 80,000 SM in the next<br />
three to four years leading to a forecast vacancy of 16% in<br />
2015. Prime face rentals and yields are expected to stabilize<br />
and forecast improvements in the business and employment<br />
sector should absorb a sizeable portion of the vacant space.<br />
Confidence in New Zealand’s resilience to the global<br />
economic forecasts have seen some significant transactions<br />
by local and offshore investors recently, including the Hyatt<br />
Regency Hotel for $60 million and the Apex Retail Centre<br />
also for $60 million.<br />
Auckland Central At A Glance<br />
conversion 1.26 nZd = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
NZD 2,000.00 NZD 3,500.00 $ 147.46 $ 258.06 N/A<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
NZD<br />
NZD<br />
400.00 NZD<br />
180.00 NZD<br />
600.00<br />
300.00<br />
$<br />
$<br />
29.49<br />
13.27<br />
$ 44.24<br />
$ 22.12<br />
N/A<br />
N/A<br />
New Construction (AAA)<br />
NZD 1,500.00 NZD 3,000.00 $ 110.60 $ 221.20 N/A<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
NZD<br />
NZD<br />
275.00 NZD<br />
150.00 NZD<br />
300.00<br />
275.00<br />
$<br />
$<br />
20.28<br />
11.06<br />
$ 22.12<br />
$ 20.28<br />
N/A<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
NZD<br />
NZD<br />
80.00 NZD<br />
80.00 NZD<br />
110.00<br />
95.00<br />
$<br />
$<br />
5.90<br />
5.90<br />
$<br />
$<br />
8.11<br />
7.00<br />
N/A<br />
N/A<br />
High Tech/R&D<br />
retaIl<br />
NZD 110.00 NZD 150.00 $ 8.11 $ 11.06 N/A<br />
Downtown<br />
NZD 1,300.00 NZD 4,000.00 $ 95.85 $ 294.93 N/A<br />
Neighborhood Service Centers<br />
Community Power Center<br />
NZD 300.00 NZD<br />
N/A<br />
700.00<br />
N/A<br />
$ 22.12<br />
N/A<br />
$ 51.61<br />
N/A<br />
N/A<br />
N/A<br />
Regional Malls<br />
NZD 600.00 NZD 1,000.00 $ 44.24 $ 73.73 N/A<br />
Solus Food Stores<br />
N/A N/A N/A N/A N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
3.2%<br />
$147.75<br />
$33,456.13<br />
5.5%<br />
5.8%<br />
2.5%<br />
4.416<br />
N/A N/A N/A N/A<br />
NZD300.00 NZD400.00 $ 963,538.73 $ 1,284,718.31<br />
NZD 250.00 NZD 350.00 $ 802,948.94 $ 1,124,128.52<br />
NZD 250.00 NZD 350.00 $ 802,948.94 $ 1,124,128.52<br />
NZD250.00 NZD400.00 $ 802,948.94 $ 1,284,718.31<br />
N/A N/A N/A N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 39
Christchurch, New Zealand<br />
Wellington, New Zealand<br />
Contact<br />
<strong>NAI</strong> Harcourts Holmwood<br />
Real Estate<br />
+ 64 3 378 0020<br />
<strong>NAI</strong> Harcourts Grenadier<br />
Real Estate<br />
+ 64 3 371 9126<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
104,428<br />
3.2%<br />
$147.75<br />
$33,456.13<br />
5.5%<br />
5.8%<br />
2.5%<br />
4.416<br />
Christchurch’s rebuild including commercial, residential and<br />
infrastructure expenditure has been estimated at $30 billion<br />
in the latest revision. The Canterbury Development Corporation<br />
anticipates 30,000 trades people will be required over 10 to<br />
15 years for the rebuild. The new draft city plan has some<br />
great ideas which potentially could make Christchurch one<br />
of the top cities in the world.<br />
The draft city plan was released for comment on August 16,<br />
2011 and has received many positive responses from the<br />
public and larger institutions. Provided some restrictions<br />
which create barriers to encouraging businesses back to the<br />
CBD are removed, we believe property owners will get behind<br />
the plan and rebuild with confidence. Insurance has been an<br />
issue for both existing and new developments, but an easing<br />
attitude from the insurers is anticipated in the coming weeks,<br />
allowing more projects to get underway including the new<br />
<strong>NAI</strong> Harcourts offices at 271 Madras Street.<br />
The property market continues to show substantial interest<br />
from land buyers within and outside the CBD, while vendors<br />
who are likely to sell, remains low. Banks are also lining up<br />
to support the rebuild provided the insurance handle is<br />
decreased. In line with Westpac’s September confidence<br />
survey we see regional economic confidence increasing with<br />
the two growth drivers being construction and agricultural<br />
export incomes. These results bode well for Christchurch and<br />
Canterbury, providing more certainty of sustained economic<br />
growth for at least the next 10 years. This view is shared by<br />
many off shore based investors who, in the face of continued<br />
volatility in world share and financial markets, are happy to<br />
invest in Christchurch land and rebuild.<br />
Contact<br />
<strong>NAI</strong> Harcourts Team<br />
Wellington<br />
+64 4 801 5199<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
104,428<br />
3.2%<br />
$147.75<br />
$33,456.13<br />
5.5%<br />
5.8%<br />
2.5%<br />
4.416<br />
The Wellington Region seems to be emerging quicker from<br />
the recessional times than first thought. With the result of<br />
an impending election upon us, any government elected<br />
will no doubt attempt to soften the effects of mounting global<br />
uncertainty through monetary and fiscal measures. Despite<br />
these measures it is unlikely to have much of a positive affect<br />
on the sluggish property markets.<br />
Wellington’s vacancy rates are expected to rise to 14% by<br />
<strong>2012</strong> due to the completion of some 48,000 SM of Class A<br />
office space. Proposed office developments such as Harbour<br />
Quays and Wellington Waterfront will however place pressure<br />
on the secondary office landlords to refurbish and improve<br />
their stock to minimize movement of their existing tenants,<br />
which will no doubt be drawn to higher quality vacancies.<br />
In retail, sentiment is down and established stores are reluctant<br />
to move, even just round the corner, in case they lose their<br />
already fragile customer base. Some key segments such as<br />
supermarkets and international brands are still performing<br />
well, as shopping locally is cheaper than a spree in Australia.<br />
Occupation is still strong within the regional shopping malls<br />
such as Westfield and the ‘Golden Mile’ of Lambton Quay.<br />
Whereas secondary markets in towns surrounding Wellington<br />
are in trouble as a number of prime sites sit vacant. These<br />
present great leasing options for enterprising retailers who<br />
could be well advised to take advantage of this nervousness<br />
as landlords forego rental increases to attract interest.<br />
Industrial vacancy rates have been falling as the confidence<br />
in this sector steadily increases; vacancy rates in the Hutt<br />
Valley which accommodates the majority of industrial space<br />
is hovering around 8%. Industrial landlords are proactively<br />
reacting to the changing market conditions by offering<br />
generous inducements to secure tenants in long term leases.<br />
This aggressive approach to letting, coupled with expanding<br />
New Zealand manufacturing output over the past six months<br />
(according to a BNZ survey) has resulted in industrial property<br />
across the Wellington region being the best performing sector<br />
when compared to returns from retail and commercial office<br />
property.<br />
Business and non-business lending, although at a low rate<br />
historically, could be on the incline and with lower levels of<br />
debt recorded than previous years, a leveling is expected<br />
in anticipation of a growing confidence in the positive<br />
performance of the commercial property sector.<br />
Christchurch At A Glance<br />
conversion 1.26 nZd = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
NZD<br />
NZD<br />
NZD<br />
NZD<br />
N/A<br />
350.00<br />
200.00<br />
N/A<br />
220.00<br />
150.00<br />
N/A<br />
NZD 450.00<br />
NZD 350.00<br />
N/A<br />
NZD 270.00<br />
NZD 220.00<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
25.81<br />
14.75<br />
N/A<br />
16.22<br />
11.06<br />
N/A<br />
$ 33.18<br />
$ 25.81<br />
N/A<br />
$ 19.91<br />
$ 16.22<br />
0.10%<br />
0.10%<br />
0.10%<br />
0.10%<br />
0.10%<br />
0.10%<br />
Bulk Warehouse<br />
Manufacturing<br />
NZD<br />
NZD<br />
70.00<br />
70.00<br />
NZD 120.00<br />
NZD 120.00<br />
$<br />
$<br />
5.16<br />
5.16<br />
$<br />
$<br />
8.85<br />
8.85<br />
3.00%<br />
3.00%<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
NZD<br />
NZD<br />
NZD<br />
NZD<br />
90.00<br />
300.00<br />
250.00<br />
N/A<br />
600.00<br />
N/A<br />
NZD 140.00<br />
NZD 700.00<br />
NZD 350.00<br />
N/A<br />
NZD 1,000.00<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
6.64<br />
22.12<br />
18.43<br />
N/A<br />
44.24<br />
N/A<br />
$ 10.32<br />
$ 51.61<br />
$ 25.81<br />
N/A<br />
$ 73.73<br />
N/A<br />
3.00%<br />
0.10%<br />
0.10%<br />
0.10%<br />
0.10%<br />
0.10%<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
NZD 1,500.00 NZD 2,500.00 $ 4,817,693.65 $ 8,029,489.42<br />
NZD 1,500.00 NZD 2,500.00 $ 4,817,693.65 $ 8,029,489.42<br />
NZD 300.00 NZD 400.00 $ 963,538.73 $ 1,284,718.31<br />
NZD 300.00 NZD 400.00 $ 963,538.73 $ 1,284,718.31<br />
NZD 400.00 NZD 600.00 $ 1,284,718.31 $ 1,927,077.46<br />
NZD 300.00 NZD 1,100.00 $ 963,538.73 $ 3,532,975.35<br />
Wellington At A Glance<br />
conversion 1.26 nZd = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
NZD 1,500.00 NZD 3,000.00 $ 110.60 $ 221.20 N/A<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
NZD<br />
NZD<br />
320.00<br />
180.00<br />
NZD<br />
NZD<br />
500.00 $<br />
280.00 $<br />
23.59<br />
13.27<br />
$<br />
$<br />
36.87<br />
20.64<br />
N/A<br />
N/A<br />
New Construction (AAA)<br />
NZD 1,200.00 NZD 3,000.00 $ 88.48 $ 221.20 N/A<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
NZD<br />
NZD<br />
NZD<br />
NZD<br />
NZD<br />
200.00<br />
150.00<br />
50.00<br />
60.00<br />
100.00<br />
NZD<br />
NZD<br />
NZD<br />
NZD<br />
NZD<br />
250.00 $<br />
200.00 $<br />
75.00 $<br />
85.00 $<br />
150.00 $<br />
14.75<br />
11.06<br />
3.69<br />
4.42<br />
7.37<br />
$<br />
$<br />
$<br />
$<br />
$<br />
18.43<br />
14.75<br />
5.53<br />
6.27<br />
11.06<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Downtown<br />
NZD 1,000.00 NZD 2,500.00 $ 73.73 $ 184.33 N/A<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
NZD 250.00<br />
N/A<br />
N/A<br />
N/A<br />
NZD 480.00 $<br />
N/A<br />
N/A<br />
N/A<br />
18.43<br />
N/A<br />
N/A<br />
N/A<br />
$ 35.39<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
NZD 200.00 NZD 400.00 $ 642,359.15 $ 1,284,718.31<br />
NZD 250.00 NZD 500.00 $ 802,948.94 $ 1,605,897.88<br />
NZD 750.00 NZD 1,000.00 $2,408,846.83 $ 3,211,795.77<br />
NZD 300.00 NZD 1,600.00 $ 963,538.73 $ 5,138,873.23<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 40
Singapore<br />
Seoul, South Korea<br />
Contact<br />
<strong>NAI</strong> <strong>Global</strong><br />
+65 9270 8051<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
270<br />
4.5%<br />
$233.17<br />
$44,968.38<br />
2.4%<br />
2.2%<br />
N/A<br />
5.185<br />
Due to global uncertainties, Singapore has experienced a<br />
weaker corporate hiring sentiment and lower tenant demand<br />
as some companies have shelved plans for relocation and<br />
expansion. In the last 12 to 18 months, the Singapore<br />
government has instituted a number of anti-speculation<br />
measures. Prices have stabilized, however a recent residential<br />
buyer paid a record-breaking S$19 million for a four-bedroom<br />
apartment at The Marq on Paterson Hill for just under<br />
S$6,400/SF.<br />
The Singapore office property market looks likely to stay<br />
caught in the renewed concerns of a global economic slump<br />
in the short to medium term. Singapore’s average CBD, Class<br />
A office space is still more than 50% cheaper than equivalent<br />
space in Hong Kong. With the overall market pre-commitments<br />
at around 60% for new buildings, we do not forecast a<br />
substantial risk of large oversupply. While vacancies are<br />
expected to continue creeping up, we believe that rents will<br />
stay flat (to slightly receding) through early <strong>2012</strong>.<br />
Singapore has been listed as one of the three most expensive<br />
prime industrial land markets in the world as of mid-2011.<br />
Biomedical/pharma manufacturing was recently the greatest<br />
contributor to the market. Average monthly gross rents for<br />
factories and warehouses grew between 15% and 17% in the<br />
first three quarters of 2011. With occupancies at 92% for<br />
conventional flatted factories and warehouses, this has<br />
provided the backdrop for continued, moderate rental growth.<br />
Demand was mostly from manufacturers renewing their<br />
existing leases at slightly higher rents.<br />
Retailers have become more cautious over their space needs.<br />
New entrants which dominated the market in recent times<br />
include fashion brands of Aeropostale (at Vivocity, CityLink Mall<br />
and Ion Orchard), H& M (at Knightsbridge) and Abercrombie<br />
& Fitch (at Orchard Building). With the city center, fringe and<br />
Orchard Road areas having the largest inventories and highest<br />
quality of retail space, developers are seeking alternative,<br />
suburban locations.<br />
Overall real estate investment in Singapore in the first half of<br />
2011 was stronger than 2010, but with a trend to slowing<br />
transaction volumes. As of Q4 2011, Singapore was ranked the<br />
seventh most active global investment market with nearly US<br />
$20 billion in concluded investment transactions over the<br />
previous 12 month period. Capital values have primarily ranged<br />
from S$1,500/SF to S$2,500/SF for prime, Class A office space<br />
with retail values ranging generally from S$1,700/SF (suburban,<br />
fringe and smaller size lots) to S$6,250/SF (prime, central).<br />
Contact<br />
<strong>NAI</strong> Korea<br />
+82 2 6205 3500<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
38,544<br />
6.1%<br />
$986.26<br />
$30,000.00<br />
3.0%<br />
3.7%<br />
3.3%<br />
48.91<br />
The commercial real estate market of 2011 continued a<br />
steady growth from last year. Even though the economy is<br />
still unstable due to the depressed housing market and<br />
rising inflation, investor demand for commercial real estate<br />
such as retail shops and studio type apartments for one or<br />
two people was very high this year.<br />
The office market is taking on different aspects dictated by<br />
region. The CBD is experiencing unprecedented oversupply<br />
and struggling to bring in tenants. Approximately 1 million<br />
SM of new office space entered the market in 2011 with<br />
most of that located in the CBD. In addition, approximately<br />
5.3 million SM of new office space is expected in Seoul<br />
through 2015. Over the next few years Seoul is likely to<br />
suffer from an oversupply in the market. The rent remained<br />
stable but given the lease incentives offered by landlords,<br />
the effective rent is expected to drop. On the contrary, the<br />
Gangnam BD has seen a relatively healthy level of leasing<br />
activity and falling vacancy rates as the IT and social<br />
commerce firms strongly expanded.<br />
Retail continued to experience a steady growth in lease<br />
activity since last year. Even though the sharp decrease of<br />
Japanese tourists after the disaster drove sales down in the<br />
biggest commercial area, affluent Chinese shoppers<br />
contributed to the recovery. The continuous inflow of SPA or<br />
luxury brands is increasing demand for shops in department<br />
stores and major commercial districts.<br />
The industrial sector is showing signs of recovery in<br />
comparison to the latter half of 2010. The rents increased<br />
by 10% to 20% due to the strong lease activity and the<br />
rising demand is expected to continue into <strong>2012</strong>. The Free<br />
Trade Agreement with EU is anticipated to boost imports and<br />
increase the demand for warehouse space.<br />
Numerous redevelopment and reconstruction projects are<br />
planned in Seoul. The Yongsan project, with a total projected<br />
cost of KRW 31 trillion (US $30 billion), is expected to<br />
stimulate the real estate market. Renovating office to<br />
hotel space is also very active due to the lack of current<br />
accommodations and an increase in investors seeking<br />
opportunities in the hospitality market. The investment in<br />
prime office is decreasing due to the lack of quality assets<br />
available, whereas the demand for mid-sized office space<br />
is huge and the prices are gradually rising.<br />
Singapore At A Glance<br />
conversion 1.29 sGd = 1 us$ RENT/SF/MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
SGD<br />
SGD<br />
10.00<br />
8.00<br />
SGD 15.00<br />
SGD 12.00<br />
$ 93.02<br />
$ 74.42<br />
$ 139.53<br />
$ 111.63<br />
7.50%<br />
11.00%<br />
Class B (Secondary)<br />
suburban offIce<br />
SGD 6.00 SGD 9.00 $ 55.81 $ 83.72 11.00%<br />
New Construction (AAA) SGD 7.00 SGD 10.00 $ 65.12 $ 93.02 8.00%<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
SGD<br />
SGD<br />
SGD<br />
SGD<br />
SGD<br />
6.00<br />
5.00<br />
1.40<br />
1.50<br />
2.50<br />
SGD<br />
SGD<br />
SGD<br />
SGD<br />
SGD<br />
9.50<br />
7.50<br />
2.00<br />
2.30<br />
3.50<br />
$ 55.81<br />
$ 46.51<br />
$ 13.02<br />
$ 13.95<br />
$ 23.26<br />
$ 88.37<br />
$ 69.77<br />
$ 18.60<br />
$ 21.40<br />
$ 32.56<br />
8.00%<br />
8.00%<br />
8.00%<br />
9.00%<br />
12.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
SGD<br />
SGD<br />
SGD<br />
22.00<br />
20.00<br />
N/A<br />
22.00<br />
N/A<br />
SGD 45.00<br />
SGD 39.00<br />
N/A<br />
SGD 45.00<br />
N/A<br />
$ 204.65<br />
$ 186.05<br />
N/A<br />
$ 204.65<br />
N/A<br />
$ 418.60<br />
$ 362.79<br />
N/A<br />
$ 418.60<br />
N/A<br />
2.50%<br />
3.50%<br />
N/A<br />
2.50%<br />
N/A<br />
deVeloPment land low/sf High/sf low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
SGD 850.00 SGD 1,300.00 $ 28,702,126.96 $ 43,897,370.65<br />
SGD525.00 SGD 850.00 $ 17,727,784.30 $ 28,702,126.96<br />
SGD 35.00 SGD175.00 $ 1,181,852.29 $ 5,909,261.43<br />
SGD 30.00 SGD 80.00 $ 1,013,016.25 $ 2,701,376.66<br />
SGD 900.00 SGD 1,400.00 $ 30,390,487.37 $ 47,274,091.47<br />
SGD 400.00 SGD1,500.00 $ 13,506,883.28 $ 50,650,812.29<br />
Seoul At A Glance<br />
conversion 1135.29 krW = 1 us$ RENT/M 2 /YR<br />
US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
KRW 217,800.00 KRW 360,000.00 $ 17.82<br />
KRW 294,000.00 KRW 447,600.00 $ 24.06<br />
KRW 236,400.00 KRW 336,000.00 $ 19.34<br />
KRW 138,000.00 KRW 312,000.00 $ 11.29<br />
KRW 132,000.00 KRW 288,000.00 $ 10.80<br />
$ 29.46<br />
$ 36.63<br />
$ 27.50<br />
$ 25.53<br />
$ 23.57<br />
7.90%<br />
4.40%<br />
3.30%<br />
4.10%<br />
2.90%<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
KRW 102,000.00 KRW 234,000.00 $<br />
KRW 120,000.00 KRW 217,800.00 $<br />
8.35<br />
9.82<br />
$ 19.15<br />
$ 17.82<br />
2.10%<br />
5.00%<br />
Manufacturing<br />
KRW 84,000.00 KRW 186,000.00 $ 6.87 $ 15.22 7.00%<br />
High Tech/R&D<br />
retaIl<br />
N/A N/A N/A N/A N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
KRW 1,910,000.00 KRW 3,675,000.00 $ 156.30<br />
KRW 572,250.00 KRW 1,144,500.00 $ 46.83<br />
$ 300.73<br />
$ 93.66<br />
5.30%<br />
7.20%<br />
Community Power Center KRW 287,100.00 KRW 506,000.00 $ 23.49 $ 41.41 12.00%<br />
Regional Malls<br />
KRW 487,000.00 KRW 729,300.00 $ 39.85 $ 59.68 9.60%<br />
Solus Food Stores<br />
N/A N/A N/A N/A N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
KRW 36,300,000.00 KRW 39,325,000.00 $129,395,233.74 $140,178,169.88<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 41
Taipei, Taiwan<br />
Ho Chi Minh City, Vietnam<br />
Contact<br />
<strong>NAI</strong> Taiwan<br />
+ 886 2 8770 6699<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
13,972<br />
4.4%<br />
$455.42<br />
$19,348.37<br />
1.5%<br />
4.9%<br />
1.9%<br />
23.538<br />
Taiwan’s 2011 economic growth is estimated at 5.06%<br />
according to the Taiwan government. The IMF forecasted that<br />
Taiwan’s economy in <strong>2012</strong> would grow, parallel to Hong Kong,<br />
by 5.4% and leave Singapore and South Korea behind at 5.2%<br />
and 4.5% respectively. Consumer spending is projected to reach<br />
the NT $8 trillion mark and rise by 3.96%. Both of Taiwan’s total<br />
export/import volume and GDP are escalating steadily. The<br />
unemployment rate in October 2011 was <strong>report</strong>ed at 4.27%.<br />
Eleven major transactions in Taipei’s commercial real estate<br />
market were recorded in Q2 2011, totaling NT $148.45 million,<br />
with most of the deals congregated in the CBD. In Q2, the market<br />
responded with stagnation to the luxury tax bill that was finalized.<br />
Two building auctions were suspended in NHTP; the Ya-Hsin<br />
Technology Building and the Ace Eten Building. San-Yang<br />
Chung-Hsiao Building, on the other hand, was auctioned off<br />
successfully. Located on the most dominant and much<br />
sought-after site, the auction drew stiff competition among a<br />
number of participants. The winning bid produced an 86%<br />
increment out of the reserved price. This exhibits capital<br />
abundance and solid confidence in Taiwan’s real estate market.<br />
The overall net absorption in Taipei was 20,668 pings and<br />
vacancies declined from 14.89% to 13.46%. Positive net<br />
absorption was recorded in both the CBD and in the suburban<br />
markets where the vacancy rates were consequently lowered.<br />
The suburban CDB posted 19,178 pings and the vacancy rate<br />
dropped by 1.96% to 11.73%.<br />
Favored by office tenants, the CBDs in the outskirts of Taiwan<br />
have shown progressive absorption, quarter after quarter.<br />
Rents, nonetheless, have not experienced a noticeable<br />
increase. The average rent lingered at NT $1,152 per ping.<br />
The commercial property market in the Nei-Hu Technology<br />
Park Taipei was mixed in 2011.<br />
On the one hand, Taiwan witnessed a gloomy performance<br />
since Q2 2011 due to the implementation of the luxury tax,<br />
but on the other hand, the start of Chinese tourism in Taiwan<br />
has infused investor confidence in the commercial real estate<br />
market. Expanding investments in retail shops, hotel properties<br />
and office space are forecast for <strong>2012</strong>. In the downtown area<br />
of Taipei, vacancy is at 13.46%. The suburban area vacancy<br />
rate is 11.73%. In 2011, among the six main CBDs in the<br />
Taipei downtown area, Class A space had the highest<br />
occupancy. In contrast, Class B and Class C space registered<br />
negative net absorption. Rent averaged upwards NT $2,030<br />
per ping per month. In suburban areas of Taipei, vacancy is<br />
11.66% and rental rates are NT $1,152 per ping per month.<br />
Contact<br />
<strong>NAI</strong> Nguyen Alliance Corp.<br />
+84 08 6291 5551<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
127,882<br />
6.8%<br />
$113.63<br />
$1,272.18<br />
8.0%<br />
5.0%<br />
9.0%<br />
89.316<br />
The real estate market in 2011 still encountered difficulties<br />
due to credit restrictions and high interest rates, making for<br />
a stagnant credit flow. Traditional customers in the apartment<br />
market were quiet due to soaring gold prices attracting<br />
outside investors. Thos customers lost faith in the real estate<br />
market. Prices of the mid-range and high-end apartment<br />
markets decreased. About 100 apartments were offered in<br />
Ho Chi Minh City in the mid-range market.<br />
From January to September, 2011, CPI increased to around<br />
16.63%, up some 22.42% year-on-year. Therefore, the<br />
future supply of the retail projects in HCMC is expected to<br />
exceed 1,680,000 SM in <strong>2012</strong>. This figure doubles the<br />
current supply of some 658,000 SM comprised of<br />
supermarkets, trade centers, grocery stores and shopping<br />
malls. Due to the difficulties in the economy, the number of<br />
customers visiting shopping centers dropped from 20% to<br />
10%, leading investors to renegotiate rental rates. Accordingly,<br />
developers of trade center projects had to protract the time<br />
of capital reclamation. However, the rentals will be adjusted<br />
as those centers are fully leased.<br />
The office market by the end of 2011 was relatively stable<br />
with respect to Class A and Class B office projects. The Class<br />
A office market focused mainly on the office tower projects<br />
at the fulfillment rate of 90% to100%. The rental rates for<br />
Class B office space remain unchanged with the high<br />
fulfillment rate in the downtown area of District 1 at $26 to<br />
$29 per month on average. The project is being promoted<br />
and developed in order to attract the attention of tenants<br />
who are interested in high quality services. Some small<br />
space projects are being offered for lease with appropriate<br />
rental rates to meet the increasing trend of seeking flexible<br />
office services. The market will receive a new supply of projects<br />
located in neighborhood provinces such as Binh Duong and<br />
Dong Nai.<br />
The mid-term real estate market of villas, frontage houses<br />
and land plots remains attractive to the Vietnamese.<br />
Forecasting for <strong>2012</strong>, this segment is expected to grow at<br />
a faster rate compared with other market segments.<br />
According to the comments of Knight Frank, in order to<br />
overcome the gloominess of the current housing market,<br />
developers need to be more prudent and flexible. It is<br />
important for developers to do careful research in the<br />
apartment market to meet customer’s requirements before<br />
launching the serviced apartments into the market.<br />
Taipei At A Glance<br />
conversion 29.8 tWd = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
TWD 666.00 TWD 1,089.00 $ 24.92 $ 40.74 16.20%<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
TWD 529.00<br />
TWD 475.00<br />
TWD 378.00<br />
TWD 303.00<br />
TWD<br />
TWD<br />
TWD<br />
TWD<br />
968.00<br />
635.00<br />
454.00<br />
424.00<br />
$ 19.79<br />
$ 17.77<br />
$ 14.14<br />
$ 11.34<br />
$ 36.21<br />
$ 23.76<br />
$ 16.98<br />
$ 15.86<br />
14.90%<br />
12.90%<br />
25.10%<br />
8.40%<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
TWD 242.00<br />
TWD 212.00<br />
TWD<br />
TWD<br />
333.00<br />
454.00<br />
$<br />
$<br />
9.05<br />
7.93<br />
$ 12.46<br />
$ 16.98<br />
20.50%<br />
6.30%<br />
Manufacturing<br />
TWD 127.00 TWD 230.00 $ 4.75 $ 8.60 18.60%<br />
High Tech/R&D<br />
retaIl<br />
TWD 242.00 TWD 424.00 $ 9.05 $ 15.86 11.00%<br />
Downtown<br />
TWD 1,573.00 TWD 10,890.00 $ 58.85 $ 407.40 N/A<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
deVeloPment land<br />
TWD 756.00<br />
TWD 968.00<br />
TWD 968.00<br />
TWD 1,210.00<br />
low/m 2 TWD 1,815.00<br />
TWD 3,630.00<br />
TWD 2,420.00<br />
TWD 2,269.00<br />
High/m 2 $ 28.28<br />
$ 36.21<br />
$ 36.21<br />
$ 45.27<br />
low/acre<br />
$ 67.90 N/A<br />
$ 135.80 N/A<br />
$ 90.53 N/A<br />
$ 84.88 N/A<br />
High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
TWD1,210,000.00 TWD1,512,500.00 $ 164,318,920.48 $205,398,650.60<br />
TWD1,512,500.00 TWD1,815,000.00 $ 205,398,650.60 $246,478,380.72<br />
TWD 544,500.00 TWD 605,000.00 $ 73,943,514.22 $ 82,159,460.24<br />
TWD 363,000.00 TWD 453,750.00 $ 49,295,676.14 $ 61,619,595.18<br />
TWD 2,268,750.00 TWD 2,722,500.00 $ 308,097,975.90 $369,717,571.08<br />
TWD 484,000.00 TWD 680,625.00 $ 65,727,568.19 $ 92,429,392.77<br />
Ho Chi Minh City At A Glance<br />
NET RENT/SF/MO<br />
US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
N/A<br />
$ 34.00<br />
$ 20.00<br />
$ 10.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 39.00<br />
$ 22.00<br />
$ 15.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$<br />
$<br />
$<br />
N/A<br />
37.90<br />
22.30<br />
11.15<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 43.48<br />
$ 24.53<br />
$ 16.72<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$ 9,850.00 $ 10,231.00 $ 39,861,597.30 $ 41,403,451.97<br />
N/A N/A N/A N/A<br />
$ 714.00 $ 904.00 $ 2,889,459.95 $ 3,658,363.85<br />
N/A N/A N/A N/A<br />
$ 7,614.00 $ 8,327.00 $ 30,812,812.37 $ 33,698,225.45<br />
$ 1,903.00 $ 11,420.00 $ 7,701,179.66 $ 46,215,171.69<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 42
Canada<br />
sectIon contents<br />
Calgary, Alberta, Canada<br />
Edmonton, Alberta, Canada<br />
Vancouver, British Columbia, Canada<br />
Victoria, British Columbia, Canada<br />
Halifax, Nova Scotia, Canada<br />
Ottawa, Ontario, Canada<br />
Toronto, Ontario, Canada<br />
Montreal, Quebec, Canada<br />
Regina, Saskatchewan, Canada<br />
43
Calgary, Alberta, Canada<br />
Edmonton, Alberta, Canada<br />
Contact<br />
<strong>NAI</strong> Commercial Calgary<br />
+1 403 214 2344<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
3,855,100<br />
2.7%<br />
$1,632.89<br />
$47,340.29<br />
2.0%<br />
7.5%<br />
1.0%<br />
34.493<br />
Calgary is the largest city in Alberta with a population closing<br />
in on 1,100,000. It is located in the southern half of Alberta,<br />
just two hours north of the US border and one and a half<br />
hours east of the Rocky Mountains. Calgary is a distribution<br />
center for western Canada as well as home to the head<br />
office city for the Alberta Oilsands. 2011 was a recovery<br />
year in Calgary as projects are taken off the shelf and<br />
vacancy rates return to historical averages.<br />
Calgary’s downtown office market is on the verge of eclipsing<br />
40,000,000 SF due to the development of over 10,000,000<br />
SF in the last six years. This unprecedented building boom<br />
had caused vacancy rates to climb to a high of 14% in the<br />
CBD and 22% in the suburban markets/beltline, leaving a<br />
total of +/-9,000,000 SF vacant in 2009. 2011 has proven<br />
to be an exceptional recovery year for the market with the<br />
absorption of over 2,000,000 SF. Buoyed by high oil prices<br />
and reduced rental rates, office absorption has now eclipsed<br />
3,000,000 SF in the last 24 months and shows no signs of<br />
easing.<br />
There is approximately 32,000,000 SF of retail premises in<br />
Calgary, boasting a vacancy rate of approximately 5%. New<br />
construction underway equals approximately 300,000 SF<br />
with another 200,000 SF of new construction anticipated<br />
over the next six months. Significant news in the retail sector<br />
includes; the acquisition of Zellers by Target, acquisition<br />
of Sport Chek by Canadian Tire and the emergence of<br />
American retailers such as Five Guys Burger and Fries,<br />
Buffalo Wild Wings and the potential for more including<br />
Nordstrom’s, Walgreen’s and Big Lots Inc.<br />
Calgary’s industrial market has been relatively stable over<br />
the past several years with vacancy rates steadily decreasing<br />
to just over 4%. With minimal new developments<br />
commenced, it is forecasted that vacancy rates will continue<br />
to decline and rental rates will increase. Average rental rates<br />
for space start at $6/SF for larger areas and increases to<br />
$9 to $10/SF for smaller areas. The industrial market<br />
consists of +/-110,000,000 SF of space with +/- 2,000,000<br />
SF planned for construction within the next 12 month.<br />
Calgary’s outlook is extremely positive and poised for strong<br />
growth in the coming years, provided the Alberta Oilsands<br />
remain a globally accepted source of oil. The outlook for<br />
office, industrial and retail are all well balanced with land<br />
supplies available, construction prices back in balance and<br />
steady demand by all tenants across the board.<br />
Contact<br />
<strong>NAI</strong> Commercial Edmonton<br />
+1 780 436 7410<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
3,855,100<br />
2.7%<br />
$1,632.89<br />
$47,340.29<br />
2.0%<br />
7.5%<br />
1.0%<br />
34.493<br />
Edmonton continues to expand with an influx of US retailers,<br />
while the industrial and office markets, with historically low<br />
vacancy rates, are dealing with tenant's global concerns and<br />
their continued state of caution. $162 billion in projects have<br />
been scheduled in Edmonton and Northern Alberta. Oil, Gas<br />
and Oilsands projects make up 75% of this total. Edmonton<br />
is a staging ground for the north.<br />
The potential for growth is immensely supported by statistics,<br />
such as in the month of June 2011 there were more jobs<br />
created in Alberta than throughout the entire United States<br />
(22,000 vs. 18,000). The Investment market has experienced<br />
increased activity with mainly large scale transactions and<br />
there continues to be limited availability of small investment<br />
properties.<br />
Edmonton’s first new office tower in 20 years opened this<br />
past September. The first of four towers planned for the site,<br />
Epcor Tower is a 30 story, 618,000 SF building, home to<br />
Epcor, Capital Power and the Federal Department of Justice.<br />
This ‘Epcor Effect’ has resulted in a reduction in lease rates<br />
as landlords have become more competitive to offset the<br />
increased inventory available. The suburban office market is<br />
now under further pressure reducing rates as the increased<br />
inventory/vacancy downtown will provide an incentive for<br />
office tenants to relocate.<br />
Edmonton’s retail market remains strong and has seen a<br />
significant reduction to an already low vacancy. Target<br />
has paid $1.8 billion to buy over 200 Canadian Zellers<br />
department store’s leases. Big Lots Inc. purchased Liquidation<br />
World Inc. for their first expansion outside of the US through<br />
a network of 89 stores. American retailers Cabela’s Outfitters<br />
and Lowe’s Home Improvement opened their first locations<br />
in Edmonton.<br />
Industrial buyers and tenants have few options to choose<br />
from as market activity increases. Small lease bays are taken<br />
up quickly and few availabilities present themselves for<br />
50,000 SF plus users. Industrial Land has also seen an<br />
increase in sales activity and a rebound in pricing. A sampling<br />
of sales on parcels from one to five acres this year shows an<br />
average price of $636,000 per acre versus $512,820 a year<br />
prior. Whether you blog, tweet or read the headlines, current<br />
real estate markets are viewed cautiously. If you consider the<br />
strength in retail, our first new office tower in two decades<br />
and the Oilsands projects, Edmonton remains a great market<br />
to invest.<br />
Calgary At A Glance<br />
conversion 1.01 cad = 1 us$ NET RENT/SF/YR US$ NET RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
CAD 30.00 CAD 40.00 $ 29.70 $ 39.60 2.50%<br />
CAD 22.00 CAD 30.00 $ 21.78 $ 29.70 5.70%<br />
CAD 12.00 CAD 22.00 $ 11.88 $ 21.78 10.60%<br />
N/A N/A N/A N/A N/A<br />
CAD 19.00 CAD 25.00 $ 18.81 $ 24.75 7.30%<br />
CAD 10.00 CAD 19.00 $ 9.90 $ 18.81 12.50%<br />
CAD 4.75 CAD 6.00 $ 4.70 $ 5.94 4.20%<br />
CAD 5.25 CAD 10.00 $ 5.20 $ 9.90 4.00%<br />
CAD 9.00 CAD 17.00 $ 8.91 $ 16.83 4.60%<br />
CAD 5.00 CAD 50.00 $ 14.85 $ 49.50 5.40%<br />
CAD 20.00 CAD 33.00 $ 19.80 $ 32.67 3.00%<br />
CAD 16.00 CAD 36.00 $ 15.84 $ 35.64 2.80%<br />
CAD 15.00 CAD160.00 $ 14.85 $ 158.42 4.20%<br />
N/A N/A N/A N/A N/A<br />
deVeloPment land low//acre High/acre low/acre High/acre<br />
Office in CBD<br />
CAD 4,500,000.00 CAD 13,000,000.00 $ 4,455,445.54 $ 12,871,287.13<br />
Land in Office Parks<br />
CAD 600,000.00 CAD 1,000,000.00 $ 594,059.41 $ 990,099.01<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
CAD<br />
CAD<br />
450,000.00 CAD<br />
450,000.00 CAD<br />
800,000.00 $ 445,544.55 $<br />
800,000.00 $ 445,544.55 $<br />
792,079.21<br />
792,079.21<br />
Retail/Commercial Land CAD 700,000.00 CAD 1,300,000.00 $ 693,069.31 $ 1,287,128.71<br />
Residential<br />
CAD 100,000.00 CAD 4,500,000.00 $ 99,009.90 $ 4,455,445.54<br />
Edmonton At A Glance<br />
conversion 1.01 cad = 1 us$ NET RENT/SF/YR US$ NET RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
CAD 26.00 CAD 40.00 $ 25.74 $ 39.60 7.10%<br />
CAD 20.00 CAD 28.00 $ 19.80 $ 27.72 7.10%<br />
CAD 12.00 CAD 21.00 $ 11.88 $ 20.79 7.10%<br />
CAD 22.00 CAD 27.00 $ 21.78 $ 26.73 7.10%<br />
CAD 18.00 CAD 22.00 $ 17.82 $ 21.78 7.10%<br />
CAD 12.00 CAD 18.00 $ 11.88 $ 17.82 7.10%<br />
CAD 5.00 CAD 8.00 $ 4.95 $ 7.92 3.00%<br />
CAD 6.25 CAD 10.50 $ 6.19 $ 10.40 3.00%<br />
CAD 6.25 CAD 10.50 $ 6.19 $ 10.40 3.00%<br />
CAD 18.00 CAD 37.00 $ 17.82 $ 36.63 1.80%<br />
CAD 16.00 CAD 35.00 $ 15.84 $ 34.65 1.80%<br />
CAD 24.00 CAD 40.00 $ 23.76 $ 39.60 1.80%<br />
CAD 30.00 CAD 150.00 $ 29.70 $ 148.51 1.80%<br />
N/A N/A N/A N/A N/A<br />
deVeloPment land low//acre High/acre low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
CAD 200,000.00 CAD 550,000.00 $ 198,019.80<br />
CAD 325,000.00 CAD 725,000.00 $ 321,782.18<br />
CAD 400,000.00 CAD 1,200,000.00 $ 396,039.60<br />
CAD 65,000.00 CAD 850,000.00 $ 64,356.44<br />
$ 544,554.46<br />
$ 717,821.78<br />
$1,188,118.81<br />
$ 841,584.16<br />
2010 <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 44
Vancouver, British Columbia, Canada<br />
Victoria, British Columbia, Canada<br />
Contact<br />
<strong>NAI</strong> Commercial<br />
Vancouver<br />
+1 604 691 6643<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
3,855,100<br />
2.7%<br />
$1,632.89<br />
$47,340.29<br />
2.0%<br />
7.5%<br />
1.0%<br />
34.493<br />
Vancouver is the largest city in British Columbia and the third<br />
largest city in Canada. Metro Vancouver is home to 2.4<br />
million people. It is one of the largest ports on the west coast<br />
and a gateway to Asia. Signs point to a modest recovery<br />
continuing through <strong>2012</strong>. Without more robust growth in the<br />
US, the British Columbia economy will grow at a respectable<br />
2.5% to 3.0% rate annually.<br />
The commercial property market has normalized with<br />
average cap rates mostly below 7% regardless of product<br />
type. The region continues to be an attractive place to live,<br />
operate a business or own commercial property. The office<br />
market has experienced positive absorption in 2011 resulting<br />
in an overall vacancy rate declining from 8% to 7%. The<br />
downtown market is very tight, the result of no new office<br />
supply since 2007. The vacancy in the CBD is about 4%,<br />
the lowest of any North American city. Three new office<br />
towers are in pre-leasing which should address the supply<br />
situation in the coming years. Meantime the suburban<br />
markets are the beneficiary.<br />
The industrial market can be characterized as stable. Overall<br />
vacancy is about 5% in the region. The tenant market has<br />
been weaker than expected in 2011. Lease rates range<br />
between $6.50 and $8.50/SF largely unchanged from last<br />
year. Land prices average $1.0 million per acre of land. With<br />
economic growth approximating 2.5% per annum we expect<br />
a strengthened tenant market in <strong>2012</strong> with corresponding<br />
modest increase in rental rates and land values.<br />
The retail market is coming off a very robust 2010. While<br />
the investment appetite remains strong there are fewer<br />
quality assets available, resulting in much lower transaction<br />
volume in 2011. Lease rates will remain stable, supported<br />
by overall economic growth, increased housing starts and<br />
slow but steady employment growth.<br />
The investment market has returned to near normal<br />
transaction volumes. REITs are flush with cash. Institutional<br />
owners are rebalancing portfolios and high-net worth<br />
investors continue to be attracted to this supply constrained<br />
west coast market. The multifamily market is particularly<br />
strong with cap rates below 5% in most sub-markets in<br />
the city and between 5% and 6% in the suburban areas.<br />
Transaction activity for 2011 was steady with improvement<br />
expected in <strong>2012</strong> resulting from continued low interest rates<br />
and population growth in the region.<br />
Contact<br />
<strong>NAI</strong> Commercial Victoria<br />
+1 250 381 2265<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
3,855,100<br />
2.7%<br />
$1,632.89<br />
$47,340.29<br />
2.0%<br />
7.5%<br />
1.0%<br />
34.493<br />
Victoria, the capital city of British Columbia, has five<br />
primary economic drivers that include the provincial seat of<br />
government, the University of Victoria, high technology,<br />
tourism and the Department of National Defense, which<br />
operates Canada’s largest naval base on the Pacific coast.<br />
Since the fall of 2008 when the financial crisis swept across<br />
North America and the rest of the world, two of the major<br />
economic drivers, government revenue and tourism, have<br />
been negatively impacted.<br />
The office market has begun an uneven recovery after three<br />
years of increasing vacancy rates. The suburban office<br />
market has seen private sector growth, particularly from<br />
high tech firms, filling spaces vacated by the public sector.<br />
The supply of new office space has continued to be stifled<br />
by existing inventory (Uptown) and limited new demand for<br />
Class A space. Over-all office vacancy rate is expected to<br />
continue to trend downwards but will remain above historical<br />
levels (9% downtown and 8% in the suburbs). Lease rates<br />
are expected to remain stable.<br />
The industrial market is slow but steady demand and limited<br />
new supply will result in below 2% vacancy rate in the<br />
downtown industrial areas and about 5% in the suburbs.<br />
Land values have held steady contributing to stable<br />
industrial rents. Due to lack of additional capacity and<br />
low vacancy in established industrial areas (particularly<br />
downtown), growing businesses will continue to look for<br />
expansion options outside downtown Victoria.<br />
The retail market in the downtown core has shown weakness<br />
due to the anemic economic recovery and continued<br />
softness in the important tourism sector. The restaurant sector<br />
was hard hit by new minimum wage legislation, tightened<br />
drinking and driving regulations and the introduction of the<br />
Harmonized Sales Tax (HST) to restaurant meals. Vacancy<br />
rates in the CRD (Capital Region District) are expected to<br />
hold steady at around 7%. Regional and community retail<br />
centers in Greater Victoria experience a healthier 2% to 3%<br />
vacancy rate. Lease rates have remained stable.<br />
The Investment market in Greater Victoria continues to be<br />
frustrated by a lack of sellers. Low interest rates, a volatile<br />
stock market and an over-supply of qualified purchasers<br />
chasing the limited number of available investment grade<br />
properties will keep cap rates down. Cap rates on prime<br />
commercial properties have remained unchanged at 6% to<br />
7% with multifamily apartments unchanged at around 5%.<br />
Vancouver At A Glance<br />
conversion 1.01 cad = 1 us$ NET RENT/SF/YR US$ NET RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
CAD 35.00 CAD 50.00 $ 34.65 $ 49.50 5.00%<br />
CAD 28.00 CAD 38.00 $ 27.72 $ 37.62 6.00%<br />
CAD 25.00 CAD 35.00 $ 24.75 $ 34.65 8.00%<br />
CAD 30.00 CAD 40.00 $ 29.70 $ 39.60 10.00%<br />
CAD 25.00 CAD 32.00 $ 24.75 $ 31.68 12.00%<br />
CAD 18.00 CAD 25.00 $ 17.82 $ 24.75 14.00%<br />
CAD 6.00 CAD 9.00 $ 5.94 $ 8.91 4.50%<br />
CAD 6.50 CAD 10.00 $ 6.44 $ 9.90 4.50%<br />
CAD 8.50 CAD 14.00 $ 8.42 $ 13.86 5.00%<br />
CAD 100.00 CAD 200.00 $ 99.01 $198.02 5.00%<br />
CAD 25.00 CAD 65.00 $ 24.75 $ 64.36 5.00%<br />
CAD 30.00 CAD 40.00 $ 29.70 $ 39.60 5.50%<br />
CAD 25.00 CAD 40.00 $ 24.75 $ 39.60 6.00%<br />
N/A N/A N/A N/A N/A<br />
deVeloPment land low//acre High/acre low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
CAD 3,267,000.00 CAD 5,880,600.00 $3,234,765.60 $ 5,822,229.60<br />
CAD 900,000.00 CAD 1,200,000.00 $ 891,089.11 $ 1,188,118.81<br />
CAD 850,000.00 CAD 1,200,000.00 $ 841,584.16 $ 1,188,118.81<br />
CAD 750,000.00 CAD 1,100,000.00 $ 742,574.26 $ 1,089,108.91<br />
CAD 750,000.00 CAD 1,300,000.00 $ 742,574.26 $ 1,287,128.71<br />
CAD 750,000.00 CAD 1,300,000.00 $ 742,574.26 $ 1,287,128.71<br />
Victoria At A Glance<br />
conversion 1.01 cad = 1 us$ NET RENT/SF/YR US$ NET RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
CAD 40.00 CAD 45.00 $ 39.60 $ 44.55 10.00%<br />
CAD 36.00 CAD 40.00 $ 35.64 $ 39.60 6.50%<br />
CAD 30.00 CAD 36.00 $ 29.70 $ 35.64 8.10%<br />
CAD 38.00 CAD 42.00 $ 37.62 $ 41.58 15.00%<br />
CAD 32.00 CAD 36.00 $ 31.68 $ 35.64 8.50%<br />
CAD 26.00 CAD 30.00 $ 25.74 $ 29.70 9.00%<br />
CAD 10.00 CAD 12.00 $ 9.90 $ 11.88 3.00%<br />
CAD 12.00 CAD 14.00 $ 11.88 $ 13.86 2.00%<br />
CAD 12.00 CAD 18.00 $ 11.88 $ 17.82 2.50%<br />
CAD 45.00 CAD 90.00 $ 44.55 $ 89.11 6.00%<br />
CAD 30.00 CAD 42.00 $ 29.70 $ 41.58 4.00%<br />
CAD 25.00 CAD 30.00 $ 24.75 $ 29.70 2.00%<br />
CAD 60.00 CAD 75.00 $ 59.41 $ 74.26 4.00%<br />
N/A N/A N/A N/A N/A<br />
deVeloPment land low//acre High/acre low/acre High/acre<br />
Office in CBD<br />
CAD 1,500,000.00 CAD2,000,000.00 $1,485,148.51 $1,980,198.02<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
CAD<br />
CAD<br />
CAD<br />
600,000.00 CAD 1,000,000.00 $ 594,059.41 $ 990,099.01<br />
500,000.00 CAD 750,000.00 $ 495,049.50 $ 742,574.26<br />
600,000.00 CAD 900,000.00 $ 594,059.41 $ 891,089.11<br />
Retail/Commercial Land CAD 1,000,000.00 CAD 1,500,000.00 $ 990,099.01 $1,485,148.51<br />
Residential<br />
CAD 400,000.00 CAD 1,000,000.00 $ 396,039.60 $ 990,099.01<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 45
Halifax, Nova Scotia, Canada<br />
Ottawa, Ontario, Canada<br />
Contact<br />
<strong>NAI</strong> Turner Drake<br />
& Partners<br />
+1 902 429 1811<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
3,855,100<br />
2.7%<br />
$1,632.89<br />
$47,340.29<br />
2.0%<br />
7.5%<br />
1.0%<br />
34.493<br />
Halifax is the capital city of Nova Scotia and economic center<br />
for Canada’s east coast. With a population of over 403,000,<br />
it is one of the oldest cities in Canada and offers a unique<br />
blend of history and modern conveniences. Halifax Shipyard<br />
has just received a major government contract worth a<br />
combined $25 billion and thousands of new jobs and<br />
millions of dollars in spin-off benefits for the area are<br />
anticipated over the next 25 years.<br />
Halifax’s office rental market is maintaining a healthy status<br />
quo. The overall vacancy rate increased slightly from 7.64%<br />
in 2010 to 7.75% in 2011 in part due to vacancy in Class<br />
C office space increasing by 4.25% over the past year. The<br />
overall increase in net rental rates from 2010 is 2.78% of<br />
which Class C office space had the highest increase of<br />
4.25%. The average rental rate in the Halifax office market<br />
now sits at $13.69/SF. Although there are several new office<br />
buildings proposed for the CBD none of these have yet to<br />
make it off the drawing board. Migration to suburban office<br />
markets located closer to where employees live and with<br />
free parking, have made these locations popular with<br />
employers. We anticipate the overall vacancy rate will<br />
increase to 9.03% in the next year, driven by increases in<br />
supply of rental space outpacing increased demand.<br />
The industrial market showed an increase in the vacancy<br />
rate and is now sitting at 8.22% up from 6.72% in 2010.<br />
The net rental rate in the Halifax industrial market now<br />
averages $7.30/SF increasing from $7.04/SF in 2010. We<br />
anticipate that the overall vacancy rate will rise slightly to<br />
8.32%. Despite the predicted increase in the vacancy rate,<br />
a slight increase in net rent per SF is expected.<br />
On the retail front Halifax Shopping Center and Mic Mac Mall<br />
the two largest regional malls in Nova Scotia are both full<br />
with several new to Nova Scotia retailers moving in recently.<br />
Sephora, Hollister, Rockport and Aeropostale have opened<br />
here as well as Bed, Bath and Beyond. Toys R Us has a stand<br />
alone store under construction at Dartmouth Crossing and<br />
Banana Republic is opening a factory store in this location<br />
at the end of 2011.<br />
Financing for multi-unit residential properties is readily<br />
available with CMHC mortgage loan insurance and there are<br />
numerous buildings under construction in the Halifax metro<br />
area. As in previous years, Investment sales are few and far<br />
between with most landlords holding onto their real estate.<br />
Contact<br />
<strong>NAI</strong> Commercial Ottawa<br />
+1 613 230 2100<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
3,855,100<br />
2.7%<br />
$1,632.89<br />
$47,340.29<br />
2.0%<br />
7.5%<br />
1.0%<br />
34.493<br />
Ottawa, the national capital of Canada, has experienced<br />
another positive year. Employment has increased with<br />
73,000 jobs created, including 22,000 in the private sector<br />
and 51,000 in the public sector. In Q3 2011, unemployment<br />
was 6.4%. The office market shows an increase in vacancy<br />
to 6.5%, lease rates rose during the year and absorption is<br />
up at 80,862 SF. Currently new supply under construction<br />
in Ottawa is at 787,750 SF.<br />
The vacancy in Ottawa’s office market has decreased for<br />
the 8th consecutive quarter, now hovering at 6.5%. The<br />
downtown core vacancy is at 4.3%. The CBD (Ottawa)<br />
market continues to stabilize, but vacancies are expected<br />
to impact the market in Q4 2011 with the addition of the<br />
EDC building of 535,000 SF. Rental rates are holding steady<br />
at this time.<br />
Overall, the vacancy rate in Ottawa’s suburban market<br />
decreased to just over 8.0%. The Kanata vacancy rate has<br />
decreased with a net positive absorption of 65,000 SF. The<br />
East End continues to be Ottawa’s tightest office market with<br />
vacancy decreased to 3.2%. The West End sees a 4.5%<br />
vacancy rate with Genivar’s 80,000 SF new building coming<br />
on stream for Q1 <strong>2012</strong>.<br />
For the industrial market, Ottawa again performed well with<br />
a vacancy rate decreasing to 5.4%, lease rates are averaging<br />
$7.79/SF, net absorption year to date is at 363,533 SF and<br />
construction remains constant. Demand remains healthy<br />
and there has been significant investment activity. Big block<br />
users are prevalent in the East market. There is a decreased<br />
availability in the west with Avaya (from the former Nortel<br />
campus), leasing a 107,000 SF in a building on Legget<br />
Drive. There are currently no new industrial buildings under<br />
construction. Controlex Corp. completed a sale-leaseback<br />
at 820 Belfast Road; the 12,000 SF building sold for $2.2<br />
million and is fully occupied by two tenants.<br />
Investment activity has been strong this year with notable<br />
transactions by Dundee Realty continuing to add to their<br />
portfolio; 130 Slater Street (a private sector transacted office<br />
building for $190.00/SF, 100% occupied by private sector<br />
tenants) and 360 Laurier West (a public sector transacted<br />
office building at $176.00/SF, fully occupied by five public<br />
sector tenants) was acquired by Dundee in Q3 for $48.6<br />
million.<br />
Halifax At A Glance<br />
conversion 1.01 cad = 1 us$ NET RENT/SF/YR US$ NET RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
CAD<br />
CAD<br />
CAD<br />
CAD<br />
N/A<br />
32.75<br />
7.44<br />
N/A<br />
21.50<br />
13.50<br />
N/A<br />
CAD 35.99<br />
CAD 29.48<br />
N/A<br />
CAD 35.94<br />
CAD 33.00<br />
N/A<br />
$ 32.43<br />
$ 17.27<br />
N/A<br />
$ 21.29<br />
$ 13.37<br />
N/A<br />
$ 35.63<br />
$ 29.19<br />
N/A<br />
$ 35.58<br />
$ 32.67<br />
N/A<br />
6.50%<br />
5.70%<br />
N/A<br />
7.20%<br />
7.80%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
CAD<br />
CAD<br />
6.84<br />
N/A<br />
7.96<br />
CAD 18.85<br />
N/A<br />
CAD 20.00<br />
$<br />
$<br />
6.77<br />
N/A<br />
7.88<br />
$ 18.66<br />
N/A<br />
$ 19.80<br />
11.00%<br />
N/A<br />
6.60%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
CAD<br />
CAD<br />
CAD<br />
CAD<br />
33.00<br />
27.03<br />
28.41<br />
68.00<br />
N/A<br />
CAD 60.00<br />
CAD 29.03<br />
CAD 31.50<br />
CAD 95.00<br />
N/A<br />
$ 32.67<br />
$ 26.76<br />
$ 28.13<br />
$ 67.33<br />
N/A<br />
$ 59.41<br />
$ 28.74<br />
$ 31.19<br />
$ 94.06<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/acre High/acre low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A N/A N/A N/A<br />
CAD 261,360.00 CAD 391,169.00 $ 258,772.28 $ 387,296.04<br />
CAD 217,800.00 CAD 392,040.00 $ 215,643.56 $ 388,158.42<br />
CAD 609,840.00 CAD 1,118,620.00 $ 603,801.98 $ 1,107,544.55<br />
CAD 609,575.00 CAD 1,118,620.00 $ 603,539.60 $ 1,107,544.55<br />
CAD 7,717,000.00 CAD 7,857,143.00 $7,640,594.06 $ 7,779,349.50<br />
Ottawa At A Glance<br />
conversion 1.01 cad = 1 us$ NET RENT/SF/YR US$ NET RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
N/A<br />
CDN 25.00<br />
CDN 15.00<br />
N/A<br />
CDN 18.00<br />
N/A<br />
CDN 35.00<br />
CDN 20.00<br />
N/A<br />
CDN 22.00<br />
N/A<br />
$ 24.75<br />
$ 14.85<br />
N/A<br />
$ 17.82<br />
N/A<br />
$ 34.65<br />
$ 19.80<br />
N/A<br />
$ 21.78<br />
N/A<br />
4.00%<br />
5.00%<br />
N/A<br />
4.00%<br />
Class B (Secondary)<br />
IndustrIal<br />
CDN 10.00 CDN 14.00 $ 9.90 $ 13.86 5.00%<br />
Bulk Warehouse<br />
CDN 4.00 CDN 8.00 $ 3.96 $ 7.92 5.20%<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
CDN<br />
CDN<br />
6.00<br />
8.00<br />
CDN 11.00<br />
CDN 10.00<br />
$<br />
$<br />
5.94<br />
7.92<br />
$ 10.89<br />
$ 9.90<br />
5.40%<br />
12.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
CDN 20.00<br />
CDN 20.00<br />
CDN 20.00<br />
CDN 20.00<br />
N/A<br />
CDN 50.00<br />
CDN 50.00<br />
CDN 50.00<br />
CDN 50.00<br />
N/A<br />
$ 19.80<br />
$ 19.80<br />
$ 19.80<br />
$ 19.80<br />
N/A<br />
$ 49.50<br />
$ 49.50<br />
$ 49.50<br />
$49.50<br />
N/A<br />
2.10%<br />
3.50%<br />
3.50%<br />
5.00%<br />
N/A<br />
deVeloPment land low/acre High/acre low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
CAD 17,000,000.00 CAD 17,000,000.00 $ 16,831,683.17 $16,831,683.17<br />
CAD 350,000.00 CAD 400,000.00 $ 346,534.65 $ 396,039.60<br />
CAD 275,000.00 CAD 375,000.00 $ 272,277.23 $ 371,287.13<br />
N/A N/A N/A N/A<br />
CAD 350,000.00 CAD 2,000,000.00 $ 346,534.65 $ 1,980,198.02<br />
CAD 375,000.00 CAD 3,000,000.00 $ 371,287.13 $ 2,970,297.03<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 46
Toronto, Ontario, Canada<br />
Montreal, Quebec, Canada<br />
Contact<br />
<strong>NAI</strong> Ashlar Urban<br />
+1 416 205 9222<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
3,855,100<br />
2.7%<br />
$1,632.89<br />
$47,340.29<br />
2.0%<br />
7.5%<br />
1.0%<br />
34.493<br />
Canada, in particular the major urban regions, continues to<br />
look strong relative to the rest of the world. The country<br />
produced over 60,000 new jobs in September pushing the<br />
unemployment rate to its lowest since the recession in<br />
December 2008. This has followed suit in a year that has<br />
produced 300,000 jobs to date. Q4 2011 should shed light<br />
on what to expect for the next fiscal year in both local and<br />
global markets.<br />
Office space occupancy rates in downtown Toronto continue<br />
to improve steadily despite economic uncertainty in the rest<br />
of the world. The success of developed and developing office<br />
buildings such as the PWC Building, 16 York Street and<br />
134 Peter Street (Queen-Richmond Center West) has<br />
proved how strong the market really is as the recent influx<br />
of space has not detracted from absorption rates.<br />
The periphery markets (downtown west & downtown east)<br />
have shared success with the financial core and enjoyed<br />
similar vacancy rates creating a landlord friendly market<br />
across the board. Much of this positive growth can be<br />
attributed to a noticeable push for employers to be located<br />
within the city of Toronto. This should be seen as no<br />
coincidence when looking at the numerous condominium<br />
developments taking place within the city limits. Availability<br />
rates for the downtown office market have continued to<br />
decline and look to settle at just over 8%. Net rents have<br />
followed the strength of the economy and we have seen a<br />
steady increase in rates averaged over the first three quarters.<br />
Toronto continues to be an attractive location for investors.<br />
The combination of low vacancy rates, low lending rates<br />
and solid net rental rates make even low cap rate<br />
purchases make sense. Vacancy rates may show an<br />
increase in the coming months due to the construction of<br />
new office space in and around the core. This should have<br />
little to do with market strength as absorption rates are<br />
expected to continue their steady rise. Expect net rental<br />
rates to continue to increase marginally as well.<br />
As Toronto, and the rest of Canada venture into this time of<br />
economic uncertainty, we should continue to be cautiously<br />
optimistic when investing in the real estate market. A<br />
possibility of a slower pace in the following quarters must<br />
be acknowledged as we are not isolated in today’s global<br />
economy.<br />
Contact<br />
<strong>NAI</strong> Commercial Montreal<br />
+1 514 866 3333<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
3,855,100<br />
2.7%<br />
$1,632.89<br />
$47,340.29<br />
2.0%<br />
7.4%<br />
1.0%<br />
34.493<br />
Montreal is the second largest francophone city in the world.<br />
There are nearly 3.6 million inhabitants and 80% of the<br />
business people are bilingual. It is currently ranked first<br />
among Canadian metropolitan regions in investments. It has<br />
seen a drop in the unemployment rate down to 7.4% in<br />
August 2011, as well as the highest increase in monthly job<br />
creation since 2002.<br />
A leader in the new technologies industry, Montreal is home<br />
to such companies as Bombardier Inc. and Airports Council<br />
International. Its enviable reputation in the video game<br />
industry has been further maintained with the establishment<br />
of new companies alongside big names such as Ubisoft, EA<br />
Games and THQ.<br />
Office market data is encouraging. There is a decrease in<br />
the vacancy rate downtown, which is currently at 7.9%<br />
(compared to 9.5% during Q1 2007), and this trend should<br />
continue for the entire agglomeration of Montreal, where the<br />
current rate is 9.7%. Though the market is very active for<br />
spaces 10,000 SF or less in the agglomeration, it is even<br />
more active in the suburbs, where Class A buildings are<br />
scarce and where there is existing demand in certain<br />
sectors, with a vacancy rate of 1.2% in eastern areas of the<br />
South Shore.<br />
Retail sales represent $41 billion and make Montreal the<br />
second largest commercial hub in Canada. The economic<br />
benefits for this sector will have a positive effect on the value<br />
of commercial buildings, which has increased by 22.3%<br />
compared to 2007.<br />
In order to satisfy market demand, industrial buildings<br />
in Montreal require recent structures that comply with<br />
current requirements of height and loading docks. This<br />
obsolescence however does not apply to the suburban<br />
market where industrial buildings are more recent.<br />
Additionally, the credit variation granted to businesses is on<br />
the rise (+5.6% in April 2011), which indicates an active<br />
economy confirmed by the fact that entrepreneurs are<br />
very confident (index of 6.78% in March 2011) about the<br />
evolution of their business.<br />
In conclusion, despite the economic crisis in 2009, real<br />
estate investment in Montreal constitutes a good investment.<br />
The proof being a 22.4% increase in the city’s total real<br />
estate value compared to 2007.<br />
Toronto At A Glance<br />
conversion 1.01 cad = 1 us$ NET RENT/SF/YR US$ NET RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
CDN 42.00<br />
CDN 26.00<br />
CDN 15.00<br />
N/A<br />
CDN<br />
CDN<br />
CDN<br />
61.00<br />
34.00<br />
26.00<br />
N/A<br />
$ 41.58<br />
$ 25.74<br />
$ 14.85<br />
N/A<br />
$ 60.40<br />
$ 33.66<br />
$ 25.74<br />
N/A<br />
N/A<br />
5.20%<br />
7.30%<br />
N/A<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
CDN 26.00<br />
CDN 14.00<br />
CDN<br />
CDN<br />
33.00<br />
25.00<br />
$ 25.74<br />
$ 13.86<br />
$ 32.67 10.10%<br />
$ 24.75 11.30%<br />
Bulk Warehouse<br />
Manufacturing<br />
CDN<br />
CDN<br />
4.00<br />
4.00<br />
CDN<br />
CDN<br />
9.50<br />
9.00<br />
$<br />
$<br />
3.96<br />
3.96<br />
$<br />
$<br />
9.41<br />
8.91<br />
N/A<br />
N/A<br />
High Tech/R&D<br />
retaIl<br />
CDN 9.00 CDN 16.00 $ 8.91 $ 15.84 N/A<br />
Downtown<br />
CDN 25.00 CDN 350.00 $ 24.75 $ 346.53 N/A<br />
Neighborhood Service Centers<br />
Community Power Center<br />
CDN 25.00<br />
CDN 23.00<br />
CDN<br />
CDN<br />
40.00<br />
47.00<br />
$ 24.75<br />
$ 22.77<br />
$ 39.60<br />
$ 46.53<br />
N/A<br />
N/A<br />
Regional Malls<br />
Solus Food Stores<br />
CDN 40.00<br />
N/A<br />
CDN 130.00<br />
N/A<br />
$ 39.60<br />
N/A<br />
$ 128.71<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/acre High/acre low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
CDN 400,000.00 CDN 1,200,000.00 $ 396,039.60 $ 1,188,118.81<br />
CDN 3,000,000.00 CDN 20,000,000.00 $ 2,970,297.03 $19,801,980.20<br />
Montreal At A Glance<br />
conversion 1.01 cad = 1 us$ NET RENT/SF/YR US$ NET RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
CAD 30.00<br />
CAD 25.00<br />
CAD 12.00<br />
CAD 20.00<br />
CAD 16.00<br />
CAD 14.00<br />
CAD<br />
CAD<br />
CAD<br />
CAD<br />
CAD<br />
CAD<br />
40.00<br />
30.00<br />
14.00<br />
22.00<br />
18.00<br />
15.00<br />
$ 29.70<br />
$ 24.75<br />
$ 11.88<br />
$ 19.80<br />
$ 15.84<br />
$ 13.86<br />
$ 39.60<br />
$ 29.70<br />
$ 13.86<br />
$ 21.78<br />
$ 17.82<br />
$ 14.85<br />
N/A<br />
7.80%<br />
9.00%<br />
10.00%<br />
10.30%<br />
11.70%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
CAD<br />
CAD<br />
CAD<br />
4.00<br />
3.75<br />
6.50<br />
CAD<br />
CAD<br />
CAD<br />
6.00<br />
5.25<br />
8.50<br />
$<br />
$<br />
$<br />
3.96<br />
3.71<br />
6.44<br />
$<br />
$<br />
$<br />
5.94<br />
5.20<br />
8.42<br />
4.50%<br />
8.10%<br />
12.00%<br />
Downtown<br />
CAD 65.00 CAD 200.00 $ 64.36 $ 198.02 10.00%<br />
Neighborhood Service Centers CAD 10.00 CAD 25.00 $ 9.90 $ 24.75 15.00%<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
CAD 16.00<br />
CAD 35.00<br />
CAD 20.00<br />
CAD<br />
CAD<br />
CAD<br />
28.00<br />
60.00<br />
26.00<br />
$ 15.84<br />
$ 34.65<br />
$ 19.80<br />
$ 27.72<br />
$ 59.41<br />
$ 25.74<br />
N/A<br />
9.00%<br />
N/A<br />
deVeloPment land low/acre High/acre low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
CAD 240,000.00 CAD 480,000.00 $ 237,623.76 $ 475,247.52<br />
CAD 200,000.00 CAD 400,000.00 $ 198,019.80 $ 396,039.60<br />
CAD 160,000.00 CAD 300,000.00 $ 158,415.84 $ 297,029.70<br />
CAD 160,000.00 CAD 480,000.00 $ 158,415.84 $ 475,247.52<br />
CAD 600,000.00 CAD 3,000,000.00 $ 594,059.41 $ 2,970,297.03<br />
CAD 600,000.00 CAD 3,000,000.00 $ 594,059.41 $ 2,970,297.03<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 47
Regina, Saskatchewan, Canada<br />
Contact<br />
<strong>NAI</strong> Commercial<br />
(SASK)<br />
+1 306 525 3344<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
3,855,100<br />
2.7%<br />
$1,632.89<br />
$47,340.29<br />
2.0%<br />
7.5%<br />
1.0%<br />
34.493<br />
The Saskatchewan market remains very strong and is<br />
expected to experience continued steady growth well into<br />
<strong>2012</strong> supported by strong commodity prices. Look for rates<br />
in all sectors to continue steadily upward as demand, low<br />
vacancy rates and a lack of new product will naturally force<br />
rates upward into 2013.<br />
The strong Saskatchewan economy has proven to be a real<br />
positive for the retail market. The Grasslands project in the<br />
southwest corner of the city is an exciting new development<br />
that will shift the retail and will attract new and exciting<br />
retailers to the city. Modest growth in the east and northwest<br />
sectors will continue with all others areas maintaining both<br />
rental and vacancy rates.<br />
The Regina office market has enjoyed a historically low<br />
vacancy rate, below 2% in most asset categories. The<br />
construction of a new office tower will add 200,000 SF to<br />
the market in <strong>2012</strong>. Plans are underway for an 80,000 SF<br />
downtown office building. Rental rates continue to rise as<br />
the difference between new construction and the existing,<br />
shrinking supply becomes more apparent. Look for continued<br />
strength into 2013.<br />
The Regina industrial market is beginning a marked change<br />
as a result of the investment in the intermodal project on<br />
the city's west side. Now complete is the 1 million SF facility<br />
with 300-400 new jobs created. Yanke Transport will<br />
construct a new 250,000 SF terminal as well. Industrial<br />
lease rates remain strong with rates approaching $10.00/SF<br />
for warehouse space and $13.00/SF for industrial office<br />
space.<br />
Land prices remain steady in the range of $225,000.00/acre<br />
with ample supply. The investment market remains very<br />
strong with good quality investment properties in short supply.<br />
The performance of the Saskatchewan market in light of the<br />
recession has resulted in a steady demand for this type of<br />
product. CAP rates that are sub 8% are not uncommon for<br />
quality properties that are well located and well tenanted.<br />
Rural market interest in agricultural land in Saskatchewan<br />
has risen steadily for the past three years. Increasing<br />
commodity prices have led to increased demand for rural<br />
land. Look for value to increase as investors outside<br />
Saskatchewan view the potential of this province. Worldwide<br />
demand for agricultural products will foster continued growth<br />
in <strong>2012</strong>.<br />
Regina At A Glance<br />
conversion 1.01 cad = 1 us$ NET RENT/SF/YR US$ NET RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
Regional Malls<br />
Solus Food Stores<br />
CAD 37.00 CAD 40.00 $ 36.63 $ 39.60 N/A<br />
CAD 21.00 CAD 26.00 $ 20.79 $ 25.74 N/A<br />
CAD 15.00 CAD 18.00 $ 14.85 $ 17.82 N/A<br />
N/A N/A N/A N/A N/A<br />
N/A N/A N/A N/A N/A<br />
N/A N/A N/A N/A N/A<br />
CAD 10.00 CAD 13.00 $ 9.90 $ 12.87 N/A<br />
N/A N/A N/A N/A N/A<br />
N/A N/A N/A N/A N/A<br />
CAD 24.00 CAD 30.00 $ 23.76 $ 29.70 N/A<br />
CAD 14.00 CAD 28.00 $ 13.86 $ 27.72 N/A<br />
N/A N/A N/A N/A N/A<br />
CAD 37.00 CAD 52.00 $ 36.63 $ 51.49 N/A<br />
N/A N/A N/A N/A N/A<br />
deVeloPment land low//acre High/acre low/acre High/acre<br />
Office in CBD<br />
CAD 2,613,600.00 CAD 3,920,400.00 $ 2,587,899.60 $3,881,631.60<br />
Land in Office Parks<br />
N/A N/A N/A N/A<br />
Land in Industrial Parks CAD 250,000.00 CAD 300,000.00 $ 247,524.75 $ 297,029.70<br />
Office/Industrial Land - Non-park<br />
N/A N/A N/A N/A<br />
Retail/Commercial Land CAD26,136,000.00 CAD 39,204,000.00 $25,877,253.00 $38,815,880.00<br />
Residential<br />
N/A N/A N/A N/A<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 48
EMEA<br />
sectIon contents<br />
The Baltics (Latvia/Estonia/Lithuania)<br />
Brussels, Belgium<br />
Sofia, Bulgaria<br />
Prague, Czech Republic<br />
Helsinki, Finland<br />
Paris - lle de France (Paris Region), France<br />
Frankfurt am Main, Germany<br />
Athens, Greece<br />
Tel Aviv, Israel<br />
Almaty, Kazakhstan<br />
Kuwait City, Kuwait<br />
Luxembourg City, Luxembourg<br />
Amsterdam, The Netherlands<br />
Oslo, Norway<br />
Warsaw, Poland<br />
Doha City, Qatar<br />
Moscow, Russia<br />
St. Petersburg, Russia<br />
Belgrade, Serbia<br />
Johannesburg, South Africa<br />
Madrid, Spain<br />
Stockholm, Sweden<br />
Geneva, Switzerland<br />
Zürich, Switzerland<br />
Istanbul, Turkey<br />
Kiev, Ukraine<br />
Birmingham, England, United Kingdom<br />
Edinburgh, Scotland, United Kingdom<br />
Leeds, England, United Kingdom<br />
London, England, United Kingdom<br />
Manchester, England, United Kingdom<br />
49
The Baltics (Latvia/Estonia/Lithuania)<br />
Contact<br />
<strong>NAI</strong> Baltics<br />
+371 6731 2396<br />
Country Data - Estonia<br />
Area (Sq Mi)<br />
17,462<br />
GDP Growth<br />
3.5%<br />
GDP 2011 (US$ B) $19.8<br />
GDP/Capita (US$) $14,948.13<br />
Inflation Rate<br />
2.0%<br />
Unemployment Rate 16.4%<br />
Interest Rate<br />
1.0%<br />
Population (Millions) 1.331<br />
Latvia<br />
Area (Sq Mi)<br />
24,926<br />
GDP Growth<br />
3.3%<br />
GDP 2011 (US$ B) $23.88<br />
GDP/Capita (US$) $10,628.40<br />
Inflation Rate<br />
0.9%<br />
Unemployment Rate 17.5%<br />
Interest Rate<br />
3.5%<br />
Population (Millions) 2.247<br />
Lithuania<br />
Area (Sq Mi)<br />
25,200<br />
GDP Growth<br />
3.1%<br />
GDP 2011 (US$ B) $36.73<br />
GDP/Capita (US$) $11,133.41<br />
Inflation Rate<br />
1.3%<br />
Unemployment Rate 16.0%<br />
Interest Rate<br />
2.0%<br />
Population (Millions) 3.299<br />
The Baltics At A Glance<br />
conversion 0.72 eur = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
EUR<br />
EUR<br />
9.00<br />
9.00<br />
EUR 12.00<br />
EUR 12.00<br />
$<br />
$<br />
13.94<br />
13.94<br />
$ 18.58<br />
$ 18.58<br />
5.00%<br />
5.00%<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
EUR 5.00<br />
N/A<br />
N/A<br />
EUR 7.00<br />
N/A<br />
N/A<br />
$ 7.74<br />
N/A<br />
N/A<br />
$ 10.84<br />
N/A<br />
N/A<br />
20.00%<br />
N/A<br />
N/A<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
EUR<br />
EUR<br />
4.00<br />
1.50<br />
N/A<br />
N/A<br />
EUR<br />
EUR<br />
6.00<br />
4.50<br />
N/A<br />
N/A<br />
$<br />
$<br />
6.19<br />
2.32<br />
N/A<br />
N/A<br />
$<br />
$<br />
9.29<br />
6.97<br />
N/A<br />
N/A<br />
25.00%<br />
30.00%<br />
N/A<br />
N/A<br />
City Center<br />
Neighborhood Service Centers<br />
Community Power Center (Big Box)<br />
Regional Shopping Centers/Malls<br />
Solus Food Stores<br />
EUR<br />
EUR<br />
7.00<br />
N/A<br />
8.00<br />
N/A<br />
N/A<br />
EUR 23.00<br />
N/A<br />
EUR 15.00<br />
N/A<br />
N/A<br />
$<br />
$<br />
10.84<br />
N/A<br />
12.39<br />
N/A<br />
N/A<br />
$ 35.61<br />
N/A<br />
$ 23.23<br />
N/A<br />
N/A<br />
5.00%<br />
N/A<br />
3.00%<br />
N/A<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
The outlook for the Baltic States is better than in other parts of<br />
Europe. The GDP is expected to grow by 3.6 % in 2011, but a<br />
slowing global business cycle weakened the recovery with the<br />
growth rates forecasted at 2.6 % in <strong>2012</strong> and 2.9 % in 2013.<br />
Estonia shows the highest growth rate in the region, followed<br />
by Lithuania and Latvia. Earlier imbalances have been reduced<br />
and the resilience against global turmoil is stronger.<br />
The office market faced a slowdown due to the lack of available<br />
financing and a decrease in demand. The market remains<br />
tenant driven with most leases short-term with early termination<br />
clauses. Rental rates have reached the bottom with a stabilization<br />
in vacancies and rents achieved but no significant improvement<br />
expected in the near future as unemployment remains high.<br />
Highly selective investors are interested in only well leased<br />
locations. Recovery is expected no earlier than <strong>2012</strong>.<br />
The retail market realized considerably lower vacancies than<br />
the office market. Wage increases and consumer confidence<br />
growth positively contributed to the retail volumes (+4.5%<br />
year-over-year) and customer flow. Factors affecting this<br />
market include; upward pressure on rents in prime locations,<br />
several well performing retailers moved to better locations or<br />
expanded their space and some new, international companies<br />
chose to enter the Baltic’s retail market.<br />
The downturn in the industrial/warehouse market stopped, with<br />
the bottom being reached at the end of 2010. However, despite<br />
a slight stabilization, the activity continues to remains low with<br />
vacancy around 30%. Most vacant space is accumulated in<br />
large scale projects. The recovery in this market is expected to<br />
lag behind the retail and office sectors. Continuing negative<br />
trends regarding Class C properties are due to increasing<br />
vacancies related to the relocation of tenants. Most developers<br />
are looking for pre-let agreements from large international<br />
tenants.<br />
A slight boost is forecast in the number of transactions<br />
expected in the Baltic residential/multifamily market due to an<br />
increase in activity among lenders. There was a 32% yearover-year<br />
price increase for new projects in prime locations.<br />
Equity rich investment funds, developers and private individuals<br />
from CIS countries are active in the residential market.<br />
After two depressing years in a row, hotels have <strong>report</strong>ed<br />
improved results in H1 2011. The occupancy level increased<br />
from 33% in H1 2010 to 43% in H1 2011. However, operators<br />
are still cautious and many have postponed their final decision<br />
to enter the Baltic States market. There is still room for major,<br />
international hotel chains to enter the market.<br />
EUR 10.00 EUR 60.00 $ 56,206.43 $ 337,238.56<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
EUR 10.00 EUR 100.00 $ 56,206.43 $ 562,064.26<br />
Brussels, Belgium<br />
Contact<br />
<strong>NAI</strong> Belux<br />
+32 2 420 10 10<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
11,787<br />
The moderate economic recovery of 2010 will continue into<br />
<strong>2012</strong>. After the recession of 2009 (GDP -2.7%) the economy<br />
experienced a somewhat bumpy recovery during 2010. Even<br />
so, the financial markets are worried about the current political<br />
stalemate, which leads to a postponement of necessary<br />
structural adjustments to the budget. The caretaker cabinet<br />
led by Yves Leterme will aim to reduce the deficit below 4.1%<br />
of GDP in 2011, as agreed with the European Union.<br />
The Belgian real estate market remains subdued with the<br />
availability of Grade A space driving recent rental drops in<br />
a number of submarkets over the quarter. With no new<br />
government for the moment, most public deals have been<br />
put on hold, and although the economy is recovering, the<br />
market remains uncertain. Rents held firm in the CBD, but<br />
eased down over the quarter in the city center, north station<br />
and peripheral submarkets. Take-up activity reached half of<br />
the five year average. This combined with a limited speculative<br />
completion kept the vacancy rate in Brussels at 11.2%.<br />
Development activity was historically low in 2011 and that<br />
will continue to be the case in <strong>2012</strong>. Prime face rent<br />
remained stable. The total real estate investment volume in<br />
Belgium reached EUR 0.48 billion in Q2 2011, bringing the<br />
total for the first half of the year to EUR 0.9 billion, up 40%<br />
on the volume of H1 2010. Prime office yields (6/9 year<br />
leases) remained stable at 6.0% for CBD after having<br />
experienced a compression during H2 2010.<br />
The European Union is expected to finalize a large transaction<br />
soon, although uncertainty should continue to characterize<br />
the market as the lack of government deals affect the large<br />
public sector within Brussels. However, other business<br />
sectors are still active and therefore market sentiment should<br />
slowly improve in the remainder of the year.<br />
Investor confidence and competition for large, prime quality<br />
spaces should also continue to increase. Therefore, yields<br />
should hold firm in prime locations, although the peripheral<br />
submarkets may see further softening. Rental values should<br />
largely remain stable, although certain submarkets could see<br />
further downward pressure over the remainder of the year.<br />
Recently, with the downfall of the stock national and<br />
international markets, private investors have shown an<br />
increased activity in the real estate investment market. They<br />
mainly seek investments with low risk and low management<br />
activity such as residential investments or retail investments<br />
(high-street retail or retail warehousing).<br />
Brussels At A Glance<br />
conversion 0.72 eur = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
EUR 240.00 EUR 265.00 $ 30.97 $ 34.19 8.00%<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
EUR<br />
EUR<br />
195.00 EUR 240.00<br />
160.00 EUR 195.00<br />
$<br />
$<br />
25.16<br />
20.64<br />
$ 30.97 11.00%<br />
$ 25.16 15.00%<br />
New Construction (AAA)<br />
EUR 175.00 EUR 195.00 $ 22.58 $ 25.16 8.00%<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
EUR<br />
EUR<br />
155.00 EUR 175.00<br />
120.00 EUR 155.00<br />
$<br />
$<br />
20.00<br />
15.48<br />
$ 22.58 11.00%<br />
$ 20.00 20.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
EUR<br />
EUR<br />
EUR<br />
40.00 EUR<br />
44.00 EUR<br />
50.00 EUR<br />
46.00<br />
52.00<br />
60.00<br />
$<br />
$<br />
$<br />
5.16<br />
5.68<br />
6.45<br />
$<br />
$<br />
$<br />
5.94<br />
6.71<br />
7.74<br />
N/A<br />
N/A<br />
N/A<br />
City Center<br />
EUR 1,250.00 EUR 1,650.00 $ 161.29 $ 212.90 N/A<br />
Neighborhood Service Centers EUR 120.00 EUR 170.00 $ 15.48 $ 21.94 N/A<br />
Community Power Center (Big Box)<br />
N/A N/A N/A N/A N/A<br />
Regional Shopping Centers/Malls EUR 1,250.00 EUR 1,650.00 $ 161.29 $ 212.90 N/A<br />
Solus Food Stores<br />
N/A N/A N/A N/A N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
1.7%<br />
$469.13<br />
$43,116.07<br />
1.9%<br />
8.5%<br />
1.0%<br />
10.881<br />
EUR 1,500.00 EUR 2,500.00 $ 8,430,963.90 $ 14,051,606.49<br />
EUR 500.00 EUR 1,000.00 $ 2,810,321.30 $ 5,620,642.60<br />
EUR 100.00 EUR 150.00 $ 562,064.26 $ 843,096.39<br />
EUR 200.00 EUR 350.00 $ 1,124,128.52 $ 1,967,224.91<br />
EUR 250.00 EUR 750.00 $ 1,405,160.65 $ 4,215,481.95<br />
EUR 500.00 EUR 1,000.00 $ 2,810,321.30 $ 5,620,642.60<br />
2010 <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 50
Sofia, Bulgaria<br />
Prague, Czech Republic<br />
Contact<br />
<strong>NAI</strong> atrium<br />
+359 2 9704 803<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
42,811<br />
3.6%<br />
$45.59<br />
$6,084.71<br />
2.9%<br />
7.6%<br />
0.2%<br />
7.493<br />
After an interesting year of economic stagnation and<br />
uncertain development, Bulgaria returned in 2011 to a path<br />
of economic growth. An overall 3.6% GDP increase is<br />
expected by the government. The latest published inflation<br />
rate for 2011 is 4.5 % and the unemployment rate has<br />
reached a record high 11.2 %.<br />
The Sofia office market has recorded a number of significant<br />
transactions including the take-up of 2,500 SM by the<br />
Belgium KBC Bank and 5,000 SM by Hewlett Packard<br />
during the first half of 2011. A trend to better quality office<br />
space may soon lead to a reduction in the vacancy rate for<br />
Class A office buildings, even though the supply seems to<br />
still be a problem in this segment. The overall vacancy rate<br />
for office space (Class A and Class B) in Sofia is expected<br />
to rise to 30% by the end of 2011 with the completion of<br />
several new buildings; Sofia Airport Center, Vertigo Building,<br />
Sopharma & Litex Towers. Rental rates in the first half of the<br />
year were slightly reduced with prime rents at EUR 12 for<br />
Class A offices and EUR 8 for Class B. Rents will continue<br />
to remain under pressure since the supply was increased<br />
by at least 135,000 SM in 2011 and demand remained at<br />
a stable but low level.<br />
A new trend in the Bulgarian market was caused by the<br />
instability of the Greek economy. An influx of Greek companies<br />
and capital into the Bulgarian economy will positively affect<br />
the real estate market and eventually narrow the supply/<br />
demand gap. Some of the most significant projects/<br />
companies are the IKEA (opened in September 2011),<br />
Sofia Ring Mall (under construction), Hellenic Petroleum and<br />
Coca-Cola Hellenic Bottling Company.<br />
Although no new shopping malls opened in Sofia in 2011,<br />
the vacancy levels in the shopping centers and High Street<br />
locations are increasing. This is due to a decline in consumer<br />
spending by more than 30% and the large expansion of<br />
retail facilities in 2010. Nonetheless, there are several large<br />
scale retail projects in the pipeline. More than 120,000 SM<br />
is under construction and will be added to the market in<br />
<strong>2012</strong> - 2013. This negative environment has led to a strong<br />
reduction of retail rents and a higher vacancy in High Street<br />
and shopping center properties.<br />
Contact<br />
<strong>NAI</strong> MIPA<br />
+420 224 818 677<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
30,450<br />
2.2%<br />
$213.85<br />
$20,500.62<br />
2.0%<br />
8.0%<br />
0.8%<br />
10.431<br />
The Czech economy has weathered the 2008 financial crisis<br />
better than most former Central or Eastern European Countries<br />
but remains very much tied to the overall European economy,<br />
notably Germany. Foreign based investment continues to grow<br />
and will outstrip 2010 performance four fold. Office and<br />
ndustrial take-up remains stable year-on-year but supply has<br />
dropped.<br />
Total office stock in Prague stands at 2.77 million SM of which<br />
72% is in new buildings. 105,750 SM of new supply is forecast<br />
to be completed in 2011. Gross take-up for 2011 is likely to<br />
exceed 220,000 SM. Office vacancy rates will remain at 10%.<br />
Space is set to become less readily available and landlord’s<br />
incentives are set to be reduced. Prague 4 continues to<br />
dominate the market as the district of choice with 27% of the<br />
total stock; Prague 1 has 16% and Prague 5 has15%. Prague<br />
8 is beginning to establish itself as a recognized business area<br />
and there is good development land still available there in close<br />
proximity to the city center.<br />
Czech industrial stock now stands at 3.9 million SM. 420 000<br />
SM of space was transacted in H1 2011, and by the end of<br />
this year we should see 1 million SM transacted across the<br />
country, with 55% in Prague alone. Vacancy now stands at<br />
8.9%. Three developers continue to dominate the market,<br />
Prologis (34% share), CTP (25% share) and Point Park<br />
Properties (9%).<br />
Retail in the Czech Republic has seen little activity over the last<br />
two years, due mainly to the reluctance by the banks to finance<br />
anything considered risky, so pre-lets and equity are required.<br />
Many cities, including Prague, are reaching saturation so the<br />
scope for new large shopping centers is limited. The one<br />
exception was the opening of GTC’s Galeria Harfa project in<br />
Prague 9. Next year will see the opening of Rodamco/Unibail’s<br />
extension of Cerny Most and Multi Developments Nova<br />
Karolina in Ostrava, with both developments bringing 30,000<br />
SM plus to the market.<br />
The residential market suffered over the last two years and<br />
has witnessed a drop of up to 25 % in prices since 2007. Few<br />
speculative developments have taken place recently and<br />
finance remains hard to obtain. Government tax intervention<br />
has further hampered the market. On the investment side, CPI,<br />
together with Teplice, purchased the Mlada Boreslav Futurum<br />
property from CA Immo.<br />
Sofia At A Glance<br />
conversion 0.72 eur = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
EUR 10.00<br />
EUR 8.00<br />
EUR 5.00<br />
EUR 8.00<br />
EUR 7.00<br />
EUR 5.00<br />
EUR 2.00<br />
N/A<br />
N/A<br />
EUR 14.00<br />
EUR 12.00<br />
EUR 8.00<br />
EUR 12.00<br />
EUR 11.00<br />
EUR 7.00<br />
EUR 4.00<br />
N/A<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
15.48<br />
12.39<br />
7.74<br />
12.39<br />
10.84<br />
7.74<br />
3.10<br />
N/A<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
21.68<br />
18.58<br />
12.39<br />
18.58<br />
17.03<br />
10.84<br />
6.19<br />
N/A<br />
N/A<br />
30.00%<br />
10.00%<br />
15.00%<br />
40.00%<br />
15.00%<br />
10.00%<br />
8.00%<br />
N/A<br />
N/A<br />
City Center (High Street Shop) EUR 25.00 EUR 75.00 $ 38.71 $ 116.13 N/A<br />
Neighborhood Service Centers<br />
Community Power Center (Big Box)<br />
Regional Shopping Centers/Mall<br />
Solus Food Stores<br />
EUR 10.00<br />
N/A<br />
EUR 10.00<br />
N/A<br />
EUR 20.00<br />
N/A<br />
EUR 30.00<br />
N/A<br />
$<br />
$<br />
15.48<br />
N/A<br />
15.48<br />
N/A<br />
$<br />
$<br />
30.97<br />
N/A<br />
46.45<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
EUR 300.00 EUR 800.00 $ 1,686,192.78 $ 4,496,514.08<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
EUR 50.00 EUR 80.00 $ 281,032.13 $ 449,651.41<br />
EUR 300.00 EUR 800.00 $ 1,686,192.78 $ 4,496,514.08<br />
EUR 100.00 EUR 500.00 $ 562,064.26 $ 2,810,321.30<br />
Prague At A Glance<br />
conversion 0.72 eur = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
EUR 21.00<br />
EUR 15.00<br />
EUR 12.00<br />
EUR 14.50<br />
EUR 14.00<br />
EUR 10.00<br />
EUR 22.00<br />
EUR 18.00<br />
EUR 13.00<br />
EUR 15.50<br />
EUR 15.00<br />
EUR 12.00<br />
$ 32.52<br />
$ 23.23<br />
$ 18.58<br />
$ 22.45<br />
$ 21.68<br />
$ 15.48<br />
$ 34.06<br />
$ 27.87<br />
$ 20.13<br />
$ 24.00<br />
$ 23.23<br />
$ 18.58<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
EUR<br />
EUR<br />
EUR<br />
3.00<br />
3.00<br />
3.75<br />
EUR<br />
EUR<br />
EUR<br />
3.75<br />
3.50<br />
4.50<br />
$<br />
$<br />
$<br />
4.65<br />
4.65<br />
5.81<br />
$<br />
$<br />
$<br />
5.81<br />
5.42<br />
6.97<br />
N/A<br />
N/A<br />
N/A<br />
City Center<br />
Neighborhood Service Centers<br />
EUR 140.00<br />
EUR 40.00<br />
EUR 160.00<br />
EUR 45.00<br />
$ 216.77<br />
$ 61.93<br />
$ 247.74<br />
$ 69.68<br />
N/A<br />
N/A<br />
Community Power Center (Big Box) EUR 8.00 EUR 10.00 $ 12.39 $ 15.48 N/A<br />
Regional Shopping Centers/Malls EUR 43.00 EUR 55.00 $ 66.58 $ 85.16 N/A<br />
Solus Food Stores<br />
EUR 8.00 EUR 10.50 $ 12.39 $ 16.26 N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
EUR 320.00 EUR 500.00 $ 1,798,605.63 $ 2,810,321.30<br />
EUR 120.00 EUR 150.00 $ 674,477.11 $ 843,096.39<br />
EUR 35.00 EUR 50.00 $ 196,722.49 $ 281,032.13<br />
EUR 20.00 EUR 25.00 $ 112,412.85 $ 140,516.06<br />
EUR 50.00 EUR 75.00 $ 281,032.13 $ 421,548.19<br />
EUR 50.00 EUR 100.00 $ 281,032.13 $ 562,064.26<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 51
Helsinki, Finland<br />
Paris - lle de France (Paris Region), France<br />
Contact<br />
<strong>NAI</strong> Premises<br />
+358 20 7290 710<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
130,666<br />
2.0%<br />
$234.72<br />
$43,432.05<br />
1.8%<br />
8.7%<br />
1.0%<br />
5.404<br />
Finland is still recovering from the recession but the optimistic<br />
atmosphere in the beginning of 2011 has turned to uncertainty<br />
because of the public dept crisis in Europe. GDP growth is<br />
expected to remain at 2% in 2011. The Finnish economy is<br />
dependent on foreign trade and problems in target countries<br />
will be reflected immediately in the economic growth. However,<br />
real estate professionals feel confident that going forward,<br />
investments in all areas of real estate properties should be a<br />
reliable, stable and profitable investment option compared<br />
with other investment opportunities.<br />
There is still 1 Million SM office space available in the greater<br />
Helsinki area with the vacancy rate at 11.5%. New, modern and<br />
efficient offices are sought after and many old properties and<br />
premises are being modernized. “Green building” is one of the<br />
key words being used in the market. Also many old office areas<br />
will be turned into residential homes in the next five to10 years.<br />
The retail sector has suffered the least over the past several<br />
years. Vacancy rates are relatively low and the rental prices<br />
have been stable. There are many projects for new retail<br />
parks and malls in the near future. In the greater Helsinki<br />
area many old industrial and harbor sites will be<br />
reconstructed for residential areas including local retail parks<br />
and shopping centers. Many foreign retail chains are actively<br />
looking at sites and premises to enter the Finnish market.<br />
The domestic retail chains are continuing to expand. The<br />
need for retail properties in the CBD areas of Helsinki,<br />
Tampere, Turku and others, especially university cities, will<br />
stay high and the demand will exceed the offerings.<br />
The industrial sector will face further difficulties over the<br />
next several years. The domestic manufacturing will most<br />
probably decrease when some production facilities move to<br />
China and other Far East countries. Thus the vacancy rate<br />
for older plants will increase rapidly in the future. It will be a<br />
big challenge to renovate these facilities and sites for new<br />
users as they are located mostly outside of the urban centers.<br />
The need for new modern logistic and warehouse premises<br />
will remain high and new construction projects will take place.<br />
Residential leasing possibilities will interest foreign investors<br />
due to the stability of cash flow and a low investment yield.<br />
During 2011 the following larger transactions were finalized:<br />
Suomi Life Assurance sold Fennia Quarter inkl offices+retail<br />
39,700/SM in Helsinki to Sponda for €122 million. Etera&Sitra<br />
sold Itämerentori offices 21,000/SM in Helsinki to Exillion for<br />
€85 million. Niam&Whitehall sold nine domestic office<br />
properties, 59,000/SM to Sveafastigheter for €60 million.<br />
Contact<br />
<strong>NAI</strong> France<br />
+33 1 74 90 50 32<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
247,219<br />
1.6%<br />
$2,590.79<br />
$40,965.40<br />
1.6%<br />
9.8%<br />
1.0%<br />
63.243<br />
<strong>Market</strong> activity in Q1 2011 was maintained by a 0.9%<br />
economic growth generated by a high level of internal<br />
consumption. In Q2 2011 the household consumption<br />
correlated both to the economic uncertainties and the<br />
inflation level generated an abrupt end to the market growth.<br />
The increase in transaction volume in the retail market<br />
during Q1 2011 slowed down at the beginning of Q2. The<br />
office transaction volume registered in S1 2011 was up 3%<br />
at 1,135,000 SM compared to S1 2010.<br />
The office market in the Paris area was dominated by<br />
the small premises market with a 10% increase over the<br />
previous year where only 28 transactions above 5,000 SM<br />
where registered. Even if the immediate available stock were<br />
to be reduced by 2%, the vacancy rate would remain high<br />
at 6.7% representing 3,654,000 SM.<br />
In the investment market, EUR 5.2 billion was transacted on<br />
the French commercial real estate market; a 37% increase<br />
compared to S1 2010. The investment market remains<br />
strongly office orientated representing 64% of the volume<br />
whereas the retail and industrial markets represent 14%<br />
and 6% respectively of the total investments. In the Paris<br />
area EUR 3.3 billion was invested during S1 2011; a 39%<br />
increase compared to the previous year. Even with this<br />
increase in volume, players have been very cautious and<br />
continue to favor secured and liquid assets.<br />
The Euro crisis is on everyone’s mind and most players have<br />
stopped anticipating the next development. Predictions are<br />
difficult to make, nevertheless some basics will define the<br />
market. Regardless of the election results, the cost increase<br />
in the forecasted 2013 French debt and sovereign debts<br />
being actively scrutinized, the government will have to<br />
increase taxes and make major cuts to the budget. Private<br />
and public demand alone won’t generate growth. The rise<br />
of yields and the difficulty in lending will lead investors to<br />
be very discrete in the acquisition market with some having<br />
to sell properties to meet their due dates. Equity investors<br />
will have significant opportunities in the market, however<br />
the beginning of <strong>2012</strong> is expected to get off to a slow start.<br />
Elections will freeze major public decisions.<br />
It seems <strong>2012</strong> will be one of few bright spots with hopefully<br />
two positive influences; the small and medium premises<br />
market in the major cities should hold and cost reduction<br />
policies should pull the market upward.<br />
Helsinki At A Glance<br />
conversion 0.72 eur = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
EUR 22.00<br />
EUR 22.00<br />
EUR 17.00<br />
EUR 18.00<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
27.00<br />
33.00<br />
21.00<br />
20.00<br />
$ 34.06<br />
$ 34.06<br />
$ 26.32<br />
$ 27.87<br />
$ 41.81<br />
$ 51.10<br />
$ 32.52<br />
$ 30.97<br />
N/A<br />
5.50%<br />
7.60%<br />
9.50%<br />
Class A (Prime)<br />
EUR 15.00 EUR 18.00 $ 23.23 $ 27.87 11.00%<br />
Class B (Secondary)<br />
IndustrIal<br />
EUR 8.00 EUR 13.00 $ 12.39 $ 20.13 13.50%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
EUR<br />
EUR<br />
EUR<br />
6.00<br />
5.00<br />
6.00<br />
EUR<br />
EUR<br />
EUR<br />
8.00<br />
7.00<br />
8.00<br />
$<br />
$<br />
$<br />
9.29<br />
7.74<br />
9.29<br />
$ 12.39<br />
$ 10.84<br />
$ 12.39<br />
5.20%<br />
5.30%<br />
5.30%<br />
City Center<br />
Neighborhood Service Centers<br />
Community Power Center (Big Box)<br />
Regional Shopping Centers/Malls<br />
EUR 25.00<br />
EUR 11.00<br />
EUR 11.00<br />
EUR 11.00<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
140.00<br />
44.00<br />
40.00<br />
44.00<br />
$ 38.71<br />
$ 17.03<br />
$ 17.03<br />
$ 17.03<br />
$ 216.77<br />
$ 68.13<br />
$ 61.93<br />
$ 68.13<br />
2.70%<br />
3.00%<br />
3.10%<br />
2.90%<br />
Solus Food Stores<br />
EUR 9.00 EUR 16.00 $ 13.94 $ 24.77 3.10%<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A N/A N/A N/A<br />
EUR 275.00 EUR 500.00 $ 1,545,676.71 $ 2,810,321.30<br />
EUR 175.00 EUR 300.00 $ 983,612.45 $ 1,686,192.78<br />
EUR 225.00 EUR 275.00 $ 1,264,644.58 $ 1,545,676.71<br />
EUR 250.00 EUR 400.00 $ 1,405,160.65 $ 2,248,257.04<br />
EUR 250.00 EUR 600.00 $ 1,405,160.65 $ 3,372,385.56<br />
Paris At A Glance<br />
conversion 0.72 eur = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
EUR 450.00 EUR 820.00 $ 58.06 $ 105.81 N/A<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
380.00 EUR<br />
240.00 EUR<br />
180.00 EUR<br />
150.00 EUR<br />
100.00 EUR<br />
45.00 EUR<br />
55.00 EUR<br />
50.00 EUR<br />
620.00<br />
450.00<br />
450.00<br />
350.00<br />
200.00<br />
50.00<br />
75.00<br />
110.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
49.03<br />
30.97<br />
23.23<br />
19.35<br />
12.90<br />
5.81<br />
7.10<br />
6.45<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
80.00<br />
58.06<br />
58.06<br />
45.16<br />
25.81<br />
6.45<br />
9.68<br />
14.19<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
City Center<br />
EUR 1,500.00 EUR 7,000.00 $ 193.55 $ 903.22 N/A<br />
Retail Units in Parks<br />
Community Power Center (Big Box)<br />
Regional Shopping Centers/Malls<br />
Solus Food Stores<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com<br />
52
Frankfurt am Main, Germany<br />
Athens, Greece<br />
Contact<br />
<strong>NAI</strong> apollo<br />
+49 69 970 50 50<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
137,882<br />
2.0%<br />
$3,358.24<br />
$41,235.74<br />
1.4%<br />
7.1%<br />
1.0%<br />
81.44<br />
As forecasted by experts in 2010, Germany is reaching<br />
its economic strength once again. Three years after the<br />
economic crisis, the German GDP gained a constant growth<br />
rate between 1.5% and 2% over the last one and a half<br />
years. At the end of 2011 the German GDP growth rate is<br />
expected to reach its high point at 3.5%, before it returns<br />
to a moderate level about 2% in <strong>2012</strong>.<br />
Other economic key factors demonstrate the recovery of the<br />
German economy. The unemployment rate has been<br />
consistently decreasing since 2005 (currently at 7%). This<br />
is the lowest unemployment rate since the German reunion<br />
in 1990. Inflation and buying power remain stable. As one<br />
of Europe’s most important cities Frankfurt/Main is clearly<br />
one of the main drivers responsible for this boost. Even<br />
though it anticipates a considerable increase in its<br />
population (from about 650,000 inhabitants in 2005 up to<br />
about 690,000 in 2011), unemployment in Frankfurt is<br />
sinking and currently even at 1.4% below the German<br />
average. Another hint of the economic strength of the<br />
city is the wealth of its inhabitants. The generated GDP<br />
per capita in Frankfurt is almost three times higher than<br />
the average, the buying power per capita is currently at<br />
22,000 € while the common German citizen has just under<br />
19,000 € at his disposal.<br />
In Frankfurt the rents for Class A retail space like Zeil and<br />
Goethestraße increased about €10/SM since 2010. The top<br />
rent on this famous shopping street is now at €240/SM. Due<br />
to the limited availability of retail space at these top<br />
locations, it is expected that the prices will continue to rise<br />
about 2% in <strong>2012</strong>. Furthermore, this trend was reflected<br />
through the biggest investment that took place here so far<br />
in 2011. Allianz Versicherungen bought 80% of the project<br />
Skyline Plaza at a price of €290,000,000. When finished,<br />
a large part of the building will contain retail spaces.<br />
In the office market, a slight reduction in the vacancy rate<br />
took place. The rate dropped to 16.6% while rents remained<br />
stable. Overall there was a take-up of 311,000 SM of office<br />
space through the end of October 2011. An additional<br />
258,000 SM are expected to be constructed by the end of<br />
<strong>2012</strong>.<br />
The biggest lease of 2011 took place at the northern edge<br />
of Frankfurt. Bafin Wertpapier Aufsicht leased 24,200 SM<br />
of office space. A second big lease signing happened at the<br />
Airport. Fraport AG signed a contract for 20,000 SM.<br />
Contact<br />
<strong>NAI</strong> <strong>Global</strong><br />
+1 609 945 4000<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
50,949<br />
-2.6%<br />
$291.40<br />
$26,025.80<br />
2.2%<br />
14.6%<br />
1.0%<br />
11.197<br />
As of November 2011, the Greek property market faced a<br />
daunting period of reduced consumer spending, rising taxes,<br />
falling property values, a surplus of properties and a frozen<br />
construction industry. Since 2009 the country has faced an<br />
acute economic crisis, the economy has shrunk by 12% to<br />
15% in the last three years, unemployment is at 20% and<br />
the country faces the risk of defaulting on its debts and<br />
being ejected from the Eurozone.<br />
In Athens, there is a falling demand from occupiers as<br />
companies downsize or actually close. Take-up was 50,000<br />
SM. Tenants continue to renegotiate their rents downward<br />
and there remains a short supply of good quality stock. Top<br />
rents are falling towards EUR 20/SM per month.<br />
There is limited interest in the industrial market and an<br />
increasing over supply of product as occupiers downsize.<br />
There are few transactions to <strong>report</strong>, rental values around<br />
Athens have fallen back to EUR 5/SM per month or lower.<br />
There has been a severe reduction in demand for retail<br />
space with many shops closing (68,000 small business<br />
closures estimated for 2010 and 2011 plus an additional<br />
50,000 expected to close in <strong>2012</strong>), especially in secondary<br />
locations with up to 25% vacancy, and many tenants<br />
renegotiating their rents downward by 30% or more. New<br />
shopping center projects are still proceeding although at a<br />
much slower pace. Recent openings including; River West<br />
18,000 SM, Athens Metro Mall 25,000 SM and Athens<br />
Smart Park with up to 80,000 SM on completion.<br />
In the residential sector there is surprisingly still some<br />
recognizable demand for good quality, medium size new<br />
developments in the middle income to upper income<br />
neighborhoods in Athens (price range EUR 3,500<br />
to 4,000/SM), from cash rich investors seeking safer<br />
alternatives. Small new apartments in the central areas also<br />
continue to attract buyers (c. EUR 3,000/SM). However the<br />
general state of the residential property market remains<br />
severely depressed with tens of thousands of unsold<br />
new apartments, and banks are unable to offer finance<br />
opportunities to potential borrowers.<br />
There is a reduced interest from international investors<br />
investing in commercial property due to the risk of Greece<br />
possibly defaulting, but there remains continued, limited<br />
interest from some of the local investment groups and also<br />
high net worth individuals seeking more safe investment<br />
alternatives than stock or money markets.<br />
Frankfurt am Main At A Glance<br />
conversion 0.72 eur = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
Class A (Prime)<br />
Class B (Secondary)<br />
Average City Center<br />
suburban offIce<br />
Westend Class A (Prime)<br />
EUR 21.00<br />
EUR 12.00<br />
EUR 19.08<br />
EUR 27.00<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
38.00<br />
35.00<br />
29.58<br />
34.00<br />
$<br />
$<br />
$<br />
$<br />
32.52<br />
18.58<br />
29.54<br />
41.81<br />
$<br />
$<br />
$<br />
$<br />
58.84 15.50%<br />
54.19 18.20%<br />
45.80 15.80%<br />
52.64 23.00%<br />
Westend Class B (Secondary) EUR 8.50 EUR 21.50 $ 13.16 $ 33.29 23.00%<br />
Suburban Class A (Prime)<br />
EUR 10.00 EUR 19.33 $ 15.48 $ 29.93 22.60%<br />
Suburban Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
5.42<br />
3.50<br />
3.50<br />
5.50<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
15.50<br />
6.50<br />
6.20<br />
15.75<br />
$<br />
$<br />
$<br />
$<br />
8.39<br />
5.42<br />
5.42<br />
8.52<br />
$<br />
$<br />
$<br />
$<br />
24.00 13.60%<br />
10.06 20.70%<br />
9.60 35.10%<br />
24.39 35.00%<br />
City Center<br />
Neighborhood Service Centers<br />
EUR 120.00<br />
EUR 120.00<br />
EUR<br />
EUR<br />
240.00<br />
240.00<br />
$ 185.80<br />
$ 185.80<br />
$<br />
$<br />
371.61 19.00%<br />
371.61 13.00%<br />
Community Power Center (Big Box)<br />
Regional Centers/Malls<br />
Solus Food Stores<br />
EUR<br />
EUR<br />
EUR<br />
8.00<br />
8.00<br />
7.00<br />
EUR<br />
EUR<br />
EUR<br />
70.00<br />
70.00<br />
16.50<br />
$<br />
$<br />
$<br />
12.39<br />
12.39<br />
10.84<br />
$<br />
$<br />
$<br />
108.39<br />
108.39<br />
25.55<br />
8.00%<br />
8.30%<br />
9.00%<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
EUR 1,500.00 EUR 12,000.00 $ 8,430,963.90 $ 67,447,711.16<br />
EUR 230.00 EUR 1,020.00 $ 1,292,747.80 $ 5,733,055.45<br />
EUR 80.00 EUR 245.00 $ 449,651.41 $ 1,377,057.44<br />
EUR 300.00 EUR 1,200.00 $ 1,686,192.78 $ 6,744,771.12<br />
EUR 300.00 EUR 1,200.00 $ 1,686,192.78 $ 6,744,771.12<br />
EUR 300.00 EUR 1,500.00 $ 1,686,192.78 $ 8,430,963.90<br />
Athens At A Glance<br />
conversion 0.72 eur = 1 us$ RENT/M2/MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
center cItY offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
City Center<br />
Neighborhood Service Centers<br />
Community Power Center (Big Box)<br />
Regional Shopping Centers/Malls<br />
Solus Food Stores<br />
EUR 18.00 EUR 22.00 $ 27.87 $ 34.06 N/A<br />
EUR 17.00 EUR 20.00 $ 26.32 $ 30.97 N/A<br />
EUR 14.00 EUR 18.00 $ 21.68 $ 27.87 N/A<br />
EUR 18.00 EUR 22.00 $ 27.87 $ 34.06 N/A<br />
EUR 13.00 EUR 16.00 $ 20.13 $ 24.77 N/A<br />
EUR 10.00 EUR 14.00 $ 15.48 $ 21.68 N/A<br />
EUR 4.00 EUR 6.00 $ 6.19 $ 9.29 N/A<br />
N/A N/A N/A N/A N/A<br />
N/A N/A N/A N/A N/A<br />
EUR 120.00 EUR 200.00 $ 185.80 $ 309.67 N/A<br />
EUR 10.00 EUR 18.00 $ 15.48 $ 27.87 N/A<br />
EUR 25.00 EUR 35.00 $ 38.71 $ 54.19 N/A<br />
N/A N/A N/A N/A N/A<br />
N/A N/A N/A N/A N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
EUR 1,600.00<br />
N/A<br />
EUR 2,200.00 $<br />
N/A<br />
8,993,028.15 $<br />
N/A<br />
12,365,413.71<br />
N/A<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
EUR 60.00<br />
N/A<br />
EUR 150.00 $<br />
N/A<br />
337,238.56 $<br />
N/A<br />
843,096.39<br />
N/A<br />
Retail/Commercial Land EUR 2,300.00 EUR 3,000.00 $ 12,927,477.97 $ 16,861,927.79<br />
Residential<br />
EUR 600.00 EUR 2,500.00 $ 3,372,385.56 $ 14,051,606.49<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 53
Tel Aviv, Israel<br />
Almaty, Kazakhstan<br />
Contact<br />
<strong>NAI</strong> Yair Levy Strategy<br />
+ 972 3 613 66 99<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
8,522<br />
3.8%<br />
$212.40<br />
$27,969.90<br />
2.8%<br />
7.2%<br />
3.0%<br />
7.594<br />
In 2011, the real estate market moved in a positive direction<br />
with continued growth. Banks approved credit for the<br />
construction of large scale office and commercial projects<br />
and increases in the residential market lead to price<br />
increases in the real estate market. Reasons for the price<br />
increases were due mostly from the lack of investment<br />
opportunities in the capital market and low interest rates<br />
that drove clients to invest in real estate. However this trend<br />
changed in the summer of 2011.<br />
In early 2011, residential prices broke new records and price<br />
increases reached 15% compared to the first half of 2010.<br />
The office market also prospered and the demand for offices<br />
space exceeded supply. In Tel Aviv, new office projects were<br />
started with more than 350,000 SM added to the market.<br />
The commercial market prospered as well as we witnessed<br />
the integration of the three main groups that control the<br />
commercial centers in Israel; Azrieli Group, Melisron (British<br />
Israel group) and Gazit Globe Group. However, commercial<br />
activity dramatically slowed in malls and stores with the<br />
outbreak of social crisis in the summer of 2011. Hundreds<br />
of thousands of people demonstrated across the country<br />
against the high cost of living in Israel and launched a<br />
consumer boycott against the large food cooperative. As a<br />
result, the real estate market also suffered, especially in the<br />
residential sector. Since summer 2011, there has been a<br />
sever decrease in demand in the residential sector which is<br />
due to the apparent trend of price decreases that will begin<br />
in early <strong>2012</strong>. The banks toughened credit conditions for<br />
entrepreneurs as a result of the intervention of the Central<br />
Bank, asking them to increase their capital and improve<br />
liquidity pending the crisis that may come from Europe.<br />
The offices market was also affected with little demand in<br />
this sector for rental/purchase. The only areas that weren’t<br />
damaged as a result of the summer demonstrations were<br />
the industrial and warehouse sectors, as demand is<br />
relatively strong and the business in this sector is continuing<br />
as usual.<br />
In the commerce field, we saw a decrease in the demand<br />
for rental shops. Store sales cycles showed a decrease in<br />
demand. The general direction for <strong>2012</strong> will be a decrease<br />
in prices (again a result of the demonstrations), a limit on<br />
lending that began with the strict credit conditions from the<br />
banks and the crisis that continues to threaten from other<br />
European countries.<br />
Contact<br />
<strong>NAI</strong> Aristan<br />
+ 7 727 3115320<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
1,052,100<br />
5.1%<br />
$193.80<br />
$11,805.00<br />
9.0%<br />
5.3%<br />
7.5%<br />
16.575<br />
Due to the measures undertaken by the state to help support<br />
the economy, we have observed a stabilization of the Kazakh<br />
economy and the real estate market. We have witnessed<br />
development and investment activities in various regions of<br />
Kazakhstan. At the same time a number of new government<br />
programs targeted to restore residential real estate<br />
development activity were launched. The main factors<br />
hindering real estate development are the high interest rates<br />
and a lack of investment.<br />
In the first half of 2011 the office market for Class A and<br />
Class B class space totaled over 1 million SM. There have<br />
been no significant changes in rental rates compared to<br />
2010. The biggest trends of 2011 include replacement of<br />
properties as a result of companies expanding, a decrease<br />
in the amount of vacant spaces and a low demand for<br />
existing office space.<br />
There was increased growth in the Retail market in 2011<br />
as professional retailers continued their activity in<br />
Kazakhstan at a greater level. Both international and Russian<br />
brands show the strongest interest. An important event was<br />
the announcement by the Spanish group of companies<br />
Inditex, regarding the buyback of its franchise from Fawaz<br />
Alhokair and acquisition of the shops opened in Kazakhstan<br />
which they will now directly control. This transaction is<br />
evidence of the high profitability of the fashion retail sector<br />
in Kazakhstan. The Russian chain Sportsmaster also opened<br />
in Almaty. The increase in interest among retailers has<br />
influenced developer’s plans, who have announced a<br />
number of new projects. In the short term, new international<br />
brands will continue appearing in the Kazakhstan retail<br />
market. We expect to see new franchises of international<br />
brands come to Kazakhstan in <strong>2012</strong>.<br />
According to our estimates, the warehouse market comprises<br />
a total area of approximately 800,000 SM. More than 70%<br />
of the existing warehouses stock was built during the Soviet<br />
time. During 2011 we observed the following trends; there<br />
were no significant changes to the warehouse rental rates<br />
compared to 2010, a persistently low demand for properties<br />
in the logistic/warehousing segment and slightly higher<br />
occupancy rates in the Almaty warehousing facilities.<br />
With the exception of retail, the real estate market is not<br />
stable and has yet to make a recovery. Restoration of the<br />
market will continue but total stabilization and further market<br />
growth is possible only with the full restoration of the<br />
banking sector.<br />
Tel Aviv At A Glance<br />
conversion 3.60 nIs = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
center cItY offIce<br />
New Construction (AAA)<br />
NIS 100.00 NIS 130.00 $ 30.97 $ 40.26 8.00%<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
NIS<br />
NIS<br />
NIS<br />
NIS<br />
NIS<br />
NIS<br />
NIS<br />
NIS<br />
90.00<br />
60.00<br />
70.00<br />
65.00<br />
40.00<br />
34.00<br />
30.00<br />
50.00<br />
NIS<br />
NIS<br />
NIS<br />
NIS<br />
NIS<br />
NIS<br />
NIS<br />
NIS<br />
120.00<br />
75.00<br />
80.00<br />
70.00<br />
50.00<br />
40.00<br />
35.00<br />
60.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
27.87<br />
18.58<br />
21.68<br />
20.13<br />
12.39<br />
10.53<br />
9.29<br />
15.48<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
37.16<br />
23.23<br />
24.77<br />
21.68<br />
15.48<br />
12.39<br />
10.84<br />
18.58<br />
8.00%<br />
12.00%<br />
20.00%<br />
15.00%<br />
17.00%<br />
10.00%<br />
10.00%<br />
10.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
NIS 150.00<br />
NIS 140.00<br />
NIS<br />
NIS<br />
180.00<br />
170.00<br />
$<br />
$<br />
46.45<br />
43.35<br />
$<br />
$<br />
55.74<br />
52.64<br />
5.00%<br />
6.00%<br />
Community Power Center (Big Box) NIS 75.00 NIS 90.00 $ 23.23 $ 27.87 N/A<br />
Regional Malls<br />
NIS 110.00 NIS 140.00 $ 34.06 $ 43.35 N/A<br />
Solus Food Stores<br />
NIS 60.00 NIS 85.00 $ 18.58 $ 26.32 N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
NIS 4,000.00 NIS 5,000.00 $ 4,496,514.08 $ 5,620,642.60<br />
NIS 2,200.00 NIS 2,700.00 $ 2,473,082.74 $ 3,035,147.00<br />
NIS 1,200.00 NIS 1,800.00 $ 1,348,954.22 $ 2,023,431.33<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
Almaty At A Glance<br />
conversion 148.06 kZt = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Shopping Centres/Malls<br />
Solus Food Stores<br />
KZT 6,207.00 KZT 7,390.00 $ 46.74 $ 55.64 35.00%<br />
KZT 3,842.00 KZT 7,390.00 $ 28.93 $ 55.64 14.20%<br />
KZT 2,956.00 KZT 4,434.00 $ 22.26 $ 33.39 13.50%<br />
N/A N/A N/A N/A N/A<br />
N/A N/A N/A N/A N/A<br />
KZT 2,956.00 KZT 3,990.00 $ 22.26 $ 30.04 10.00%<br />
N/A N/A N/A N/A N/A<br />
N/A N/A N/A N/A N/A<br />
N/A N/A N/A N/A N/A<br />
KZT 3,103.00 KZT 14,780.00 $ 23.36 $ 111.29 1.00%<br />
KZT 1,478.00 KZT 4,434.00 $ 11.13 $ 33.39 11.00%<br />
KZT 3,103.00 KZT 18,622.00 $ 23.36 $ 140.22 2.00%<br />
KZT 10,346.00 KZT 18,475.00 $ 77.90 $ 139.11 5.00%<br />
N/A N/A N/A N/A N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
KZT 35,472.00<br />
N/A<br />
KZT164,797.00<br />
N/A<br />
$ 969,541.49<br />
N/A<br />
$4,504,328.16<br />
N/A<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
KZT 2,867.00<br />
N/A<br />
KZT 8,868.00<br />
N/A<br />
$ 78,362.52<br />
N/A<br />
$ 242,385.37<br />
N/A<br />
Retail/Commercial Land<br />
Residential<br />
KZT 36,950.00<br />
KZT 76,856.00<br />
KZT 110,850.00<br />
KZT 162,580.00<br />
$1,009,939.05<br />
$2,100,673.22<br />
$3,029,817.15<br />
$4,443,731.82<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 54
Kuwait City, Kuwait<br />
Luxembourg City, Luxembourg<br />
Contact<br />
<strong>NAI</strong> Kuwait<br />
+1 965 22437717<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
6,880<br />
4.4%<br />
$127.80<br />
$34,743.37<br />
3.6%<br />
1.6%<br />
6.2%<br />
3.678<br />
Kuwait is a small but wealthy and open economy, with<br />
approximately 102 billion barrels of crude-oil reserves which<br />
is roughly 9.5% of the world’s reserves. Kuwait is embarking<br />
on the ambitious $125 billion, four year plan which aims to<br />
boost Kuwait’s non-oil income fourfold. <strong>Global</strong> economic<br />
recovery and stability in oil prices will keep Kuwait’s<br />
economy on good footing for the next several years.<br />
The real estate sector in Kuwait has been on the path of<br />
recovery from the global financial turndown, coupled with<br />
the discontinuation of laws which restricted trading and<br />
financing in residential projects. The demand for residential<br />
properties is high, both from the native Kuwaiti population<br />
for private residential real estate and from expatriates for<br />
rented residential apartments. However, the supply has not<br />
kept up with surging demand, pushing prices upward.<br />
Demand in the residential sector is booming with a waiting<br />
list in excess of 90,000 units under a guaranteed housing<br />
project by the government. Favorable demographics are the<br />
prime factor putting upward pressure on demand.<br />
The 1.1 million strong Kuwaiti population will continue to<br />
grow by an average 3% over the next three years. The<br />
expatriate population growth had slowed down during the<br />
recession years with occupancy rates for rented apartments<br />
at around 90% to 95%, but the rental rates in the country<br />
remained fairly stable over the past year. The influx of<br />
expatriates is expected to resume with the upswing in oil<br />
exports and increasing investment activities, and rental rates<br />
could move up in the near to medium term.<br />
The commercial real estate segment on the other hand is<br />
witnessing oversupply. Vacancy rates in commercial office<br />
towers in the city skyrocketed during recession years, and<br />
currently average about 25%. In addition to the already<br />
existing 1.2 million SM in Kuwait City, 0.5 million SM of<br />
capacity is set to hit the market in <strong>2012</strong>. If proportional<br />
increase in demand is not forthcoming, further softening of<br />
prices could be seen in the near term.<br />
To support the struggling commercial sector, the government<br />
of Kuwait through its investment arm, Kuwait Investment<br />
Authority (KIA), announced that it will invest $3.6 billion in<br />
the local commercial property sector. Kuwait Real Estate<br />
Clearing Company was formed in 2010 to improve<br />
the transparency of transactions, real estate prices and<br />
efficiency of the market.<br />
Contact<br />
<strong>NAI</strong> Belux<br />
+352 621 268 977<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
998<br />
3.1%<br />
$55.19<br />
$108,226.61<br />
1.9%<br />
5.6%<br />
1.0%<br />
0.51<br />
Luxembourg offers a strategic position at the heart of Europe<br />
and is the world’s second largest home for asset management,<br />
only behind the US. Its political system consists of a<br />
parliamentary democracy under the form of a constitutional<br />
monarchy. Recently, the country confirmed its commitment<br />
toward R&D and innovation. Luxembourg is an international<br />
country welcoming foreign people, offering a high quality of<br />
living and a tailor-made international school system.<br />
Sustained market activity with take-up of 48,634 SM during<br />
Q2 in 73 deals, brought the total to 75,334 SM for H1. The<br />
recovery was confirmed in Q2 2011 with take-up increasing<br />
by 59% over the same period last year; this reflects a return<br />
to pre-boom levels. This strong take-up combined with a<br />
moderate speculative completion (9,700 SM) led to a further<br />
decrease of the vacancy rate from 6.6% in Q1 to 6.3% in Q2.<br />
The development pipeline for 2011 is very low, amounting<br />
to 52.000 SM. The speculative pipeline foreseen for <strong>2012</strong><br />
is estimated at 37.600 SM of which the largest part will be<br />
in the periphery (18,000 SM and four buildings) followed by<br />
the station (14,500 SM for the Central Plaza) and the CBD<br />
(3,300 SM remaining speculative of the 488 building). The<br />
lack of new supply entering the market in the course of<br />
2011 and <strong>2012</strong> is likely to drive the vacancy rate down<br />
further. Looking ahead in 2013, speculative development<br />
remains low with only 49,000 SM to be delivered.<br />
Downward pressure on rental levels is not prevalent either<br />
in town or in the periphery markets. While rents, especially<br />
in the periphery, were in steady decline since the beginning<br />
of the crisis, it seems that a slight increase for the prime<br />
locations has begun with the rest of the country enjoying a<br />
stable market. Prime rents in the CBD are around EUR<br />
40/SM/month excluding VAT.<br />
Investment volume reached EUR 85 million during Q2 2011,<br />
taking the total of H1 EUR 105 million; no transactions by<br />
institutional investors. The volume of investment is a marked<br />
improvement against last year; however it still remains low<br />
due to the lack of products that meet the criteria sought by<br />
prospective buyers. In the meantime, prime yields (6/9 year<br />
leases) remained stable in Luxembourg at 5.5% to 6%.<br />
Kuwait At A Glance<br />
conversion 0.28 kWd = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center (Big Box)<br />
Regional Shopping Centres/Malls<br />
Solus Food Stores<br />
KWD 6.00 KWD 8.00 $ 23.89 $ 31.85 20.00%<br />
KWD 6.00 KWD 8.00 $ 23.89 $ 31.85 10.00%<br />
KWD 5.00 KWD 7.00 $ 19.91 $ 27.87 2.00%<br />
KWD 6.00 KWD 8.00 $ 23.89 $ 31.85 5.00%<br />
KWD 6.00 KWD 8.00 $ 23.89 $ 31.85 5.00%<br />
KWD 5.00 KWD 7.00 $ 19.91 $ 27.87 1.00%<br />
KWD 2.50 KWD 4.00 $ 9.95 $ 15.93 5.00%<br />
KWD 3.00 KWD 5.00 $ 11.94 $ 19.91 3.00%<br />
N/A N/A N/A N/A N/A<br />
KWD 18.00 KWD 30.00 $ 71.67 $ 119.45 2.00%<br />
KWD 8.00 KWD 20.00 $ 31.85 $ 79.63 1.00%<br />
KWD20.00 KWD 28.00 $ 79.63 $ 111.48 2.00%<br />
KWD 20.00 KWD 35.00 $ 79.63 $ 139.35 2.00%<br />
KWD 8.00 KWD 20.00 $ 31.85 $ 79.63 1.00%<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
KWD 3,500.00 KWD 6,500.00 $ 50,585,783.37 $ 93,945,026.26<br />
Land in Office Parks<br />
N/A N/A N/A N/A<br />
Land in Industrial Parks<br />
KWD 185.00 KWD 1,150.00 $ 2,673,819.98 $ 16,621,043.11<br />
Office/Industrial Land - Non-park<br />
N/A N/A N/A N/A<br />
Retail/Commercial Land<br />
KWD 3,000.00 KWD 5,500.00 $ 43,359,242.89 $ 79,491,945.30<br />
Residential<br />
KWD 250.00 KWD 1,000.00 $ 3,613,270.24 $ 14,453,080.96<br />
Luxembourg At A Glance<br />
conversion 0.72 eur = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
31.00<br />
35.00<br />
22.00<br />
24.00<br />
26.00<br />
16.00<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
40.00<br />
40.00<br />
31.00<br />
28.00<br />
28.00<br />
24.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
48.00<br />
54.19<br />
34.06<br />
37.16<br />
40.26<br />
24.77<br />
$ 61.93<br />
$ 61.93<br />
$ 48.00<br />
$ 43.35<br />
$ 43.35<br />
$ 37.16<br />
6.30%<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
EUR<br />
EUR<br />
3.30<br />
2.50<br />
EUR<br />
EUR<br />
5.00<br />
5.80<br />
$<br />
$<br />
5.11<br />
3.87<br />
$<br />
$<br />
7.74<br />
8.98<br />
N/A<br />
N/A<br />
High Tech/R&D<br />
retaIl<br />
EUR 4.20 EUR 6.70 $ 6.50 $ 10.37 N/A<br />
City Center<br />
EUR 40.00 EUR 100.00 $ 61.93 $ 154.84 N/A<br />
Neighborhood Service Centers<br />
Community Power Center (Big Box)<br />
EUR<br />
EUR<br />
8.00<br />
8.00<br />
EUR<br />
EUR<br />
10.00<br />
10.00<br />
$<br />
$<br />
12.39<br />
12.39<br />
$ 15.48<br />
$ 15.48<br />
N/A<br />
N/A<br />
Regional Shopping Centers/Malls<br />
Solus Food Stores<br />
EUR 40.00<br />
N/A<br />
EUR 100.00<br />
N/A<br />
$ 61.93<br />
N/A<br />
$ 154.84<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/Hectare High/Hectare low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 55
Amsterdam, The Netherlands<br />
Oslo, Norway<br />
Contact<br />
<strong>NAI</strong> Netherlands<br />
+3120 364 0007<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
14,422<br />
1.7%<br />
$776.09<br />
$46,641.03<br />
2.6%<br />
4.4%<br />
1.0%<br />
16.64<br />
According to the latest forecast the Dutch economy has<br />
experienced a growth of 1.5% in 2011 and is expected to<br />
grow an additional 1% in <strong>2012</strong>. The growth can be attributed<br />
mainly to the export market. Business investments are<br />
expected to recover well with a growth of 9.25% this year<br />
however continued growth is not expected to continue into<br />
<strong>2012</strong>. The unemployment figure is around 4.5% and expected<br />
to fall to 4.25% in <strong>2012</strong>.<br />
The take-up of office space shows a positive image with a<br />
take-up of approximately 525,000 SM in the first half of<br />
2011, resulting in a growth of 16% compared with the same<br />
period in 2010. The outlook for 2011 is a total take-up of<br />
approximately 1.1 million SM. The total take-up in 2010 was<br />
1.014 million SM. The prime rents have remained stable but<br />
the average rents are declining. Substantial incentives are<br />
being offered to support rental rates. Among the largest office<br />
transactions in 2011 were School of Rotterdam lease of<br />
16,000 SM in Rotterdam and Bookings deal of 12,500 SM<br />
in Amsterdam.<br />
In the first half of 2011 the take-up of industrial space was<br />
approximately 1.24 million SM which is a growth of 45%<br />
compared to the same period in 2010. The total take-up in<br />
2010 was 2.17 million SM. The average effective rents<br />
declined in 2011. The vacancy rate rose in 2011 compared<br />
to 2010 to a 13% total vacancy of which 23% was in logistic<br />
centers. Among the largest transactions were the MJV lease<br />
of 42,700 SM in Terneuzen and the Kuehne + Nagel lease of<br />
34,000 SM in Utrecht.<br />
The stock of retail space is approx. 27.7 million SM. The<br />
vacancy is 6.2% of the stock. Properties located on shopping<br />
streets outside the city center have been most affected by the<br />
rise in vacancy rates. The prime rent levels in the large cities<br />
increased slightly, but in the smaller regional cities the rent<br />
levels are declining.<br />
The recovery of the investment market in 2010 seems to<br />
have disappeared. The total investment volume was over €2<br />
billion in the first half of 2011. This volume is €0.6 billion<br />
less compared to the same period in 2010. Prime Yields in<br />
the four largest cities are between 5.75% to 7.25%. Among<br />
the largest transactions were six logistics centers sold for<br />
€157 million to WP Carey and the Amstel Hotel sale for €100<br />
million to a Lebanese investor.<br />
Contact<br />
<strong>NAI</strong> FirstPartners<br />
+47 2301 1400<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
125,013<br />
1.8%<br />
$425.04<br />
$86,210.86<br />
1.4%<br />
3.6%<br />
2.3%<br />
4.93<br />
Norway benefits from a robust economic system that is<br />
supported by huge stocks of natural resources and a skilled<br />
labor force. Most large international companies have a<br />
presence in the country’s capital city Oslo. There are two<br />
key business districts; CBD East with almost half a million<br />
square meters of prime office space in Bjørvika, and CBD<br />
West including Vika, Tjuvholmen and Aker Brygge which is<br />
currently undergoing comprehensive redevelopment.<br />
Norway is now in a relatively strong position with almost full<br />
employment, solid private consumption and other non-oil<br />
export companies continuing to do well. Interest rates are<br />
expected to remain low over the long term, and GDP growth<br />
will nearly double by 2013.<br />
Throughout the recovery in 2010 rents have increased<br />
moderately and have now all but flattened out entirely. Rents<br />
are not expected to see significant increases again until late<br />
2013. Prime office rents in CBD areas are close to<br />
NOK 4,000/SM but average rents in these areas are<br />
approximately NOK 2,700/SM. Average industrial rents in<br />
the Alnabru area are around NOK 1,000/SM and average<br />
retail rents around NOK 6,000/SM. Prime office yields have<br />
been decreasing gently over the last two years and now<br />
stand at around 5.25%.<br />
Investment activity has dropped off in 2011 after an<br />
encouraging 2010 and financing has become more of an<br />
issue. There were however some significant transactions in<br />
2011. The most active buyers in the market are investors<br />
including the Storebrand Group, Eiendomsspar AS and<br />
Pareto Project Finance as well as KLP and Vital. However,<br />
there has been a significant increase in private investment<br />
throughout 2011.<br />
In addition to Norwegian Property's extensive refurbishment<br />
plans for Aker Brygge, there is on going development in<br />
Bjørvika which now houses some of the biggest accountancy<br />
and banking firms such as Ernst & Young and PWC. Norway’s<br />
largest bank DnB will also start to occupy their new 80,000<br />
SM building in <strong>2012</strong>. Deloitte will soon follow and occupy<br />
their landmark 'iceberg' building upon completion in 2013.<br />
The area of Økern/Løren/Ulven towards the east of the city<br />
is also undergoing extensive redevelopment to provide a mix<br />
of retail, office and industrial just outside the city center.<br />
Amsterdam At A Glance<br />
conversion 0.72 eur = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
Class A (Prime)<br />
Class B (Secondary)<br />
Average City Center<br />
suburban offIce<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Light Industrial<br />
High Tech/R&D<br />
retaIl<br />
High Street Shops<br />
Retail Units In Parks<br />
Community Power Center (Big Box)<br />
Solus Food Stores<br />
EUR 200.00 EUR 350.00 $ 25.81 $ 45.16 14.00<br />
EUR 175.00 EUR 225.00 $ 22.58 $ 29.03 14.00<br />
EUR 150.00 EUR 220.00 $ 19.35 $ 28.39 14.00<br />
EUR 175.00 EUR 225.00 $ 22.58 $ 29.03 14.00<br />
EUR 95.00 EUR 150.00 $ 12.26 $ 19.35 14.00<br />
EUR 25.00 EUR 110.00 $ 3.23 $ 14.19 N/A<br />
N/A N/A N/A N/A N/A<br />
N/A N/A N/A N/A N/A<br />
EUR 1,500.00 EUR 2,500.00 $ 193.55 $ 322.58 N/A<br />
EUR 300.00 EUR 550.00 $ 38.71 $ 70.97 N/A<br />
EUR 125.00 EUR 175.00 $ 16.13 $ 22.58 N/A<br />
N/A N/A N/A N/A N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
EUR 700.00 EUR 2,165.00 $ 3,934,449.82 $ 12,168,691.22<br />
Land in Office Parks<br />
EUR 255.00 EUR 980.00 $ 1,433,263.86 $ 5,508,229.74<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
EUR<br />
EUR<br />
100.00 EUR<br />
100.00 EUR<br />
375.00 $<br />
375.00 $<br />
562,064.26 $<br />
562,064.26 $<br />
2,107,740.97<br />
2,107,740.97<br />
Retail/Commercial Land<br />
EUR 150.00 EUR 23,500.00 $ 843,096.39 $ 132,085,101.03<br />
Residential<br />
EUR 300.00 EUR 4,000.00 $ 1,686,192.78 $ 22,482,570.39<br />
Oslo At A Glance<br />
conversion 5.82 nok = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
NOK 2,500.00 NOK 3,500.00 $39.91<br />
NOK 2,400.00 NOK 3,200.00 $38.31<br />
NOK 1,600.00 NOK 2,100.00 $25.54<br />
NOK 1,600.00 NOK 2,400.00 $ 25.54<br />
NOK 1,500.00 NOK 2,200.00 $ 23.94<br />
NOK 1,300.00 NOK 1,500.00 $ 20.75<br />
$55.87<br />
$51.08<br />
$33.52<br />
$ 38.31<br />
$ 35.12<br />
$ 23.94<br />
1.00%<br />
6.00%<br />
7.50%<br />
4.00%<br />
7.00%<br />
10.00%<br />
Bulk Warehouse<br />
NOK 550.00 NOK 1,200.00 $ 8.78 $ 19.16 6.00%<br />
Manufacturing<br />
NOK 450.00 NOK 800.00 $ 7.18 $ 12.77 6.00%<br />
High Tech/R&D<br />
retaIl<br />
NOK 750.00 NOK 1,050.00 $ 11.97 $ 16.76 6.00%<br />
City Center<br />
Neighborhood Service Centers<br />
Community Power Center (Big Box)<br />
Regional Shopping Centers/Malls<br />
NOK 2,500.00 NOK 11,000.00 $ 39.91<br />
NOK 1,200.00 NOK 1,500.00 $ 19.16<br />
NOK 1,300.00 NOK 2,500.00 $ 20.75<br />
NOK 1,800.00 NOK 5,000.00 $ 28.73<br />
$ 175.59<br />
$ 23.94<br />
$ 39.91<br />
$ 79.81<br />
5.00%<br />
6.00%<br />
7.00%<br />
7.00%<br />
Solus Food Stores<br />
NOK 900.00 NOK 1,500.00 $ 14.37 $ 23.94 7.00%<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
NOK 5,000.00 NOK 10,000.00 $ 3,476,686.14 $ 6,953,372.28<br />
NOK 3,000.00 NOK 6,000.00 $ 2,086,011.69 $ 4,172,023.37<br />
NOK 1,500.00 NOK 3,000.00 $ 1,043,005.84 $ 2,086,011.69<br />
NOK 1,000.00 NOK 2,500.00 $ 695,337.23 $ 1,738,343.07<br />
NOK 1,500.00 NOK 4,000.00 $ 1,043,005.84 $ 2,781,348.91<br />
NOK 1,000.00 NOK 15,000.00 $ 695,337.23 $ 10,430,058.43<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 56
Warsaw, Poland<br />
Doha City, Qatar<br />
Contact<br />
<strong>NAI</strong> Estate Fellows<br />
+48 22 379 7300<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
120,728<br />
3.7%<br />
$468.82<br />
$12,313.72<br />
2.7%<br />
9.2%<br />
4.5%<br />
38.073<br />
Q1 of 2011 has definitely brightened the economic spirit in<br />
Warsaw with growing foreign investments having a positive<br />
effect on the demand for office space. Still, the bank loan<br />
financing policy remains restrictive and has kept the level<br />
of new deliveries to the market low, limiting the supply of<br />
Class A office space, as well as increasing rents and<br />
vacancy rates. This is the case in Warsaw, the capital of<br />
Poland. But other Polish cities have seen stable market<br />
activity and rental rates.<br />
The beginning of 2011 brought 198,000 SM of office space<br />
with new lease transactions to the market, where 2010<br />
closed with 211,000 SM total for the entire year. This shows<br />
that tenants are concerned with an increase in rental rates<br />
in the future. The investment volume has noted a 400%<br />
raise (approximately €2 billion) with most of the transactions<br />
coming from foreign investors in Warsaw and half of them<br />
in the retail sector. An example is the acquisition of Warsaw<br />
Promenada by Atrium Real Estate and Wroclaw Magnolia by<br />
Blackstone. The largest transaction was the purchase of the<br />
Europolis office portfolio by CA Immo fund.<br />
As rents grow, coupled with the demand and the shrinking<br />
amount of new investments, average cap rates have held<br />
at approximately 6.5%, although slightly less for retail<br />
projects. The numbers are generally higher in the smaller<br />
cities. 2010 brought over 560,000 SM of new retail space<br />
and supply should remain at the current level through 2011.<br />
The Warsaw retail market remains the largest with 1.37<br />
million SM of modern retail space. The forecast shows<br />
Warsaw will experience a strong demand as the new<br />
pipeline remains extremely limited.<br />
The logistics market experienced a 7% rise in the transaction<br />
volume with 800,000 SM and 64% of the total in new lease<br />
contracts signed. Rents remain stable and vacancy rates<br />
have shown a slight dip to 13.3% in Q2 2011. Almost 45%<br />
of new contracts signed took place in Warsaw. The largest<br />
lease transaction, a 25,500 SM project was secured by TK<br />
Maxx and Wroclaw Goodman.<br />
The forecast shows a further increase in demand for<br />
projects all over the country. Due to stable economic growth<br />
as well as the promising idea of fiscal reforms, the prospect<br />
of further economic development in Poland seems to be the<br />
most favorable amongst all European countries.<br />
Contact<br />
<strong>NAI</strong> Qatar<br />
+974 431 6717<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ M)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
11,437<br />
30.2%<br />
$126.98<br />
$77.76<br />
2.4%<br />
0.5%<br />
4.5%<br />
17.01<br />
The state of Qatar is located on the western side of the<br />
Arabian Gulf. Qatar is one of the richest and fastest growing<br />
economies in the world with a GDP of 150,550 billion, a rate<br />
of growth at 30.20% and a per capita income of 88,558.<br />
The population rate is 17.01 million with an unemployment<br />
rate of 0.50%. The interest rate is 4.5% and the inflation<br />
rate is 2.4%.<br />
Qatar’s construction sector is growing at a fast pace,<br />
propelled by the country’s powerful economy, stable political<br />
environment and the thriving real estate sector in preparation<br />
for hosting the 2022 FIFA World Cup. The positive aspects<br />
in the market include; developers bring to the market a timely<br />
transfer of high quality, value-added projects, improvement<br />
of the banks in managing the risks associated with over<br />
exposure to the real estate sector and the investor friendly<br />
laws and regulations, including generous financial incentives<br />
and tax breaks to attract investors. All of these factors have<br />
created solid fundamentals in the real estate market in Qatar.<br />
There is strong demand for both leasehold and freehold<br />
properties in Qatar. The average rate (leasehold) for a three<br />
bedroom apartment is US $2,546, US $2,122 for a two<br />
bedroom apartment, US $1,736 for a single bedroom<br />
apartment and the average asking rate for a villa is US<br />
$4,214. For freehold properties the rate is US $3,193/SM.<br />
The office market is experiencing strong demand. The<br />
vacancy rate for office space in Doha is very low. The<br />
vacancy rate in the CBD is around 15% and 5 % in suburban<br />
areas where the average rate per square meter is low as<br />
compared to CBD, but will get facilities similar to CBD. The<br />
average asking rate for office space in the CBD is US<br />
$56/SM. In the suburban areas, the average rate is US<br />
$46/SM. For freehold units the rate is US $4,888/SM.<br />
The retail sector has a very promising future. Notwithstanding<br />
the instability in the market, the retail sector has remained<br />
strong. The average rate in the retail sector is US $48/SM.<br />
The promising nature of the retail market is mainly attributed<br />
to the capita income and increased consumer spending.<br />
There is also a strong demand for warehouses in Qatar with<br />
the average at US $18/SM.<br />
Warsaw At A Glance<br />
conversion 0.72 eur = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
EUR 300.00<br />
EUR 264.00<br />
EUR 192.00<br />
EUR 186.00<br />
EUR 180.00<br />
EUR 132.00<br />
EUR 336.00<br />
EUR 300.00<br />
EUR 240.00<br />
EUR 198.00<br />
EUR 198.00<br />
EUR 168.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
38.71<br />
34.06<br />
24.77<br />
24.00<br />
23.23<br />
17.03<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
43.35<br />
38.71<br />
30.97<br />
25.55<br />
25.55<br />
21.68<br />
20.00%<br />
6.20%<br />
8.00%<br />
25.00%<br />
5.20%<br />
10.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
EUR 45.00<br />
N/A<br />
N/A<br />
EUR 65.00<br />
N/A<br />
N/A<br />
$<br />
$<br />
$<br />
5.81<br />
3.23<br />
5.42<br />
$<br />
$<br />
$<br />
8.39<br />
4.32<br />
7.74<br />
19.00%<br />
N/A<br />
N/A<br />
City Center<br />
EUR 900.00 EUR 1,080.00 $ 116.13 $ 139.35 1.30%<br />
Neighborhood Service Centers EUR 72.00 EUR 120.00 $ 9.29 $ 15.48 N/A<br />
Community Power Center (Big Box)<br />
Regional Shopping Centers/Malls<br />
Solus Food Stores<br />
EUR 400.00<br />
EUR 180.00<br />
EUR 120.00<br />
EUR 600.00<br />
EUR 300.00<br />
EUR 144.00<br />
$<br />
$<br />
$<br />
51.61<br />
23.23<br />
15.48<br />
$<br />
$<br />
$<br />
77.42<br />
38.71<br />
18.58<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
EUR 2,000.00 EUR 3,000.00 $ 11,241,285.19 $ 16,861,927.79<br />
EUR 300.00 EUR 950.00 $ $1,686,192.78 $ 5,339,610.47<br />
EUR 65.00 EUR 100.00 $ 365,341.77 $ 562,064.26<br />
N/A N/A N/A N/A<br />
EUR 1,500.00 EUR 2,500.00 $ 8,430,963.90 $ 14,051,606.49<br />
EUR 300.00 EUR 900.00 $ 1,686,192.78 $ 5,058,578.34<br />
Doha City At A Glance<br />
conversion 3.64 Qar = 1 us$ RENT/M 2 /Mo US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
QAR 185.00<br />
QAR 165.00<br />
N/A<br />
QAR 170.00<br />
QAR 140.00<br />
QAR 70.00<br />
QAR<br />
QAR<br />
QAR<br />
QAR<br />
QAR<br />
260.00<br />
197.00<br />
N/A<br />
220.00<br />
180.00<br />
145.00<br />
$ 56.66<br />
$ 50.53<br />
N/A<br />
$ 52.07<br />
$ 42.88<br />
$ 21.44<br />
$ 79.63<br />
$ 60.34<br />
N/A<br />
$ 67.38<br />
$ 55.13<br />
$ 44.41<br />
15.00%<br />
10.00%<br />
N/A<br />
2.00%<br />
5.00%<br />
2.00%<br />
Bulk Warehouse<br />
QAR 30.00 QAR 65.00 $ 9.19 $ 19.91 10.00%<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
City Center<br />
Neighborhood Service Centers<br />
Community Power Center(Big Box)<br />
Regional Shopping Centers/Malls<br />
Solus Food Stores<br />
QAR 90.00<br />
N/A<br />
QAR 680.00<br />
QAR 175.00<br />
N/A<br />
QAR 425.00<br />
QAR 165.00<br />
QAR<br />
QAR<br />
QAR<br />
QAR<br />
QAR<br />
150.00<br />
N/A<br />
810.00<br />
325.00<br />
N/A<br />
630.00<br />
220.00<br />
$ 27.56<br />
N/A<br />
$ 208.26<br />
$ 53.60<br />
N/A<br />
$ 130.17<br />
$ 50.53<br />
$ 45.94<br />
N/A<br />
$ 248.08<br />
$ 99.54<br />
N/A<br />
$ 192.95<br />
$ 67.38<br />
N/A<br />
N/A<br />
0.00%<br />
0.00%<br />
N/A<br />
N/A<br />
10.00%<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
QAR 18,500.00 QAR 24,000.00 $ 20,567,845.99 $26,682,611.01<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
QAR 5,920.00 QAR 31,000.00 $ 6,581,710.72 $ 34,465,039.22<br />
QAR 1,250.00 QAR 21,000.00 $ 1,389,719.32 $ 23,347,284.63<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 57
Moscow, Russia<br />
St. Petersburg, Russia<br />
Contact<br />
<strong>NAI</strong> Becar<br />
+7 495 787 42 97<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
6,601,668<br />
4.3%<br />
$1,678.11<br />
$11,996.17<br />
7.4%<br />
7.3%<br />
8.3%<br />
139.887<br />
Among other BRIC emerging markets, Russia has been<br />
impacted the most by the global economic crisis. Nevertheless,<br />
the economy, still very dependent on raw materials and oil<br />
prices, has also seen a relatively fast recovery as Russian<br />
GDP grew by 4.8% in 2011. Moscow, as the capital and<br />
largest city of the country, has experienced the fastest<br />
recovery within Russia over the past two years.<br />
Office rents are up, now reaching $1,200/SM for prime<br />
properties, and the overall vacancy rate at about 13% is<br />
significantly lower than in 2009 and 2010. Russian<br />
corporate occupiers are leading the way, looking for larger<br />
premises as they are expending and hiring new staff. Good<br />
news from the employment market, combined with a<br />
growing economy, are reasons to be optimistic for <strong>2012</strong><br />
which should see a stronger revival in demand for office<br />
space in both Class A and Class B submarkets. One<br />
exception to this trend is the relatively new neighborhood of<br />
Moscow City, which has never recovered from the downturn<br />
of 2008 and 2009.<br />
Large office towers that were expected to bring a total of<br />
more than 1.5 million SM to Moscow’s prime market in just<br />
three years, have see very high vacancy rates at over 20%.<br />
There is little hope for improvement due to the lack of<br />
infrastructures and good access. Nevertheless there are<br />
good opportunities to be found, with high quality Class A<br />
office rental rates sometimes below 40% of what they are<br />
in other parts of the center, negotiated as one to three years<br />
subleases. The prime office market is doing generally better<br />
outside this neighborhood, with vacancy falling and rents<br />
steadily rising.<br />
Prime retail rents rose by over 30% in the past two years,<br />
stabilized prime shopping centers and key street retail<br />
locations have vacancy levels below 2% and rents are<br />
increasing. Secondary shopping centers have not recovered<br />
yet from the serious drop in both rentals and occupancy<br />
level. Turnover by Russian retailers improved significantly<br />
over the past 24 months and retail chains are expanding<br />
again in Moscow.<br />
Prime office and retail yields have been stable at around<br />
10% with very few transactions. Prime cash flow properties<br />
are rare or inadequately priced. Russian investors are active<br />
in the secondary office market, acquiring properties $5 to<br />
$30 million in size, at yields similar to the primary market.<br />
This submarket is expected to see yield compressions over<br />
the next year.<br />
Contact<br />
<strong>NAI</strong> Becar<br />
+7 812 490 70 01<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
6,601,668<br />
4.3%<br />
$1,678.11<br />
$11,996.17<br />
7.4%<br />
7.3%<br />
8.3%<br />
139.887<br />
The second largest city in Russia, St. Petersburg is located<br />
at the crossroads of Finland and the Baltic countries, and<br />
historically has benefited from the positive influence of the<br />
dynamic economy in this region. Large international and<br />
Russian companies generally decide to be headquartered<br />
in Moscow so St. Petersburg has been less impacted by the<br />
global economic crisis than the rival capital city.<br />
Office rents have recovered slowly but steadily since 2010<br />
where they used to be much lower than in Moscow, but are<br />
now about equal. Rental rates reached $900/SM for the<br />
best office buildings located in the heart of the historical city<br />
around Nevsky Prospect. At this level, the demand, from<br />
mainly foreign corporate occupiers, has yet to return to<br />
normal levels and the vacancy remains high at over 30% in<br />
some prime office buildings. Meanwhile the Class B and<br />
Class C office markets have seen relatively higher demand<br />
and lower vacancies.<br />
Retail rents are now reaching $3500/SM for prime properties,<br />
almost back to pre-crisis levels. These properties are fully<br />
occupied while the secondary market, still oversupplied, has<br />
not fully recovered and continues to see higher vacancies<br />
at about 20%.<br />
The industrial market is still under-supplied but rents<br />
withstood the impact of the crisis better than other sectors.<br />
Prime warehouse rental rates were stable at $170/SM per<br />
year during 2010 and 2011 and remain at a higher level<br />
than in Moscow.<br />
The hospitality market, which had been strongly hit in 2009<br />
with dropping occupancy rates, continues its recovery that<br />
began in 2010. Hospitality remains attractive to many<br />
investors due to the strong tourism potential of the region<br />
and lack of European standard two and three star hotels in<br />
the city.<br />
Investment yields were stable in 2011, and at the current<br />
10% to 11% for Class B office, are at the same level as in<br />
Moscow. There is no Class A office investment market<br />
currently in St Petersburg due to high vacancies, the large<br />
amount of potential deals starting at over $40 million and<br />
inadequate pricing. Many owners are still trying to lease or<br />
sell prime properties at pre-crisis prices, resulting in a large<br />
gap between the offer and the demand. This imbalance is<br />
expected to progressively disappear over the next two years.<br />
Moscow At A Glance<br />
RENT/M 2 /YR<br />
US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
$ 600.00 $ 1,100.00 $ 55.74 $ 102.18 15.00%<br />
Class A (Prime)<br />
$ 700.00 $ 1,200.00 $ 65.03 $ 111.47 7.00%<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
500.00<br />
400.00<br />
500.00<br />
250.00<br />
$<br />
$<br />
$<br />
$<br />
900.00<br />
700.00<br />
800.00<br />
600.00<br />
$ 46.45<br />
$ 37.16<br />
$ 46.45<br />
$ 23.22<br />
$ 83.60 10.00%<br />
$ 65.03 20.00%<br />
$ 74.32 20.00%<br />
$ 55.74 15.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
90.00<br />
100.00<br />
$<br />
$<br />
115.00<br />
120.00<br />
$<br />
$<br />
8.36<br />
9.29<br />
$ 10.68 25.00%<br />
$ 11.15 15.00%<br />
High Tech/R&D<br />
retaIl<br />
$ 120.00 $ 135.00 $ 11.15 $ 12.54 15.00%<br />
Downtown<br />
$ 1,500.00 $ 5,000.00 $ 55.74 $ 102.18 10.00%<br />
Neighborhood Service Centers $ 800.00 $ 3,500.00 $ 65.03 $ 111.47 5.00%<br />
Community Power Center (Big Box) $ 500.00 $ 3,500.00 $ 46.45 $ 83.60 15.00%<br />
Regional Shopping Centers/Malls<br />
Solus Food Stores<br />
$<br />
$<br />
500.00<br />
600.00<br />
$ 4,000.00<br />
$ 2,000.00<br />
$ 46.45<br />
$ 55.74<br />
$ 83.60<br />
$ 102.18<br />
5.00%<br />
5.00%<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$ 1,150.00 $ 1,850.00 $ 4,653,884.86 $ 7,486,684.34<br />
$ 450.00 $ 1,300.00 $ 1,821,085.38 $ 5,260,913.32<br />
$ 1,550.00 $ 600.00 $ 6,272,627.42 $ 2,428,113.84<br />
$ 150.00 $ 450.00 $ 607,028.46 $ 1,821,085.38<br />
$ 150.00 $ 2,200.00 $ 607,028.46 $ 8,903,084.08<br />
$ 400.00 $ 2,500.00 $ 1,618,742.56 $10,117,141.00<br />
St. Petersburg At A Glance<br />
RENT/M 2 /YR<br />
US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
$ 380.00<br />
$ 400.00<br />
$ 300.00<br />
$ 320.00<br />
$ 320.00<br />
$ 230.00<br />
$ 100.00<br />
$ 540.00<br />
$ 900.00<br />
$ 530.00<br />
$ 500.00<br />
$ 480.00<br />
$ 400.00<br />
$ 120.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
35.30<br />
37.16<br />
27.87<br />
29.73<br />
29.73<br />
21.37<br />
9.29<br />
$ 50.17<br />
$ 83.61<br />
$ 49.24<br />
$ 46.45<br />
$ 44.59<br />
$ 37.16<br />
$ 11.15<br />
20.00%<br />
12.00%<br />
15.00%<br />
N/A<br />
20.00%<br />
25.00%<br />
10.00%<br />
Manufacturing<br />
$ 82.00 $ 111.00 $ 7.62 $ 10.31 25.00%<br />
High Tech/R&D<br />
retaIl<br />
City Center<br />
Retail Units in Parks<br />
Community Power Center (Big Box)<br />
Regional Shopping Centers/Malls<br />
Solus Food Stores<br />
$ 110.00<br />
$ 800.00<br />
$ 500.00<br />
$ 240.00<br />
$ 320.00<br />
$ 400.00<br />
$ 150.00<br />
$ 3,500.00<br />
$ 900.00<br />
$ 480.00<br />
$ 1,400.00<br />
$ 1,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
10.22<br />
74.32<br />
46.45<br />
22.30<br />
29.73<br />
37.16<br />
$ 13.94<br />
$ 325.16<br />
$ 83.61<br />
$ 44.59<br />
$ 130.06<br />
$ 92.90<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$ 650.00 $ 1,350.00 $ 2,630,460.74 $ 5,463,264.60<br />
$ 57.00 $ 200.00 $ 230,671.17 $ 809,372.53<br />
$ 34.00 $ 115.00 $ 137,593.33 $ 465,389.21<br />
$ 57.00 $ 230.00 $ 230,671.17 $ 930,778.41<br />
$ 115.00 $ 570.00 $ 465,389.21 $ 2,306,711.72<br />
$ 570.00 $ 1,900.00 $ 2,306,711.72 $ 7,689,039.07<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 58
Belgrade, Serbia<br />
Johannesburg, South Africa<br />
Contact<br />
<strong>NAI</strong> Atrium<br />
+ 381 11 2205880<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
34,116<br />
3.0%<br />
$41.31<br />
$5,573.62<br />
9.9%<br />
18.4%<br />
N/A<br />
7.411<br />
The economy of Serbia is largely driven by the following<br />
sectors; processing of base metals, food processing,<br />
machinery and chemical processing. As of <strong>2012</strong>, the<br />
automobile industry will become an important industry<br />
sector, as FIAT Group Automobiles will start production of<br />
cars in its recently opened factory in Serbia. The Statistical<br />
Office of the Republic of Serbia announced that industrial<br />
production recovered slightly from January to August 2011<br />
with an increase of 3%.<br />
Belgrade modern office stock in 2011 remains 460,000 SM<br />
(NRA), as no new office buildings were completed. The level<br />
of office take-up is stable, resulting in a positive net absorption<br />
of office space and gradual decrease of vacancy that<br />
currently amounts to approximately 25%. The prime rental<br />
level has stabilized at EUR 16/SM/month for Class A office<br />
space and it can be expected that rental levels will remain<br />
stable in the next two to three years, as new office properties<br />
should enter the market in <strong>2012</strong> and 2013.<br />
Due to the financial crisis, consumption power in Serbia has<br />
dropped by approximately 30%, negatively affecting the<br />
retail market with turnovers in all types of retail properties.<br />
Only one neighborhood shopping center was opened in<br />
2011, but next year a modern shopping center of 30,000<br />
SM (GLA) should be completed in Belgrade, topped by the<br />
football pitch of a local football club. Belgrade shopping<br />
center stock per 1,000 inhabitants increased to 110, which<br />
is a much smaller ratio than in comparable cities in the CEE<br />
region, indicating potential for further expansion. Rental<br />
levels in traditional downtown retail locations are unbearable<br />
for many tenants, resulting in visible vacancy and high<br />
fluctuation of tenants. The situation in modern shopping<br />
centers is slightly better, as occupancy is nearly 100% but<br />
tenant fluctuation is unusually high.<br />
The segment of the logistics market is very inert, so only a<br />
few modern logistics properties were completed in 2011.<br />
The most notable was the completion of a regional<br />
distribution center by Croatian company “IDEA”. Prime<br />
warehouse rents remain very stable ranging around EUR<br />
4/SM/month.<br />
The investment market is still in its infancy phase, as it is<br />
very shallow and non-transparent. It is hard to estimate the<br />
prime yield level, but some estimation can be made by<br />
analyzing price fundamentals of international property<br />
investors that are actually selling finished investment<br />
products on the Serbian investment market.<br />
Contact<br />
<strong>NAI</strong> FINLAY<br />
+ 27 11 807 4724<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
471,445<br />
3.5%<br />
$366.17<br />
$7,249.41<br />
5.8%<br />
24.4%<br />
5.5%<br />
50.511<br />
Property delivered a 4.3% total return in the six months<br />
leading up to June 2011. The lack of capital growth reflects<br />
a stagnant market year-on-year, due to rising vacancies and<br />
base rental yields moving up to 9.6%. Capital growth in retail<br />
property remained resilient (0.4%), offices grew marginally<br />
(0.1%), but industrial growth contracted substantially<br />
(-1.5%). South Africa continues to be seen as the gateway<br />
into Africa, with China leading the acquisition trail.<br />
Steady but slow growth indicates cautious optimism for the<br />
commercial property sector for <strong>2012</strong> (anticipated GDP<br />
growth 3.6%). Since 2008, the listed property sector has<br />
remained fairly resilient and commercial property continues<br />
to outperform overall global sector performance.<br />
Cap rates for retail reflect 7.3%, 8% and 9.2% for superregional,<br />
regional and neighborhood centers respectively.<br />
Prime office space reflects 9.2%, with Class B space at<br />
10.7%. Industrial rates range from 9.8% for high tech<br />
industrial space to 10.3% for warehousing. Vacancies rose<br />
again from early 2011. National vacancies reflect 6.8%, with<br />
offices at 11.7%, retail at 6.4% and industrial at 4.2%.<br />
Rising cost pressures continue to offset any improvements<br />
in rental returns or vacancies, and along with a further loss<br />
of jobs, will also affect sector performance. Tenant bad debt<br />
has increased from 3% to 7%.<br />
Compared to 2010, retail turnover hovers at similar levels,<br />
however trading densities come under increased pressure<br />
year-on-year, as foot count steadily decreases. Over 100,000<br />
SM of retail space was launched in 2011 in Johannesburg<br />
alone, and new development continues, albeit reduced, in all<br />
sectors.<br />
Class A office take-up (at 6.8%, down from 8.1% in the<br />
previous year), supports the office rental sector, but Class B<br />
and Class C office vacancies have risen, at 10.7%<br />
and 13.2% respectively. Rental rates in both CBD and<br />
decentralized offices have remained relatively stagnant since<br />
2008.<br />
Exciting development opportunities have resulted from<br />
projects such as the ReaVaya Bus Rapid Transport project<br />
and the recently opened Gautrain railway system, which<br />
connect nodes within the metropolitan areas.<br />
Industrial development is trending toward more mixed-use<br />
properties in order to diversify investment spread, tenant<br />
mix and services “under one roof”.<br />
Belgrade At A Glance<br />
conversion 0.72 eur = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
EUR 15.00<br />
EUR 14.00<br />
EUR 12.00<br />
N/A<br />
N/A<br />
EUR 16.00<br />
EUR 15.00<br />
EUR 13.00<br />
N/A<br />
N/A<br />
$<br />
$<br />
$<br />
23.23<br />
21.68<br />
18.58<br />
N/A<br />
N/A<br />
$ 24.77<br />
$ 23.23<br />
$ 20.13<br />
N/A<br />
N/A<br />
30.00%<br />
22.00%<br />
27.00%<br />
N/A<br />
N/A<br />
Class B (Secondary)<br />
IndustrIal<br />
EUR 8.00 EUR 10.00 $ 12.39 $ 15.48 N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
EUR<br />
EUR<br />
2.50<br />
3.50<br />
N/A<br />
EUR<br />
EUR<br />
4.50<br />
5.50<br />
N/A<br />
$<br />
$<br />
3.87<br />
5.42<br />
N/A<br />
$<br />
$<br />
6.97<br />
8.52<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
City Center<br />
EUR 40.00 EUR 100.00 $ 61.93 $ 154.84 N/A<br />
Neighborhood Service Centers<br />
Community Power Center (Big Box)<br />
EUR<br />
EUR<br />
8.00<br />
8.00<br />
EUR 30.00<br />
EUR 12.00<br />
$<br />
$<br />
12.39<br />
12.39<br />
$ 46.45<br />
$ 18.58<br />
N/A<br />
5.00%<br />
Regional Malls<br />
EUR 10.00 EUR 70.00 $ 15.48 $ 108.39 N/A<br />
Solus Food Stores<br />
EUR 6.00 EUR 8.00 $ 9.29 $ 12.39 N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
EUR 250.00 EUR 400.00 $ 1,405,160.65 $ 2,248,257.04<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
EUR 50.00 EUR 80.00 $ 281,032.13 $ 449,651.41<br />
EUR 300.00 EUR 450.00 $ 1,686,192.78 $ 2,529,289.17<br />
EUR 200.00 EUR 400.00 $ 1,124,128.52 $ 2,248,257.04<br />
Johannesburg At A Glance<br />
conversion 8.24 Zar = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
ZAR<br />
ZAR<br />
ZAR<br />
ZAR<br />
ZAR<br />
N/A<br />
55.00<br />
20.00<br />
135.00<br />
85.00<br />
62.00<br />
ZAR<br />
ZAR<br />
ZAR<br />
ZAR<br />
ZAR<br />
N/A<br />
85.00 $<br />
95.00 $<br />
210.00 $<br />
225.00 $<br />
150.00 $<br />
N/A<br />
7.44<br />
2.71<br />
18.26<br />
11.50<br />
8.39<br />
N/A<br />
$ 11.50<br />
$ 12.85<br />
$ 28.41<br />
$ 30.44<br />
$ 20.29<br />
N/A<br />
6.90%<br />
20.10%<br />
6.80%<br />
8.40%<br />
10.70%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
ZAR<br />
ZAR<br />
ZAR<br />
22.00<br />
9.00<br />
23.00<br />
ZAR<br />
ZAR<br />
ZAR<br />
34.00 $<br />
30.00 $<br />
38.00 $<br />
2.98<br />
1.22<br />
3.11<br />
$<br />
$<br />
$<br />
4.60<br />
4.06<br />
5.14<br />
4.80%<br />
1.60%<br />
7.50%<br />
City Center<br />
Neighborhood Service Centers<br />
Community Power Center (Big Box)<br />
Regional Malls<br />
Solus Food Stores<br />
ZAR<br />
ZAR<br />
ZAR<br />
ZAR<br />
80.00<br />
150.00<br />
100.00<br />
300.00<br />
N/A<br />
ZAR<br />
ZAR<br />
ZAR<br />
ZAR<br />
300.00 $<br />
350.00 $<br />
200.00 $<br />
650.00 $<br />
N/A<br />
10.82<br />
20.29<br />
13.53<br />
40.59<br />
N/A<br />
$ 40.59<br />
$ 47.35<br />
$ 27.06<br />
$ 87.94<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
ZAR 1,500.00 ZAR 2,000.00 $ 736,686.17 $ 982,248.22<br />
ZAR 4,200.00 ZAR 8,300.00 $ 2,062,721.26 $ 4,076,330.12<br />
ZAR 600.00 ZAR 1,600.00 $ 294,674.47 $ 785,798.58<br />
ZAR 1,600.00 ZAR 8,300.00 $ 785,798.58 $ 4,076,330.12<br />
ZAR 1,500.00 ZAR 2,500.00 $ 736,686.17 $ 1,227,810.28<br />
ZAR 1,000.00 ZAR 2,000.00 $ 491,124.11 $ 982,248.22<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 59
Madrid, Spain<br />
Stockholm, Sweden<br />
Contact<br />
<strong>NAI</strong> <strong>Global</strong><br />
+ 1 609 945 4000<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
195,365<br />
0.7%<br />
$1,366.09<br />
$29,605.05<br />
1.1%<br />
19.3%<br />
1.0%<br />
46.144<br />
A new prime minister from the conservative party will<br />
commence running the country in mid-December, with an<br />
overall majority. He is expected to implement major austerity<br />
measures and policies to stimulate the economy in <strong>2012</strong>.<br />
Unemployment remains high at 20.8% and GDP growth is<br />
expected to be around 0.8% in 2011 with 1% predicted in<br />
<strong>2012</strong> following negative growth in 2010.<br />
In Madrid, the vacancy rate in the office market has continued<br />
to fall and is currently at 10.1%. This is attributed to new stock<br />
coming on the market with no new speculative buildings in<br />
the pipeline. 50,000 SM of vacant space remains in Torre<br />
Cristal in the city center. The vacancy rate is set to increase<br />
with completion of several new projects. Take-up in Q3<br />
2011 was 84,000 SM which is less than the previous year.<br />
In Barcelona, the vacancy rate has slowed to 13.19%, a<br />
significant drop on the previous quarter with prime vacancy<br />
at 9%. Take-up is currently at around 192,000 SM. Space<br />
has been taken-up in Diagonal by Everis and Vodafone.<br />
The housing market in Spain continues to suffer with main<br />
properties up for sale; particularly in the resort areas where<br />
these are often second homes.<br />
The continuing debt crisis has dramatically affected the<br />
investment market as bank lending remains the major obstacle.<br />
In Madrid in 2011, only EUR 218 million had been<br />
invested in the office market. A private investor purchased<br />
an office building in Allagra with the sale totaling EUR 62<br />
million. The prime yields remain stable at 5.75%. In<br />
Barcelona the lack of transactions has helped the yields stay<br />
at 5.75%. It is hoped that some transactions may be<br />
completed by the end of 2011. More opportunistic investors<br />
are beginning to see the possibility for future investments<br />
and are looking for deals from Spanish banks.<br />
In the retail sector, Spanish brands such as Inditex<br />
and Mango, continue to look abroad for growth. Internet<br />
shopping has also grown dramatically in Spain with Gap and<br />
Macys providing this service. Demand remains high in the<br />
prime areas of Barcelona where there is a 0% vacancy rate<br />
and an increase of 6% in rents over the last two years with<br />
Prada, Apple and Ferrari all opening new stores. In Madrid,<br />
the eagerly awaited Abercrombie and Fitch opened as well<br />
as Orange and Pull and Bear.<br />
Contact<br />
<strong>NAI</strong> Svefa<br />
+46 8 441 15 50<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
173,860<br />
2.6%<br />
$474.69<br />
$50,742.11<br />
1.9%<br />
8.2%<br />
2.0%<br />
9.355<br />
Sweden has been in a recession since 2008–2009, when<br />
GDP fell sharply. The recovery accelerated in 2010, but<br />
during the past summer it began rapidly losing momentum.<br />
Financial turbulence swept in from abroad, sending stock<br />
prices plummeting and adding to uncertainty in the market.<br />
Concerned households and businesses are postponing<br />
consumption and investment decisions. Growth is consequently<br />
slowing and unemployment is expected to level out at<br />
around 7.5% in <strong>2012</strong>.<br />
Players in the commercial market include AFA, Alecta,<br />
AMF Pension, Atrium Ljungberg, Diligentia, Fabege,<br />
Hufvudstaden, SEB and Vasakronan. Activity in the<br />
Stockholm market from Q4 2010 through Q2 2011 was<br />
good with recorded transactions in every sector. However,<br />
due to the uncertain world economy and financial<br />
turbulence, we now see that investors are hesitant to make<br />
a move. The majority of those who remain active are<br />
established players with strong financial positions. Foreign<br />
investors with a good financial position continue to show<br />
interest in the market, but are mainly interested in prime<br />
products that are still relatively high priced. Other foreign<br />
investors with difficult financial and debt situations have<br />
been forced to sell their properties. We expect to see this<br />
type of forced selling become more frequent in <strong>2012</strong> since<br />
many loans need to be renegotiated.<br />
Stockholm is expanding with new areas for housing, and in<br />
these areas, some commercial elements are necessary such<br />
as hotels and other services. Approximately 3,100 homes<br />
and 300,000 SM of commercial space are being planned<br />
within the Stockholm city limits. This expansion is mainly<br />
focused in the east areas by the harbor and the west city<br />
area, Kungsholmen.<br />
There is little additional buildable land left in the CBD, but<br />
despite that the city center continues to add new buildings.<br />
The latest addition is Water Front, a conference center with<br />
a hotel and office space that was completed in late 2010.<br />
However, to serve and create new business opportunities,<br />
the infrastructure needs to be improved. At the moment<br />
Stockholm has some ongoing essential projects to fulfill this<br />
requirement. Odenplan is one of the major city planning<br />
areas that is important. During 2011 construction started<br />
on a project called Citybanan, a new station for railway<br />
transportation.<br />
Madrid At A Glance<br />
conversion 0.72 eur = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
22.00<br />
17.00<br />
11.00<br />
15.00<br />
14.50<br />
12.50<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
27.00 $<br />
23.00 $<br />
15.50 $<br />
20.00 $<br />
17.50 $<br />
17.50 $<br />
34.06<br />
26.32<br />
17.03<br />
23.23<br />
22.45<br />
19.35<br />
$ 41.81<br />
$ 35.61<br />
$ 24.00<br />
$ 30.97<br />
$ 27.10<br />
$ 27.10<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
EUR<br />
EUR<br />
EUR<br />
3.50<br />
2.75<br />
4.50<br />
EUR<br />
EUR<br />
EUR<br />
5.00 $<br />
4.00 $<br />
5.50 $<br />
5.42<br />
4.26<br />
6.97<br />
$<br />
$<br />
$<br />
7.74<br />
6.19<br />
8.52<br />
N/A<br />
N/A<br />
N/A<br />
City Center<br />
Neighborhood Service Centers<br />
Community Power Center (Big Box)<br />
Regional Shopping Centers/Malls<br />
Solus Food Stores<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
40.00<br />
8.00<br />
4.00<br />
6.00<br />
8.00<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
EUR<br />
180.00 $<br />
10.00 $<br />
7.00 $<br />
8.00 $<br />
12.00 $<br />
61.93<br />
12.39<br />
6.19<br />
9.29<br />
12.39<br />
$ 278.71<br />
$ 15.48<br />
$ 10.84<br />
$ 12.39<br />
$ 18.58<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
EUR 700.00 EUR 1,050.00 $ 3,934,449.82 $ 5,901,674.73<br />
EUR 210.00 EUR 630.00 $ 1,180,334.95 $ 3,541,004.84<br />
EUR 160.00 EUR 430.00 $ 899,302.82 $ 2,416,876.32<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
Stockholm At A Glance<br />
conversion 6.95 sek = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
SEK<br />
SEK<br />
SEK<br />
SEK<br />
SEK<br />
SEK<br />
SEK<br />
SEK<br />
SEK<br />
3,800.00<br />
2,700.00<br />
1,900.00<br />
1,700.00<br />
1,500.00<br />
1,200.00<br />
800.00<br />
600.00<br />
800.00<br />
SEK 4,900.00 $<br />
SEK 4,000.00 $<br />
SEK 3,000.00 $<br />
SEK 2,600.00 $<br />
SEK 2,400.00 $<br />
SEK 1,600.00 $<br />
SEK 1,300.00 $<br />
SEK 1,200.00 $<br />
SEK 1,300.00 $<br />
50.80<br />
36.09<br />
25.40<br />
22.72<br />
20.05<br />
16.04<br />
10.69<br />
8.02<br />
10.69<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
65.50<br />
53.47<br />
40.10<br />
34.75<br />
32.08<br />
21.39<br />
17.38<br />
16.04<br />
17.38<br />
6.00%<br />
7.00%<br />
7.00%<br />
12.00%<br />
13.00%<br />
17.00%<br />
10.00%<br />
12.00%<br />
15.00%<br />
City Center<br />
SEK 6,500.00 SEK 8,000.00 $ 86.89 $ 106.94 4.00%<br />
Neighborhood Service Centers<br />
Community Power Center (Big Box)<br />
Regional Shopping Centers/Malls<br />
Solus Food Stores<br />
SEK<br />
SEK<br />
SEK<br />
SEK<br />
1,500.00<br />
1,200.00<br />
1,500.00<br />
900.00<br />
SEK 2,800.00 $<br />
SEK 2,700.00 $<br />
SEK 6,000.00 $<br />
SEK 2,000.00 $<br />
20.05<br />
16.04<br />
20.05<br />
12.03<br />
$<br />
$<br />
$<br />
$<br />
37.43<br />
36.09<br />
80.20<br />
26.73<br />
9.00%<br />
7.00%<br />
9.00%<br />
5.00%<br />
deVeloPment land low/ m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
SEK 8,000.00 SEK 15,000.00 $ 4,658,259.19 $ 8,734,235.98<br />
SEK 1,500.00 SEK 3,000.00 $ 873,423.60 $ 1,746,847.20<br />
SEK 650.00 SEK 1,400.00 $ 378,483.56 $ 815,195.36<br />
SEK 500.00 SEK 1,000.00 $ 291,141.20 $ 582,282.40<br />
SEK 1,500.00 SEK 2,500.00 $ 873,423.60 $ 1,455,706.00<br />
N/A SEK 16,000.00 N/A $ 9,316,518.38<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 60
Geneva, Switzerland<br />
Contact<br />
<strong>NAI</strong> Commercial CRE<br />
+ 41 22 707 44 44<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
Due to the financial sector, demand for office premises<br />
remained resilient throughout 2011. In general, the economy<br />
is strong with 2.8% unemployment and Q3 2011 inflation at<br />
0.5%. Despite uncertainties within the Eurozone, combined<br />
with the pegging of the Swiss Franc to the Euro by the<br />
SNB, the appreciation of the Swiss Franc may have a<br />
negative impact on the economy during <strong>2012</strong>. Nonetheless,<br />
in uncertain times, Switzerland remains a stability refuge<br />
within Europe.<br />
The prime office market has performed well, with strong<br />
take-up within the CBD, notably for waterfront premises.<br />
New-comer hedge funds such as Brevan Howard and<br />
BlueCrest and banks such as Morgan Stanley and Barclays<br />
have relocated to new offices. HSBC and Crédit Agricole are<br />
presently renovating their respective new and existing<br />
waterfront premises. Prime rents have remained buoyant,<br />
with waterfront properties renting for around CHF 1,000 to<br />
1,300/SM per year and higher if exceptional properties. The<br />
lake Geneva area around Nyon and Rolle has continued to<br />
grow, however with 30 major developments, supply is on the<br />
increase and this is likely to have a negative impact in <strong>2012</strong>.<br />
Despite this Lloyds bank has announced plans to move their<br />
back offices to Nyon and will join Shire and Craft Foods.<br />
The take-up in the light industrial and warehousing market<br />
has been subdued. Rents remain at CHF120 to 150/SM per<br />
year for production areas and CHF 200 to 375/SM per year<br />
for high tech-office space, depending on the level of build out.<br />
The investment market for landmark buildings has remained<br />
strong with a slightly decreased volume of sales mainly due<br />
to the lack of supply. Net prime yields are currently between<br />
3.75% and 4.0%, and lower for exceptional product.<br />
The retail market has remained stable during 2011. Bally<br />
has relocated from the Rue du Marché to Rue du Rhône and<br />
Moncler has found a niche waterfront location. A large<br />
number of retail units will come on stream in <strong>2012</strong> and<br />
2013 due to important renovations along Rue du Rhône.<br />
Although rents have technically fallen, this was due to<br />
excessive rents being paid by well-known companies<br />
seeking landmark locations at “any price”.<br />
The Geneva office market continues to outpace Zürich at<br />
present and although the future trend for Geneva and the<br />
Lake Geneva region appears good, due to the heavy reliance<br />
on the financial community, there is currently a sense of<br />
uncertainty in the market, pending the more stable settling<br />
of Switzerland’s European neighbors.<br />
Geneva At A Glance<br />
conversion 0.91 cHf = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
CHF 900.00<br />
CHF 850.00<br />
CHF 1,300.00<br />
CHF 1,200.00<br />
$<br />
$<br />
91.88<br />
86.78<br />
$<br />
$<br />
132.72<br />
122.51<br />
0.50%<br />
1.30%<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
CHF 600.00<br />
CHF 450.00<br />
CHF 450.00<br />
CHF 300.00<br />
CHF<br />
CHF<br />
CHF<br />
CHF<br />
750.00<br />
600.00<br />
550.00<br />
450.00<br />
$<br />
$<br />
$<br />
$<br />
61.25<br />
45.94<br />
45.94<br />
30.63<br />
$<br />
$<br />
$<br />
$<br />
76.57<br />
61.25<br />
56.15<br />
45.94<br />
5.00%<br />
3.00%<br />
4.00%<br />
6.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
CHF<br />
CHF<br />
70.00<br />
90.00<br />
CHF<br />
CHF<br />
90.00<br />
150.00<br />
$<br />
$<br />
7.15<br />
9.19<br />
$<br />
$<br />
9.19<br />
15.31<br />
0.80%<br />
1.00%<br />
High Tech/R&D<br />
retaIl<br />
CHF 250.00 CHF 360.00 $ 25.52 $ 36.75 3.50%<br />
City Center<br />
CHF 3,250.00 CHF 4,500.00 $ 331.79 $ 459.41 0.30%<br />
Neighborhood Service Centers<br />
Community Power Center (Big Box)<br />
Regional Shopping Centers/Malls<br />
Solus Food Stores<br />
CHF 450.00<br />
N/A<br />
CHF 350.00<br />
N/A<br />
CHF<br />
CHF<br />
500.00<br />
N/A<br />
600.00<br />
N/A<br />
$<br />
$<br />
45.94<br />
N/A<br />
35.73<br />
N/A<br />
$<br />
$<br />
51.05<br />
N/A<br />
61.25<br />
N/A<br />
5.00%<br />
N/A<br />
1.00%<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
15,937<br />
1.8%<br />
$544.07<br />
$69,435.00<br />
0.5%<br />
2.8%<br />
N/A<br />
7.836<br />
CHF 30,000.00 CHF 50,000.00 $ 133,413,055.05 $ 222,355,091.74<br />
CHF 700.00 CHF 1,200.00 $ 3,112,971.28 $ 5,336,522.20<br />
CHF 200.00 CHF 300.00 $ 889,420.37 $ 1,334,130.55<br />
CHF 250.00 CHF 400.00 $ 1,111,775.46 $ 1,778,840.73<br />
CHF 1,000.00 CHF 1,500.00 $ 4,447,101.83 $ 6,670,652.75<br />
N/A N/A N/A N/A<br />
Zürich, Switzerland<br />
Contact<br />
<strong>NAI</strong> Commercial CRE<br />
+41 44 221 04 04<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
The Greater Zürich Area (GZA) has seen slow but stable<br />
progress during 2011. Strengthened by unemployment at<br />
2.8% (national) and Q3 2011 inflation at 0.5%, the economic<br />
factors are good despite the strong Swiss Franc. Financial<br />
users are the principle movers, with several large premium<br />
office buildings coming on stream, notably in the west of<br />
Zurich. Zug has continued to see strong demand with<br />
numerous head offices relocating to new developments.<br />
Despite the activity in the new Züriwest area, where there<br />
has been take-up by Deutsche Bank, Citibank, Zürich<br />
Kantonalbank in addition to Ernst and Young and a new<br />
Marriott Hotel, the traditional Bahnhofstrasse prime area has<br />
seen a slight dip in rents and stagnation in vacant premises.<br />
Nonetheless, prime rents remain around CHF 850/SM per<br />
year for well located air-conditioned premises. A number of<br />
on-going office developments in the Zürich area will come<br />
on stream during <strong>2012</strong> and may potentially have a negative<br />
impact on supply and demand. Zug area developments have<br />
seen excellent take up during 2011, with a large number of<br />
already fully pre-let buildings set to come on stream in <strong>2012</strong><br />
and 2013.<br />
Due to continued pressure on the Swiss Franc, despite efforts<br />
by the Swiss National Bank to subdue the situation by forcing<br />
a maintained level, manufacturing, production and warehousing<br />
have been impacted negatively by the Eurozone problems<br />
and the strong Swiss Franc. The situation is currently stable,<br />
however uncertainty persists as to whether this will continue.<br />
Demand has been low in this sector, with an increasing level<br />
of separation or companies seeking alternative solutions.<br />
Investment remains strong due to the short supply of available<br />
investment properties, though an increasing number of sale<br />
and lease backs have been noted. Prime yields are transacting<br />
at rates between 4% and 4.5% for prime properties,<br />
depending on the quality of building and tenant mix.<br />
In the main retail High Street market, there has been little<br />
movement since early 2011. Bahnhofstrasse retailers have<br />
profited and carried out renovations. Shopping centers have<br />
continued their development notably with Zürich airport<br />
attracting an even wider range of high class retailer.<br />
Currently, rental levels for retail are higher than Geneva with<br />
rents in excess of CHF 5,000/SM per year.<br />
Zürich is poised to stay ahead in the market for the first six<br />
months of <strong>2012</strong> despite the economic situation and the<br />
impending issues which will result from the next series of<br />
Eurozone problems.<br />
Zürich At A Glance<br />
conversion 0.91 cHf = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
CHF<br />
CHF<br />
CHF<br />
CHF<br />
CHF<br />
CHF<br />
750.00 CHF<br />
700.00 CHF<br />
400.00 CHF<br />
350.00 CHF<br />
300.00 CHF<br />
280.00 CHF<br />
900.00<br />
800.00<br />
575.00<br />
480.00<br />
420.00<br />
375.00<br />
$ 76.57<br />
$ 71.46<br />
$ 40.84<br />
$ 35.73<br />
$ 30.63<br />
$ 28.59<br />
$ 91.88<br />
$ 81.67<br />
$ 58.70<br />
$ 49.00<br />
$ 42.88<br />
$ 38.28<br />
N/A<br />
2.00%<br />
4.00%<br />
4.00%<br />
4.00%<br />
5.00%<br />
Bulk Warehouse<br />
CHF 70.00 CHF 90.00 $ 7.15 $ 9.19 1.00%<br />
Manufacturing<br />
CHF 80.00 CHF 150.00 $ 8.17 $ 15.31 1.00%<br />
High Tech/R&D<br />
retaIl<br />
CHF 200.00 CHF 350.00 $ 20.42 $ 35.73 5.00%<br />
City Center<br />
CHF 3,500.00 CHF 5,500.00 $ 357.32 $ 561.50 0.30%<br />
Neighborhood Service Centers<br />
Community Power Center (Big Box)<br />
Regional Shopping Centers/Malls<br />
Solus Food Stores<br />
CHF<br />
CHF<br />
450.00 CHF<br />
N/A<br />
450.00 CHF<br />
N/A<br />
500.00<br />
N/A<br />
800.00<br />
N/A<br />
$ 45.94<br />
N/A<br />
$ 45.94<br />
N/A<br />
$ 51.05<br />
N/A<br />
$ 81.67<br />
N/A<br />
2.00%<br />
N/A<br />
3.00%<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
15,937<br />
1.8%<br />
$544.07<br />
$69,435.00<br />
0.5%<br />
2.8%<br />
N/A<br />
7.836<br />
CHF 30,000.00 CHF 50,000.00 $133,413,055.05 $ 222,355,091.74<br />
CHF 700.00 CHF 1,000.00 $ 3,112,971.28 $ 4,447,101.83<br />
CHF 250.00 CHF 350.00 $ 1,111,775.46 $ 1,556,485.64<br />
CHF 300.00 CHF 500.00 $ 1,334,130.55 $ 2,223,550.92<br />
CHF 1,000.00 CHF 2,000.00 $ 4,447,101.83 $ 8,894,203.67<br />
N/A N/A N/A N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 61
Istanbul, Turkey<br />
Kiev, Ukraine<br />
Contact<br />
<strong>NAI</strong> Treas<br />
+90 216 481 47 00<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
302,535<br />
3.6%<br />
$789.60<br />
$10,916.69<br />
5.7%<br />
10.7%<br />
5.8%<br />
72.33<br />
On the heals of positive economic figures that included GDP<br />
growth approaching 9% in Q4 2011, <strong>2012</strong> has continued<br />
the favorable trend. Turkey will achieve GDP growth of 5.3%<br />
in 2011 compared with the CEE average of 1.8%. The<br />
consumer confidence index increased 8.2% points in 2011<br />
and should reach a level of 70% in February <strong>2012</strong>.<br />
Total modern office stock in Istanbul is 1.9 million SM. The<br />
supply of prime office space in the CBD is limited and the<br />
vacancy rate is rapidly decreasing. Therefore, rents continue<br />
to rise. Umraniye has become the most popular district on<br />
the Asian side for office development. The affordable rental<br />
rates compared to the European side and availability of<br />
suitable properties for construction make Umraniye more<br />
attractive. The largest completed projects in the office<br />
market included the Zorlu Mixed Use Project in Zincirlikuyu,<br />
and Eroglu Office Project with 75,000 SM of GLA in<br />
Umraniye. Both projects delivered in Q4 <strong>2012</strong>.<br />
The retail market indicators have become more positive in<br />
2011. The total inventory of leasable area has reached 2.6<br />
million SM, with 90 shopping centers in Istanbul. The<br />
average rental rates in shopping centers range from $35 to<br />
$70/SM per month, although the rental rates in the main<br />
districts are between $47.50 to $150/SM per month. In Q1<br />
2011, six shopping centers opened in Turkey with a total of<br />
400,000 SM GLA.<br />
The industrial market was most affected by the global<br />
economic crisis. The rapid regression during the second and<br />
the third quarters of 2011 has now stabilized and new<br />
investment was initiated in Q4 2011 with 1.9 million SM of<br />
new construction licenses.<br />
After the recession in the Turkish real estate market, new<br />
investment transactions were realized in 2011 and this trend<br />
is likely to continue. The yield trends for the office and the<br />
retail markets increased in 2011 and that is expected to<br />
continue into <strong>2012</strong>.<br />
Contact<br />
<strong>NAI</strong> Pickard<br />
+380 44 278 00 02<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
233,000<br />
4.5%<br />
$157.66<br />
$3,484.14<br />
10.8%<br />
7.7%<br />
7.8%<br />
45.25<br />
Compared to most western economies averaging less than<br />
1% GDP growth, the Ukrainian economy this year should<br />
achieve a healthy 6%, which is based on strong long term<br />
fundamentals and primary products; currently iron and steel<br />
but with agricultural commodity prices rising by up to 30%<br />
world wide, food products are increasingly more significant.<br />
The current high growth rates and these mid to long term<br />
fundamentals are already causing a stir in the retail sector<br />
which has been the first to react. The vacancy rate for<br />
shopping centers in Kyiv is currently about 2%. Half of the<br />
total Ukrainian retail turnover market is concentrated in the<br />
“Big 6”; Kyiv, Kharkiv, Lviv, Odesa, Dnipropetrovsk and<br />
Donetsk where there are approximately 90 operating<br />
retail/entertainment centers. There was a significant growth<br />
of retail space in the capital in 2011 with the opening of the<br />
second phase of Dream Town (82,000 SM) and Promenada<br />
Park (43,000 SM). The average rental rates in high quality<br />
shopping centers have increased up to $80 to $90/SM per<br />
month and in the middle quality lots of 100 to 300 SM they<br />
are $60 to 70/SM. Average market rental rates can range<br />
from $20 to $200/SM. Facade retail space in central Kyiv<br />
starts at $60 (CBD) up to $250 (prime location) per SM.<br />
Another sector to react is hospitality, due to the economic<br />
fundamentals, but also because of Euro <strong>2012</strong> and tax<br />
incentives offered by the government for hotel projects that<br />
open before June <strong>2012</strong>. In addition to the six hotels already<br />
operating, there should be at least six more by <strong>2012</strong>.<br />
The average rental rates in the office market of Kyiv are<br />
currently $30 to $35/SM in Class A, $18 to $25/SM in<br />
Class B with vacancy rates of 6% to 7% and 12% to 13%<br />
respectively. During 2011 the amount of office space has<br />
increased by 110,000 SM, mostly all of it in the Class B<br />
segment. In <strong>2012</strong> about 270,000 SM is expected to be<br />
added to the stock. The vacancy rate in the warehouse<br />
market is 14%, and rental rates are low at $5 to $6 per<br />
month excluding the operational expenses. Consequently<br />
only 106,000 SM of warehouse space was added in 2011,<br />
the largest being the warehouse complex Technoyarmarok-1<br />
with 12,000 SM. Prime yields in Kyiv can vary from 12% to<br />
16% depending on quality and/or location.<br />
Istanbul At A Glance<br />
conversion 0.72 eur = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
EUR 360.00<br />
EUR 300.00<br />
EUR 243.00<br />
EUR 230.00<br />
EUR 200.00<br />
EUR 121.00<br />
EUR 700.00<br />
EUR 550.00<br />
EUR 262.00<br />
EUR 300.00<br />
EUR 190.00<br />
EUR 227.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
46.45<br />
38.71<br />
31.35<br />
29.68<br />
25.81<br />
15.61<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
90.32<br />
70.97<br />
33.81<br />
38.71<br />
24.52<br />
29.29<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
EUR<br />
EUR<br />
EUR<br />
54.00<br />
40.00<br />
64.00<br />
EUR<br />
EUR<br />
EUR<br />
66.00<br />
56.00<br />
68.00<br />
$<br />
$<br />
$<br />
6.97<br />
5.16<br />
8.26<br />
$<br />
$<br />
$<br />
8.52<br />
7.23<br />
8.77<br />
N/A<br />
N/A<br />
N/A<br />
City Center<br />
Neighborhood Service Centers<br />
Community Power Center (Big Box)<br />
Regional Shopping Centers/Malls<br />
Solus Food Stores<br />
EUR 750.00<br />
EUR 306.00<br />
EUR 300.00<br />
EUR 400.00<br />
EUR 250.00<br />
EUR 1,800.00<br />
EUR 890.00<br />
EUR 668.00<br />
EUR 780.00<br />
EUR 400.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
96.77<br />
39.48<br />
38.71<br />
51.61<br />
32.26<br />
$<br />
$<br />
$<br />
$<br />
$<br />
232.26<br />
114.84<br />
86.19<br />
100.64<br />
51.61<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
EUR 850.00 EUR 4,015.00 $ 4,777,546.21 $ 22,566,880.03<br />
N/A N/A N/A N/A<br />
EUR 265.00 EUR 650.00 $ 1,489,470.29 $ 3,653,417.69<br />
EUR 375.00 EUR 1,600.00 $ 2,107,740.97 $ 8,993,028.15<br />
EUR 560.00 EUR 4,200.00 $ 3,147,559.85 $ 23,606,698.91<br />
EUR 250.00 EUR 2,000.00 $ 1,405,160.65 $ 11,241,285.19<br />
Kiev At A Glance<br />
conversion 8.02 uaH = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
cItY center offIce<br />
New Construction<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
City Center<br />
Neighborhood Service Centers<br />
Community Power Center (Big Box)<br />
Regional Shopping Centers/Malls<br />
Solus Food Stores<br />
low High low High Vacancy<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A N/A N/A N/A N/A<br />
UAH 220.00 UAH 320.00 $ 30.58 $ 44.48 N/A<br />
UAH 120.00 UAH 200.00 $ 16.68 $ 27.80 N/A<br />
N/A N/A N/A N/A N/A<br />
UAH 80.00 UAH 96.00 $ 11.12 $ 13.34 N/A<br />
UAH 64.00 UAH 80.00 $ 8.90 $ 11.12 N/A<br />
UAH 32.00 UAH 80.00 $ 4.45 $ 11.12 N/A<br />
N/A N/A N/A N/A N/A<br />
N/A N/A N/A N/A N/A<br />
UAH 560.00 UAH 2,000.00 $ 77.84 $ 278.01 N/A<br />
UAH 130.00 UAH 350.00 $ 18.07 $ 48.65 N/A<br />
UAH 130.00 UAH 365.00 $ 18.07 $ 50.74 N/A<br />
UAH 370.00 UAH 660.00 $ 51.43 $ 91.74 N/A<br />
UAH 90.00 UAH 135.00 $ 12.51 $ 18.77 N/A<br />
UAH 8,000.00 UAH 24,000.00 $ 4,036,770.74 $12,110,312.23<br />
UAH 250.00 UAH 1,000.00 $ 126,149.09 $ 504,596.34<br />
UAH 50.00 UAH 200.00 $ 25,229.82 $ 100,919.27<br />
UAH 30.00 UAH 150.00 $ 15,137.89 $ 75,689.45<br />
UAH 3,000.00 UAH 10,000.00 $ 1,513,789.03 $ 5,045,963.43<br />
UAH 800.00 UAH 3,200.00 $ 403,677.07 $ 1,614,708.30<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 62
Birmingham, England, United Kingdom<br />
Edinburgh, Scotland, United Kingdom<br />
Contact<br />
<strong>NAI</strong> Haywards<br />
+44 20 7101 0200<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
94,058<br />
1.0%<br />
$2,173.00<br />
$34,800.00<br />
5.0%<br />
8.3%<br />
0.5%<br />
62.262<br />
Birmingham has the second largest urban economy in the<br />
United Kingdom. Historically known for its manufacturing,<br />
the city has seen a shift to a service economy, which now<br />
accounts for 86% of its employment. It is the largest center<br />
for employment in public administration, education and<br />
health in the UK. It is the third largest retail center behind<br />
London’s West End and Glasgow.<br />
Although office availability stands at 750,000 SF, this is<br />
expected to be absorbed over the next two to three years.<br />
There has been a return to speculative development with<br />
Hines’s 305,000 SF project (Two Snowhill). This was the first<br />
major speculative project to be started in a provincial office<br />
center in almost a year. Although headline rents are<br />
expected to remain stable, incentive packages are likely to<br />
shrink as Class A space is absorbed.<br />
While industrial take up remains strong, this is at reduced<br />
levels to that experienced in 2010 when the logistics market<br />
was driven by retailer demand. The absence of speculative<br />
development is creating a shortage of modern well-specified<br />
distribution properties which is creating intense competition<br />
between occupiers. This is forcing occupiers to take older,<br />
less well-specified units and to consider “design and build”<br />
solutions. The region has three of the four vacant warehouse<br />
units in excess of 500,000 SF currently available in the<br />
UK. The largest letting in the area was to Amazon (Towers<br />
Business Park, Rugelely, 700,000 SF) for well under the<br />
asking terms of £4.75/SF. Prime yields in the region stand<br />
at 6.75%.<br />
The prime retail area of Birmingham is the Bull Ring, which<br />
is anchored by Debenhams and Selfridges. Overall, retail<br />
vacancy rates have fallen for the second year with the prime<br />
stock continuing to let. Birmingham has a “Big City Plan”<br />
part of which addresses how future economic growth can<br />
be achieved by expanding the city’s core area. The plan is<br />
expected to deliver 16 million SF of new office, retail, leisure<br />
and cultural floor space. This will, in turn, create 50,000<br />
new jobs and a £2.1 billion growth in the local economy per<br />
annum. The five key areas for transformation are based<br />
around New Street Station, Westside, the Snow Hill District,<br />
Eastern Core Expansion and The Southern Gateway.<br />
Contact<br />
<strong>NAI</strong> Haywards<br />
+44 20 7101 0200<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
94,058<br />
1.0%<br />
$2,173.00<br />
$34,800.00<br />
5.0%<br />
8.3%<br />
0.5%<br />
62.262<br />
The economy of Edinburgh is largely based on the service<br />
sector. It is particularly recognized for its financial services<br />
industry being the UK’s second financial center after London<br />
and Europe’s fourth by assets. As a World Heritage Site,<br />
tourism is an important employer. It is the center of<br />
Scotland’s government and legal system, both of which have<br />
separate powers and identity to the rest of the UK.<br />
There has been no increase in rents over the past 12<br />
months, although availability of Class A space has fallen by<br />
c.50% since mid 2010. The change in Edinburgh’s fortunes<br />
is demonstrated by Waverley Gate, a 217,000 SF office<br />
project. When the owner, Castlemore Securities went into<br />
administration in 2009, there was over 200,000 SF to let.<br />
Lettings to Amazon (58,000 SF) and others has reduced the<br />
available space to c.40,000 SF. There are just two office<br />
projects under construction. The biggest is the city of<br />
Edinburgh Council’s 186,500 SF speculative development<br />
as part of the extension of the Edinburgh International<br />
Conference Center, which will be completed in 2013.<br />
The prime industrial location is the area along the M8<br />
motorway that runs between Glasgow and Edinburgh<br />
referred to as the “Central Belt”. Within this area, modern,<br />
well specified units remain in short supply which contrasts<br />
with an oversupply of secondary industrial properties.<br />
The availability of government grants is driving some<br />
projects (e.g. Eurocentral, 200,000 SF of new build underway)<br />
rather than occupier demand. Access to finance and limited<br />
rental growth prospects remain a barrier to speculative<br />
development. Scotland saw one of the largest transactions<br />
in the UK during the year with Amazon acquiring 1.0 million<br />
SF in Dunfermline in March 2011 on undisclosed terms. The<br />
investment market remains stable with prime yields at<br />
6.75%.<br />
Overall, Scottish retail sales figures continue to under<br />
perform the UK average. Substantial investment is underway<br />
to expand and redevelop a number of flagship retail sites<br />
across the city, including Princes Street and the St James<br />
Center. Outside Edinburgh, Scotland’s biggest ever<br />
regeneration project on a 266 acre site at Leith has outline<br />
planning consent for 15,000 homes, 1.4 million SF of offices<br />
and 970,000 SF of retail, leisure and community facilities.<br />
Nearby Resolution Property has been picked as the<br />
preferred bidder for the Ocean Terminal Shopping Center<br />
(420,000 SF shopping mall, asking price £95 million, initial<br />
yield 7%).<br />
Birmingham At A Glance<br />
conversion 0.62 GbP = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
GBP<br />
N/A<br />
25.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
GBP<br />
N/A<br />
28.50<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 40.32<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$<br />
N/A<br />
45.97<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
12.50%<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
GBP<br />
GBP<br />
2.75<br />
2.75<br />
N/A<br />
GBP<br />
GBP<br />
5.25<br />
5.25<br />
N/A<br />
$<br />
$<br />
4.44<br />
4.44<br />
N/A<br />
$<br />
$<br />
8.47<br />
8.47<br />
N/A<br />
15.00%<br />
15.00%<br />
N/A<br />
City Center<br />
Neighborhood Service Centers<br />
Community Power Center (Big Box)<br />
Regional Shopping Centers/Malls<br />
Solus Food Stores<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
GBP 300.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 483.87<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/acre High/acre low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
Edinburgh At A Glance<br />
conversion 0.62 GbP = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
N/A<br />
GBP 25.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
GBP 27.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 40.32<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 43.55<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
12.00%<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
GBP<br />
GBP<br />
3.00<br />
3.00<br />
N/A<br />
GBP<br />
GBP<br />
5.25<br />
5.25<br />
N/A<br />
$<br />
$<br />
4.84<br />
4.84<br />
N/A<br />
$<br />
$<br />
8.47<br />
8.47<br />
N/A<br />
15.00%<br />
15.00%<br />
N/A<br />
City Center<br />
Neighborhood Service Centers<br />
Community Power Center (Big Box)<br />
Regional Shopping Centers/Malls<br />
Solus Food Stores<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
GBP 210.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 338.71<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/acre High/acre low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
2010 <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 63
Leeds, England, United Kingdom<br />
London, England, United Kingdom<br />
Contact<br />
<strong>NAI</strong> Haywards<br />
+44 20 7101 0200<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
94,058<br />
1.0%<br />
$2,173.00<br />
$34,800.00<br />
5.0%<br />
8.3%<br />
0.5%<br />
62.262<br />
Leeds is the largest financial service center outside London<br />
based on the number of staff employed. The economy has<br />
shifted away from manufacturing with an even split between<br />
the public sector, finance and leisure employment. In 2011,<br />
it was announced that four sites totaling c.350 acres in<br />
Leeds will become enterprise zones, with the aim of creating<br />
new jobs and investment in the region.<br />
Office leasing activity is slightly up from 2010 although<br />
headline rents have remained steady. Take up has been<br />
supported by three large transactions; Asda (The Mint,<br />
38,039 SF), Redmayne Bentley (9 Bond Court, 13,930 SF)<br />
and Clarion Solicitors (Elizabeth House, 15,000 SF). There<br />
are two large pre-let requirements in the office market;<br />
Walker Morris (100,000 SF) and KPMG (60,000 SF). Availability<br />
is expected to increase as public sector occupiers<br />
seek to consolidate their space needs. This will release<br />
largely secondary stock onto the market. It is unlikely that<br />
this will affect demand for Class A space and the rents paid.<br />
Supply of industrial stock over 100,000 SF in the region has<br />
reduced significantly over the last 12 months, underpinned<br />
by a few large transactions; Debenhams (Sherburn,<br />
660,000 SF) and online retailer ASOS (Barnsley, 550,000<br />
SF). While the headline numbers look healthy, the market is<br />
still heavily biased towards the occupier as each of the<br />
completed deals have significant incentive packages<br />
attached. The supply of good quality stock is now limited,<br />
forcing occupiers to either compromise on specification or<br />
look at “design and build” solutions as little speculative<br />
development is anticipated. Prime investment yields are<br />
c.7.25%.<br />
Department stores within Leeds include Debenhams, House<br />
of Fraser and Harvey Nichols. Leeds is described as the<br />
‘Knightsbridge of the North’ and is consistently ranked as<br />
one of the UK’s top five retail destinations. The £350 million<br />
Trinity Walk project will see the redevelopment of over 1<br />
million SF of prime retail and leisure space in the city center,<br />
scheduled for completion in Spring 2013. The retail-led<br />
project will create 4,000 retail and leisure jobs and will<br />
transform a site north east of Leeds city center, most of<br />
which has been empty for the past four decades. The plans<br />
are scaled down from proposals which stalled two years ago<br />
due to the economic downturn.<br />
Contact<br />
<strong>NAI</strong> Haywards<br />
+44 20 7101 0200<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
94,058<br />
1.0%<br />
$2,173.00<br />
$34,800.00<br />
5.0%<br />
8.3%<br />
0.5%<br />
62.262<br />
The position of London as a major financial, tourist and<br />
transport hub has resulted in its economy remaining fairly<br />
buoyant during the recession. This is in contrast to the<br />
remainder of the UK. In addition there have been significant<br />
capital investment projects upgrading London’s infrastructure<br />
(e.g. Crossrail, Olympic Park projects). The Olympics Games<br />
in <strong>2012</strong> will give a further boost to the regional economy.<br />
The Central London office market consists of the West<br />
End, City and Docklands. The supply of Class A office<br />
accommodation continues to fall, although take up is above<br />
its long term average. In the West End, limited supply<br />
has resulted in rents increasing and incentive packages<br />
shrinking; this trend is set to continue over the next year.<br />
Key lettings include Debenhams (Regents Place 150,000<br />
SF). The City has also seen improved take up, but developers<br />
are delaying projects due to the economic uncertainty. This<br />
will mean that two to three years out, the choice of Class A<br />
space will be restricted.<br />
The investment market has remained buoyant with 11-12<br />
St James’s Square (£147 million, 5.45%) being a<br />
benchmark sale. Overseas investors account for 55% of<br />
transactions by value. Significantly the City has seen a<br />
synchronized sell off as over £5 billion of property is<br />
currently on the market; effectively one year’s transaction<br />
value on the market at one time.<br />
The proximity of Heathrow Airport continues to have a<br />
positive impact on warehouse rents, which are rising faster<br />
than the national average. This is being driven by third party<br />
logistics providers and retail distribution. Although vacancy<br />
rates have remained unchanged for two years at just under<br />
9%, there are signs of a shortage of Class A space. As a<br />
consequence, we expect to see more “design and build”<br />
speculative development in and around Heathrow over the<br />
next 12 months. The largest <strong>report</strong>ed deal was DB<br />
Schenker’s new UK HQ and warehouse facility (The Portal,<br />
Heathrow 106,500 SF) based on a headline rent of<br />
£14.00/SF, the largest pre-let at Heathrow for five years.<br />
Demand from the luxury retail market is growing with<br />
effectively no vacancies in the prime West End streets (e.g.<br />
Bond Street). In September, Westfield’s Stratford City<br />
opened. Close to the Olympic Park in East London, the<br />
center provides 1.8 million SF of retail space as part of 13.5<br />
million SF mixed use project.<br />
Leeds At A Glance<br />
conversion 0.62 GbP = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
N/A<br />
GBP 24.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
GBP<br />
N/A<br />
25.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 38.71<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 40.32<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
10.00%<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
GBP<br />
GBP<br />
2.00<br />
2.00<br />
N/A<br />
GBP<br />
GBP<br />
4.25<br />
4.25<br />
N/A<br />
$<br />
$<br />
3.23<br />
3.23<br />
N/A<br />
$<br />
$<br />
6.85<br />
6.85<br />
N/A<br />
15.00%<br />
15.00%<br />
N/A<br />
City Center<br />
Neighborhood Service Centers<br />
Community Power Center (Big Box)<br />
Regional Shopping Centers/Malls<br />
Solus Food Stores<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
GBP 260.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 419.35<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/acre High/acre low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
London At A Glance<br />
conversion 0.62 GbP = 1 us$ RENT/SF/YR RENT/SF/YR<br />
low High low High Vacancy<br />
offIce West end<br />
Mayfair<br />
GBP 90.00 GBP 105.00 $ 145.16 $ 169.35 5.90%<br />
Victoria<br />
GBP 55.00 GBP 63.00 $ 88.71 $ 101.61 N/A<br />
Midtown<br />
offIce cItY<br />
GBP 42.50 GBP 50.00 $ 68.55 $ 80.65 N/A<br />
Core<br />
Fringe<br />
Docklands<br />
IndustrIal sPace<br />
Greater London<br />
West London<br />
retaIl sPace (Zone a)<br />
GBP<br />
GBP<br />
GBP<br />
GBP<br />
GBP<br />
45.00<br />
30.00<br />
30.00<br />
5.00<br />
8.75<br />
GBP<br />
GBP<br />
GBP<br />
GBP<br />
GBP<br />
55.00<br />
35.00<br />
36.00<br />
11.50<br />
13.50<br />
$<br />
$<br />
$<br />
$<br />
$<br />
72.58<br />
48.39<br />
48.39<br />
8.06<br />
14.11<br />
$<br />
$<br />
$<br />
$<br />
$<br />
88.71<br />
56.45<br />
58.06<br />
18.55<br />
21.77<br />
7.70%<br />
N/A<br />
6.90%<br />
10.00%<br />
9.00%<br />
Oxford Street (Zone A)<br />
GBP 300.00 GBP 750.00 $ 483.87 $ 1,209.68 N/A<br />
Bond Street (Zone A)<br />
Sloane Street (Zone A)<br />
City (Zone A)<br />
GBP 250.00<br />
N/A<br />
N/A<br />
GBP 1,000.00<br />
N/A<br />
N/A<br />
$ 403.23<br />
N/A<br />
N/A<br />
$ 1,612.90<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/acre High/acre low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
2010 <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 64
Manchester, England, United Kingdom<br />
Contact<br />
<strong>NAI</strong> Haywards<br />
+44 20 7101 0200<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
94,058<br />
1.0%<br />
$2,173.00<br />
$34,800.00<br />
5.0%<br />
8.3%<br />
0.5%<br />
62.262<br />
The City’s economy is now largely service based with financial<br />
services, life sciences, cultural and media being the main<br />
sectors. The wider urban area is the third largest in the UK<br />
and is second in the UK for inward investment after London.<br />
It is ranked second in the UK and 12th in Europe as the “best<br />
place to do business”. Manchester was voted best UK city<br />
outside London for availability of retail, leisure amenities and<br />
a lively city environment. It is the third most visited UK city by<br />
foreign visitors.<br />
Annual take up of office space is likely to be below the long<br />
term average of 850,000 SF per annum. There are several<br />
large occupiers who are in negotiation for space (KPMG<br />
55,000 SF; Pannone Solicitors 80,000 SF; Lloyds Banking<br />
Group 180.000 SF). The Co-operative Group has launched<br />
the first phase of its NOMA project; an £800 million project<br />
set to transform 20 acres of Manchester City Center providing<br />
4 million SF of office, retail, residential and leisure space. As<br />
part of the project, the group will occupy a new 400,000 SF<br />
HQ building. The BBC has moved 2,500 jobs to Media City,<br />
Salford, a regeneration area to the west of the City Center,<br />
including five London based departments as part of its cost<br />
cutting program.<br />
Although warehouse take up remained strong, activity levels<br />
are well below those experienced in 2010. This fall in take up<br />
has been mirrored by a fall in availability, particularly for larger<br />
unit sizes where there is an acute shortage of supply. With no<br />
speculative development taking place, this is forcing occupiers<br />
to consider “design and build” solutions. During the year, there<br />
were significant transactions, including a new 450,000 SF<br />
distribution facility for Waitrose at Chorley. The investment<br />
market remains strong underlined by the current availability<br />
of a well let distribution unit in Trafford Park (360,000 SF,<br />
£28.7 million, 6.5%).<br />
The Arndale Center is the primary shopping center, anchored<br />
by Next and BHS. Outside the Arndale Center retailing is<br />
fragmented with various enclaves including the new<br />
Spinningfields development. Outside the City Center, Trafford<br />
Center rents have also remained around the £400 Zone A<br />
mark with new arrivals including Banana Republic and<br />
Hollister.<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
Manchester At A Glance<br />
conversion 0.62 GbP = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
cItY center offIce<br />
New Construction<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
GBP<br />
N/A<br />
25.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
GBP 29.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 40.32<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 46.77<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
15.50%<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
GBP<br />
GBP<br />
3.00<br />
3.00<br />
N/A<br />
GBP<br />
GBP<br />
5.00<br />
5.00<br />
N/A<br />
$<br />
$<br />
4.84<br />
4.84<br />
N/A<br />
$<br />
$<br />
8.06<br />
8.06<br />
N/A<br />
15.00%<br />
15.00%<br />
N/A<br />
City Center<br />
Neighborhood Service Centers<br />
Community Power Center (Big Box)<br />
Regional Shopping Centers/Malls<br />
Solus Food Stores<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
GBP 230.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 370.97<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/acre High/acre low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
<br />
<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 65
Latin America<br />
sectIon contents<br />
Buenos Aires, Argentina<br />
Nassau, The Bahamas<br />
Rio de Janeiro, Brazil<br />
Sao Paulo, Brazil<br />
Santiago, Chile<br />
Bogotá, Colombia<br />
San Jose, Costa Rica<br />
Santo Domingo, Dominican Republic<br />
Kingston, Jamaica<br />
Ciudad Juarez, Chihuahua, Mexico<br />
Guadalajara, Jalisco, Mexico<br />
Guanajuato, Mexico<br />
Matamoros, Tamaulipas, Mexico<br />
Mexicali, Baja California, Mexico<br />
Mexico City, Mexico<br />
Monterrey, Nuevo Leon, Mexico<br />
Querétaro, Mexico<br />
Reynosa, Tamaulipas, Mexico<br />
Saltillo, Coahuila, Mexico<br />
San Luis Potosi, Mexico<br />
Tijuana, Baja California, Mexico<br />
Panama City, Republic of Panama<br />
Lima, Peru<br />
Caracas, Venezuela
Buenos Aires, Argentina<br />
Nassau, The Bahamas<br />
Contact<br />
<strong>NAI</strong> Castro Cranwell<br />
& Weiss S.A.<br />
+1 54 11 4320 4320<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
1,073,500<br />
4.0%<br />
$362.99<br />
$8,874.94<br />
10.6%<br />
8.6%<br />
9.0%<br />
40.9<br />
The Argentine economy is expected to realize a 7% growth<br />
in 2011 as the agricultural and commodities sectors<br />
benefit from high prices, and loose fiscal policies continue<br />
to push consumer demand. The economy is expected<br />
to continue expanding throughout <strong>2012</strong> at a rate of<br />
approximately 5% based on Argentina’s competitive<br />
advantages in sectors like agribusiness, commodities,<br />
tourism and specialized manufacturing.<br />
The commercial real estate market was stable in 2011<br />
with soft demand and no new significant commercial<br />
buildings in the market, so that vacancy stayed around 8%.<br />
Lease prices remained stable, with Class A lease prices at<br />
approximately $32/SM/month in new buildings like Madero<br />
Office, the first green building finished in Argentina. Class<br />
B space and suburban offices have seen values remain<br />
flat in 2011 with transactions being completed in the $15<br />
to $20/SM/month range as companies emphasized cost<br />
savings. Significant transactions were done by Oracle<br />
which leased 5,300 SM in Puerto Madero and Vostu<br />
with 5,000 SM in the same area. In a suburban Class A<br />
building, Dow took 5,000 SM paying approximately<br />
$18/SM.<br />
Premium industrial parks and logistics facilities maintained<br />
their values, with the values and vacancy levels remaining<br />
in the low single digits. This segment in Argentina continues<br />
to be underserviced and demand is continuing to increase<br />
with the overall economy. In the other markets segments,<br />
warehouse space vacancy increased slightly.<br />
Top retail lease values remained flat during 2011 both in<br />
High Street properties and shopping centers. Nevertheless,<br />
the retail market continues to be under serviced as is<br />
evident by the inauguration of new shopping centers and<br />
full occupancy in high-end sectors. Cap rates also<br />
remained flat in 2011 and are generally in the 10% to 14%<br />
range, although there continues to be a lack of sellers,<br />
particularly of premium properties.<br />
Although the political uncertainties were solved by the new<br />
re-election of the current government, the evolution of the<br />
country’s inflation and the exterior market volatility seem to<br />
be the principal concerns for investors in the local market.<br />
Investors are finding numerous attractive opportunities in<br />
build-to-suit warehouses, hotel and tourism projects<br />
(especially in the premium markets) and with the conversion<br />
of rural and agricultural property.<br />
Contact<br />
<strong>NAI</strong> Bahamas<br />
+1 242 396 0028<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
5,383<br />
0.9%<br />
$7.54<br />
$21,985.00<br />
2.76%<br />
13.95%<br />
4.75%<br />
.313<br />
The overall market remains sluggish. Retail rates have<br />
remained unchanged or have decreased depending upon<br />
location. Rental rates in the Class A properties have<br />
remained relatively stable with tenant retention being a<br />
primary concern. The market for warehouse space has been<br />
strong. Our primary industries; tourism and banking, have<br />
been challenged during 2011.<br />
The commercial real estate market has been faced<br />
with many challenges in 2011. Our tourism and banking<br />
industries have suffered due to global economic conditions<br />
as well as pressure put on tax haven jurisdictions in regards<br />
to disclosure and compliance. The vacancy rate in the Class<br />
A buildings is currently 6.94%. Retail businesses in the<br />
prime shopping areas continue to suffer in our weak<br />
economy. Vacancy rates in the retail sector average 8.73%.<br />
Layoffs in the hospitality and banking industry, as well<br />
as other ancillary businesses, have raised the official<br />
unemployment rate to 13.7%. This has resulted in a rise in<br />
the number of non-performing loans to $1.216 billion dollars<br />
representing 19.6% of total loans.<br />
The Bahamas’ government and affected property owners<br />
have aligned to relocate the container port from the CBD to<br />
Arawak Cay, adjacent to the western entrance to Nassau<br />
Harbor. This relocation, in early <strong>2012</strong>, will make available<br />
40 acres of prime harbor front property for redevelopment.<br />
The $2.4 billion Baha Mar Development on New Providence<br />
with an 18-hole golf course, four luxury hotels, luxury spa,<br />
a convention center, casino, shopping arcade and water<br />
theme park is underway and scheduled for completion in<br />
the fall of 2014.<br />
The $4.9 billion Ginn Sur Mer development on Grand<br />
Bahama, currently in receivership, is being sold to a<br />
Canadian development company. The infusion of new capital<br />
will be a much needed shot in the arm for the island of<br />
Grand Bahama as well as the Bahamas. The new Sir Lynden<br />
Pindling US Departure terminal is now open. This is the<br />
first phase of a three phase project. The second phase is<br />
scheduled for completion in the fall of <strong>2012</strong>.<br />
The Bahamas is totally dependent upon its tourism and<br />
banking industries. Fortunately the developments previously<br />
mentioned are now becoming a reality and will go a long<br />
way to keeping the local economy afloat, positioning this<br />
island nation for a bright future as world economic conditions<br />
improve.<br />
Buenos Aires At A Glance<br />
RENT/M 2 /MO<br />
US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$ 27.00<br />
$ 23.00<br />
$<br />
$<br />
32.00<br />
30.00<br />
$ 30.10<br />
$ 25.64<br />
$ 35.67<br />
$ 33.44<br />
1.00%<br />
7.00%<br />
Class B (Secondary)<br />
suburban offIce<br />
$ 10.00 $ 17.00 $ 11.15 $ 18.95 15.00%<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 18.00<br />
$ 14.00<br />
$ 10.00<br />
$<br />
$<br />
$<br />
22.00<br />
18.00<br />
12.00<br />
$ 20.07<br />
$ 15.61<br />
$ 11.15<br />
$ 24.53<br />
$ 20.07<br />
$ 13.38<br />
1.00%<br />
2.00%<br />
3.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
3.50<br />
3.50<br />
5.00<br />
$<br />
$<br />
$<br />
7.00<br />
5.50<br />
8.00<br />
$ 3.90<br />
$ 3.90<br />
$ 5.57<br />
$<br />
$<br />
$<br />
7.80<br />
6.13<br />
8.92<br />
N/A<br />
N/A<br />
N/A<br />
Downtown<br />
$ 38.00 $ 115.00 $ 42.36 $ 128.21 3.00%<br />
Neighborhood Service Centers $ 18.00 $ 25.00 $ 20.07 $ 27.87 10.00%<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Storesl<br />
N/A<br />
$ 25.00<br />
N/A<br />
$<br />
N/A<br />
80.00<br />
N/A<br />
N/A<br />
$ 27.87<br />
N/A<br />
N/A<br />
$ 89.19<br />
N/A<br />
N/A<br />
8.00%<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$ 500.00 $ 1,200.00 $ 2,023,431.33 $ 4,856,235.20<br />
N/A N/A N/A N/A<br />
$ 30.00 $ 80.00 $ 121,405.88 $ 323,749.01<br />
$ 40.00 $ 80.00 $ 161,874.51 $ 323,749.01<br />
$ 200.00 $ 1,000.00 $ 809,372.53 $ 4,046,862.67<br />
$ 400.00 $ 1,500.00 $ 1,618,745.07 $ 6,070,294.00<br />
Nassau At A Glance<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
RENT/SF/YR<br />
US$ RENT/SF/YR<br />
low High low High Vacancy<br />
deVeloPment land low/sf High/sf low/acre High/acree<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A N/A N/A N/A N/A<br />
$ 53.00 $ 62.33 $ 53.00 $ 62.33 13.20%<br />
$ 29.00 $ 48.80 $ 29.00 $ 48.80 24.70%<br />
N/A N/A N/A N/A N/A<br />
$ 41.50 $ 67.90 $ 41.50 $ 67.90 4.90%<br />
$ 15.00 $ 32.00 $ 15.00 $ 32.00 12.00%<br />
$ 10.00 $ 15.00 $ 10.00 $ 15.00 1.70%<br />
N/A N/A N/A N/A N/A<br />
N/A N/A N/A N/A N/A<br />
$ 15.00 $ 81.00 $ 15.00 $ 81.00 8.20%<br />
$ 15.50 $ 89.40 $ 15.50 $ 89.40 8.80%<br />
N/A N/A N/A N/A N/A<br />
N/A N/A N/A N/A N/A<br />
N/A N/A N/A N/A N/A<br />
$ 35.00 $ 100.00 $ 1,524,589.45 $ 4,355,969.86<br />
$ 10.00 $ 30.00 $ 435,596.99 $ 1,306,790.96<br />
$ 10.00 $ 23.00 $ 435,596.99 $ 1,001,873.07<br />
$ 10.00 $ 23.00 $ 435,596.99 $ 1,001,873.07<br />
$ 15.00 $ 30.00 $ 653,395.48 $ 1,306,790.96<br />
$ 10.00 $ 138.00 $ 435,596.99 $ 6,011,238.40<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 67
Rio de Janeiro, Brazil<br />
Sao Paulo, Brazil<br />
Contact<br />
<strong>NAI</strong> Brazil Dworking<br />
+1 55 11 3755 8894<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
3,287,612<br />
4.1%<br />
$2,192.96<br />
$11,249.82<br />
4.6%<br />
7.5%<br />
12.0%<br />
194.933<br />
Rio de Janeiro, globally considered Brazil’s main tourist and<br />
resort destination, is also the second largest and second<br />
most important city with the country’s second highest GDP<br />
following Sao Paulo. Given its tremendous growth over the<br />
last few years, the real estate sector is notorious for its high<br />
prices, ranking among the most expensive cities in the<br />
world.<br />
In the office sector, although lease and sale values are rising,<br />
demand remains strong for Class A+, Class A and Class B<br />
buildings. The vacancy rate at mid-year 2011 reached<br />
2.79%, remaining at a level below the historical market<br />
average of about 10%. In order to meet this demand,<br />
660,000 SM of new inventory will be delivered by year-end<br />
2014. The Barra da Tijuca submarket will be the largest<br />
recipient of that activity, but the downtown area will also<br />
receive its fair share of new buildings, resulting from the<br />
renovation of many older buildings that had fallen into<br />
disrepair given that they were functionally obsolete for 21st<br />
Century office needs. This retrofitting is currently a common<br />
activity in Rio de Janeiro as an alternative to new development<br />
due to the scarcity of available land.<br />
The retail sector, as well as in Sao Paulo, is directly linked<br />
to high consumer demand, but Rio de Janeiro’s is largely<br />
due to its status as host of the Olympics and World Cup in<br />
2014 and 2016 respectively. This has caused the expansion<br />
of supermarket chains and drugstores that serve city<br />
residents, but also the expansion and opening of new stores<br />
that offer typical Brazilian products catering to tourists.<br />
Development activity in the industrial sector, growing<br />
apprehensively until 2008, has shown significant growth in<br />
recent years. Important industrial parks along President<br />
Dutra Highway, one of the main roads in the state, and also<br />
in regions such as Pavuna, Belford Roxo and Duque de<br />
Caxias, have and are being constructed. Similar to the office<br />
sector, asking lease rates for industrial space are also<br />
among the most expensive in the country. This general<br />
scenario of high prices in Rio de Janeiro reflects the low<br />
vacancy rates and its high international exposure. Given the<br />
likelihood of continued high economic activity for at least<br />
the mid-term, pricing will probably not decrease for several<br />
years.<br />
Contact<br />
<strong>NAI</strong> Brazil Dworking<br />
+1 55 11 3755 8894<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
3,287,612<br />
4.1%<br />
$2,192.96<br />
$11,249.82<br />
4.6%<br />
7.5%<br />
12.0%<br />
194.933<br />
Sao Paulo is the main corporate, financial and commercial<br />
city in Brazil, home to numerous multinational firms that are<br />
located in high-rise buildings along famous avenues such<br />
as Faria Lima, Paulista and Berrini. In 2010 it became the<br />
city with the highest GDP in current prices in Brazil. The GDP<br />
per capita is among the ten largest in the world. Enjoying a<br />
moment in history, the city grows in pace with the rhythm<br />
of the Brazilian economy.<br />
The Office <strong>Market</strong> is experiencing the lowest vacancy rate<br />
it has ever had over the last few years at just 0.8%. The<br />
lack of product combined with the strong economy and<br />
subsequent demand, has pushed prices to the highest levels<br />
ever. They are, however, a clear sign that prices have<br />
recovered from the deficit experienced in the early 2000s<br />
due to the macroeconomic crises. The construction activity<br />
remains strong, driven by equally strong absorption. The<br />
next four years should witness a 47% increase in new Class<br />
A buildings, that may relieve the upward pressure on lease<br />
rates causing them to stabilize or at least reduce the rate of<br />
increase.<br />
The Retail Sector, growing along with the strong consumer<br />
demand, is also enjoying a period of great expansion. With<br />
an unemployment rate around 6%, the increase in<br />
consumer goods and leisure sales has motivated the<br />
expansion of large retailers, such as supermarkets and well<br />
known restaurant chains, that upon opening in Sao Paulo,<br />
were received with open arms and strong sales. Shopping<br />
centers have also experienced high retail activity. Smaller<br />
neighborhood ones have done well due to the location of<br />
various services available at one site. Shopping malls<br />
continue to thrive due to their offering of a broad variety of<br />
several major brands at one location that is secure, clean,<br />
modern and climate controlled.<br />
The Industrial <strong>Market</strong> also enjoyed strong growth and<br />
demand. However, it occurred increasingly further from the<br />
city’s core; along the main state highways in the Sao Paulo<br />
metropolitan area and satellite cities within a radius of 200<br />
km. Such locations facilitate distribution and production<br />
logistics due to the access to major highways and the soon<br />
to be completed Ring Road. Additionally, there are now many<br />
more existing and under construction industrial flex projects.<br />
These are highly divisible and accommodate small, medium<br />
and large companies needing a strategic location with layout<br />
flexibility, security and visibility.<br />
Rio de Janeiro At A Glance<br />
conversion 1.80 brl = 1 us$ RENT/M2/MO US$ NET RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
BRL 90.00<br />
BRL 80.00<br />
BRL 55.00<br />
BRL 80.00<br />
BRL 60.00<br />
BRL 55.00<br />
BRL 170.00<br />
BRL 270.00<br />
BRL 110.00<br />
BRL 130.00<br />
BRL 130.00<br />
BRL 110.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
55.74<br />
49.55<br />
34.06<br />
49.55<br />
37.16<br />
34.06<br />
$ 105.29<br />
$ 167.22<br />
$ 68.13<br />
$ 80.52<br />
$ 80.52<br />
$ 68.13<br />
N/A<br />
7.30%<br />
1.00%<br />
N/A<br />
23.00%<br />
0.20%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
BRL 14.50<br />
BRL 14.50<br />
BRL 17.00<br />
BRL<br />
BRL<br />
BRL<br />
25.00<br />
25.00<br />
32.00<br />
$<br />
$<br />
$<br />
8.98<br />
8.98<br />
10.53<br />
$ 15.48<br />
$ 15.48<br />
$ 19.82<br />
4.30%<br />
3.80%<br />
3.50%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
deVeloPment land<br />
BRL 90.00<br />
N/A<br />
N/A<br />
BRL 90.00<br />
N/A<br />
low/m 2 BRL 260.00<br />
N/A<br />
N/A<br />
BRL 180.00<br />
N/A<br />
High/m 2 $<br />
$<br />
55.74<br />
N/A<br />
N/A<br />
55.74<br />
N/A<br />
low/acre<br />
$ 161.03<br />
N/A<br />
N/A<br />
$ 111.48<br />
N/A<br />
High/acre<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
BRL 3,000.00 BRL 35,000.00 $ 6,744,771.12 $ 78,688,996.36<br />
N/A N/A N/A N/A<br />
BRL 250.00 BRL 400.00 $ 562,064.26 $ 899,302.82<br />
N/A N/A N/A N/A<br />
BRL 400.00 BRL 1,500.00 $ 899,302.82 $ 3,372,385.56<br />
BRL 2,000.00 BRL 12,000.00 $ 4,496,514.08 $26,979,084.46<br />
Sao Paulo At A Glance<br />
conversion 1.80 brl = 1 us$ RENT//M 2 /MO US$ NET RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
BRL 90.00 BRL 170.00 $ 55.74 $ 105.29 N/A<br />
BRL 90.00 BRL 200.00 $ 55.74 $ 123.87 0.80%<br />
BRL 55.00 BRL 120.00 $ 34.06 $ 74.32 3.00%<br />
BRL 60.00 BRL 80.00 $ 37.16 $ 49.55 N/A<br />
BRL 60.00 BRL 90.00 $ 37.16 $ 55.74 2.80%<br />
BRL 48.00 BRL 70.00 $ 29.73 $ 43.35 4.50%<br />
BRL 14.00 BRL 25.00 $ 8.67 $ 15.48 5.00%<br />
BRL 14.00 BRL 25.00 $ 8.67 $ 15.48 6.20%<br />
BRL 16.00 BRL 30.00 $ 9.91 $ 18.58 4.70%<br />
BRL 90.00 BRL 260.00 $ 55.74 $ 161.03 N/A<br />
N/A N/A N/A N/A N/A<br />
N/A N/A N/A N/A N/A<br />
BRL 80.00 BRL 150.00 $ 49.55 $ 92.90 N/A<br />
N/A N/A N/A N/A N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
BRL 3,000.00 BRL 12,000.00 $ 6,744,771.12 $ 26,979,084.46<br />
Land in Office Parks<br />
N/A N/A N/A N/A<br />
Land in Industrial Parks<br />
BRL 250.00 BRL 400.00 $ 562,064.26 $ 899,302.82<br />
Office/Industrial Land - Non-park<br />
N/A N/A N/A N/A<br />
Retail/Commercial Land BRL 400.00 BRL 1,500.00 $ 899,302.82 $ 3,372,385.56<br />
Residential<br />
BRL 1,500.00 BRL 9,000.00 $ 3,372,385.56 $20,234,313.35<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 68
Santiago, Chile<br />
Bogotá, Colombia<br />
Contact<br />
<strong>NAI</strong> Sarrà<br />
+1 56 2 347 7000<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
291,933<br />
6.0%<br />
$222.79<br />
$12,804.99<br />
3.0%<br />
8.7%<br />
5.3%<br />
17.399<br />
The Chilean economy is regarded as the most developed in<br />
the region. In 2011, the Chilean economy experienced<br />
steady growth, as evidenced by the 6.8% growth rate<br />
compared with 5.2% in 2010. The national GDP reached an<br />
average of US $16,000 per capita. In 2011, Chile enjoyed<br />
one of the most productive periods in the past several years.<br />
The Chilean economy wasn’t affected by the student’s<br />
demands and protests during the final months of 2011.<br />
In Santiago, the real estate market reflects the good health<br />
of the economic growth with a notable increase in the<br />
number of new building permits and the speed with which<br />
new space continues to be absorbed. In 2011, 74,000 SM<br />
entered the Class A+ office market. In 2011, office vacancy<br />
decreased to 2.6%. The absorption of Class A and Class A+<br />
office space reached 79,204 SM.<br />
The most significant office project to come on the market<br />
was the Costanera Center office building, which is designed<br />
to be a “green” building. It boasts more than 120,000 SM<br />
of available space in four towers with a huge retail space<br />
including a hotel and a shopping mall with convenience<br />
and retail stores. This complex is being developed by<br />
the prestigious architect Cesar Pelli. It will be the highest<br />
building in Latin America standing at over 300 meters high.<br />
Over the next 24 months, an additional 450,000 SM of<br />
office space is projected to hit the office market. This will<br />
absorb the high demand for Class A+ office space in the<br />
capital city of Santiago. We expect to see a vacancy rate<br />
near 5% in <strong>2012</strong> for Class A+ office space. The average<br />
lease rates in the main Santiago business areas rose<br />
on average to US $27.13/SM. Sale values for new office<br />
buildings in El Golf, the most exclusive Santiago business<br />
district, reached an average of US $2,778/SM.<br />
Investment returns have stabilized in the three major asset<br />
classes ranging from 7% to 9% for office, 9% to 11% for<br />
retail and 11% to 12% for industrial. These return rates are<br />
expressed in UF which is an internal index that protects the<br />
investment from inflation. All leasing contracts are signed<br />
with this index. The index varies approximately 3% a year.<br />
Given this, the majority of the more important foreign funds<br />
are steadily taking a position in our market.<br />
Contact<br />
<strong>NAI</strong> Colombia Correa<br />
+1 571 632 4420<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
440,831<br />
4.6%<br />
$308.57<br />
$6,700.61<br />
2.6%<br />
11.5%<br />
4.5%<br />
46.052<br />
Colombia has experienced a strong recovery from the global<br />
economic crisis and has continued to make inroads into the<br />
mining and oil sectors. Colombia is Latin America’s number<br />
four oil producer and continues to be recognized around the<br />
world as an emerging power. Improved security, greater<br />
political stability and efficient policies to control inflation and<br />
budget deficits have also allowed the country to recover its<br />
investment grade rating and sign an FTA with the US.<br />
Office market vacancies were approximately 10% in 2010,<br />
but in 2011, due to greater demand from multinational<br />
companies, the vacancy rate for Class A space was<br />
approximately 5% and rental rates were more stable at<br />
approximately $28/SM. Overall, supply continues to lead<br />
demand in Class B and Class C buildings. Important projects<br />
for 2011 include Torre REM, a $50 million project that will<br />
comprise 20,000 SM of office space.<br />
Bogota and its Greater Metropolitan Area encompass more<br />
than 4 million SM of industrial land. In 2011, the largest<br />
vacancy among the main industrial submarkets was<br />
registered in the suburban market with 83% of the total<br />
industrial inventory. Recent developments include Zona<br />
Franca del Pacifico, with more than 200,000 SM of industrial<br />
and office space.<br />
Colombia’s hotel sector expects to invest $1.5 billion this<br />
year, about $300 million more than was invested last year.<br />
The increase in investment is based on government<br />
promises that hotels built after 2003 will receive tax benefits<br />
for 30 years, while hotels that invest in upgrading their<br />
establishments will be allowed tax breaks for fifteen years.<br />
The country's three biggest cities Bogota, Medellin and Cali<br />
comprise most of this new development. However, new<br />
initiatives for different types of projects such as ecotourism<br />
developments have begun. Also, many recognized international<br />
brands have entered the local market. For example, the<br />
exclusive brand Six Senses is planning to enter the<br />
Colombian market and develop luxury resorts in the<br />
Amazonas and Santa Marta areas.<br />
In the retail sector, demand remained strong with the overall<br />
vacancy rate in Bogotá around 4% for Class A product and<br />
rent prices remained stable. In 2011, Metro 127 in Bogota,<br />
was opened with 10,000 SM. It is forecast that in <strong>2012</strong><br />
Colombia will continue to be an attractive destination for<br />
both corporate users and investors.<br />
Santiago At A Glance<br />
conversion 523.15 clP = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
CLP 132,411.00<br />
CLP 116,522.00<br />
CLP 116,522.00<br />
CLP 198,621.00 $ 23.51<br />
CLP 177,431.00 $ 20.69<br />
CLP 148,300.00 $ 20.69<br />
$ 35.27<br />
$ 31.51<br />
$ 26.34<br />
5.30%<br />
0.60%<br />
2.10%<br />
New Construction (AAA)<br />
Class A (Prime)<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Class B (Secondary)<br />
IndustrIal<br />
CLP 90,039.00 CLP 121,818.00 $ 15.99 $ 21.63 9.26%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
CLP<br />
CLP<br />
CLP<br />
23,834.00<br />
18,500.00<br />
31,000.00<br />
CLP 31,779.00 $<br />
CLP 24,400.00 $<br />
CLP 41,500.00 $<br />
4.23<br />
3.29<br />
5.51<br />
$<br />
$<br />
$<br />
5.64<br />
4.33<br />
7.37<br />
1.90%<br />
N/A<br />
N/A<br />
Downtown<br />
CLP 113,873.00 CLP 344,268.00 $ 20.22 $ 61.14 3.70%<br />
Neighborhood Service Centers CLP 200.50 CLP 301,500.00 $ 0.04 $ 53.54 N/A<br />
Community Power Center CLP 385,200.00 CLP 770,400.00 $ 68.40 $ 136.81 N/A<br />
Regional Malls<br />
Solus Food Stores<br />
CLP<br />
N/A<br />
25,680.00<br />
N/A<br />
CLP 77,040.00 $<br />
N/A<br />
4.56<br />
N/A<br />
$ 136.81<br />
N/A<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
CLP 1,544,793.00 CLP 2,648,218.00 $ 11,949,852.10 $ 20,485,471.79<br />
CLP 240,000.00 CLP 278,000.00 $ 1,856,536.44 $ 2,150,488.05<br />
CLP 64,200.00 CLP 85,600.00 $ 496,623.50 $ 662,164.67<br />
CLP 64,200.00 CLP 85,600.00 $ 496,623.50 $ 662,164.67<br />
CLP 428,000.00 CLP 428,000.00 $ 3,310,823.33 $ 3,310,823.33<br />
CLP 107,000.00 CLP 256,000.00 $ 827,705.83 $ 1,980,305.54<br />
Bogotá At A Glance<br />
conversion 1953.50 coP = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
COP 55,000.00<br />
COP 42,000.00<br />
COP 30,000.00<br />
COP 75,000.00 $ 31.39<br />
COP 50,000.00 $ 23.97<br />
COP 38,000.00 $ 17.12<br />
$ 42.80<br />
$ 28.53<br />
$ 21.69<br />
5.00%<br />
8.00%<br />
12.00%<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
COP 17,000.00<br />
N/A<br />
N/A<br />
COP 26,000.00 $<br />
N/A<br />
N/A<br />
9.70<br />
N/A<br />
N/A<br />
$ 14.84<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
COP 9,000.00<br />
N/A<br />
N/A<br />
COP 19,000.00 $<br />
N/A<br />
N/A<br />
5.14<br />
N/A<br />
N/A<br />
$ 10.84<br />
N/A<br />
N/A<br />
13.00%<br />
N/A<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
COP 125,000.00<br />
COP 28,000.00<br />
COP 200,000.00 $ 71.34<br />
COP 77,000.00 $ 15.98<br />
$ 114.14<br />
$ 43.94<br />
4.00%<br />
N/A<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
COP 16,000.00<br />
COP 14,000.00<br />
N/A<br />
COP 21,000.00 $<br />
COP 23,000.00 $<br />
N/A<br />
9.13<br />
7.99<br />
N/A<br />
$ 11.98<br />
$ 13.13<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 69
San Jose, Costa Rica<br />
Contact<br />
<strong>NAI</strong> Costa Rica<br />
+ 1 506 2228 7760<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
19,700<br />
San Jose At A Glance<br />
conversion: 498.65 col = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
COL 128,016.00<br />
COL 103,632.00<br />
COL 73,152.00<br />
COL 158,496.00 $ 23.85<br />
COL 112,776.00 $ 19.31<br />
COL 109,728.00 $ 13.63<br />
$ 29.53<br />
$ 21.01<br />
$ 20.44<br />
4.30%<br />
7.40%<br />
9.50%<br />
New Construction (AAA)<br />
Class A (Prime)<br />
N/A<br />
COL 77,419.20<br />
N/A<br />
COL 105,460.80<br />
N/A<br />
$ 14.42<br />
N/A<br />
$ 19.65<br />
N/A<br />
9.00%<br />
Class B (Secondary)<br />
IndustrIal<br />
COL 48,768.00 COL 97,536.00 $ 9.09 $ 18.17 29.30%<br />
Bulk Warehouse<br />
COL 33,599.04 COL 48,219.36 $ 6.26 $ 8.98 10.40%<br />
Manufacturing<br />
COL 28,528.80 COL 60,106.80 $ 5.32 $ 11.20 19.80%<br />
High Tech/R&D<br />
retaIl<br />
COL 21,213.60 COL 29,260.80 $ 3.95 $ 5.45 5.90%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
COL 70,896.48<br />
COL 71,201.28<br />
COL 59,009.28<br />
COL 162,153.60<br />
COL 132,588.00<br />
COL 191,597.28<br />
COL 202,935.84<br />
COL 240,060.48<br />
$ 13.21<br />
$ 13.27<br />
$ 10.99<br />
$ 30.21<br />
$ 24.70<br />
$ 35.70<br />
$ 37.81<br />
$ 44.73<br />
9.70%<br />
4.90%<br />
1.70%<br />
N/A<br />
Solus Food Stores<br />
COL 42,672.00 COL 65,759.88 $ 7.95 $ 12.25 2.40%<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
4.2%<br />
$38.41<br />
$7,946.35<br />
4.2%<br />
6.5%<br />
N/A<br />
4.834<br />
Costa Rica’s economy has diversified in recent years from<br />
agricultural commodities to specialized agricultural and<br />
electronic supplies. During 2011, GDP growth was 4.5%.<br />
Costa Rica attracted one of the highest levels of FDI in Latin<br />
America. Outsourcing services among others, and FTZ<br />
agreements have helped to increase the economic growth.<br />
FDI is estimated to increase by 50% by the end of 2011<br />
due to the market saturation of insurance companies and<br />
major telecommunication firms such as Telefonica, Movistar,<br />
America Movil, Claro and TUYO. This increase happened<br />
after the government opened up the monopoly formerly held<br />
by the I.C.E, which is the country’s electrical institute.<br />
IBM recently announced a $300 million investment and<br />
Bridgestone an $88 million plant. Other investments include<br />
NDC with a 1,600 SM plant for $4 million and Beam One<br />
for $10 million. The demand has increased in almost every<br />
type of real estate sector and the market has been adapted<br />
accordingly. Tourism rose 7.8% compared to 2010 with<br />
more than 2.1 million visitors in 2011. Airlines introduced<br />
flights to SJO Airport (third best airport in Latin America) and<br />
to Liberia International. AMP Terminals received a $1 billion<br />
deal to manage Moin Port.<br />
There was a $68 million expansion in the hotel industry with<br />
several good projects arriving on the market; Riu (five-star,<br />
500 room hotel), Melia (312 rooms in Papagayo), Bvlgari<br />
(invested $100 million in the first hotel in America), Holiday<br />
Inn finished a hotel in Escazu, Wyndham H.G. (new hotel in<br />
Escazu) and Hyatt (new hotel in Papagayo and first hotel to<br />
the east of San Juan)<br />
The vacancy rate in the office market is 8.6%. The projection<br />
for the vacancy rate in <strong>2012</strong> is that it will remain low,<br />
between 7% and 9%, with some volatility. Approximately<br />
146,155 SM of Class A+ and Class A office inventory is<br />
under construction and should be completed within the next<br />
nine months.<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
Santo Domingo, Dominican Republic<br />
Contact<br />
<strong>NAI</strong> Dominicana<br />
+1 809 476 7788<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
The Dominican Republic has the second largest economy<br />
in the Caribbean and experienced a growth rate superior<br />
to 4.2% in 2011. The country is primarily dependent<br />
on agriculture, trade and services, particularly tourism.<br />
Agriculture remains the most important sector in terms of<br />
domestic consumption and the second most important in<br />
terms of export earnings. Tourism accounts for more than<br />
$1 billion in annual earnings. Free trade zone and tourism<br />
are the two fastest growing export sectors.<br />
The office market in Santo Domingo, the capital of the<br />
Dominican Republic, is being driving by a mix of foreign and<br />
national companies. Currently there is a low inventory with<br />
limited vacancy, but a handful of new Class A office buildings<br />
should enter the market in <strong>2012</strong>. Nevertheless, this new<br />
product is largely pre-rented or purchased due to the lack<br />
of new supply and high demand. Resulting from this<br />
demand in the market, prices have begun to increase.<br />
The industrial market is also experiencing a low inventory<br />
due to the lack of new speculative product and heavy<br />
demand. The activity is occurring mainly in the Free Zone<br />
and the industrial park around the port and the airport.<br />
Distribution centers and manufacturing are the principal<br />
industrial tenants around the country.<br />
The retail sector is experiencing the most import activity,<br />
mainly in the capitol area. A new mall opened recently and<br />
two more are under construction. These latter two are almost<br />
90% pre-leased or pre-sold. Despite the new construction, a<br />
low inventory continues and prices are increasing. Single tenant<br />
retail stores, like supermarket chains, have also expanded their<br />
presence around the country. These expansion and<br />
development trends are expected to increase through <strong>2012</strong>.<br />
Investment in the tourism sector is also increasing with the<br />
construction of new hotels and resorts (most notably in the<br />
Punta Cana area), infrastructure development with the<br />
second line for the Santo Domingo subway, the construction<br />
of a new cruise port in Puerto Plata that will increase tourism<br />
along the North Coast and the inauguration of the Atlantic<br />
Boulevard in the Samana area (the Corredor Duarte) which<br />
includes several projects such as tunnels, overpasses, etc.<br />
to help the traffic flow into and out of Santo Domingo.<br />
The multifamily rental market is in need of new construction<br />
due to a lack of supply. Most new construction is mainly<br />
concentrated in building condominiums. There is also a<br />
strong opportunity in the hospitality market due to the high<br />
annual occupancy rate.<br />
Santo Domingo At A Glance<br />
conversion 38.00 doP = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
DOP 4,320.00 DOP 4,896.00 $ 10.56 $ 11.96 10.00%<br />
Class A (Prime)<br />
DOP 3,168.00 DOP 3,744.00 $ 7.75 $ 9.15 9.00%<br />
Class B (Secondary)<br />
suburban offIce<br />
DOP 2,160.00 DOP 2,592.00 $ 5.28 $ 6.34 11.00%<br />
New Construction (AAA)<br />
Class A (Prime)<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
DOP 2,160.00<br />
DOP 2,937.60<br />
DOP 2,592.00 $<br />
DOP 4,389.10 $<br />
5.28<br />
7.18<br />
$ 6.34 15.00%<br />
$ 10.73 18.00%<br />
Manufacturing<br />
DOP 4,976.60 DOP 7,257.60 $ 12.17 $ 17.74 12.00%<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
N/A<br />
DOP 1,728.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
DOP 2,592.00 $<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
4.22<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 6.34<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
8.00%<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/sf High/sf low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
18,792<br />
5.5%<br />
$53.92<br />
$5,363.73<br />
4.9%<br />
13.5%<br />
N/A<br />
10.052<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
DOP 168.00 DOP 180.00 $ 17,891.39 $19,169.35<br />
N/A N/A N/A N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 70
Kingston, Jamaica<br />
Ciudad Juarez, Chihuahua, Mexico<br />
Contact<br />
<strong>NAI</strong> Jamaica<br />
+1 876 925 7861<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
4,244<br />
1.8%<br />
$14.68<br />
$5,365.59<br />
5.8%<br />
11.5%<br />
6.2%<br />
2.736<br />
With local Jamaican interest rates at a historic low and<br />
general bank lending costs falling due to competition, there<br />
has been significant interest in the property market. The<br />
prime properties are those leased to overseas companies<br />
on longer leases (five to 10 years). Development is becoming<br />
viable in many cases. Conservative bank lending is still<br />
evident due to a high number of bad loans over the past<br />
three years.<br />
There remains a shortage of quality office units with<br />
adequate parking facilities. Little new space has been built<br />
in recent years as development costs for new buildings<br />
have exceeded the developed value. On the old Kingston<br />
waterfront DIGICEL, a major cellular provider, is building a<br />
211,000 SF space (19,600 SM) for its own use. This is<br />
expected to galvanize further interest in the old CBD. The<br />
situation is changing and currently a number of developers<br />
are seeking sites to develop. Office yields are around 8.5%<br />
to 9% Rental levels are firming due to a lack of supply of<br />
good space with adequate parking.<br />
The only activity in the industrial market has been a small<br />
number of large owner-occupier developments, mainly in<br />
the warehousing and distribution sectors. Rental demand<br />
for units in the more desirable areas (for staff and<br />
customers) often dictates rental levels. Space over 10,000<br />
SF is limited for rental and purchase. Industrial yields are<br />
around 10% to 11% with rental levels remaining firm.<br />
There has been little new expansion in the retail market.<br />
Fallout, due to the reduction in retail activity, has been<br />
minimal. Yields in this market tend to follow the office<br />
market. Many retail units are owner occupied. Retail yields<br />
are around 8.5% to 9.5% with rental levels remaining firm.<br />
In the resort market, the long awaited $2 billion Harmony<br />
Cove development project by the Tavistock Group of Florida<br />
is slated for commencement in <strong>2012</strong>.<br />
Due to the sluggishness of all sectors in the residential<br />
market, development sites have remained unsold. Some<br />
owner occupiers have developed industrial/commercial sites<br />
for their own use. With the reduction of interest rates from<br />
the low teens to 6.25%, property investment is now much<br />
more viable and of increasing interest to local pension funds,<br />
other investment funds and individuals investors.<br />
Contact<br />
<strong>NAI</strong> Mexico<br />
+1 619 690 3029<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
758,449<br />
3.9%<br />
$1,041.09<br />
$9,489.19<br />
3.2%<br />
4.5%<br />
4.5%<br />
109.713<br />
Juarez, the largest city in Chihuahua, with a population of<br />
1.5 million is situated across the border directly south of El<br />
Paso, Texas. It has been a destination for foreign manufacturing<br />
since the 1960’s. Manufacturing facilities, known as<br />
“maquiladoras” drive the economy. 33% of Mexico’s foreign<br />
manufacturing operations are found in Juarez. Approximately<br />
330 registered maquiladora operations in Juarez employ<br />
over 235,000 people in primary sectors ranging from<br />
electronics to automotive and logistics.<br />
In the industrial market, Juarez is home to Philips, Thomson,<br />
GM, Electrolux, Yazaki, Foxconn, Lear, Johnson & Johnson, GE<br />
Medical, Johnson Controls, Delphi and Ford. Both regional and<br />
international developers have established in Juarez. Institutional<br />
US developers include GE, Prologis and Verde. Mexican firms<br />
such as Vesta and O’Donnell have invested during the last five<br />
years. Industrial vacancy rates in Juarez exceed 14%,<br />
comprising approximately 9 million SF. Most leasing activity is<br />
being offset by increased vacancies from consolidations in the<br />
market. During 2011, most activity was from existing firms trading<br />
older spaces for newer facilities at discounted rates. Recently,<br />
additional activity has increased from firms like Foxconn migrating<br />
new suppliers to improve just-in-time efficiencies. From 2009 to<br />
2011 lease rates fell by 20%; by the end of December 2011,<br />
they are still below historical rates noted from 2007 to 2008.<br />
Between 2010 and 2011, there has been little construction<br />
activity in the market. With excess inventories continuing,<br />
most companies will opt to lease existing buildings and few<br />
will require build-to-suits for lease during <strong>2012</strong>. During <strong>2012</strong>,<br />
Juarez will continue as a “tenant’s market” with owners<br />
continuing free rent, tenant improvements and discounted<br />
lease rates. Expansions will increase from existing firms which<br />
can benchmark the cost differential between home markets<br />
and migrate more operations to Mexico.<br />
Activity in the office sector was slow during 2011. Local<br />
firms, government agencies and global service providers are<br />
concentrated in a limited cluster of Class A options. Overall<br />
rates remained stable or slightly lower during 2011, with<br />
vacancies ranging from 10% to 15%, except in Class B<br />
(secondary) offices where vacancies run 25% to 30%.<br />
Retail activity continued during 2011 with some expansions<br />
from Mexican retailers growing on the border markets. Some<br />
increased activity is projected for <strong>2012</strong>. The critical mass of<br />
industrial firms located in Juarez with proximity to all US<br />
markets and a 50 year history with foreign manufacturers<br />
ensures a bright future heading into <strong>2012</strong>.<br />
Kingston At A Glance<br />
conversion 86.15 Jmd = 1 us$ RENT/SF/YR US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
JMD<br />
JMD<br />
N/A<br />
457.00 JMD<br />
229.00 JMD<br />
N/A<br />
762.00 $<br />
457.00 $<br />
N/A<br />
5.30<br />
2.66<br />
$<br />
$<br />
N/A<br />
8.85<br />
5.30<br />
N/A<br />
N/A<br />
N/A<br />
New Construction (AAA)<br />
Class A (Prime)<br />
JMD<br />
JMD<br />
1,372.00 JMD 1,677.00 $ 15.93<br />
1,067.00 JMD 1,677.00 $ 12.39<br />
$ 19.47<br />
$ 19.47<br />
N/A<br />
N/A<br />
Class B (Secondary)<br />
IndustrIal<br />
JMD 762.00 JMD 1,067.00 $ 8.85 $ 12.39 N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
JMD<br />
JMD<br />
457.00 JMD<br />
457.00 JMD<br />
915.00 $<br />
915.00 $<br />
5.30<br />
5.30<br />
$ 10.62<br />
$ 10.62<br />
N/A<br />
N/A<br />
High Tech/R&D<br />
retaIl<br />
JMD 1,067.00 JMD 1,067.00 $ 12.39 $ 12.39 N/A<br />
Downtown (High Street Shops) JMD 762.00 JMD 1,372.00 $ 8.85 $ 15.93 N/A<br />
Neighborhood Service Centers<br />
Community Power Center (Big Box)<br />
JMD<br />
JMD<br />
762.00 JMD<br />
762.00 JMD<br />
915.00 $<br />
915.00 $<br />
8.85<br />
8.85<br />
$ 10.62<br />
$ 10.62<br />
N/A<br />
N/A<br />
Regional Malls<br />
JMD 1,144.00 JMD 1,677.00 $ 13.28 $ 19.47 N/A<br />
Solus Food Stores<br />
N/A N/A N/A N/A N/A<br />
deVeloPment land low/acre High/acre low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
JMD90,000,000.00 JMD 130,000,000.00 $1,044,689.50 $1,508,995.94<br />
JMD 70,000,000.00 JMD 90,000,000.00 $ 812,536.27 $1,044,689.50<br />
JMD 16,000,000.00 JMD 30,000,000.00 $ 185,722.58 $ 348,229.83<br />
JMD 16,000,000.00 JMD 30,000,000.00 $ 185,722.58 $ 348,229.83<br />
JMD 20,000,000.00 JMD 50,000,000.00 $ 232,153.22 $ 580,383.05<br />
JMD 15,000,000.00 JMD 80,000,000.00 $ 174,114.92 $ 928,612.88<br />
Cuidad Juarez At A Glance<br />
RENT/SF/YR<br />
low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
$ 12.00 $ 17.00 $ 14.50 N/A<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
$<br />
$<br />
9.00<br />
7.00<br />
$<br />
$<br />
12.00<br />
9.00<br />
$<br />
$<br />
10.50<br />
8.00<br />
10.00%<br />
25.00%<br />
New Construction (AAA)<br />
$ 12.00 $ 17.00 $ 14.50 15.00%<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
$<br />
$<br />
9.00<br />
7.00<br />
3.25<br />
3.75<br />
$<br />
$<br />
$<br />
$<br />
12.00<br />
9.00<br />
3.75<br />
5.50<br />
$<br />
$<br />
$<br />
$<br />
10.50<br />
8.00<br />
3.50<br />
4.65<br />
10.00%<br />
30.00%<br />
15.00%<br />
14.00%<br />
High Tech/R&D<br />
retaIl<br />
N/A N/A N/A N/A<br />
Downtown<br />
$ 10.00 $ 18.00 $ 14.00 N/A<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
$ 8.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 10.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 9.00<br />
N/A<br />
N/A<br />
N/A<br />
35.00%<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/sf High/sf low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A N/A N/A N/A<br />
$ 5.57 $ 180.00 $ 242,627.52 $ 7,840,745.74<br />
$ 3.25 $ 50.00 $ 141,569.02 $ 2,177,984.93<br />
N/A N/A N/A N/A<br />
$ 7.00 $ 20.00 $ 304,917.89 $ 871,193.97<br />
$ 9.00 $ 19.00 $ 392,037.29 $ 827,634.27<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 71
Guadalajara, Jalisco, Mexico<br />
Guanajuato, Mexico<br />
Contact<br />
<strong>NAI</strong> Mexico<br />
+1 619 690 3029<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
758,449<br />
3.9%<br />
$1,041.09<br />
$9,489.19<br />
3.2%<br />
4.5%<br />
4.5%<br />
109.713<br />
Guadalajara, Jalisco, is the second largest city in Mexico<br />
with more than 4.5 million inhabitants. It has a thriving<br />
economic and real estate development climate. As a colonial<br />
city, Guadalajara has managed to modernize without<br />
seriously altering its centuries-old city plan or endangering<br />
its reputation in Mexico for a good quality of life. Guadalajara<br />
is known as the “Silicon Valley of Mexico,” hosting<br />
multinational firms such as IBM, HP, Foxxcon, Flextronics,<br />
SCI-Sanmina and Freescale Semiconductor.<br />
Guadalajara is a destination for electronics, manufacturing,<br />
Mexican national firms and third party logistics. New sectors<br />
include call centers and fulfillment operations. Several regional<br />
and international developers have made large investments<br />
during the last five years. These include AMB, Prologis, CPA and<br />
German funds. Aggressive promotion has nearly doubled the<br />
city’s industrial base during the past four years. Class A industrial<br />
facilities reflect 95% occupancy and inventories are being<br />
reduced by demand from manufacturing, engineering centers,<br />
call centers and back office operations. During <strong>2012</strong>, three<br />
major CEM’s will expand operations; Sanmina, Flextronics and<br />
Jabil. Gamesa will construct its regional distribution center.<br />
Several call centers expanded during 2011 and three more are<br />
planned for <strong>2012</strong>. Additional construction is planned for areas<br />
outside the city center, as infill sites are being rezoned for<br />
commercial uses. Industrial lease rates remained stable in 2011.<br />
During <strong>2012</strong>, as back-office, call centers and distribution<br />
operations absorb remaining inventory, lease rates may increase.<br />
The city experienced an increase of nearly 500% Class A office<br />
inventory between 2009 and 2011. Even with heavy demand,<br />
this resulted in excess vacancies during 2011 and slightly<br />
declining rates. Two additional projects are scheduled to begin<br />
construction during <strong>2012</strong>, totaling nearly 400,000 SF. Financial<br />
services are driving the demand. Banco del Bajío and Seguros<br />
MTY/NYL will secure additional space during <strong>2012</strong>.<br />
There are seven major retail centers in Guadalajara, with the<br />
most recent opening in October 2011. Decreased vacancies<br />
in the retail sector in Guadalajara will continue during <strong>2012</strong>.<br />
Convenience stores such as Oxxo, 7 Eleven and Waldo’s are<br />
seeking both in-line and pad sites. Retail space rates and land<br />
values remained flat in most commercial submarkets during<br />
2011. Strip center construction will return during <strong>2012</strong>.<br />
Guadalajara is a regional distribution center with airlift, rail<br />
and highway access for the entire country, making it a great<br />
place for companies to locate. It also provides the best<br />
climate in Mexico for advanced education in all sectors.<br />
Contact<br />
<strong>NAI</strong> Mexico<br />
+1 619 690 3029<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
758,449<br />
3.9%<br />
$1,041.09<br />
$9,489.19<br />
3.2%<br />
4.5%<br />
4.5%<br />
109.713<br />
Guanajuato, with a population of 5.5 million people, is<br />
located in Central Mexico in the area known as El Bajio.<br />
Guanajuato is the crossroad for two diverse industrial<br />
corridors; the Pan-American Highway (45) and NAFTA<br />
Highway (57) which link South America, Mexico and North<br />
America. Guanajuato is establishing the next Inland Port and<br />
FTZ to showcase the multimodal capabilities and advantages<br />
of this emerging state.<br />
Guanajuato is home to six industrial parks. The industrial<br />
market is comprised of approximately 8.5 million SF of<br />
construction. Guanajuato’s main industries include metal<br />
fabrication, chemicals, machinery, appliances and beverages.<br />
Major corporations located in Guanajuato include GM,<br />
American Axle, Colgate Palmolive, Faurecia, Getrag, Flexi,<br />
VW and the new Mazda and Honda plants. Guanajuato<br />
Inland Port is a world class project offering integrated logistics,<br />
manufacturing and foreign trade benefits. The Inland Port<br />
comprises a Strategic FTZ, federal customs facilities and<br />
rail facility, and is located adjacent to the international<br />
airport. Industrial vacancies rose during 2011 to 10% as a<br />
result of new construction designed to target new foreign<br />
manufacturers in the automotive and electronics sectors.<br />
Countering the trend, between 2009 and 2011 industrial<br />
lease rates increased 5% to 10%. At the end of 2011,<br />
200,000 SF of industrial facilities were under construction<br />
in Castro Del Rio Industrial Park, and 220,000 SF in Leon,<br />
STIVA Industrial Park. Lease rates and land values are<br />
projected to continue to rise during <strong>2012</strong>.<br />
Guanajuato’s office market is comprised of low rise, garden<br />
office type projects hosting regional Mexican firms and<br />
global service providers. Lease rates are stable and not<br />
projected to rise in <strong>2012</strong>. Only minor construction is<br />
projected for the office sector during <strong>2012</strong>.<br />
The retail sector is comprised of large mixed-use shopping<br />
centers located in middle and low income areas. Plaza El<br />
Suez in Celaya is the premier power center in the region<br />
hosting a Walmart and Cinepolis. Retail lease rates and land<br />
values are expected to remain stable through <strong>2012</strong>.<br />
Guanajuato’s strategic location in Central Mexico and its<br />
unique logistics crossroads with multimodal rail and highway<br />
intersections not found in other states, make this an attractive<br />
market for investors. Guanajuato also has one of the most<br />
aggressive state governments offering creative investment<br />
incentives for investors.<br />
Guadalajara At A Glance<br />
RENT/SF/YR<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
deVeloPment land low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
low High effective avg. Vacancy<br />
N/A N/A N/A N/A<br />
$ 10.37 $ 15.55 N/A 20.00%<br />
$ 8.29 $ 10.37 N/A 25.00%<br />
$ 23.50 $ 28.50 N/A N/A<br />
$ 19.50 $ 22.00 N/A 20.00%<br />
N/A N/A N/A N/A<br />
$ 4.15 $ 5.18 N/A 9.00%<br />
$ 5.18 $ 6.82 N/A 8.00%<br />
$ 11.15 $ 16.72 N/A 2.00%<br />
$ 15.00 $ 20.00 N/A 7.00%<br />
$ 15.00 $ 20.00 N/A 8.00%<br />
$ 15.00 $ 20.00 N/A 2.00%<br />
$ 25.00 $ 55.00 N/A 15.00%<br />
N/A N/A N/A N/A<br />
$ 700.00 $ 1,500.00<br />
$ 250.00 $ 500.00<br />
$ 80.00 $ 150.00<br />
$ 100.00 $ 300.00<br />
$ 350.00 $ 800.00<br />
$ 250.00 $ 750.00<br />
Guanajuato At A Glance<br />
RENT/SF/YR<br />
low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$<br />
$<br />
4.28<br />
4.28<br />
$ 17.15<br />
$ 17.15<br />
$ 10.71<br />
$ 10.71<br />
10.00%<br />
5.00%<br />
Class B (Secondary)<br />
suburban offIce<br />
$ 2.57 $ 8.57 $ 5.57 3.00%<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$<br />
$<br />
4.28<br />
4.28<br />
$ 17.15<br />
$ 17.15<br />
$ 10.71<br />
$ 10.71<br />
5.00%<br />
5.00%<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
$<br />
2.57<br />
2.57<br />
5.14<br />
5.57<br />
$<br />
$<br />
$<br />
$<br />
8.57<br />
3.43<br />
6.00<br />
6.86<br />
$<br />
$<br />
$<br />
$<br />
5.57<br />
3.00<br />
5.57<br />
6.21<br />
3.00%<br />
13.00%<br />
11.00%<br />
1.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
deVeloPment land<br />
$ 16.20<br />
$ 15.90<br />
$ 18.60<br />
$ 18.60<br />
N/A<br />
low/m 2 $ 29.10<br />
$ 27.50<br />
$ 39.10<br />
$ 39.10<br />
N/A<br />
High/m 2 $ 22.65<br />
$ 21.70<br />
$ 29.20<br />
$ 29.20<br />
N/A<br />
low/acre<br />
9.00%<br />
8.00%<br />
13.00%<br />
13.00%<br />
N/A<br />
High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$ 30.00 $ 50.00 $ 121,405.88 $ 202,343.13<br />
$ 32.00 $ 45.00 $ 129,499.61 $ 182,108.82<br />
$ 32.00 $ 45.00 $ 129,499.61 $ 182,108.82<br />
$ 30.00 $ 50.00 $ 121,405.88 $ 202,343.13<br />
$ 120.00 $ 380.00 $ 485,623.52 $1,537,807.81<br />
$ 150.00 $ 60.00 $ 607,029.40 $ 242,811.76<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 72
Matamoros, Tamaulipas, Mexico<br />
Mexicali, Baja California, Mexico<br />
Contact<br />
<strong>NAI</strong> Mexico<br />
+1 619 690 3029<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
758,449<br />
3.9%<br />
$1,041.09<br />
$9,489.19<br />
3.2%<br />
4.5%<br />
4.5%<br />
109.713<br />
Matamoros is a destination for foreign operations in Mexico,<br />
employing over 65,000 workers, in approximately 155<br />
industrial plants. “By the border, by the sea” and “La Gran<br />
Puerta de Mexico” are slogans for this community, which<br />
borders Brownsville, Texas. Matamoros is located on the<br />
major trade corridor (NAFTA Highway) connecting Mexico<br />
with Texas and serving all points to the Midwest and Eastern<br />
US. Matamoros has hosted US and foreign operations since<br />
the 1970’s.<br />
Major sectors range from heavy steel products, metal<br />
fabrication, automotive and electronics. Matamoros hosts<br />
five major industrial parks. The vacancy rate was 10% at<br />
the end of 2011. The same fall in demand and consolidation<br />
during 2011 was reflected in Matamoros as the rest of the<br />
Mexican industrial markets. New projects included Joerns<br />
Health Care, Spellman, Overhead Doors, Rotronics, ATD and<br />
CRH. More demand will occur in <strong>2012</strong> due to projected<br />
expansions from existing operations and a growing supplier<br />
base. Industrial land values remained consistent during<br />
2011, with asking prices ranging from $30 to $40/SM. No<br />
change is expected for <strong>2012</strong>. During 2011, industrial lease<br />
rates fell 10% to 20% for Class B and Class C facilities.<br />
Shell rates averaged $.36 to .38/SF/month. Only build to<br />
suit projects were completed during 2011. Tenants will<br />
continue to experience a “tenants market” and receive<br />
additional incentives.<br />
Matamoros’ office market is primarily comprised of small<br />
projects hosting local service industries. The outlook for<br />
<strong>2012</strong> is that rates will remain the same and demand will be<br />
generated from local and regional operations.<br />
Retail centers in Matamoros host a mix of domestic and US<br />
franchises and big box operations. 2011 growth has been<br />
limited to expansions of Mexican retailers; these are mainly<br />
supermarkets (Bodega Aurrera). In <strong>2012</strong> there are plans for<br />
a new HEB, Home Depot and Seven Eleven stores. Lease<br />
rates and land prices will remain the same.<br />
Matamoros’ unique location on the NAFTA Highway, rail<br />
service, its border location, strong industrial tradition and<br />
its ability to ship overnight to much of the US, make it a<br />
destination for foreign firms to locate new projects in<br />
Mexico. The long term outlook is very favorable through<br />
<strong>2012</strong> and beyond. In <strong>2012</strong> Matamoros will see construction<br />
of a new international bridge, 100% dedicated to rail<br />
services and the expansion of the cargo area at the Veterans<br />
Bridge and Brownsville Airport.<br />
Contact<br />
<strong>NAI</strong> Mexico<br />
+1 619 690 3029<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
758,449<br />
3.9%<br />
$1,041.09<br />
$9,489.19<br />
3.2%<br />
4.5%<br />
4.5%<br />
109.713<br />
Mexicali is a thriving metropolitan area with 900,000+ residents.<br />
As the capital of Baja California, it hosts over 200<br />
maquiladora operations. Mexicali’s high work ethic<br />
contributed to the attraction of more than 100 new<br />
manufacturing companies to Mexicali from 1996 to 2011.<br />
As a testimony to the city, LG is reopening its 586,000 SF<br />
facility after two years of shifting production to Asia; LG will<br />
assemble LCD televisions with production beginning in<br />
November 2011.<br />
During 2011, activity in the industrial market was slow. Five<br />
major transactions were recorded through October 2011.<br />
Sunpower Corporation is locating its new Mexican operation<br />
in Mexicali at the Cambridge Campus by leasing 320,000<br />
SF with production expected for Q1 <strong>2012</strong>. This company<br />
manufactures and assembles solar panels. Pilkington (glass<br />
company) expanded in 2011 by leasing 118,000 SF at<br />
PIMSA I Industrial Park; the company has been in Mexicali<br />
for more than 10 years. Goodrich is expanding its facility<br />
with an additional 140,000 SF added to the existing<br />
300,000+ SF, located at the Colorado Industrial Development;<br />
this company is in the aerospace industry and supplies parts<br />
to the major aerospace companies. BI Technologies is also<br />
expanding its operation by leasing 80,000 SF at the PIMSA<br />
IV Industrial Park; the company produces components to the<br />
automotive sector.<br />
Pleatco is locating its first operation in Mexicali. This<br />
company leased 30,000 SF in the El Dorado Industrial Park;<br />
Pleatco manufactures filters for the use of swimming pools<br />
and Jacuzzis. Industrial lease rates will remain flat and<br />
competitive for <strong>2012</strong>. Prices for industrial land have<br />
remained flat since the purchase of large development tracts<br />
by Kellogg and Goodrich. The vacancy rate in Q3 2011 was<br />
11.5% and dropped compared to 17% in Q3 2010.<br />
The office market is small with most office projects no larger<br />
than three stories and located in one of three commercial<br />
corridors in the city. Most retail centers are small strip with<br />
food and drug establishments that are located in anchored<br />
neighborhood centers. Lease rates are expected to remain<br />
flat during <strong>2012</strong> and Mexicali will remain a destination for<br />
national retailers.<br />
Mexicali holds a unique position on the Mexican border with<br />
overnight drive times to most western US markets. Its<br />
industrial culture, abundant water and natural gas will help<br />
to maintain it as a destination for foreign operations through<br />
<strong>2012</strong> and many years to come.<br />
Matamoros At A Glance<br />
RENT/SF/YR<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
deVeloPment land low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
low High effective avg. Vacancy<br />
$ 8.40 $ 18.00 $ 12.00 20.00%<br />
$ 6.00 $ 8.40 $ 8.40 30.00%<br />
$ 2.40 $ 6.00 $ 4.80 30.00%<br />
$ 8.40 $ 18.00 $ 12.00 10.00%<br />
$ 6.00 $ 8.40 $ 8.40 10.00%<br />
$ 2.40 $ 6.00 $ 4.80 10.00%<br />
$ 3.36 $ 4.56 $ 4.56 10.00%<br />
$ 4.56 $ 6.00 $ 5.76 N/A<br />
$ 6.00 $ 6.60 $ 6.36 N/A<br />
$ 11.40 $ 14.40 $ 12.96 15.00%<br />
$ 8.40 $ 9.60 $ 9.00 30.00%<br />
$ 11.16 $ 12.00 $ 11.64 20.00%<br />
$ 9.60 $ 10.80 $ 10.20 10.00%<br />
N/A N/A N/A N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 100,000.00 $ 160,000.00<br />
$ 75,000.00 $ 90,000.00<br />
$ 200,000.00 $ 400,000.00<br />
$ 150,000.00 $ 300,000.00<br />
Mexicali At A Glance<br />
RENT/SF/YR<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
deVeloPment land low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
low High effective avg. Vacancy<br />
N/A N/A N/A N/A<br />
$ 12.00 $ 21.60 $ 10.80 14.00%<br />
$ 3.60 $ 10.00 $ 6.00 10.00%<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
$ 3.36 $ 4.08 $ 3.72 6.00%<br />
$ 3.60 $ 4.56 $ 4.08 8.00%<br />
N/A N/A N/A N/A<br />
$ 3.60 $ 6.00 $ 4.80 3.00%<br />
$ 6.00 $ 7.20 $ 6.60 10.00%<br />
N/A N/A N/A N/A<br />
$ 8.40 $ 16.00 N/A 4.00%<br />
N/A N/A N/A N/A<br />
$ 283,400.00 $ 607,287.00<br />
N/A<br />
N/A<br />
$ 101,215.00 $ 202,409.00<br />
$ 80,972.00 $ 182,186.00<br />
$ 202,429.00 $ 607,287.00<br />
$ 485,830.00 $ 931,174.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 73
Mexico City, Mexico<br />
Contact<br />
<strong>NAI</strong> Mexico<br />
+1 619 690 3029<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
Mexico City At A Glance<br />
RENT/SF/YR<br />
low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
Regional Malls<br />
Solus Food Stores<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
26.65<br />
19.80<br />
11.20<br />
22.20<br />
16.65<br />
11.10<br />
5.00<br />
5.30<br />
5.55<br />
20.00<br />
19.80<br />
27.75<br />
38.50<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
44.50<br />
26.40<br />
17.75<br />
27.75<br />
22.20<br />
17.76<br />
6.65<br />
8.35<br />
8.35<br />
73.50<br />
28.60<br />
44.40<br />
55.50<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
7.00%<br />
15.00%<br />
20.00%<br />
15.00%<br />
25.00%<br />
15.00%<br />
10.00%<br />
7.50%<br />
10.00%<br />
10.00%<br />
15.00%<br />
10.00%<br />
10.00%<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
758,449<br />
3.9%<br />
$1,041.09<br />
$9,489.19<br />
3.2%<br />
4.5%<br />
4.5%<br />
109.713<br />
Mexico City, the capital of Mexico, is located in South Central<br />
Mexico with over 23 million inhabitants. Mexico City is the<br />
first stop for foreign investors interested in industrial, retail,<br />
and office investments in Mexico. A competitive exchange<br />
rate, record high exports, a low inflation rate (3.25%) and<br />
significant international reserves ($130 billion), provide a strong<br />
foundation for economic growth through <strong>2012</strong>. Mexico City is<br />
a global city hosting many Latin America HQ operations.<br />
Mexican firms with headquarters in México City include;<br />
Grupo Modelo, Televisa, Grupo Azteca, Aeroméxico, Grupo<br />
Carso, Telmex, DESC, GICSA and BIMBO. Automotive firms<br />
include GM, Ford, Volkswagen, Nissan, Honda, Fiat and<br />
Chrysler. Multinationals like Coca Cola, Pepsi, Honeywell,<br />
Siemens, Motorola, USG, Microsoft, IBM, HP, Samsung,<br />
Sony, INTEL, LG, P&G and Walmart maintain headquarters<br />
in Mexico City. There is more than 12.5 million SM of<br />
industrial construction. By the end of 2011, industrial<br />
vacancies in Mexico City area dropped to 7.5% from 10.6%<br />
in 2010, due to absorption of 260,000 SM. Less active<br />
submarkets are Tultitlan with 16% vacancy and Vallejo<br />
Azcapotzalco with 12.5%; all other industrial sectors are<br />
experiencing single digit vacancies. New developments are<br />
being built in Cuautitlán, Tlalnepantla and Toluca-Lerma.<br />
Lease rates experienced a rise of 4% during 2011.<br />
Wal-Mart, Costco, Home Depot, Best Buy, Office Depot and<br />
other big box retailers experienced growth, with Walmart<br />
opening over 350 branded stores during 2011. Investors<br />
will seek stand-alone sites, strip and anchored centers for<br />
openings in early <strong>2012</strong>.<br />
Office market vacancies stand at 10.7%, similar to 2010.<br />
There are 7 million SM of office space in Mexico City and<br />
over 800,000 SM under construction. Demand for Class A<br />
offices shows no sign of diminishing and construction is at<br />
an all time high with 150,000 SM under construction on<br />
Avenida Reforma alone. New construction exceeds previous<br />
years, with over 800,000 SM of offices, 250,000 SM of<br />
industrial buildings and 145,000 SM of commercial areas<br />
completed during 2011. Office lease rates range from $24<br />
to $40/ SM/month. The Mexico City office market reflects<br />
strong activity, with constant demand which will remain<br />
through <strong>2012</strong>.<br />
Mexico City’s critical mass, domestic demand and presence<br />
as a leader among Latin American corporate headquarters,<br />
ensures growth will continue for Mexico City as a global<br />
destination for both corporate users and investors.<br />
$ 1,280.00 $ 3,000.00 $ 5,179,984.22 $ 12,140,588.01<br />
$ 408.00 $ 878.00 $ 1,651,119.97 $ 3,553,145.42<br />
$ 60.00 $ 243.00 $ 242,811.76 $ 983,387.63<br />
$ 100.00 $ 325.00 $ 404,686.27 $ 1,315,230.37<br />
$ 215.00 $ 690.00 $ 870,075.47 $ 2,792,335.24<br />
$ 265.00 $ 560.00 $ 1,072,418.61 $ 2,266,243.10<br />
Monterrey, Nuevo Leon, Mexico<br />
Contact<br />
<strong>NAI</strong> Mexico<br />
+1 619 690 3029<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
Monterrey At A Glance<br />
RENT/SF/YR<br />
low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
14.91<br />
13.66<br />
9.94<br />
18.63<br />
22.37<br />
14.91<br />
3.00<br />
4.32<br />
N/A<br />
27.34<br />
19.88<br />
N/A<br />
25.47<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
19.89<br />
18.63<br />
14.91<br />
29.83<br />
26.09<br />
21.12<br />
3.96<br />
5.04<br />
N/A<br />
45.98<br />
24.86<br />
N/A<br />
62.45<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
17.83<br />
16.72<br />
14.49<br />
27.87<br />
23.41<br />
16.72<br />
3.20<br />
4.35<br />
N/A<br />
27.87<br />
21.18<br />
N/A<br />
44.59<br />
N/A<br />
5.00%<br />
7.00%<br />
6.00%<br />
10.00%<br />
11.00%<br />
12.00%<br />
10.00%<br />
9.00%<br />
N/A<br />
6.00%<br />
12.00%<br />
N/A<br />
4.00%<br />
N/A<br />
deVeloPment land low/sf High/sf low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
758,449<br />
3.9%<br />
$1,041.09<br />
$9,489.19<br />
3.2%<br />
4.5%<br />
4.5%<br />
109.713<br />
Monterrey, Nuevo Leon is located in Northeast México, 140<br />
miles from the Laredo, Texas border crossing. It’s the third<br />
largest city in Mexico, with a population of 4.6 million. It<br />
ranks second in Mexico’s industrial production through<br />
well-developed communication systems, an educated work<br />
force and proximity to the US. Due to its 100 years of<br />
industrial experience, Monterrey is known as the Sultan of<br />
the North, and is often compared with Chicago.<br />
As the major industrial market in Northeast Mexico, Monterrey<br />
hosts multinational corporations such as BASF, Caterpillar,<br />
Daewoo, GE, JCI, Navistar, Mattel, Panasonic, Parker, LG,<br />
Whirlpool, LG, Carrier, Rockwell, Ryder, Lego, Arvin Meritor,<br />
MD Helicopters, Hitachi, Sonoco, Heb, Nippon Seiki and<br />
Polaris. Monterrey also offers both domestic and foreign<br />
operations, a diverse supplier infrastructure and also the<br />
benefits of Monterrey’s high quality of life and low cost<br />
workforce. Developers include both regional and international<br />
firms such as CPA, Prologis, Verde, Finsa and Intramerica.<br />
Monterrey offers more than 40 industrial parks in seven<br />
industrial zones with average vacancy rates near 10% at<br />
the end of 2011. The industrial market was very active<br />
during 2011, with 44 new firms commencing operations.<br />
During the second half, several existing companies initiated<br />
new plant investments. As of October 2011, there are 12<br />
industrial firms negotiating new space. Activity is projected<br />
to remain consistent through <strong>2012</strong>. Industrial lease rates<br />
have remained constant during 2011, although developers<br />
are aggressively offering more concessions through free<br />
rent and tenant improvements. 1,200,000 SF in multiple<br />
industrial projects were under construction at the end of<br />
2011. Developers will continue to offer aggressive incentives<br />
and <strong>2012</strong> will continue as a tenant’s market. Much of the<br />
excess inventory will be absorbed.<br />
The office market saw a growth during 2011. Although<br />
vacancy rates will fall below 8% in <strong>2012</strong>, rental rates have<br />
not risen. Current projects under construction range from<br />
20,000 to 100,000 SF buildings.<br />
US retailers such as Walmart, Sam’s Club, Costco, Sears<br />
and HEB continue to open stores in Monterrey. Home Depot<br />
and Lowes have established a presence. Prospects are<br />
strong for many additional big box retailers and franchises<br />
to expand in Monterrey during <strong>2012</strong>.<br />
Monterrey’s critical mass of industrial firms, proximity to US<br />
markets and 100 year manufacturing history ensure the future<br />
is promising as one of Mexico’s premier destination markets.<br />
N/A N/A N/A N/A<br />
$ 4.18 $ 18.58 $ 14,006.12 $ 62,256.86<br />
$ 3.72 $ 10.00 $ 12,464.78 $ 33,507.46<br />
$ 1.39 $ 9.29 $ 4,657.54 $ 31,128.43<br />
$ 5.57 $ 46.45 $ 18,663.66 $ 155,642.15<br />
$ 13.94 $ 90.00 $ 46,709.40 $ 301,567.14<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 74
Querétaro, Mexico<br />
Contact<br />
<strong>NAI</strong> Mexico<br />
+1 619 690 3029<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
758,449<br />
Queretaro, with two million residents, is located in Central<br />
Mexico’s “El Bajio” region. It is positioned on the NAFTA<br />
Highway (57), linking South America, Mexico and North<br />
America. Queretaro is also a major logistics hub with 70%<br />
of Mexico’s Gross Domestic Product (GDP) located within a<br />
135 mile radius. During the 1990’s a portion of Mexico<br />
City’s manufacturing sector relocated and Queretaro<br />
benefitted as the first major city to the north from Mexico City.<br />
Queretaro hosts 20 industrial parks and zones. The automotive<br />
sector has four assembly plants, more than 60 Tier 1 suppliers,<br />
over 100 Tier 2 suppliers, and employs more than 35,000<br />
workers. Aerospace is the other leading sector, hosting major<br />
Canadian and Brazilian companies in a rapidly growing cluster.<br />
Industrial vacancies during 2011 rose to 10% as a result of<br />
new construction designed to target new foreign manufacturers.<br />
During 2011, expansions and new industrial investments<br />
included aerospace suppliers such as Lear Jet, Embraer and<br />
Eurocopter. Samsung relocated new projects from Asia, and<br />
3PL distribution operations such as Grupo CID expanded in<br />
the market. Industrial lease rates fell 10% from 2009 to 2011.<br />
Strong competition among developers to offer creative<br />
incentives and flexible lease contracts ensures that <strong>2012</strong><br />
will continue as a “tenants market.” At year end 2011,<br />
180,000 SF was under construction at El Marques Industrial<br />
Park. Queretaro and Innovation Technological & Industrial<br />
Parks are building new facilities for <strong>2012</strong>. Calamanda on<br />
Highway 57 is offering a new 300,000 SF facility. <strong>2012</strong> Pent<br />
up demand from 2010 to 2011 will drive additional industrial<br />
leasing activity during <strong>2012</strong>. Lease rates will remain stable<br />
through <strong>2012</strong> and new construction will be primarily for<br />
build-to-suits for lease or purchase. Industrial land prices<br />
will rise in high demand submarkets of the city during <strong>2012</strong>.<br />
Queretaro offers a combination of low and midrise office<br />
projects. New projects include Empresalia, Business Center<br />
and Central Park. Lease rates in <strong>2012</strong> are projected to<br />
remain stable.<br />
Retail growth continues and was steady during 2011. For<br />
<strong>2012</strong>, ALTEA Retail <strong>Market</strong> Center will initiate construction<br />
as the largest commercial project in Latin America, projecting<br />
over 5,000,000 SF.<br />
The unique location on the NAFTA 57 Highway in Central<br />
Mexico, proximity to major population centers, the perception<br />
of a unique quality of life and the expanding electronics,<br />
automotive and aerospace sectors make Queretaro a great<br />
destination for business.<br />
Querétaro At A Glance<br />
RENT/SF/YR<br />
low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
13.93<br />
8.57<br />
4.45<br />
12.86<br />
10.28<br />
5.14<br />
2.57<br />
3.85<br />
5.14<br />
13.93<br />
14.76<br />
17.15<br />
17.15<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
20.43<br />
17.15<br />
9.48<br />
17.15<br />
16.53<br />
10.29<br />
3.43<br />
4.71<br />
6.43<br />
20.43<br />
24.48<br />
25.72<br />
25.72<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
17.18<br />
12.86<br />
6.97<br />
15.00<br />
13.41<br />
7.71<br />
3.00<br />
4.28<br />
5.78<br />
17.81<br />
19.62<br />
21.43<br />
21.43<br />
N/A<br />
12.00%<br />
15.00%<br />
10.00%<br />
20.00%<br />
10.00%<br />
15.00%<br />
20.00%<br />
10.00%<br />
5.00%<br />
3.00%<br />
10.00%<br />
5.00%<br />
5.00%<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
3.9%<br />
$1,041.09<br />
$9,489.19<br />
3.2%<br />
4.5%<br />
4.5%<br />
109.713<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
$ 50.00 $ 70.00 $ 15,564.86 $ 21,790.80<br />
$ 30.00 $ 60.00 $ 9,338.91 $ 18,677.83<br />
$ 300.00 $ 800.00 $ 93,389.14 $ 249,037.70<br />
$ 150.00 $ 600.00 $ 46,694.57 $ 186,778.28<br />
Reynosa, Tamaulipas, Mexico<br />
Contact<br />
<strong>NAI</strong> Mexico<br />
+1 619 690 3029<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
758,449<br />
Reynosa is one of the largest cities in Tamaulipas, with a<br />
population of nearly 1 million people. Reynosa is located on<br />
the Northeast border of Mexico, across from McAllen Texas,<br />
on the renowned NAFTA Highway. It is one of the busiest<br />
commercial border crossings in Northeast Mexico and offers<br />
direct access to distribution routes into Central and Eastern<br />
US. Reynosa recently inaugurated its third international<br />
crossing, Anzalduas Bridge, to facilitate cross border traffic.<br />
Reynosa is one of the top five maquiladora markets in<br />
Mexico, offering 13 industrial parks and hosting 350<br />
manufacturing operations. Main sectors include electronics,<br />
metal fabrication, automotive and medical devices. Reynosa<br />
hosts LG, Emerson, Jabil, Motorola, Panasonic, Corning,<br />
Fisher and Paykel as well as many other global firms.<br />
Industrial vacancy rates held steady at 12% for most of<br />
2011. With increased leasing activity from Q4 2011, through<br />
the first half of <strong>2012</strong>, vacancies are expected to drop during<br />
the next six months. During 2011, Reynosa experienced<br />
increased leasing activity compared to 2010. By the end of<br />
2011, transactions totaling over 1.6 million SF were<br />
completed in Reynosa. Major projects included Corning Cable<br />
(297,000 SF), Cequent Automotive (220,000 SF), Cal-Comp-<br />
New Kinpo Group (126,000 SF), Gear for Sports/Hanes<br />
(170,000 SF) and Kauffman Manufacturing (80,000 SF).<br />
From 2008 to 2010, lease rates fell 20% to 25%, however<br />
lease rates remained flat during 2011. Developers in <strong>2012</strong><br />
will continue to entice prospects with aggressive rates and<br />
rental concessions. There were no new speculative buildings<br />
constructed during 2011. None are projected for <strong>2012</strong>, until<br />
excess vacancies are absorbed. With pent up demand and<br />
the ability to compare Mexico vs. home markets, many firms<br />
are planning expansions to launch during <strong>2012</strong>.<br />
Reynosa’s office market is comprised of small projects<br />
hosting local service industries. Most are located near major<br />
arterials or near the border and residential communities.<br />
Lease rates remained stable during 2011 and no changes<br />
in lease rates are expected for <strong>2012</strong>.<br />
Retail availability is limited to a small number of anchored<br />
shopping centers and strip centers in the metro area. Lease<br />
rates remained stable during 2011. Vacancies remained low<br />
due to strong demand from Mexican retail tenants. Walmart<br />
and a number of US franchisers have entered the market.<br />
Reynosa’s unique location on the NAFTA Highway, its border<br />
location and its ability to ship overnight to the US, continue<br />
to make Reynosa a strong market for investors.<br />
Reynosa At A Glance<br />
RENT/SF/YR<br />
low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
9.00<br />
6.00<br />
2.40<br />
8.50<br />
6.00<br />
2.40<br />
3.48<br />
3.84<br />
N/A<br />
5.00<br />
3.00<br />
3.00<br />
4.00<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
18.00<br />
8.40<br />
6.00<br />
22.00<br />
8.40<br />
6.00<br />
4.32<br />
4.50<br />
N/A<br />
6.50<br />
5.00<br />
5.50<br />
5.50<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
12.00<br />
8.00<br />
4.00<br />
17.50<br />
8.00<br />
4.50<br />
3.78<br />
4.20<br />
N/A<br />
5.33<br />
4.85<br />
5.33<br />
5.33<br />
N/A<br />
6.00%<br />
2.00%<br />
4.00%<br />
7.00%<br />
1.00%<br />
3.00%<br />
12.00%<br />
13.00%<br />
N/A<br />
N/A<br />
2.00%<br />
N/A<br />
6.00%<br />
N/A<br />
deVeloPment land low/sf High/sf low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
3.9%<br />
$1,041.09<br />
$9,489.19<br />
3.2%<br />
4.5%<br />
4.5%<br />
109.713<br />
$ 2.29 $ 3.32 $ 99,751.71 $ 144,618.20<br />
$ 2.29 $ 2.98 $ 99,751.71 $ 129,807.90<br />
$ 1.72 $ 2.52 $ 74,922.68 $ 109,770.44<br />
$ 1.72 $ 1.95 $ 74,922.68 $ 84,941.41<br />
$ 2.18 $ 3.21 $ 94,960.14 $ 139,826.63<br />
$ 4.59 $ 11.47 $ 199,939.02 $ 499,629.74<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 75
Saltillo, Coahuila, Mexico<br />
San Luis Potosi, Mexico<br />
Contact<br />
<strong>NAI</strong> Mexico<br />
+1 619 690 3029<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
758,449<br />
3.9%<br />
$1,041.09<br />
$9,489.19<br />
3.2%<br />
4.5%<br />
4.5%<br />
109.713<br />
Saltillo is the capital of Coahuila, located in Northeast Mexico.<br />
Saltillo ranks second in Mexico for international exports.<br />
Saltillo is located 180 miles south of the US border with<br />
Laredo, Texas. Saltillo is the 20th largest city in Mexico with a<br />
population of approximately 800,000. The region comprises<br />
the municipalities of Saltillo, Ramos Arizpe and Arteaga. Saltillo<br />
is headquarters to Grupo Industrial Saltillo, a Mexican<br />
conglomerate making home appliances, silverware and auto<br />
parts.<br />
37% of cars and 62% of trucks produced in Mexico are<br />
assembled in Saltillo, ranking it first in Mexico, and providing<br />
a key platform for the global automotive industry. Saltillo’s<br />
principal sectors include automotive, metal fabrication,<br />
electronics, plastics, appliances and aerospace. GM, Chrysler<br />
and Freightliner are established in Saltillo. <strong>Global</strong> suppliers<br />
such as ITT Industries, Magna Steyr, Quimmco, Johnson<br />
Controls and John Deere also maintain operations.<br />
Major industrial developers in Saltillo include Amistad, Davisa,<br />
Finsa, CPA and Avante-Alianza, all located throughout eight<br />
industrial parks. Current vacancy rate for Class A industrial<br />
space is: 4% The industrial sector saw continued activity<br />
during 2011. Companies expanding in the market included;<br />
JCI, Nova Steel, Coil Plus , Delphi, Magna Formex, BIC, Venture<br />
Steel, Deacero, Kuehen & Nagel, Commercial Vehicle Group,<br />
Stone Ridge, Axle Alliance, Behr and Whirlpool. Activity is<br />
projected to remain consistent through <strong>2012</strong>. Industrial lease<br />
rates remained flat during 2011. Low vacancies equated too<br />
few concessions or free rent. Saltillo may see slight increases<br />
in lease rates during <strong>2012</strong>, due to increased activity and less<br />
inventory. Whirlpool finished the expansion of its facility with<br />
a 700,000 SF plant. Seven new industrial buildings were<br />
delivered by Amistad, Davisa, Finsa, and Avante-Alianza<br />
Derramadero during 2011.<br />
The office sector in Saltillo is relatively small. Saltillo offers<br />
two high rise buildings with 20 floors each; small, two or three<br />
floor office buildings are still customary. Lease rates were flat<br />
for 2011 and expected to remain the same for <strong>2012</strong>. The<br />
current Class A vacancy rate is 10%.<br />
Two shopping malls currently operate in Saltillo. No new<br />
developments are planned for <strong>2012</strong>. A trend in the market is<br />
for small strip center developments offering 30 spaces or less.<br />
Saltillo offers investors a skilled, educated labor force with a<br />
30 year tradition of manufacturing with foreign firms.<br />
The proximity to the US and 45 minute driving distance to<br />
Monterrey make it an excellent location.<br />
Contact<br />
<strong>NAI</strong> Mexico<br />
+1 619 690 3029<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
758,449<br />
3.9%<br />
$1,041.09<br />
$9,489.19<br />
3.2%<br />
4.5%<br />
4.5%<br />
109.713<br />
San Luis Potosi (SLP) is the geographic center of Mexico and<br />
located adjacent to 10 neighboring states. It is situated on<br />
NAFTA Highway 57, linking North and South America. SLP’s<br />
strategic hub for logistics hosts the premier Inland Port and<br />
Free Trade Zone (FTZ) in Mexico; Interpuerto. SLP is home to<br />
global operations such as GM, Toyota, Daikin MQuay, Magna,<br />
Cummins and Valeo. Primary sectors include metal fabrication,<br />
appliances, automotive and aerospace.<br />
Central Mexico and SLP continue to be excellent destinations<br />
for global manufacturers when logistics plays a strategic role<br />
for the location decision. 70% of the Mexican market is located<br />
within a five hour radius from SLP. There are 13 industrial parks<br />
in SLP, including the FTZ and inter-modal services offered at<br />
Interpuerto. By the end of 2011, industrial inventory rates fell<br />
to 10%. During 2011 SLP welcomed Daikin McQuay, Loreal,<br />
Cummins DPC, Magna (Automotive) and LORVA (Logistics),<br />
among others, to the market. Between 2008 and 2011 land<br />
prices increased inside industrial parks on average from<br />
$20/SM to $29/SM. Between 2009 and 2011 industrial lease<br />
rates fell 13% to 15%. Strong competition among developers<br />
offering flexible terms ensures that <strong>2012</strong> will continue as a<br />
“tenants market.” In January 2011, only 119,166 SF was<br />
under construction at Logistik IP. In 2011, Lorva Logistics<br />
relocated operations to an owned 100,000 SF facility. Prudential<br />
at Millennium Industrial Park has initiated a 200,000 SF project<br />
to be completed during <strong>2012</strong>. A significant portion of the<br />
available inventory should be absorbed during <strong>2012</strong>. Key state<br />
incentives, manufacturing cluster development, FTZ growth<br />
and logistics projects will drive demand for existing facilities.<br />
SLP’s office sector is comprised of low rise projects. During<br />
2011, most tenants were Mexican firms. Minor speculative<br />
office construction is projected for <strong>2012</strong>, with lease rates and<br />
land values remaining stable.<br />
Walmart, Costco, Home Depot, Fabricas de Francia, Soriana,<br />
Gigante and Chedraui are taking advantage of SLP’s growing<br />
consumer incomes and strategic location. During 2011, Grupo<br />
Carso launched its newest commercial center anchored by<br />
Liverpool. Retail construction in <strong>2012</strong> will focus on new<br />
neighborhood centers with lease rates projected to increase.<br />
SLP’s unique location on the NAFTA 57 Highway, world class<br />
infrastructure, strategic FTZ’s and Inland Ports remain a draw<br />
for companies looking at this market. The excellent quality of<br />
life, expanding automotive, appliances, medical and aerospace<br />
sectors will continue to bring business to SLP.<br />
Saltillo At A Glance<br />
RENT/SF/YR<br />
low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
$ 11.14 $ 16.72 $ 13.37 8.00%<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
$<br />
$<br />
7.80<br />
6.68<br />
$<br />
$<br />
10.03<br />
7.80<br />
$<br />
$<br />
8.91<br />
6.68<br />
10.00%<br />
9.00%<br />
New Construction (AAA)<br />
$ 13.37 $ 16.72 $ 13.37 2.00%<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
$<br />
$<br />
7.80<br />
6.74<br />
3.60<br />
4.50<br />
5.40<br />
$<br />
$<br />
$<br />
$<br />
$<br />
8.91<br />
7.80<br />
4.44<br />
5.04<br />
6.24<br />
$<br />
$<br />
$<br />
$<br />
$<br />
8.91<br />
6.74<br />
3.84<br />
4.68<br />
6.00<br />
3.00%<br />
3.00%<br />
4.00%<br />
4.00%<br />
N/A<br />
Downtown<br />
$ 10.03 $ 15.60 $ 11.14 10.00%<br />
Neighborhood Service Centers<br />
Community Power Center<br />
$ 7.80<br />
N/A<br />
$ 10.03<br />
N/A<br />
$ 8.91<br />
N/A<br />
12.00%<br />
N/A<br />
Regional Malls<br />
Solus Food Stores<br />
$ 11.14<br />
N/A<br />
$ 28.42<br />
N/A<br />
$ 15.00<br />
N/A<br />
11.00%<br />
N/A<br />
deVeloPment land low/sf High/sf low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
$ 2.78 $ 3.71 $ 121,095.96 $ 161,606.48<br />
$ 1.67 $ 3.71 $ 72,744.70 $ 161,606.48<br />
$ 13.93 $ 27.87 $ 606,786.60 $1,214,008.80<br />
$ 11.14 $ 18.58 $ 485,255.04 $ 809,339.20<br />
San Luis Potosi At A Glance<br />
RENT/SF/YR<br />
low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
6.86<br />
4.28<br />
6.86<br />
6.86<br />
4.28<br />
2.14<br />
4.85<br />
N/A<br />
12.86<br />
14.41<br />
21.43<br />
21.43<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
12.86<br />
6.99<br />
12.86<br />
12.86<br />
6.99<br />
3.00<br />
5.14<br />
N/A<br />
21.43<br />
25.87<br />
30.01<br />
30.01<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
9.86<br />
5.64<br />
9.86<br />
9.86<br />
5.64<br />
2.57<br />
4.99<br />
N/A<br />
17.14<br />
20.16<br />
25.72<br />
25.72<br />
N/A<br />
N/A<br />
10.00%<br />
10.00%<br />
5.00%<br />
5.00%<br />
5.00%<br />
15.00%<br />
11.00%<br />
N/A<br />
2.00%<br />
5.00%<br />
10.00%<br />
10.00%<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$ 150.00 $ 600.00 $ 607,029.40 $ 2,428,117.60<br />
$ 20.00 $ 35.00 $ 80,937.25 $ 141,640.19<br />
$ 20.00 $ 35.00 $ 80,937.25 $ 141,640.19<br />
$ 50.00 $ 100.00 $ 202,343.13 $ 404,686.27<br />
$ 400.00 $ 800.00 $ 1,618,745.07 $ 3,237,490.14<br />
$ 150.00 $ 600.00 $ 607,029.40 $ 2,428,117.60<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 76
Tijuana, Baja California, Mexico<br />
Contact<br />
<strong>NAI</strong> Mexico<br />
+1 619 690 3029<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
758,449<br />
Tijuana is located in Northwest Mexico in the state of Baja<br />
California. With its shared border with San Diego, CA, it is the<br />
busiest border crossing in the world. Tijuana has hosted the<br />
largest concentration of foreign manufacturing firms in Mexico<br />
for over 40 years due to its position to ship overnight to most<br />
parts of the Western US. Tijuana is a bi-cultural border city<br />
with a population of 2 million people.<br />
Tijuana’s industrial market is comprised of 72.5 million SF.<br />
More than 900 global firms are established in Tijuana’s 45<br />
industrial parks in sectors ranging from aerospace, medical<br />
devices, electronics and general industrial. By the end of<br />
2011, vacancy rates had fallen from 12.6% to 11.72%,<br />
despite continued consolidations creating vacant space.<br />
Vacancy rates for <strong>2012</strong> are forecasted to fall below 8%. 2011<br />
continued as a tenant’s market with lease rates remaining at<br />
their lowest levels in 20 years. The 15% to 25% discounts<br />
have been well received by firms trading older space for lower<br />
rates in newer projects. Net absorption of 1.2 million SF was<br />
driven by projects such as INZI (192,000 SF), Energy Labs<br />
(288,000 SF), Ryerson (80,000 SF), Elektra (80,000 SF),<br />
Andrea (110,000 SF) and Samsung (225,000 SF). These<br />
firms are expanding to take advantage of the cost differential<br />
between Mexico and home markets. New construction during<br />
2011 included Andrea, INZI, Samsung and Ryerson. New<br />
construction is expected for build-to-suit project for other<br />
Samsung suppliers during <strong>2012</strong> in or nearby the El Florido<br />
Industrial Park. Lease rates will rise during <strong>2012</strong> in<br />
submarkets lacking sufficient inventory to support new<br />
demand. <strong>2012</strong> is expected to continue as a tenant’s market<br />
in submarkets with excess inventory.<br />
Two Class A office towers were completed during 2011;<br />
Corporativo Tapachula and World Trade Center. Office lease<br />
rates remained flat. <strong>2012</strong> will reflect clients relocating to trade<br />
for better quality space and/or to consolidate from other<br />
locations in Tijuana.<br />
Retail investment from domestic and international firms<br />
continued during 2011. <strong>2012</strong> will see a limited amount<br />
of new commercial centers with the biggest projects<br />
concentrated in the southeast and south (Blvd 2000).<br />
The critical mass of industrial firms, well developed industrial<br />
clusters with a proximity to western US markets and a 40 year<br />
history with foreign manufacturers, makes Tijuana a strong<br />
market for investors.<br />
Tijuana At A Glance<br />
RENT/SF/YR<br />
low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
20.00<br />
13.00<br />
6.50<br />
N/A<br />
N/A<br />
5.50<br />
$ 25.00<br />
$ 20.00<br />
$ 13.00<br />
N/A<br />
N/A<br />
$ 11.00<br />
$<br />
$<br />
$<br />
$<br />
22.00<br />
16.50<br />
9.00<br />
N/A<br />
N/A<br />
8.00<br />
32.00%<br />
18.00%<br />
25.00%<br />
N/A<br />
N/A<br />
25.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$<br />
$<br />
3.00<br />
3.00<br />
N/A<br />
N/A<br />
$<br />
$<br />
4.80<br />
4.80<br />
N/A<br />
N/A<br />
$<br />
$<br />
3.96<br />
3.96<br />
N/A<br />
N/A<br />
28.00%<br />
10.00%<br />
N/A<br />
N/A<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
$<br />
$<br />
10.00<br />
N/A<br />
15.00<br />
N/A<br />
$ 20.00<br />
N/A<br />
$ 40.00<br />
N/A<br />
$<br />
$<br />
15.00<br />
N/A<br />
25.00<br />
N/A<br />
8.00%<br />
N/A<br />
5.00%<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
3.9%<br />
$1,041.09<br />
$9,489.19<br />
3.2%<br />
4.5%<br />
4.5%<br />
109.713<br />
$ 43.00 $ 1,500.00 $ 174,015.09 $ 6,070,294.00<br />
N/A N/A N/A N/A<br />
$ 60.00 $ 100.00 $ 242,811.76 $ 404,686.27<br />
$ 50.00 $ 130.00 $ 202,343.13 $ 526,092.15<br />
$ 30.00 $ 1,500.00 $ 121,405.88 $ 6,070,294.00<br />
$ 80.00 $ 450.00 $ 323,749.01 $ 1,821,088.20<br />
Panama City, Republic of Panama<br />
Contact<br />
<strong>NAI</strong> Panama<br />
+1 507 302 0105<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
Panama City At A Glance<br />
Panama has long been the crossroads of the Americas and<br />
the crux of commerce for over 500 years. Today, Panama’s<br />
advantageous location continues to drive business in a variety<br />
of sectors as evidenced by Panama housing the second<br />
largest free trade zone in the world, the largest financial center<br />
in Latin America, a port system that boasts more cranes then<br />
Brazil and better then 10% GDP growth the first half of 2011.<br />
Considered the regional hub for the Americas, firms like<br />
Procter & Gamble, Caterpillar, 3M, Dell, BASF and 3PL have<br />
established significant operations in Panama, taking advantage<br />
of several fiscal benefits and world class infrastructure.<br />
Development activity in downtown Panama City, as well as<br />
the suburbs, has continued to grow to support office and<br />
warehousing needs. Class A industrial parks have seen<br />
strong growth over the last year with several important<br />
projects breaking ground to provide mixed use solutions for<br />
warehouse, showroom, office, hotel and convention space.<br />
The International Airport and the Panama Canal are both<br />
undergoing expansion projects to keep pace with the demand.<br />
Office vacancy has remained under 6% throughout 2011.<br />
With a total existing office inventory of 838,911 SM, Class<br />
A+ buildings make up 8% (70,750 SM) of the total existing<br />
inventory and leases on average for $27.63/SM/month. Class<br />
A demand is strong with average lease rates of<br />
$24.38/SM/month and vacancy rates under 3%. Average<br />
common area maintenance fees range from $1.35/SM/month<br />
in Class C office to $2.43/SM/month in Class A+. <strong>Market</strong><br />
average maintenance fees are $1.73/SM/month. Construction<br />
in the office market continues to plow forward with over 25<br />
office projects underway as of Q3 2011. A total of 601,745<br />
SM are currently under construction representing an<br />
impressive 72% increase over existing inventory. Average sale<br />
list price for office under construction is $2,435.54/SM.<br />
Retail is in high demand. Several commercial strip malls are<br />
under construction throughout the city, particularly in the<br />
suburbs, where land values make the small projects more<br />
attractive. Retail lease rates range anywhere from $20 to<br />
$35/SM/month, with high end retail asking for upwards of<br />
$40 to $80/SM/month.<br />
Panama’s outlook for the future is extremely positive. The<br />
Latin Business Chronicle expects Panama to post the highest<br />
GDP growth in Latin America for the next five years.<br />
Multinational corporations continue to see the value in<br />
Panama as new organizations establish regional operations<br />
in the country on a regular basis.<br />
RENT/M 2 /MO<br />
US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
Flex Space<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
22.00<br />
18.50<br />
16.00<br />
18.00<br />
18.00<br />
12.00<br />
4.00<br />
N/A<br />
N/A<br />
20.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
28.00<br />
30.00<br />
23.00<br />
30.00<br />
35.00<br />
28.00<br />
9.00<br />
N/A<br />
N/A<br />
30.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
24.53<br />
20.62<br />
17.84<br />
20.07<br />
20.07<br />
13.38<br />
4.46<br />
N/A<br />
N/A<br />
22.30<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 31.22<br />
$ 33.44<br />
$ 25.64<br />
$ 33.44<br />
$ 39.02<br />
$ 31.22<br />
$ 10.03<br />
N/A<br />
N/A<br />
$ 33.44<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
29,119<br />
6.7%<br />
$29.94<br />
$8,340.11<br />
3.0%<br />
4.3%<br />
N/A<br />
3.59<br />
$ 1,500.00 $ 2,800.00 $ 6,070,294.00 $ 11,331,215.48<br />
N/A N/A N/A N/A<br />
$ 110.00 $ 650.00 $ 445,154.89 $ 2,630,460.74<br />
N/A N/A N/A N/A<br />
$ 400.00 $ 2,000.00 $ 1,618,745.07 $ 8,093,725.34<br />
$ 400.00 $ 1,800.00 $ 1,618,745.07 $ 7,284,352.81<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 77
Lima, Peru<br />
Caracas, Venezuela<br />
Contact<br />
<strong>NAI</strong> Peru Rosecorp<br />
+511 440 2630<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
496,225<br />
6.0%<br />
$162.48<br />
$5,414.27<br />
2.5%<br />
7.5%<br />
4.3%<br />
30.009<br />
Peru’s 2011 growth rate is expected to be 6.3%, a decrease<br />
from 8.8% in 2010 due to repercussions from the change<br />
in government and economic policies and also the US and<br />
European financial crises. However, the World Bank predicts<br />
Peru will continue as a growth leader in Latin America<br />
through 2013. Following this line, the Latin Business Index<br />
highlights the country has the second best macroeconomic<br />
environment in the region. The S&P credit rating improved<br />
from BBB- to BBB.<br />
The industrial sector demand for space keeps growing as<br />
do the rents and this market remains unsatisfied. Sale prices<br />
in Lima for Class A properties are $800 to $1,300/SM and<br />
lease rates in this Class are $4.00 to $7.00/SM. The trend<br />
of industrial migration and relocation continues from central<br />
parts of the main cities due to residential and commercial<br />
developments moving a few kilometers beyond their periphery.<br />
Examples are the district of Cerro Colorado in Arequipa y La<br />
Esperanza en Trujillo and Chilca in Lima; where a new 250<br />
Ha Industrial Park is now being developed at a price of<br />
$30/SM.<br />
The office market has shown a steady increase in rent<br />
throughout the year, a consequence of the supply backlog<br />
and pressure on the ideal land available for office building<br />
projects. The total increase was 9.1% from an average of<br />
$16.5/SM up to $18/SM in the prime office sector. The<br />
vacancy for this segment is at 4.5% in delivered space,<br />
although 51,730 SM was delivered during 2011. By the end<br />
of <strong>2012</strong> or mid 2013, a large number of projects are<br />
expected to be delivered. About 40% of prime buildings<br />
announced over the next two years they will seek LEED<br />
certification, showing an encouraging trend towards<br />
sustainable construction.<br />
The 2011 retail sector growth was steady and continued its<br />
galloping rhythm in all formats. Total sales grew by 25%<br />
reaching $4.1 billion. Peru’s <strong>Global</strong> Retail delivers new retail<br />
malls nationwide. It is becoming increasingly difficult to find<br />
suitable land for the development of these projects. In<br />
response to these market conditions, malls began to include<br />
office buildings and hotels within the complex, optimizing<br />
their products. Stand alone stores are located on first floor<br />
office buildings and strip center projects are quickly increasing<br />
in number. Thus, the trend in Lima for <strong>2012</strong> will be<br />
mixed-use malls and buildings as well as a greater number<br />
of neighborhood service centers.<br />
Contact<br />
<strong>NAI</strong> Ferca<br />
+1 58 212 286 8124<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
352,140<br />
0.5%<br />
$296.34<br />
$9,955.48<br />
32.2%<br />
8.1%<br />
17.4%<br />
29.767<br />
Venezuela offers excellent opportunities for investment due<br />
to extraordinary oil revenues. Although oil prices went from<br />
$147 to $98 (October, 2011), oil revenues are still an<br />
important commodity. The level of Venezuela cash reserves<br />
at the beginning of the economic crisis allowed that<br />
macroeconomic imbalances did not translate into a severe<br />
contraction in the market. The oil sector and oil related<br />
industries are the key drivers of the Venezuela economy.<br />
The office market in Caracas, mostly dependent on foreign<br />
companies, has become thin. Sale and rental prices<br />
increased due to very low inventory, while construction of<br />
new projects started but only a few have entered the market<br />
in 2011. More projects are expected to be finished in <strong>2012</strong>,<br />
which will not be enough to catch up with demand for Class<br />
AAA offices.<br />
The industrial real estate market has also seen low inventory<br />
levels in 2011 with rental and sale prices above 2010 levels.<br />
It is expected that this trend will continue through <strong>2012</strong> due<br />
to an increase in oil revenue and plans from the Chavez<br />
administration to reduce unemployment through development<br />
of the manufacturing, construction and agricultural sectors.<br />
Retail has also seen low inventory levels and increased prices.<br />
Vacancy rates at Class AAA shopping centers are extremely<br />
low. The retail sector has benefited from the government policy<br />
of increasing consumption of the lower income population,<br />
which increased the demand of retail outlets.<br />
Investment in real estate among transnational companies<br />
use this type of investment to hedge their Bolivar cash<br />
balances against inflation. Due to the exchange control<br />
system in force since 2006, repatriation of dividends at an<br />
official exchanges rate of $1 to VEF 4.30 is very difficult,<br />
leaving many companies to invest their Bolivar cash surplus<br />
in the office/warehouse market.<br />
Venezuela has the largest oil reserves in the world, a<br />
commodity that will continue to be key to the world economy.<br />
Due to its foreign exchange reserves, it’s estimated that<br />
Venezuela will be able to cope with any temporary variation<br />
of oil price.<br />
The multifamily market has faced strong intervention from<br />
the Venezuelan government. The current deficit is currently<br />
estimated in more than 2,000,000 units. This situation has<br />
caused the Chavez Administration to launch construction<br />
plans financed with public funds and with the cooperation<br />
of foreign countries (Uruguay, Iran and China).<br />
Lima At A Glance<br />
RENT/M 2 /MO<br />
US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 17.00<br />
$ 16.50<br />
$ 15.00<br />
$ 16.50<br />
$ 16.00<br />
$ 13.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
22.00<br />
20.00<br />
17.00<br />
18.00<br />
17.00<br />
15.00<br />
$ 18.95<br />
$ 18.39<br />
$ 16.72<br />
$ 18.39<br />
$ 17.84<br />
$ 14.49<br />
$ 24.53<br />
$ 22.30<br />
$ 18.95<br />
$ 20.07<br />
$ 18.95<br />
$ 16.72<br />
7.00%<br />
4.00%<br />
7.00%<br />
6.00%<br />
3.00%<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech / R&D<br />
retaIl<br />
$<br />
$<br />
3.00<br />
3.00<br />
N/A<br />
$<br />
$<br />
7.00<br />
7.00<br />
N/A<br />
$<br />
$<br />
3.34<br />
3.34<br />
N/A<br />
$<br />
$<br />
7.80<br />
7.80<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
$ 17.00<br />
N/A<br />
$ 25.00<br />
$ 32.00<br />
N/A<br />
$<br />
$<br />
$<br />
35.00<br />
N/A<br />
48.00<br />
60.00<br />
N/A<br />
$ 18.95<br />
N/A<br />
$ 27.87<br />
$ 35.67<br />
N/A<br />
$ 39.02<br />
N/A<br />
$ 53.51<br />
$ 66.89<br />
N/A<br />
N/A<br />
N/A<br />
2.00%<br />
3.00%<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$ 1,700.00 $ 2,200.00 $ 6,879,666.54 $ 8,903,097.87<br />
N/A N/A N/A N/A<br />
$ 400.00 $ 800.00 $ 1,618,745.07 $ 3,237,490.14<br />
N/A N/A N/A N/A<br />
$ 1,000.00 $ 1,600.00 $ 4,046,862.67 $ 6,474,980.27<br />
$ 600.00 $ 1,700.00 $ 2,428,117.60 $ 6,879,666.54<br />
Caracas At A Glance<br />
conversion: 4.30 Veb = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
VEB 3,084.00<br />
VEB 2,040.00<br />
VEB 1,200.00<br />
N/A<br />
N/A<br />
N/A<br />
VEB 1,020.00<br />
VEB 4,032.00<br />
VEB 3,060.00<br />
VEB 1,440.00<br />
N/A<br />
N/A<br />
N/A<br />
VEB 1,440.00<br />
$ 66.63<br />
$ 44.07<br />
$ 25.93<br />
N/A<br />
N/A<br />
N/A<br />
$ 22.04<br />
$ 87.11<br />
$ 66.11<br />
$ 31.11<br />
N/A<br />
N/A<br />
N/A<br />
$ 31.11<br />
10.10%<br />
7.50%<br />
5.40%<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
VEB 684.00<br />
N/A<br />
VEB 1,080.00<br />
N/A<br />
$ 14.78<br />
N/A<br />
$ 23.33<br />
N/A<br />
N/A<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
VEB 3,120.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
VEB 4,392.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 67.41<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 94.89<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land low/m 2 High/m 2 low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
VEB 1,720.00 VEB 2,580.00 $1,618,745.07 $ 2,428,117.60<br />
N/A N/A N/A N/A<br />
VEB 860.00 VEB 1,720.00 $ 809,372.53 $ 1,618,745.07<br />
N/A N/A N/A N/A<br />
VEB 3,010.00 VEB 3,870.00 $2,832,803.87 $ 3,642,176.40<br />
N/A N/A N/A N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 78
United States<br />
sectIon contents<br />
Birmingham, AL<br />
Huntsville, AL<br />
Phoenix, AZ<br />
Jonesboro, AR<br />
Little Rock, AR<br />
Bakersfield, CA<br />
Inland Empire, CA<br />
Los Angeles, CA<br />
Oakland, CA<br />
Orange County, CA<br />
Sacramento, CA<br />
San Diego, CA<br />
San Francisco, CA<br />
Ventura County, CA<br />
Colorado Springs, CO<br />
Denver, CO<br />
Hartford, CT<br />
Wilmington, DE (Cecil County, MD)<br />
Washington, DC<br />
Bradenton, FL<br />
Fort Lauderdale, Florida<br />
Ft. Myers, FL<br />
Jacksonville, FL<br />
Martin/St. Lucie Counties, FL<br />
Miami, FL<br />
Ocala/Gainesville, FL<br />
Orlando, FL<br />
Palm Beach County, FL<br />
Tampa Bay, FL<br />
Atlanta, GA<br />
Savannah, GA<br />
Honolulu, HI<br />
Boise, ID<br />
Southeast ID<br />
Chicago, IL<br />
Springfield, IL<br />
Fort Wayne, IN<br />
Indianapolis, IN<br />
Cedar Rapids/Iowa City, IA<br />
Davenport/Bettendorf, IA<br />
and Rock Island/Moline, IL<br />
Des Moines, IA<br />
Sioux City, IA<br />
Wichita, KS<br />
Lexington, KY<br />
Baton Rouge, LA<br />
Lake Charles, LA<br />
Monroe, LA<br />
New Orleans, LA<br />
Greater Portland, ME<br />
Baltimore, MD<br />
Suburban MD<br />
Boston, MA<br />
Greater Springfield, MA<br />
Detroit, MI<br />
Grand Rapids, MI<br />
Lansing, MI<br />
Minneapolis/St. Paul, MN<br />
Jackson, MS<br />
Kansas City, MO<br />
St. Louis, MO<br />
Billings, MT<br />
Bozeman, MT<br />
Missoula, MT<br />
Lincoln, NE<br />
Omaha, NE<br />
Las Vegas, NV<br />
Reno, NV<br />
Manchester, NH<br />
Portsmouth, NH<br />
Atlantic County, NJ<br />
Middlesex/Somerset Counties, NJ<br />
Northern NJ<br />
Ocean/Monmouth Counties, NJ<br />
Princeton, NJ<br />
Southern NJ<br />
Albuquerque, NM<br />
Las Cruces, NM<br />
Albany, NY<br />
Long Island, NY<br />
New York City, NY<br />
Westchester, NY<br />
Asheville, NC<br />
Charlotte, NC<br />
Greensboro/High Point/<br />
Winston-Salem, NC<br />
Raleigh/Durham, NC<br />
Fargo, ND<br />
Akron, OH<br />
Canton, OH<br />
Cincinnati, OH<br />
Cleveland, OH<br />
Columbus, OH<br />
Dayton, OH<br />
Oklahoma City, OK<br />
Tulsa, OK<br />
Portland, OR<br />
Allentown/Bethlehem/Easton, PA<br />
Berks County, PA<br />
Bucks County, PA<br />
Harrisburg/York/Lebanon, PA<br />
Lancaster, PA<br />
Philadelphia, PA<br />
Philadelphia Suburbs, PA<br />
Pittsburgh, PA<br />
Schuylkill County, PA<br />
Wilkes-Barre/Scranton/Hazleton, PA<br />
Charleston, SC<br />
Columbia, SC<br />
Greenville/Spartanburg, SC<br />
Sioux Falls, SD<br />
Chattanooga, TN<br />
Clarksville, TN<br />
Knoxville, TN<br />
Memphis, TN<br />
Nashville, TN<br />
Austin, TX<br />
Beaumont, TX<br />
Corpus Christi, TX<br />
Dallas, TX<br />
El Paso, TX<br />
Fort Worth, TX<br />
Houston, TX<br />
Rio Grande Valley, TX<br />
San Antonio, TX<br />
Texarkana, TX<br />
Salt Lake City, UT<br />
Washington County, UT<br />
Burlington, VT<br />
Lynchburg, VA<br />
Northern VA<br />
Seattle/Puget Sound, WA<br />
Spokane, WA<br />
Tri-Cities, WA<br />
Madison, WI<br />
Milwaukee, WI<br />
Northeastern (Fox Valley/Green Bay), WI<br />
Casper, WY
Birmingham, Alabama<br />
Huntsville/Decatur County, Alabama<br />
Contact<br />
<strong>NAI</strong> Chase Commercial<br />
Realty<br />
+1 888 539 1686<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
1,135,203<br />
1,163,620<br />
565,361<br />
$68,238<br />
$50,071<br />
36<br />
The Alabama economy is slowly rebounding with economic<br />
development prospects picking up and a few projects that were<br />
set in motion before the recession, beginning to come online.<br />
Unemployment remains a large factor in the recovery process.<br />
While the unemployment rate has improved in recent months,<br />
it is still hovering around 9.3% in Birmingham. Any increase in<br />
commercial leasing will depend on job growth. Until there is a<br />
significant increase in employment, the recovery process will<br />
remain relatively slow.<br />
Q2 2011 ended with positive absorption across the office<br />
market. Absorption was 149,938 SF, an increase from negative<br />
349,445 SF in Q1 when Regions Plaza, a vacant 211,000 SF<br />
building, was purchased by an out of state investor and<br />
put back on the market as a multi-tenant space for lease. The<br />
positive absorption in Q2 is largely due to a 100,000 SF lease<br />
with FEMA located in the CBD. Occupancy for Q2 was 88.6%,<br />
an increase from 87.9% at the end of Q1. Rents held steady<br />
in most submarkets with an average weighted rental rate of<br />
$19.38 SF for the Birmingham market and $21.33 SF for<br />
Class A product.<br />
The Birmingham industrial market experience 230,622 SF of<br />
positive direct absorption in Q2 2011, a continued increase<br />
from 60,518 SF of positive absorption in Q1. The direct<br />
occupancy rate for the market was 81.0%, an increase from<br />
79.3% at the end Q1. The amount of sublease space available<br />
in the market continues to decrease with 275,174 SF available<br />
in Q2. The overall occupancy rate for Birmingham’s industrial<br />
market is 79.0%, an increase from 77.4% in Q1.<br />
Birmingham's retail market experienced negative absorption<br />
of 138,079 SF in Q2 2011, a decrease from positive 35,620<br />
SF at year-end 2010. Occupancy dropped slightly to 87.0%<br />
in Q2, down slightly to 87.6%. The average weighted rental<br />
rate has also declined from $15.77 SF in 2010 to $15.37 SF<br />
at mid-year 2011.<br />
Contact<br />
<strong>NAI</strong> Chase Commercial<br />
RE Services<br />
+1 888 539 1686<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
586,806<br />
648,240<br />
294,040<br />
$65,238<br />
$49,530<br />
37<br />
Huntsville, Alabama continues to remain one of the southeast’s<br />
top metropolitan area areas for 2011. Huntsville ranks<br />
as the nation’s third largest aerospace and defense<br />
manufacturing hub. Huntsville was named one of the Top 5<br />
Small Cities of the Future in North America. Strong growth<br />
has propelled Huntsville to Alabama’s second largest<br />
metropolitan area as referenced by the US Census. Again,<br />
Madison County was one of the state's leaders in jobs for<br />
new and expanding employers.<br />
The Huntsville/Madison County real estate market has<br />
remained stable throughout most of 2011 even though the<br />
local economy continues to remain in recession along with<br />
the rest of the country. Defense related jobs continue<br />
to trickle in as a result from BRAC consolidation of 2005.<br />
However recent cutbacks related to NASA and the potential<br />
for cutback in defense has created an environment of<br />
uncertainty as it relates to near term expansion for many<br />
tenants and users. As a result, absorption has slowed. The<br />
primary driver for growth continues to be the Base Realignment<br />
and Closure process.<br />
The Huntsville/Madison County community continues to lead<br />
Alabama again in both population growth and new jobs. All<br />
market segments have seen some growth but absorption<br />
continues to remain sluggish. Commercial sales remain<br />
negligible on large projects as a result of tight credit; some<br />
smaller projects are moving to closing with less constraint.<br />
New construction in office, industrial and retail continues to<br />
be stagnant due to credit markets. We anticipate modest<br />
growth for <strong>2012</strong>.<br />
The office sector received the biggest news with approval<br />
of a new 140,000 SF office building, the first of several to<br />
be included in the mixed use park being developed by<br />
Corporate Office Properties Trust. Redstone Gateway will<br />
create an additional 4.6 million SF of commercial space over<br />
a 10 year period.<br />
Retail remains slow, however several projects are under<br />
construction for Kroger and Target in Madison and small<br />
shop space in Jones Valley. Manufacturing Companies<br />
remain in a hiring freeze. Some new build to suit developments<br />
are being planned for Research Park and vacancy rates<br />
remaining relatively low when compared to comparable<br />
cities.<br />
Birmingham At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
16.50<br />
13.50<br />
21.50<br />
18.00<br />
13.00<br />
N/A<br />
$ 26.00<br />
$ 19.50<br />
$ 32.00<br />
$ 26.00<br />
$ 16.50<br />
N/A<br />
$ 21.10<br />
$ 16.65<br />
$ 26.00<br />
$ 22.50<br />
$ 17.80<br />
N/A<br />
7.30%<br />
26.00%<br />
N/A<br />
11.60%<br />
16.60%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
3.00<br />
3.00<br />
$<br />
$<br />
4.00<br />
6.50<br />
$<br />
$<br />
3.50<br />
4.50<br />
9.00%<br />
13.00%<br />
High Tech/R&D<br />
retaIl<br />
$ 9.00 $ 12.50 $ 10.20 8.00%<br />
Downtown<br />
$ 12.30 $ 25.00 $ 14.50 11.00%<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
6.50<br />
8.50<br />
18.00<br />
$ 17.35<br />
$ 19.00<br />
$ 40.00<br />
$ 12.80<br />
$ 17.00<br />
$ 29.00<br />
13.50%<br />
10.00%<br />
13.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
305,000.00<br />
195,000.00<br />
50,000.00<br />
40,000.00<br />
320,000.00<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
850,000.00<br />
310,000.00<br />
125,000.00<br />
240,000.00<br />
850,000.00<br />
N/A<br />
Huntsville/Decatur County At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
17.50<br />
14.00<br />
19.00<br />
16.00<br />
13.00<br />
N/A<br />
$ 25.00<br />
$ 17.00<br />
$ 25.00<br />
$ 21.00<br />
$ 15.75<br />
N/A<br />
$ 19.00<br />
$ 15.00<br />
$ 21.00<br />
$ 18.00<br />
$ 15.00<br />
N/A<br />
9.00%<br />
20.00%<br />
15.00%<br />
6.00%<br />
12.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
2.00<br />
3.00<br />
$<br />
$<br />
3.50<br />
4.50<br />
$<br />
$<br />
3.00<br />
3.75<br />
10.00%<br />
15.00%<br />
High Tech/R&D<br />
retaIl<br />
$ 8.25 $ 10.25 $ 9.25 12.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
$<br />
$<br />
10.00<br />
8.00<br />
$ 15.00<br />
$ 18.00<br />
$ 13.00<br />
$ 15.00<br />
10.00%<br />
7.00%<br />
Community Power Center<br />
$ 8.00 $ 10.00 $ 7.00 5.00%<br />
Regional Malls<br />
$ 20.00 $ 65.00 $ 30.00 9.00%<br />
deVeloPment land Low High<br />
Office in CBD (per buildable SF)<br />
Land in Office Parks (per acre)<br />
Land in Industrial Parks (per acre)<br />
Office/Industrial Land - Non-park (per acre)<br />
Retail/Commercial Land (per acre)<br />
Residential (per acre)<br />
$ 400,000.00 $ 600,000.00<br />
$ 50,000.00 $ 120,000.00<br />
$ 25,000.00 $ 50,000.00<br />
$ 50,000.00 $ 150,000.00<br />
$ 225,000.00 $ 750,000.00<br />
$ 15,000.00 $ 125,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 80
Phoenix, Arizona<br />
Jonesboro, Arkansas<br />
Contact<br />
<strong>NAI</strong> Horizon<br />
+1 602 955 4000<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
4,208,147<br />
4,283,239<br />
2,083,427<br />
$76,063<br />
$57,789<br />
33<br />
The economic pressures on the Phoenix metropolitan area<br />
are in line with many markets across the US as the world’s<br />
economies struggle to avoid recession. This is fueled by the<br />
European economic crisis, rising debt concerns in the US<br />
and an economy that continues to stagnate. Continued<br />
weakness in the Phoenix area’s housing market has resulted<br />
in slow economic growth. As a city that relies on population<br />
growth, Phoenix will continue to struggle until the economy<br />
rebounds.<br />
One of the few bright spots in the local economy is the<br />
growing stability of the commercial real estate industry.<br />
Activity has remained steady overall but with slower growth<br />
and suppressed rental rates. The freefall from a few years<br />
ago is just about over. Each sector has its strengths and<br />
areas of continued trouble. All sectors are significantly<br />
healthier and more stable than during the decline of<br />
2008-2009.<br />
The area experiencing the healthiest rebound has been the<br />
multifamily sector. Private investors continue to buy top<br />
apartment properties in many US markets, especially in<br />
cities like Phoenix where the stagnant housing market and<br />
continued job insecurity makes sense for these investments.<br />
The office market’s sales transactions have increased over<br />
the past several quarters, but dollar volume is nearly half of<br />
last quarter’s total. Many of the transactions involve A+<br />
properties selling for half of what they sold for in 2006.<br />
Savvy investors know that values like this will not be<br />
available for long and have been aggressive in their deal<br />
making.<br />
The industrial sector continues to see large leases and sales<br />
of big box properties throughout the Valley. Several large<br />
investors such as Cole Real Estate are gobbling up<br />
properties quickly. Main Street’s move to the Internet has<br />
aggravated retail (much to the benefit of the industrial<br />
sector).<br />
Both the lower and higher end of the retail continuum are<br />
faring better. Discount and high end retailers have embraced<br />
growth in the market. Meanwhile traditional retailers<br />
continue to struggle with changing customer buying habits<br />
as a result of the poor economy.<br />
Contact<br />
<strong>NAI</strong> Halsey<br />
+1 870 972 9191<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
123,152<br />
131,623<br />
60,451<br />
$53,233<br />
$39,299<br />
33<br />
Jonesboro continues to be one of the brightest spots in the<br />
mid-south for growth and investment. As a regional<br />
hub, Jonesboro boasts a trade area over 500,000 people,<br />
drawing from nearly two dozen counties in Arkansas,<br />
Tennessee and Missouri. The city has grown 40% since<br />
1990, and current census estimates that pace of 2% to<br />
2.5% growth will continue for the next 10 to 20 years.<br />
Jonesboro is home to Arkansas State University, one of the<br />
south’s up and coming premiere research institutions which<br />
continues to set enrollment records. Specialized training and<br />
partnership programs between ASU and the international<br />
community continue to add global manufacturing to the<br />
city’s diverse mix of market segments. Nordex USA<br />
completed its $100 million plant construction and started<br />
production.<br />
The financial sector continues to be strong. IBERIA Bank<br />
recently made a significant downtown facilities investment.<br />
Southern Bank of Commerce continues its growth<br />
undergoing a major expansion and renovation on Nettleton<br />
Avenue and Stephen’s Inc., the largest investment banking<br />
firm off Wall Street, has opened a newly constructed office<br />
in the city’s premiere professional office park.<br />
NEA Baptist is in construction on its new $300 million<br />
healthcare facility that will include clinical space for over<br />
120 physicians as well as a state of the art hospital.<br />
St. Bernards Heathcare continues its development of the<br />
“Medical Mile” connecting ASU to downtown Jonesboro with<br />
the opening of the new 55,000 SF Health & Wellness Center.<br />
Ritter Communications is preparing to move into a new<br />
high-tech corporate campus.<br />
Downtown Jonesboro continues its unparalleled growth of<br />
new offices, lofts and restaurants. Vox 306 has opened on<br />
Church Street, and Bennigan’s leads a list of new<br />
restaurants set to open in the coming months. The Stadium<br />
Boulevard corridor now boasts new locations for Red Lobster<br />
and Longhorn Steakhouse, both <strong>report</strong>ing record openings,<br />
with Cheddar’s, Panera Bread and high end jewelry retailer<br />
Sissy’s Log Cabin to follow. A new Harp’s grocery superstore<br />
nearing completion on Highland Drive; and the region’s<br />
largest CAT dealership (Holt Ag) has selected Jonesboro as<br />
its newest market.<br />
Phoenix At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
20.00<br />
17.00<br />
8.00<br />
25.00<br />
16.00<br />
5.00<br />
$ 36.00<br />
$ 36.00<br />
$ 24.00<br />
$ 30.00<br />
$ 35.00<br />
$ 46.20<br />
$ 36.00<br />
$ 22.62<br />
$ 18.26<br />
$ 27.39<br />
$ 24.06<br />
$ 16.71<br />
28.00%<br />
19.90%<br />
21.10%<br />
42.00%<br />
25.10%<br />
21.10%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
2.16<br />
2.28<br />
$ 10.80<br />
$ 15.00<br />
$<br />
$<br />
4.81<br />
6.73<br />
14.70%<br />
12.80%<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
4.20<br />
4.61<br />
1.00<br />
5.52<br />
6.00<br />
$ 18.00<br />
$ 38.00<br />
$ 38.00<br />
$ 35.00<br />
$ 40.00<br />
$ 11.01<br />
$ 17.66<br />
$ 14.35<br />
$ 18.87<br />
$ 18.97<br />
23.40%<br />
14.10%<br />
16.90%<br />
8.60%<br />
18.90%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 414,000.00 $ 5,663,125.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
39,204.00<br />
21,344.00<br />
81,632.00<br />
81,450.00<br />
25,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
556,174.00<br />
696,960.00<br />
522,719.00<br />
425,324.00<br />
571,429.00<br />
Jonesboro At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
N/A<br />
$ 14.00<br />
$ 10.00<br />
$ 18.00<br />
$ 12.00<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
22.00<br />
16.00<br />
22.00<br />
20.00<br />
N/A<br />
$ 12.00<br />
$ 15.00<br />
$ 18.00<br />
$ 18.00<br />
N/A<br />
N/A<br />
N/A<br />
10.00%<br />
10.00%<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 8.00 $ 15.00 $ 12.00 10.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$ 3.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 6.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 3.50<br />
N/A<br />
N/A<br />
N/A<br />
10.00%<br />
N/A<br />
N/A<br />
N/A<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$ 10.00<br />
N/A<br />
$ 18.00<br />
$<br />
$<br />
22.00<br />
N/A<br />
32.00<br />
$ 14.00<br />
N/A<br />
$ 25.00<br />
N/A<br />
N/A<br />
10.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
N/A<br />
$ 120,000.00 $<br />
N/A<br />
330,000.00<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
5,000.00<br />
5,000.00<br />
N/A<br />
8,000.00<br />
$<br />
$<br />
$<br />
25,000.00<br />
15,000.00<br />
N/A<br />
20,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 81
Little Rock, Arkansas<br />
Bakersfield, California<br />
Contact<br />
<strong>NAI</strong> Dan Robinson<br />
& Associates<br />
+1 501 224 7500<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
714,981<br />
367,014<br />
63,511<br />
$48,144<br />
35<br />
Little Rock has been energized with the recent passage of<br />
the new local sales tax (1.5 cents) that becomes effective<br />
in <strong>2012</strong>. Dormant projects are being revived. The primary<br />
driver of the CBD activity is the completion of planned<br />
tourism infrastructure and continued program expansion at<br />
the Clinton Presidential Library. The funding for the research<br />
park and expansion of the Port’s infrastructure compliments<br />
this positive atmosphere. Natural gas production and<br />
ancillary facility support continues to be an economic factor.<br />
Major developments are nearing completion along the<br />
Chenal corridor. In July, <strong>2012</strong>, Southwest Power Pool is<br />
scheduled for a corporate move. They will be relocating<br />
to a 20.5 acre office campus comprised of a 36,000 SF<br />
operations center and a LEED certified corporate office<br />
facility of 150,000 SF, accompanied by a 600 space parking<br />
deck. In the immediate area is Chenal Valley, a planned<br />
community owned and developed by Deltic Timber<br />
Corporation. New ancillary facilities to compliment the<br />
existing 34 neighborhoods include the Promenade at<br />
Chenal, a 38 acre lifestyle center developed by Red<br />
Development. Numerous new national retailers are being<br />
welcomed. The Promenade is projected to be 100%<br />
occupied in early <strong>2012</strong>.<br />
The medical community is expanding into Chenal Valley. St.<br />
Vincent West is under construction; a 37 acre health village<br />
campus. Baptist Health has purchased 22 acres for<br />
development. Midtown Little Rock, the Park Avenue Center<br />
is moving forward with its retail development. The most<br />
recent construction to join the new Target facility is Cheddars<br />
Restaurant. Another active commercial/retail node is the<br />
northwest quadrant of the I-430/Col. Glenn Road interchange.<br />
There is extensive site activity and the dust is flying!<br />
Industrial activity is ramping up to support our new<br />
industries; Welspun, a steel pipe fabrication facility and<br />
Caterpillar’s motor grader production facility. The industrial<br />
focus is along the I-440 corridor with the Port in the center<br />
of the activity. Port infrastructure has or is being upgraded.<br />
Of particular note is the completion of the short line rail<br />
re-vitalization serving the Port. Plans are also in place to<br />
assemble additional industrial land for the Port facility.<br />
Contact<br />
<strong>NAI</strong> Central Cal<br />
+1 661 864 1000<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
865,775<br />
972,430<br />
370,536<br />
$65,122<br />
$49,247<br />
The Kern County and Bakersfield markets have benefitted<br />
from the economic drivers of agriculture, oil, gas, solar, wind<br />
and diverse military weapons research programs in eastern<br />
Kern County. This however is not enough to offset the<br />
contraction in financial services and the construction industry<br />
from the prolific over development of the residential housing<br />
sector. Kern County unemployment at 16.1% leads both<br />
the nation 9.0% and the state 12.2% while the city of<br />
Bakersfield is 10.2%.<br />
The office market ended Q3 of 2011 with an overall vacancy<br />
of 6.9% and net absorption of 51,798 SF. New construction<br />
was limited to 10,577 SF in one building defining the overall<br />
trend of little to no construction. Large transaction categories<br />
were financial services, medical users and governmental.<br />
While supply and demand were close to equilibrium,<br />
landlord’s past over encumbrance of their properties during<br />
2005 to 2007 have lead to foreclosures, a trend we expect<br />
to see more of.<br />
The Bakersfield industrial market ended Q3 with a vacancy<br />
rate of 10.6% while overall net absorption remained<br />
positive. Three large industrial parks are providing the driving<br />
force for development with Caterpillar taking 450,000 SF at<br />
Fort Tejon. Growth categories remain oil, gas, solar, wind,<br />
farming and farm services. Warehouse distribution will play<br />
a large part in the future of Kern County.<br />
The retail sector had an overall vacancy reduction to 6.6%<br />
with major transactions being completed in the big box<br />
categories, drug store chains as well as the dollar store<br />
chains competing for new sites across Kern County.<br />
Foreclosures include three strip centers, two neighborhood<br />
centers and the East Hills Regional Mall. The consolidation<br />
of the Hispanic grocery stores chains is a further sign of the<br />
difficult times that retailers are having in the Bakersfield<br />
market.<br />
New Construction in 2007 that had high construction cost<br />
and high debt levels are experiencing the greatest vacancy<br />
with the southeast quadrant of Bakersfield at 15.8%.<br />
Conservatively leveraged and well located centers are<br />
showing vacancies as low as 3% with very little rollover,<br />
increased rents and national credit tenant interest.<br />
Total Population<br />
Median Age<br />
Total Population<br />
Median Age<br />
30<br />
Little Rock At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
13.00<br />
8.84<br />
N/A<br />
16.75<br />
11.00<br />
1.50<br />
N/A<br />
3.50<br />
N/A<br />
5.00<br />
9.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
20.00<br />
15.00<br />
N/A<br />
21.00<br />
18.00<br />
5.50<br />
N/A<br />
12.00<br />
N/A<br />
28.00<br />
24.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
12.00%<br />
12.60%<br />
N/A<br />
14.20%<br />
7.00%<br />
16.10%<br />
1.00%<br />
24.30%<br />
N/A<br />
8.80%<br />
8.60%<br />
Regional Malls<br />
$ 15.00 $2,500.00 N/A 8.20%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 8.00 $ 25.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
152,460.00<br />
32,760.00<br />
65,340.00<br />
108,900.00<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
522,760.00<br />
130,680.00<br />
261,360.00<br />
1,306,800.00<br />
N/A<br />
Bakersfield At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
18.55<br />
16.35<br />
11.89<br />
N/A<br />
17.98<br />
8.67<br />
$<br />
$<br />
$<br />
$<br />
$<br />
19.45<br />
17.98<br />
13.01<br />
N/A<br />
19.34<br />
11.89<br />
$ 18.95<br />
$ 17.16<br />
$ 12.45<br />
N/A<br />
$ 18.99<br />
$ 12.09<br />
0.50%<br />
4.40%<br />
5.10%<br />
N/A<br />
5.10%<br />
5.10%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
3.09<br />
3.79<br />
7.16<br />
$<br />
$<br />
$<br />
4.98<br />
8.05<br />
10.56<br />
$<br />
$<br />
$<br />
4.64<br />
4.84<br />
8.28<br />
10.80%<br />
9.90%<br />
8.30%<br />
Downtown<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
10.90<br />
12.24<br />
12.75<br />
11.20<br />
$<br />
$<br />
$<br />
$<br />
30.11<br />
20.34<br />
17.25<br />
36.00<br />
$ 13.41<br />
$ 15.24<br />
$ 13.50<br />
$ 19.53<br />
9.10%<br />
9.50%<br />
11.10%<br />
10.50%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 653,400.00 $ 1,100,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
348,000.00<br />
108,900.00<br />
70,000.00<br />
217,800.00<br />
36,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
480,000.00<br />
217,800.00<br />
125,000.00<br />
348,000.00<br />
42,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 82
Inland Empire (Riverside/San Bernardino), California<br />
Los Angeles, California<br />
Contact<br />
<strong>NAI</strong> Capital<br />
(Riverside)<br />
+1 951 346 0800<br />
<strong>NAI</strong> Capital<br />
(Ontario/San Bernardino)<br />
+1 909 945 2339<br />
<strong>NAI</strong> Capital<br />
(Temecula Valley)<br />
+1 951 491 7590<br />
<strong>NAI</strong> Capital<br />
(Palm Desert)<br />
+1 760 346 1566<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
4,316,573<br />
4,683,568<br />
2,004,775<br />
$76,590<br />
$60,366<br />
31<br />
As measured by unemployment numbers, the Inland Empire<br />
suffered the most during the recent recession. Even now,<br />
unemployment in the Inland Empire remains high. As of<br />
September 2011 the unemployment rate was at 13.4%. This<br />
is below the 15.1% peak but well above the area’s average<br />
unemployment rate.<br />
High unemployment has truly hurt the Inland Empire’s office<br />
market. Vacancy rates for Class A space exceed 25%. The<br />
rate for Class B space is lower, 17.2%, but still above its<br />
average rate. The lack of demand for Inland Empire<br />
office space has put downward pressure on lease rates.<br />
Furthermore, high vacancy rates and low lease rates have<br />
halted new construction. We estimate that only 46,000 SF on<br />
new office space came on-line in 2011.<br />
The Inland Empire’s industrial market is slowly improving.<br />
Vacancy rates are below 10% and lease rates are<br />
strengthening. A significant portion of cargo from the Port<br />
of Long Beach is transported and warehoused in the Inland<br />
Empire. As world trade improves, we expect conditions in the<br />
Inland Empire’s industrial market to improve. Furthermore, the<br />
big box distribution centers (350,000 SF and above) have<br />
surpassed absorption levels of 2007, with existing inventory<br />
showing a sub-3% vacancy factor. The reemergence of the<br />
“Institutional Developer” seeking large industrial land sites has<br />
been prevalent throughout 2011 with the common statement<br />
being made that we can’t get the big boxes up and vertical<br />
quick enough based on the brisk absorption within the Inland<br />
Empire marketplace.<br />
The Inland Empire’s retail market remains weak. Vacancy<br />
rates for community and neighborhood retail centers are<br />
above 10%. Vacancy rates for the area’s malls are lower,<br />
7.3%, but are high compared to historical numbers. High<br />
unemployment and weak consumer spending will likely keep<br />
conditions in the retail market subdued.<br />
Contact<br />
<strong>NAI</strong> Capital (Encino)<br />
+1 818 905 2400<br />
<strong>NAI</strong> Capital (West Los Angeles)<br />
+1 310 440 8500<br />
<strong>NAI</strong> Capital (South Bay)<br />
+1 310 532 9080<br />
<strong>NAI</strong> Capital (Commerce)<br />
+1 323 201 3600<br />
<strong>NAI</strong> Capital (Pasadena)<br />
+1 626 564 4800<br />
<strong>NAI</strong> Capital (Santa Clarita)<br />
+1 661 705 3550<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
12,834,862<br />
12,953,100<br />
6,534,423<br />
$87,692<br />
$61,324<br />
34<br />
Los Angeles County has the largest economy in the five<br />
county Los Angeles Basin. Its 5 million strong civilian labor<br />
force is larger than the other four counties combined.<br />
Unfortunately, 12.2% of that labor force was unemployed<br />
as of September 2011. Additionally, Los Angeles’ labor force<br />
shrunk recently as companies and employees left the area<br />
for greener pastures in other states.<br />
In terms of jobs, Los Angeles is dominated by service jobs.<br />
The first three largest sectors are trade, transportation and<br />
utilities, employing approximately 737,000 people. The<br />
second largest sector is government. With the numerous<br />
budget problems in California we expect the government<br />
sector to shrink in the future. On a positive note, the third<br />
largest sector is education and health services which we<br />
forecast to grow. Demand for education increases during<br />
times of high unemployment as individuals acquire more<br />
human capital. Additionally, as the population ages we<br />
expect demand for health services to increase. While not in<br />
the top three, leisure and hospitality, the industry for which<br />
Los Angeles is famous, remains healthy.<br />
Conditions in the office market remain soft. High unemployment<br />
has significantly impacted Los Angeles’ office market.<br />
Vacancy rates for Class A and Class B office space remain<br />
elevated while lease rates remain low. Excess supply and<br />
little demand for office space have limited new construction.<br />
We estimate that only 1,000,000 SF of new space came<br />
on-line during the first nine months of 2011.<br />
Los Angeles’ industrial market is starting to rebound due in<br />
large part to increased activity at the Port of Long Beach. A<br />
strengthening import/export market will continue to provide<br />
relief to this sector. On the other hand, onerous regulation<br />
and excessive costs will continue to cause businesses to<br />
move out of the area. In general we expect the industrial<br />
market to improve but the improvement will be mitigated<br />
due to government regulations.<br />
Some downward pressure remains in the retail market as<br />
vacancy rates for this sector remain high and lease rates<br />
remain low. A lack of consumer spending and a shift to<br />
internet shopping are negatively impacting the retail market.<br />
The recent demise of Borders underscores the impact that<br />
the internet is having on traditional brick and mortar stores.<br />
Unfortunately, we expect this trend to continue.<br />
Inland Empire (Riverside/San Bernardino) At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
N/A<br />
N/A<br />
N/A<br />
$ 12.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 32.45<br />
N/A<br />
N/A<br />
N/A<br />
$ 22.54<br />
N/A<br />
N/A<br />
N/A<br />
59.80%<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
9.00<br />
1.44<br />
$ 33.26<br />
$ 208.71<br />
$ 23.40<br />
$ 18.43<br />
25.50%<br />
17.20%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$<br />
$<br />
$<br />
2.04<br />
1.80<br />
1.80<br />
N/A<br />
$ 31.20<br />
$ 12.00<br />
$ 19.20<br />
N/A<br />
$<br />
$<br />
$<br />
4.22<br />
3.92<br />
4.07<br />
N/A<br />
9.10%<br />
9.30%<br />
8.80%<br />
N/A<br />
Neighborhood Service Centers<br />
Community Power Centers<br />
$<br />
$<br />
4.04<br />
3.00<br />
$ 48.00<br />
$ 108.00<br />
$ 16.54<br />
$ 17.48<br />
12.70%<br />
10.80%<br />
Regional Malls<br />
$ 12.00 $ 45.00 $ 17.86 7.30%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
$<br />
N/A<br />
786,956.00<br />
N/A<br />
$ 1,200,000.00<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential (per acre)<br />
$<br />
$<br />
108,054.00<br />
N/A<br />
105,454.00<br />
N/A<br />
$<br />
$<br />
898,213.00<br />
N/A<br />
105,454.00<br />
N/A<br />
Los Angeles At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
27.00<br />
18.00<br />
30.00<br />
24.00<br />
18.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
40.75<br />
44.35<br />
60.00<br />
60.00<br />
48.00<br />
N/A<br />
$ 33.32<br />
$ 20.96<br />
$ 30.92<br />
$ 30.61<br />
$ 24.70<br />
N/A<br />
15.80%<br />
12.80%<br />
52.90%<br />
17.60%<br />
13.60%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
7.00<br />
8.00<br />
9.00<br />
$<br />
$<br />
$<br />
12.00<br />
14.00<br />
18.00<br />
$<br />
$<br />
$<br />
6.30<br />
6.22<br />
6.27<br />
7.20%<br />
8.80%<br />
8.90%<br />
Downtown<br />
$ 1.50 $ 120.00 $ 24.31 5.20%<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
9.30<br />
9.00<br />
12.00<br />
$<br />
$<br />
$<br />
72.00<br />
63.00<br />
65.00<br />
$ 23.48<br />
$ 21.74<br />
$ 19.93<br />
7.00%<br />
6.90%<br />
4.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
$<br />
N/A<br />
533,333.00<br />
N/A<br />
$ 18,867,924.00<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$ 46,948.00<br />
N/A<br />
$ 8,903,467.00<br />
N/A<br />
Retail/Commercial Land<br />
Residential<br />
$ 452,060.00<br />
N/A<br />
$ 11,060,606.00<br />
N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 83
Oakland, California<br />
Orange County, California<br />
Contact<br />
<strong>NAI</strong> Kilpatrick<br />
+1 510 336 4715<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
1,534,442<br />
1,631,103<br />
811,853<br />
$94,711<br />
$70,970<br />
36<br />
The overall mood is one of cautious optimism. Economists<br />
agree that there will be a slow, lumbering growth in the East<br />
Bay. Positive indicators did come in September as industrial<br />
production paired with consumer prices reflected by gains<br />
in energy, food and housing. Recent employment growth<br />
has placed fears of a double dip recession aside, with core<br />
growth related to increased business activity.<br />
The East Bay industrial market <strong>report</strong>ed a total vacancy<br />
decrease of 100 basis points to 10.6% from a year ago,<br />
but increased slightly from the past quarter. Overall net<br />
absorption remained negative at just under a million SF,<br />
primarily focused in the I-880 corridor manufacturing<br />
market. Although not reflective of any other segments of the<br />
market, the primary cause of the major hemorrhage has<br />
gained national attention; solar giant Solyndra’s bankruptcy<br />
created an immediate availability of over 1.3 million SF and<br />
accounted for roughly 80% of year-to-date negative net<br />
absorption.<br />
Office market conditions in the East Bay continue to mirror<br />
the current economic conditions. Driven by professional<br />
services and technology, a number of tenants have been<br />
relocating to East Bay markets from San Francisco in search<br />
of lower cost options. Activity has been focused primarily in<br />
downtown Oakland and in the suburbs as larger corporate<br />
users look to secure space in light of future hiring. Increased<br />
leasing activity paints a positive picture for the future, but<br />
growth has not reach levels to significantly impact market<br />
fundamentals.<br />
The East Bay multifamily market has continued to perform<br />
well. Rising payrolls have contributed to healthy absorption,<br />
decreased vacancy rates and rent growth to near prerecession<br />
levels. A steady increase in transaction velocity<br />
has been focused at either end of the pricing spectrum.<br />
Private investment groups are targeting top-tier assets,<br />
while smaller local investors have focused primarily on<br />
distressed assets. Minimal new apartment construction is<br />
underway, but as market conditions continue to improve the<br />
development pipeline will grow.<br />
Contact<br />
<strong>NAI</strong> Capital (Orange County)<br />
+1 949 854 6600<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
3,023,473<br />
3,082,395<br />
1,587,502<br />
$103,233<br />
$76,585<br />
35<br />
Orange County’s economy is predominately service oriented.<br />
If we divide Orange County employment between industries<br />
that produce goods and those that provide services, we find<br />
that only 16.2% of all jobs in Orange County are in industries<br />
that produce goods. The three largest sectors in Orange<br />
County as measured by employment are professional and<br />
business services, trade, transportation and utilities and<br />
leisure and hospitality. Each of these industries fall in the<br />
service sector.<br />
The unemployment rate in Orange County remains stubbornly<br />
high. As of September 2011 the rate was 8.6%.<br />
This is below the peak of 10% but well above the 5.4%<br />
average. In recent months, the unemployment rate has<br />
fluctuated between 8.6% and 9.5%. While the September<br />
data is at the lower boundaries, this is still too high to create<br />
a robust economic recovery. We expect economic conditions<br />
in Orange County to gradually improve over the next year.<br />
High unemployment has significantly impacted the office<br />
market in Orange County. Vacancy rates for Class A and<br />
Class B office space remain elevated while lease rates<br />
remain low. Excess supply and little demand for office space<br />
are the driving factors that have limited new construction.<br />
We estimate that only 400,000 SF of new space came<br />
on-line during the first nine months of 2011. A lack of<br />
financing is also to blame. However, even if financing were<br />
available, it is not apparent that more office space would be<br />
needed.<br />
The industrial and retail markets have fared somewhat<br />
better. Vacancy rates in the industrial market are below 7%.<br />
In the retail market vacancy rates are between 2.3% and<br />
7.1%. The 2.3% vacancy rate for malls is rather impressive<br />
given the lack of consumer spending. We attribute these low<br />
rates to the excellent retail properties located in Orange<br />
County. Examples include South Coast Plaza Mall, the Irvine<br />
Spectrum and the Newport Center.<br />
Orange County’s multifamily market continues to perform<br />
well. A high foreclosure rate, tight credit market and a weak<br />
labor market have encouraged consumers to rent rather<br />
than purchase at this time.<br />
Oakland At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
26.28<br />
18.25<br />
N/A<br />
25.32<br />
17.60<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
35.61<br />
23.68<br />
N/A<br />
29.52<br />
26.43<br />
N/A<br />
$ 27.96<br />
$ 21.55<br />
N/A<br />
$ 26.08<br />
$ 20.12<br />
N/A<br />
9.20%<br />
15.10%<br />
N/A<br />
15.40%<br />
14.60%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
4.87<br />
5.26<br />
8.42<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$<br />
$<br />
$<br />
10.03<br />
9.35<br />
15.30<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$<br />
$<br />
$<br />
5.28<br />
6.60<br />
9.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
8.10%<br />
12.00%<br />
24.10%<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Orange County At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
N/A<br />
25.75<br />
11.76<br />
6.00<br />
2.40<br />
3.48<br />
2.40<br />
N/A<br />
9.00<br />
12.00<br />
33.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
N/A<br />
34.80<br />
54.07<br />
68.82<br />
15.00<br />
13.80<br />
15.00<br />
N/A<br />
60.00<br />
51.00<br />
45.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
N/A<br />
28.18<br />
25.62<br />
21.32<br />
6.42<br />
6.44<br />
6.46<br />
N/A<br />
23.45<br />
22.47<br />
41.06<br />
N/A<br />
N/A<br />
N/A<br />
45.50%<br />
19.00%<br />
14.80%<br />
6.90%<br />
6.90%<br />
6.40%<br />
N/A<br />
7.10%<br />
6.90%<br />
2.30%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A<br />
$ 995,520.00<br />
$ 664,294.00<br />
N/A<br />
$ 625,000.00<br />
N/A<br />
N/A<br />
$ 1,126,761.00<br />
$ 1,593,750.00<br />
N/A<br />
$ 1,000,000.00<br />
N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com<br />
84
Sacramento, California<br />
San Diego, California<br />
Contact<br />
<strong>NAI</strong> Aguer Havelock<br />
+1 916 563 7555<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
2,182,119<br />
2,314,016<br />
1,099,661<br />
$86,934<br />
The Sacramento market has been exhibiting mixed signals.<br />
We continue to see signs of the economic recovery process<br />
that commenced in 2010. The combination of low interest<br />
rates, low inflation and the prospect of significant corporate<br />
earnings recovery in 2011 should provide the catalyst for<br />
increased jobs and additional tenant demand in <strong>2012</strong>.<br />
Unfortunately, low investor confidence and lack of significant<br />
job creation in our region is a further negative on commercial<br />
private sector activity.<br />
The office market has been lead by continued demand and<br />
net absorption from the State of California, although the<br />
state is now showing signs of slowing as the Governor’s<br />
Administration is desperately looking for ways to solve<br />
the state’s structural deficit problem. The private sector<br />
industries that have led our region’s recovery include legal,<br />
education, health care and most significantly, engineering.<br />
The stimulus package has propelled almost all sectors of<br />
the engineering field to consider significant expansion.<br />
The Office market ended the Q3 2011 with a 17.2%<br />
vacancy rate, and net absorption totaling positive 359,206<br />
SF. Rental rates ended Q3 at $1.70, a decrease over the<br />
previous quarter. Just two buildings delivered to the market<br />
during Q3 with a total 160,195 SF.<br />
The industrial market experienced a slight decrease in<br />
vacancy rate from the previous quarter, ending Q3 2011 at<br />
13.4% compared to 13.6% from the Q2. Industrial rental<br />
rates also decreased 1.4%, ending the quarter at $5.08/SF.<br />
The most notable industrial transaction is the sale of 7501<br />
Foothills Boulevard located in Roseville. The 465,000 SF<br />
building sold for $53,000,000.<br />
The retail market did not experience much change during<br />
Q3 2011 with a vacancy rate of 10.3% and average quoted<br />
rates at $16.92. A total of nine retail buildings were<br />
delivered to the market totaling 236,841 SF of space.<br />
Notable transactions in the retail market were Oak Shade<br />
Town Center in Davis selling for $35,000,000 ($337.31/SF)<br />
and the 76,248 SF lease of 1815 Douglas Boulevard signed<br />
by Hobby Lobby.<br />
Contact<br />
<strong>NAI</strong> San Diego<br />
+1 619 497 2255<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
3,319,907<br />
3,542,129<br />
1,620,037<br />
$71,669<br />
The San Diego housing market continues to experience a<br />
decrease in housing prices, down 5.8% from 2010 with the<br />
average single family home selling for $369,000. Many<br />
houses selling near the median price are being acquired<br />
without financing by investors and being rented with the<br />
average rental rate increasing 9% from 2010.<br />
Improved activity in the office market resulted in a decrease<br />
in the countywide vacancy rate from 13.9% in the Q4 2010<br />
to 13% in the Q3 2011 with positive net absorption of<br />
671,997 SF. Average rents decreased from 2010 to<br />
$25.32/SF per year. The largest office lease signing in 2011<br />
was Novatel Wireless with 96,000 SF. The first six months<br />
of 2011 registered 83 lease transactions totaling<br />
$64,377,591, or $121.29/SF. Office cap rates ranged from<br />
6% to 10%, up slightly from 2011. The largest sale was 110<br />
Plaza downtown for $80,000,000, or $245.42/SF at an 8%<br />
cap rate.<br />
The industrial market decreased vacancy in 2011 to 8%<br />
from 11.2% in 2010. Rental rates fell to $8.13/SF per year<br />
with positive net absorption of 718,543 SF as of the end of<br />
Q3 2011. The largest lease signing was Northwood, LLC for<br />
33,424 SF. Midway through 2011, six industrial buildings<br />
sold for a total volume of $163,666,000 averaging<br />
$84.79/SF. The largest industrial sale was a portfolio<br />
comprised of 25 industrial building totaling 1,095,525 SF<br />
for $86,000,000 or $78.50/SF. at a 7.75% cap rate.<br />
The San Diego retail market experienced little change in<br />
2011. At the end of the Q3 2011, the vacancy rate was 5%;<br />
average asking rents were $21.30/SF per year. The largest<br />
lease signed in 2011 was Mr. O’s BBQ for 10,954 SF. During<br />
the first six months of 2011, six retail sales occurred with<br />
an aggregate volume of $9,716,835,000 and an average<br />
price of $103/SF. Cap rates declined in 2011 to approximately<br />
7.75% from 8.27% in 2010.<br />
Median<br />
Household Income<br />
$67,938<br />
Median<br />
Household Income<br />
$52,930<br />
Total Population<br />
Median Age<br />
36<br />
Total Population<br />
Median Age<br />
32<br />
Sacramento At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
21.60<br />
18.00<br />
N/A<br />
16.20<br />
7.20<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
38.40<br />
33.00<br />
N/A<br />
31.56<br />
45.00<br />
N/A<br />
$ 31.03<br />
$ 21.17<br />
N/A<br />
$ 22.33<br />
$ 20.68<br />
N/A<br />
9.60%<br />
13.70%<br />
N/A<br />
23.00%<br />
18.50%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$ 2.88<br />
N/A<br />
N/A<br />
$ 7.56<br />
N/A<br />
N/A<br />
$ 5.10<br />
N/A<br />
N/A<br />
13.60%<br />
N/A<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
9.12<br />
8.28<br />
9.00<br />
22.80<br />
$<br />
$<br />
$<br />
$<br />
38.40<br />
39.00<br />
33.00<br />
24.00<br />
$ 16.05<br />
$ 16.93<br />
$ 21.13<br />
$ 26.16<br />
4.10%<br />
14.00%<br />
8.50%<br />
7.30%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
$<br />
N/A<br />
55,749.65<br />
N/A<br />
$ 1,045,440.00<br />
Land in Industrial Parks<br />
$ 376,510.00 $ 19,560,000.00<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
18,315.02<br />
55,749.65<br />
N/A<br />
$ 6,837,606.84<br />
$ 4,112,453.53<br />
N/A<br />
San Diego At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
27.24<br />
15.00<br />
42.00<br />
14.40<br />
8.40<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
29.88<br />
36.00<br />
48.36<br />
48.36<br />
52.08<br />
N/A<br />
$ 28.36<br />
$ 24.00<br />
$ 47.88<br />
$ 31.80<br />
$ 24.48<br />
N/A<br />
16.00%<br />
18.00%<br />
N/A<br />
13.00%<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
4.20<br />
3.48<br />
3.48<br />
$<br />
$<br />
$<br />
30.00<br />
19.20<br />
48.84<br />
$<br />
$<br />
$<br />
8.04<br />
8.16<br />
8.16<br />
10.00%<br />
9.00%<br />
8.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
12.00<br />
9.60<br />
11.88<br />
21.96<br />
$<br />
$<br />
$<br />
$<br />
53.76<br />
60.00<br />
48.00<br />
36.00<br />
$ 13.32<br />
$ 20.88<br />
$ 22.92<br />
$ 26.64<br />
5.00%<br />
8.00%<br />
5.00%<br />
4.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 85
San Francisco, California<br />
Ventura County, California<br />
Contact<br />
<strong>NAI</strong> Kilpatrick<br />
+1 415 226 1510<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
4,388,477<br />
4,600,912<br />
2,368,649<br />
$106,788<br />
$77,395<br />
San Francisco has side stepped the rest of California with a<br />
strong foundation in the finance, international trade and<br />
tourism sectors topped with a thriving high-tech industry.<br />
Demand for residential and office space has pushed vacancy<br />
rates down and rents up. Investors are taking advantage of<br />
market-bottom pricing paired with high demand growth and<br />
a fixed supply of land.<br />
Increasing asking rates, downward pressure on vacancy and<br />
positive shifts in employment continue to be the story<br />
regarding the San Francisco office market. Vacancy rates<br />
have continued to decrease from a market high of 14.2% in<br />
Q3 2010 down to 12.1%. Submarkets south of the financial<br />
district continue to grow with significant move-ins in 2011<br />
by major tech companies including Google, Salesforce and<br />
Zynga. Investor confidence and downward pressure on cap<br />
rates continues to be the story of a number of office building<br />
sales.<br />
The San Francisco industrial supply continues to decrease<br />
as buildings or land are converted to other uses, primarily<br />
residential and flex office space. Fixed supply of land<br />
continues to drive costs above manageable operating levels<br />
for industrial use and companies continue to relocate to the<br />
East Bay. Historical buildings south of the CBD continue to<br />
be a hot-spot for both creative office space and housing,<br />
driven by high-tech start-ups.<br />
Multifamily residential activity has been strong. Rental rates<br />
have been increasing dramatically and cap rates dropping<br />
to historically low levels. Demand has been driven by<br />
expanding educational facilities in the area, high-tech<br />
companies hiring rapidly, and a lack of affordable forpurchase<br />
housing opportunities.<br />
A number of major projects are under way which will<br />
significantly impact the urban landscape. The first, the<br />
Transbay Transit Center is to be the “Grand Central Station<br />
of the West” and include new residential, office and retail<br />
space all in the core of San Francisco. SFPUC Headquarters<br />
is currently under construction encompassing a total of<br />
257,097 SF and is 100% pre-leased. Another significant<br />
project underway is the addition of floors 9 to 12 at 188<br />
Spear Street.<br />
Contact<br />
<strong>NAI</strong> Capital (Ventura County)<br />
+1 805 278 1400<br />
<strong>NAI</strong> Capital (Westlake Village)<br />
+1 805 446 2400<br />
<strong>NAI</strong> Capital (Simi Valley)<br />
+1 805 522 7132<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
836,425<br />
891,269<br />
430,061<br />
$98,688<br />
$77,517<br />
Ventura County is the smallest county in the Los Angeles<br />
Basin as measured by population. Its largest industries are<br />
trade, transportation and utilities, which underscores the<br />
importance of the Port of Hueneme to the local economy.<br />
The second largest industry is not an industry but rather the<br />
government. More generally, Ventura County’s economy is<br />
service orientated as 84% percent of all jobs in the county<br />
are considered some type of service job.<br />
Ventura County’s unemployment rate was 10.1% at the end<br />
of September 2011. While high, this is lower than the 11.3%<br />
peak of the previous recession. The reliance on government<br />
sector jobs is not likely to bode well for Ventura County.<br />
Budget problems at all levels of government suggest that<br />
jobs in this sector will decrease in the coming months. If<br />
not, furlough days and other cost cutting measures will<br />
continue to negatively impact the wages of government<br />
employees.<br />
Economic conditions in the office market remain weak.<br />
Vacancy rates are high. In fact, vacancy rates for Class B<br />
space are 20%, while those for Class A space are not much<br />
better. Excess supply and little demand have severely<br />
curtailed new construction. We estimate that a paltry 5,800<br />
SF of new office space came on-line in 2011. However, this<br />
will change in the coming months when the 100,000 SF<br />
offices at RiverPark come on-line.<br />
Due to the Port of Hueneme, vacancy rates for industrial<br />
space have fared better. The rates are high but not nearly<br />
as high as those for office space. More importantly, we expect<br />
this segment to improve along with world trade. Although<br />
small compared to other ports in the region, the Port<br />
of Hueneme handles significant amounts of fresh produce<br />
and automobiles.<br />
Ventura County’s retail market is expanding. The Collection<br />
at RiverPark is a new 600,000 SF open air specialty center<br />
that will open in <strong>2012</strong>. Tenants will include Whole Foods<br />
<strong>Market</strong>, a 16-screen Century Theatre and REI. Target has<br />
already opened its 150,000 SF store at the site.<br />
Total Population<br />
Median Age<br />
38<br />
Total Population<br />
Median Age<br />
35<br />
San Francisco At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
21.99<br />
26.00<br />
10.20<br />
31.97<br />
21.00<br />
10.20<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
59.87<br />
59.87<br />
50.00<br />
79.23<br />
86.01<br />
98.26<br />
$ 40.94<br />
$ 38.26<br />
$ 31.11<br />
$ 50.29<br />
$ 38.40<br />
$ 31.75<br />
61.00%<br />
12.00%<br />
14.30%<br />
93.00%<br />
14.00%<br />
11.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
3.84<br />
5.88<br />
$<br />
$<br />
38.50<br />
15.00<br />
$<br />
$<br />
9.39<br />
9.18<br />
6.00%<br />
5.00%<br />
High Tech/R&D<br />
retaIl<br />
$ 7.80 $ 36.00 $ 20.80 15.00%<br />
Downtown<br />
$ 18.00 $ 120.00 $ 37.80 4.00%<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
15.28<br />
25.00<br />
N/A<br />
$<br />
$<br />
66.00<br />
42.00<br />
N/A<br />
$ 30.22<br />
$ 32.21<br />
N/A<br />
6.00%<br />
3.00%<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
$30,000,000.00<br />
$ 1,124,069.00<br />
$ 80,000,000.00<br />
$ 24,377,593.00<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
$ 445,000.00<br />
N/A<br />
N/A<br />
$ 3,559,322.00<br />
N/A<br />
N/A<br />
Residential<br />
$ 1,950,000.00 $ 36,305,547.00<br />
Ventura County At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
22.20<br />
11.94<br />
3.60<br />
3.60<br />
3.60<br />
N/A<br />
7.80<br />
10.20<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
35.40<br />
41.47<br />
15.00<br />
21.00<br />
21.00<br />
N/A<br />
42.00<br />
54.00<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
N/A<br />
23.17<br />
26.05<br />
22.70<br />
6.80<br />
6.82<br />
6.76<br />
N/A<br />
21.92<br />
21.81<br />
12.55<br />
N/A<br />
N/A<br />
N/A<br />
73.60%<br />
17.40%<br />
20.00%<br />
9.20%<br />
8.20%<br />
11.00%<br />
N/A<br />
9.10%<br />
9.20%<br />
2.80%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
N/A<br />
43,500.00<br />
325,000.00<br />
N/A<br />
650,000.00<br />
N/A<br />
$<br />
$<br />
$<br />
N/A<br />
1,089,000.00<br />
650,000.00<br />
N/A<br />
1,250,000.00<br />
N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 86
Colorado Springs, Colorado<br />
Denver, Colorado<br />
Contact<br />
<strong>NAI</strong> Highland<br />
Commercial Group<br />
+1 719 577 0044<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
799,976<br />
874,368<br />
397,332<br />
$65,958<br />
$51,003<br />
The local economy and commercial real estate market has<br />
largely mirrored the national economy. Colorado Springs has<br />
experienced the worst commercial market in 19 years. Our<br />
problems are reflective of the national economy as we have<br />
lost primary employment jobs in the last three years and<br />
capital markets are still stagnant. Our current unemployment<br />
rate is 9.6% above the national average. A more precipitous<br />
decline has been avoided because of our strong military<br />
presence.<br />
Overall, the office market “feels” better than 2009 and<br />
2010. With no new construction, vacancy rates continue to<br />
decline with the CBD as the strongest submarket. Metro<br />
vacancy rates are 14.4% while Class A remains the weakest<br />
at 19.9%. Rental rates remain flat. No new spec construction<br />
is planned.<br />
The industrial market has outpaced all other sectors<br />
with 2.7 million SF of leasing activity since 2009. Vacancy<br />
rate has declined to 10.1% and rates are flat. Activity in<br />
warehouse/distribution space is the strongest with organic<br />
growth driving the market. No spec projects are planned.<br />
Investment real estate transactions remain scarce and few<br />
investment grade options have been available. Of the $252<br />
million in improved property sales thus far in 2011, 63% is<br />
attributed to outside investors, the remaining 37% have<br />
been Colorado investors; 12% office, 8% industrial, 48%<br />
retail and 24% multifamily. Keep in mind that a large portion<br />
of overall sales activity included “user” transactions.<br />
Land values are stable but flat. New single family lot<br />
development should begin in <strong>2012</strong> after a four year hiatus.<br />
The land market will slowly improve.<br />
The projection for Colorado Springs is for the economy to<br />
continue to slowly improve during the balance of 2011 into<br />
the <strong>2012</strong> time period. Retail vacancy rates are up slightly<br />
and rates down slightly, but the activity has picked up<br />
in 2011 versus 2010. Leasing should catch up with the<br />
activity. Quality retail locations are leasing well and the dated<br />
properties are suffering. Creative re-use will be required for<br />
the older locations. Barring national calamity, we expect<br />
<strong>2012</strong> to be better.<br />
Contact<br />
<strong>NAI</strong> Shames Makovsky<br />
+1 303 534 5005<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
2,847,582<br />
3,009,276<br />
1,586,705<br />
$85,192<br />
$67,358<br />
Located on the western edge of the Great Plains, Denver is<br />
the largest city in the Rocky Mountain region. Its diverse<br />
industry base and highly educated workforce place Denver<br />
in an excellent position for business growth and economic<br />
development. Denver’s high-tech, health care and energy<br />
sectors continue to lead the region’s economic recovery,<br />
which experts predict will unroll in a series of gains and<br />
setbacks until business and consumer confidence returns<br />
to a sustainable level.<br />
As <strong>2012</strong> begins, Metro Denver is slowly continuing its<br />
recovery. Vacancy rates dropped by more than 7.5% in both<br />
the office and retail markets to 14.0% and 7.3%, respectively.<br />
Positive absorption rates reflect the drop in vacancy with<br />
1,874,287 SF absorbed in the office market and 1,467,212<br />
SF retail product absorbed.<br />
Denver’s industrial market is slightly behind with a slight rise<br />
in vacancy to 6.1% and a negative absorption of -335,752<br />
SF. Lease Rates have remained low across the board and<br />
are expected to show little to no change until employment<br />
begins to grow and leasing activity increases. During 2011,<br />
overall market office lease rates declined 1.0% to<br />
$19.73/SF, industrial rates declined 2.8% to $4.47 and<br />
retail rates also declined 2.8% to $14.46. Several specific<br />
submarkets including the Lodo area surrounding the<br />
redevelopment of Union Station and the US-36 Boulder<br />
corridor have enjoyed increased lease rates.<br />
Total office and industrial building sales activity in 2011 was<br />
up compared to 2010. In the first six months of 2011, the<br />
market saw 33 office sales transactions with a total volume<br />
of $642,357,600 and 61 industrial sales transactions with<br />
a total volume of $167,325,177. The price per square foot<br />
averaged $175.42 for office and $53.67 for industrial.<br />
However, total retail center sales activity in 2011 was down<br />
compared to 2010. In 2011, the market saw 26 retail sales<br />
transactions with a total volume of $112,517,443. The price<br />
per square foot averaged $97.07. Additionally, several large<br />
new construction projects were delivered to the market in<br />
2011 including the 1,000,000 SF St. Anthony Hospital in<br />
Lakewood and a new 400,000 SF facility for IKEA in<br />
Centennial.<br />
Total Population<br />
Median Age<br />
36<br />
Total Population<br />
Median Age<br />
38<br />
Colorado Springs At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
13.50<br />
8.50<br />
N/A<br />
12.00<br />
8.00<br />
3.25<br />
4.00<br />
6.25<br />
12.25<br />
8.00<br />
18.00<br />
15.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
15.50<br />
11.50<br />
N/A<br />
14.50<br />
11.50<br />
4.50<br />
5.50<br />
8.50<br />
25.00<br />
28.00<br />
30.00<br />
29.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
14.75<br />
11.25<br />
N/A<br />
13.50<br />
10.45<br />
3.75<br />
4.75<br />
7.25<br />
17.00<br />
15.00<br />
23.00<br />
20.00<br />
N/A<br />
10.00%<br />
10.20%<br />
N/A<br />
19.90%<br />
14.40%<br />
10.00%<br />
14.00%<br />
14.00%<br />
4.10%<br />
11.40%<br />
7.30%<br />
13.40%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
653,000.00<br />
175,000.00<br />
130,000.00<br />
87,000.00<br />
130,000.00<br />
15,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
1,524,600.00<br />
350,000.00<br />
218,000.00<br />
218,000.00<br />
871,200.00<br />
50,000.00<br />
Denver At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
Premium (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
31.00<br />
17.50<br />
12.00<br />
21.88<br />
15.50<br />
9.00<br />
$ 35.93<br />
$ 40.50<br />
$ 38.97<br />
$ 25.01<br />
$ 31.39<br />
$ 26.50<br />
$ 33.39<br />
$ 27.98<br />
$ 20.98<br />
$ 22.32<br />
$ 21.98<br />
$ 16.88<br />
28.00%<br />
12.00%<br />
14.00%<br />
10.00%<br />
12.00%<br />
19.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
1.70<br />
2.50<br />
1.70<br />
$ 14.85<br />
$ 12.00<br />
$ 17.00<br />
$<br />
$<br />
$<br />
4.31<br />
4.87<br />
4.47<br />
7.00%<br />
3.00%<br />
6.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
10.86<br />
5.00<br />
8.00<br />
11.00<br />
$ 39.74<br />
$ 40.00<br />
$ 38.00<br />
$ 28.00<br />
$ 21.98<br />
$ 14.19<br />
$ 17.94<br />
$ 19.18<br />
2.00%<br />
10.00%<br />
7.00%<br />
15.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 353,107.34 $16,332,752.61<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
$<br />
$<br />
116,276.07<br />
43,551.02<br />
$<br />
$<br />
740,520.21<br />
172,061.70<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
1,176.47<br />
23,076.92<br />
10,856.69<br />
$16,332,752.61<br />
$15,840,329.48<br />
$13,995,881.26<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 87
Hartford, Connecticut<br />
Wilmington, DE (Cecil County, MD)<br />
Contact<br />
<strong>NAI</strong> Elite<br />
+1 877 327 3755<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
1,221,605<br />
1,267,861<br />
663,585<br />
$89,739<br />
The Hartford region of Connecticut is known for being<br />
part of New England’s Knowledge Corridor. Hartford is<br />
increasingly being defined as the Knowledge Corridor’s<br />
business center with its postmodern skyline, numerous<br />
corporate headquarters, government district and easily<br />
navigated main thoroughfares. Connecticut’s location<br />
between New York City, Boston and Providence makes it an<br />
ideal location for companies interested in having a suburban<br />
feel with easy access to everything.<br />
During 2011, Connecticut saw increased activity in all<br />
sectors of the commercial real estate market and it is<br />
expected that <strong>2012</strong> will show continued improvement. The<br />
population for the region is expected to grow by 2% by 2015<br />
which is in line with the state average. Employment growth<br />
has been light; currently the unemployment rate is 8.9%<br />
which is slightly below the national average of 9.1%. There<br />
were 1,620,900 jobs in Connecticut in September 2011 according<br />
to the CES survey of employers. The CPS survey of<br />
households showed 1,708,329 employed persons for the<br />
month. Connecticut added 3,400 jobs in September 2011<br />
according to the CES survey while the broader CPS<br />
employment measure rose by 7,135.<br />
The Hartford office market and surrounding submarkets<br />
ended Q3 2011 with a vacancy rate of 10.9%. The vacancy<br />
rate was down over the previous quarter, with a net<br />
absorption totaling positive 100,199 SF in Q3 2011. Vacant<br />
sublease space increased to 264,549 SF at the end of the<br />
quarter.<br />
The Hartford industrial market and surrounding submarkets<br />
ended the Q3 2011 with a vacancy rate at 9.9%, down from<br />
the previous quarter with a net absorption of 346,044 SF.<br />
Vacant sublease space increased to 685,314 SF at the end<br />
of Q3 2011.<br />
The Hartford retail market and surrounding submarkets<br />
vacancy was 6% at the end of Q3 2011, slightly better<br />
than the previous quarters 6.1% with a net absorption<br />
of 175,894 SF and vacant sublease space decrease by<br />
(3,875) SF.<br />
Contact<br />
<strong>NAI</strong> Emory Hill<br />
+1 302 322 9500<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
1,015,478<br />
1,081,158<br />
524,045<br />
$75,590<br />
Delaware’s unemployment rate slowly decreased, hovering<br />
at 8.1% into Q4 2011. Activity among all product types<br />
remained slow throughout the year and vacancy remained<br />
high. The lack of construction on the horizon is expected to<br />
help recovery as activity inches upward. Businesses<br />
continue to seek improvement on their bottom lines but<br />
many are unable to adapt further.<br />
Expiring leases are trending toward shorter term renewals,<br />
however, some tenants have approached their landlords<br />
to negotiate lower rates in exchange for longer term<br />
commitments. The decrease in retail rates was not as severe<br />
as in other property categories, with strip retail remaining<br />
in demand, but the number of retail vacancies increased<br />
slightly in the CBD and power centers as retailers relocated<br />
or closed. Christiana Mall remained an exception as new<br />
space was mostly absorbed with minimal remaining<br />
vacancy. The newly opened Nordstrom has drawn increased<br />
activity to the mall and many new retailers are expected to<br />
open within the next few months.<br />
The largest office sale transaction was the acquisition of<br />
101 Bellevue Parkway by WR Berkley in September, 2011<br />
for $9.25 million from Star Processing, Inc. Young Conaway<br />
Stargatt and Taylor leased the former New Castle County<br />
Courthouse (125,000 SF). Willis Insurance agency recently<br />
leased 13,000 SF at 222 Delaware Avenue. In general<br />
though, activity in the Wilmington CBD remains slow.<br />
The University of Delaware acquired the former Chrysler site<br />
in Newark and construction has begun. Building there will<br />
continue through <strong>2012</strong> with the Thomas Jefferson medical<br />
facility opening by 2013. However, the lack of an automaker<br />
at the site has put a strain on industrial space in the market;<br />
rates have decreased, and vacancies and absorption rates<br />
have increased. Fisker’s purchase of the GM assembly plant<br />
in Newport, which will begin production in early <strong>2012</strong>, will<br />
lead to some flex and industrial space absorption related to<br />
just-in-time suppliers. We predict the slow increase in<br />
activity will be maintained throughout <strong>2012</strong>.<br />
Median<br />
Household Income<br />
$69,655<br />
Median<br />
Household Income<br />
$60,468<br />
Total Population<br />
Median Age<br />
39<br />
Total Population<br />
Median Age<br />
38<br />
Hartford At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
Premium (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
16.00<br />
11.00<br />
N/A<br />
16.62<br />
11.46<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
35.00<br />
36.75<br />
N/A<br />
25.27<br />
20.62<br />
N/A<br />
$ 22.53<br />
$ 15.33<br />
N/A<br />
$ 21.82<br />
$ 17.75<br />
N/A<br />
17.20%<br />
10.40%<br />
N/A<br />
13.00%<br />
10.20%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
3.36<br />
3.42<br />
6.06<br />
$<br />
$<br />
$<br />
5.49<br />
5.79<br />
16.13<br />
$<br />
$<br />
$<br />
4.04<br />
4.35<br />
7.64<br />
10.00%<br />
9.90%<br />
8.60%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
9.43<br />
10.65<br />
7.63<br />
12.43<br />
$<br />
$<br />
$<br />
$<br />
16.43<br />
17.37<br />
22.00<br />
29.50<br />
$ 11.43<br />
$ 13.51<br />
$ 11.61<br />
$ 20.76<br />
5.10%<br />
8.70%<br />
4.30%<br />
2.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Wilmington, DE (Cecil County, MD) At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
26.00<br />
22.00<br />
11.00<br />
24.00<br />
22.00<br />
15.50<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
30.00<br />
26.00<br />
17.00<br />
28.00<br />
27.00<br />
19.00<br />
$ 27.50<br />
$ 24.00<br />
$ 16.00<br />
$ 26.00<br />
$ 22.50<br />
$ 18.50<br />
25.00%<br />
20.00%<br />
35.00%<br />
15.00%<br />
20.00%<br />
30.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
$ 3.50<br />
N/A<br />
$ 5.50<br />
N/A<br />
$ 4.75<br />
N/A<br />
20.00%<br />
N/A<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
8.00<br />
12.00<br />
15.00<br />
15.00<br />
20.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
15.00<br />
18.00<br />
40.00<br />
30.00<br />
40.00<br />
$ 12.00<br />
$ 15.00<br />
$ 22.00<br />
$ 37.00<br />
$ 28.00<br />
18.00%<br />
8.00%<br />
9.20%<br />
11.00%<br />
5.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
40,000.00<br />
200,000.00<br />
90,000.00<br />
150,000.00<br />
300,000.00<br />
35,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
75,000.00<br />
330,000.00<br />
200,000.00<br />
350,000.00<br />
400,000.00<br />
100,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 88
Washington, District of Columbia<br />
Bradenton, Florida<br />
Contact<br />
<strong>NAI</strong> KLNB<br />
+1 202 375 7500<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
5,692,986<br />
6,142,565<br />
3,181,058<br />
$115,089<br />
$87,202<br />
35<br />
Although Washington DC’s office market recorded positive<br />
net absorption market-wide, vacancy increased slightly<br />
overall due to the delivery of new vacant space. Negative<br />
net absorption was posted in the CBD, largely due to<br />
construction deliveries. These included the 392,000 SF<br />
building at 1015 Half Street SE that was delivered fully<br />
vacant and 733 10th Street, a 169,000 SF building that was<br />
delivered 85% pre-leased.<br />
The Washington DC metro office market has experienced<br />
more than 1.3 million SF of positive net absorption year-todate.<br />
Full-service asking rental rates for Class A space<br />
averaged $54/SF. At the same time, the average full-service<br />
asking rental rate for Class B space was $42/SF. A large<br />
overhang of sublease space was available near the close of<br />
2011, though it had been reduced from the start of the year.<br />
The recovery in the Washington DC metro office market is<br />
expected to continue at a slow pace into <strong>2012</strong>.<br />
While government leasing is expected to slow, leasing<br />
activity in the private sector will likely begin to increase with<br />
little to no rental rate growth expected region-wide until<br />
<strong>2012</strong>. The fundamentals in the Washington DC region<br />
remain strong and we expect the market to continue its<br />
upward trend in subsequent quarters. Sales activity in the<br />
District stayed relatively strong during 2011 as more than<br />
$1.5 billion traded hands.<br />
DC is one of the world’s top investment markets. 2011 saw<br />
a record high sale price of $904/SF on the sale of a trophy<br />
office in the East End. One of the largest industrial lease<br />
signings that occurred in 2011 included the 95,578 SF<br />
lease signed by the DC Metropolitan Police Department at<br />
2850 New York Ave NE in the District.<br />
In the retail sales market cap rates were lower in 2011,<br />
averaging 7.20% compared to the same period in 2010<br />
when they averaged 8.25%. The unemployment rate is at<br />
11.1% compared to the national average of 9.1%.<br />
Contact<br />
<strong>NAI</strong> Manasota<br />
+1 941 741 9667<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
712,161<br />
751,808<br />
327,506<br />
$71,472<br />
$50,735<br />
47<br />
The Sarasota-Bradenton-Lakewood Ranch (LWR) market<br />
is doing “ok” since the residential market nightmare is<br />
passing. Steady absorption rates and new housing construction<br />
targeting a lower income market prevail. The impact on<br />
the commercial market has peaked and office absorption<br />
has improved in some sub-markets. New pockets of<br />
expansion are occurring where the key drivers include<br />
sports venues, big box and community centers along the<br />
I-75/University Parkway corridor.<br />
Per SF pricing continues to decline in the office market, but<br />
we have witnessed an increase in volume and a new<br />
normalization. Regional vacancy is 21% on 7 million SF of<br />
space, down 32,000 SF and steady absorption in the LWR<br />
University Parkway submarket where the largest transactions<br />
took place for $13.25 million for a 54,928 SF building on<br />
2.68 acres and $12.5 million for a 62,650 SF property.<br />
The industrial market is strengthening. The biggest deal was<br />
in Bradenton for a 123,357 SF building on 16.47 acres at<br />
$15.4 million SF ($4,124.83/SF). It closed in March 2011.<br />
The multifamily market is hot here as elsewhere. The largest<br />
sale was in Bradenton with a 342,880 SF garden low-rise<br />
on 28 acres for $23.2 million in June 2011.<br />
The retail market continues to grow. With risk aversion high,<br />
investors here turn to single tenant properties with high<br />
quarterly figures. A new 176,000 SF Super Walmart will be<br />
completed in <strong>2012</strong>. Benderson <strong>report</strong>s absorption of<br />
150,000 SF of retail space at University Parkway and I-75.<br />
Land developers are rushing to buy approved land for<br />
subdivisions from Pasco south to Naples. A parcel located<br />
on SR 70 and I-75 in Bradenton recently sold for $22<br />
million. Investments were made in the Port of Manatee area,<br />
which boasts strong connections to Panama as it is the<br />
closest US port to South America.<br />
Three new contracts are underway in the University Parkway<br />
area. A 70 acre, $110 million sports complex (Mustangs<br />
Stadium) with cutting edge spa, private club and high-tech<br />
sports training academy is under construction in LWR.<br />
An expanded Benderson Park in LWR, Sarasota, is under<br />
construction for $19.5 million. The project’s centerpiece is<br />
a regional mall to break ground in <strong>2012</strong> next to the fully<br />
leased big box center. Prices per SF continue to decline in<br />
the market but are stabilizing in this area. A new Walmart is<br />
also under construction at SR 70 & I-75.<br />
Washington At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
42.00<br />
26.00<br />
15.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 90.00<br />
$ 82.00<br />
$ 70.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 60.00<br />
$ 54.00<br />
$ 42.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
11.50%<br />
7.00%<br />
N/A<br />
N/A<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
$ 3.70<br />
N/A<br />
$ 16.50<br />
N/A<br />
$ 8.50<br />
N/A<br />
13.40%<br />
N/A<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
8.50<br />
40.00<br />
20.00<br />
20.00<br />
35.00<br />
$ 27.00<br />
$ 62.50<br />
$ 50.00<br />
$ 65.00<br />
$ 90.00<br />
$ 16.00<br />
$ 52.00<br />
$ 35.00<br />
$ 40.00<br />
$ 62.00<br />
10.10%<br />
8.80%<br />
4.00%<br />
4.40%<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
2,000,000.00<br />
N/A<br />
N/A<br />
N/A<br />
2,000,000.00<br />
N/A<br />
$ 101,500,000.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 101,500,000.00<br />
N/A<br />
Bradenton At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
13.50<br />
11.00<br />
N/A<br />
12.00<br />
10.00<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
22.00<br />
16.00<br />
N/A<br />
16.00<br />
12.00<br />
N/A<br />
$ 18.00<br />
$1 4.00<br />
N/A<br />
$ 14.00<br />
$ 10.00<br />
N/A<br />
14.20%<br />
31.60%<br />
N/A<br />
N/A<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
3.00<br />
3.00<br />
N/A<br />
$<br />
$<br />
6.00<br />
6.00<br />
N/A<br />
$<br />
$<br />
4.00<br />
4.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
14.00<br />
10.00<br />
10.00<br />
N/A<br />
$<br />
$<br />
$<br />
25.00<br />
10.00<br />
24.00<br />
N/A<br />
$ 18.00<br />
$ 12.00<br />
$ 21.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
$<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
9,500.00 $<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
9,500.00<br />
Residential<br />
$ 3,444.00 $ 22,475.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 89
Fort Lauderdale, Florida<br />
Ft. Myers/Naples/Port Charlotte/Bonita Springs, Florida<br />
Contact<br />
<strong>NAI</strong> Rauch, Weaver,<br />
Norfleet, Kurtz & Co.<br />
+1 954 771 4400<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
5,599,440<br />
5,744,653<br />
2,816,414<br />
$73,683<br />
$50,739<br />
Fort Lauderdale is a service market for southeast Florida. The<br />
major industries are tourism, finance and service related<br />
business with a strong segment of international trade. This<br />
area is serviced by three seaports, Port of Miami, Port<br />
Everglades and the Port of Palm Beach, as well as three<br />
international airports. An increase in import/export is driving<br />
industrial leasing. The seaports are gearing up for the 2014<br />
completion of the Panama Canal expansion.<br />
The office market experienced a decline in occupancy in<br />
Class A space with rents unchanged. Class B space saw a<br />
slight increase in rates and leasing of available space. There<br />
is no new office construction in the market. Office vacancies<br />
are in the 10% to 20% range.<br />
Industrial vacancies are in the 10% to 20% range, with the<br />
High Tech/R&D space at the top end, and bulk warehouse<br />
and manufacturing space being leased up. As a result, rents<br />
are following suit with bulk space averaging $6.50/SF<br />
gross and manufacturing $8.00/SF gross. There is no new<br />
projected inventory in the pipeline that will aid in this continued<br />
recovery.<br />
The retail market has experienced a favorable decline in<br />
vacancies that ranged from 10% to 20% last year and are<br />
now <strong>report</strong>ed at 4% to 15% with regional malls at the top<br />
end. Although rates have increased slightly, they are still<br />
within range to keep the stores occupied. Investors are<br />
delaying major purchases unless they can buy at 40% to<br />
50% of previous values. Cap rates are up to at least 8.5%<br />
to10.5% based on current income without credit for any<br />
vacant space.<br />
The multifamily sector had some transactions but most sellers<br />
do not want to discount prices. Multifamily occupancy is<br />
up with most projects above 90% occupancy. Rents on<br />
multifamily projects are trending upward but most owners<br />
are careful not to raise rates aggressively for fear of losing<br />
tenants. The policy of most landlords is to do anything to keep<br />
the current tenants in place as new tenants are few and far<br />
between. New construction may be on the horizon for <strong>2012</strong>.<br />
Contact<br />
<strong>NAI</strong> Southwest<br />
Florida<br />
+1 239 437 3330<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
997,788<br />
1,093,248<br />
463,699<br />
$73,520<br />
$50,764<br />
2011 was a positive change with vacancy rates and prices<br />
beginning to stabilize. Development has been slowed as<br />
banks continue to realize the effects of the economy. There<br />
is the promise of plenty of cash in the marketplace from<br />
both inside and outside of the US. Many developers profess<br />
to be more active in the “green” marketplace and landlords<br />
are retaining and attracting new tenants as their primary<br />
concern. <strong>2012</strong> looks to have a brighter future.<br />
The Southwest Florida market has many positive factors<br />
when you consider it’s a coastal location offering a positive<br />
impact on the quality of life. Southwest Florida can also<br />
boast that many prominent, former and current business<br />
executives live in the area at least part of the year. This<br />
expertise and experience serve as valuable resources to the<br />
business community. Our area is home to many higher<br />
education campuses; Edison State College, Hodges University,<br />
Ave Maria University and Florida Gulf Coast University which<br />
is a member of the State University System of Florida.<br />
<strong>2012</strong> brings with it the encouragement of new companies<br />
finding their way to Florida’s Gulf Coast for regional and<br />
corporate office locations. Retaining jobs is even more<br />
important to regional economic development groups than<br />
attracting new "cluster" industries. Valuing what you already<br />
have is just as important as bringing in new industries to<br />
your community.<br />
The region stretches from the 10,000 islands north to Port<br />
Charlotte and from the Gulf of Mexico east to Lehigh Acres.<br />
This area continues to be home to a growing population of<br />
young professionals, and opportunities continue to grow<br />
other industries, including biotechnology and healthcare.<br />
The John Madden Company is planning to break ground on<br />
their Research Loop at the Southwest Florida International<br />
Airport which will introduce new, high paying career<br />
opportunities that will only further propel our region forward.<br />
Charlotte, Collier, Hendry and Lee Counties <strong>report</strong>ed<br />
increased unemployment in 2009. Lee County’s<br />
unemployment rate rose to 14.7% in 2011. Collier County’s<br />
unemployment rate increased to 13.98% and Charlotte<br />
County’s figure grew to 13.79%. The unemployment rate is<br />
not seasonally adjusted.<br />
Total Population<br />
Median Age<br />
38<br />
Total Population<br />
Median Age<br />
39<br />
Fort Lauderdale At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 25.00<br />
$ 20.00<br />
$ 15.00<br />
$ 22.00<br />
$ 19.00<br />
$ 15.00<br />
$ 29.00<br />
$ 31.00<br />
$ 26.00<br />
$ 25.00<br />
$ 27.00<br />
$ 22.00<br />
$ 27.00<br />
$ 22.00<br />
$ 20.50<br />
$ 23.00<br />
$ 23.00<br />
$ 18.50<br />
20.00%<br />
22.00%<br />
10.00%<br />
20.00%<br />
20.00%<br />
15.00%<br />
Bulk Warehouse<br />
$ 5.00 $ 8.00 $ 6.50 10.00%<br />
Manufacturing<br />
$ 6.00 $ 10.00 $ 8.00 12.00%<br />
High Tech/R&D<br />
retaIl<br />
$ 5.50 $ 7.50 $ 6.00 20.00%<br />
Downtown<br />
$ 10.00 $ 23.05 $ 16.50 6.00%<br />
Neighborhood Service Centers $ 7.00 $ 18.00 $ 12.50 4.00%<br />
Community Power Center<br />
Regional Malls<br />
$ 17.75<br />
$ 25.00<br />
$ 25.00<br />
$ 60.00<br />
$ 19.75<br />
$ 30.00<br />
8.00%<br />
15.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 500,000.00 $ 1,000,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
300,000.00<br />
220,000.00<br />
220,000.00<br />
400,000.00<br />
400,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
600,000.00<br />
500,000.00<br />
500,000.00<br />
700,000.00<br />
600,000.00<br />
Ft Myers/Naples/Port Charlotte/Bonita Springs At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
17.00<br />
15.00<br />
10.00<br />
17.00<br />
15.00<br />
12.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
24.00<br />
17.00<br />
13.00<br />
19.00<br />
17.00<br />
14.00<br />
$ 20.00<br />
$ 16.00<br />
$ 12.00<br />
$ 17.50<br />
$ 15.00<br />
$ 13.00<br />
16.70%<br />
18.00%<br />
17.00%<br />
50.00%<br />
50.00%<br />
50.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
$<br />
$<br />
$<br />
$<br />
$<br />
1.00<br />
2.00<br />
6.00<br />
5.00<br />
7.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
3.50<br />
3.00<br />
8.00<br />
8.00<br />
10.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
2.00<br />
2.50<br />
7.00<br />
7.50<br />
8.00<br />
15.00%<br />
11.00%<br />
16.00%<br />
18.00%<br />
16.50%<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
10.00<br />
20.00<br />
$<br />
$<br />
15.00<br />
70.00<br />
$ 13.00<br />
$ 45.00<br />
9.00%<br />
13.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
N/A<br />
98,000.00<br />
75,000.00<br />
50,000.00<br />
$<br />
$<br />
$<br />
$<br />
275,000.00<br />
100,000.00<br />
80,000.00<br />
75,000.00<br />
Retail/Commercial Land<br />
Residential<br />
$ 250,000.00<br />
N/A<br />
$ 1,000,000.00<br />
N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 90
Jacksonville, Florida<br />
Martin/St. Lucie Counties, Florida<br />
Contact<br />
<strong>NAI</strong> Hallmark Partners<br />
+1 904 363 9002<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
1,443,558<br />
1,538,087<br />
736,427<br />
$70,069<br />
$54,430<br />
Jacksonville experienced four quarters of positive absorption<br />
in all sectors but has done so with minimal employment<br />
gains while loosing value in all rental properties due to a<br />
decline in rents. Port expansion and educated back room<br />
office service employment with quality infill development<br />
locations bode well for Jacksonville’s future. In the short<br />
term Jacksonville will “plod” along but long term will<br />
continue to be one of the better places in America for<br />
business to relocate.<br />
All markets, office, industrial and retail continued to have<br />
positive absorption during 2011, which is the good news,<br />
but rental rates continue to decline in all three specialty<br />
areas. The office market “chugs” along with Jacksonville’s<br />
financial services sector continuing to expand and add a<br />
relatively small amount of jobs. GE Capital, JP Morgan along<br />
with Deutsche Bank lead the way. Overall the market has<br />
bottomed out with vacancy rates declining slightly in each<br />
of the last four quarters.<br />
Jacksonville’s industrial warehouse leasing was notably<br />
stronger in Q3 2011 and hadn’t been as strong since Q4<br />
2010. Like the office market, the retail sector’s leasing and<br />
absorption rates are up but rental rates are down. The<br />
research/high tech space has suffered slightly, but not<br />
enough to put a damper on the positive numbers for bulk<br />
warehouse in the last four quarters.<br />
Jacksonville’s retail market is the same old story within a<br />
different specialty. There was positive absorption and slightly<br />
declining vacancy rates but quoted rents also dropped. The<br />
biggest news is LA Fitness has entered the market and will<br />
be completing at least two deals by the end of 2011.<br />
The Jacksonville apartment market continues its positive<br />
trend. For the first time in three years the average market<br />
vacancy factor is less than 10%. In all specialties, with<br />
the exception of multifamily housing, there has been<br />
minimal new construction, if any, while sublease numbers<br />
remain stagnant in all areas but are still reduced from 12<br />
months ago.<br />
Contact<br />
<strong>NAI</strong> Southcoast<br />
+1 772 286 6292<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
437,453<br />
490,775<br />
201,130<br />
$71,903<br />
$51,026<br />
Real estate of all types continues to be depressed with most<br />
sales being REO dispositions or other types of distressed<br />
sales. Leasing and end-user activity has increased in the<br />
retail and office markets. Land continues to be sluggish.<br />
Although some home builders are active in Martin and Indian<br />
River Counties, St. Lucie County remains burdened with an<br />
oversupply of inventory. The flex space sector remains slow<br />
due to the functional obsolescence of flex space design.<br />
The retail market has shown signs of tightening. Several big<br />
box spaces had been vacated in 2008 to 2010 and these<br />
spaces have been leased to new tenants significantly<br />
reducing the inventory. At present there are no second<br />
generation box spaces left in Martin and St. Lucie Counties<br />
and the former Linens N Things in Vero Beach is presently<br />
pending, an <strong>NAI</strong> Southcoast brokered deal.<br />
Activity in RFP’s for office space has increased and<br />
occupancy of office space appears to be up which has put<br />
some upward pressure on rental rates for Class A and Class<br />
B space. Class C or Class B secondary space remains<br />
difficult to lease and both are suffering greater vacancies.<br />
The trend has been for businesses to upgrade to newer,<br />
better located space during the recession. Although rental<br />
rates and occupancy has not reached levels at which new<br />
construction is merited, this trend bodes well for newer<br />
construction.<br />
Residential land tracts in rural areas have reached prices<br />
10% to 20% of what they sold for in the boom years of<br />
2004 to 2006. Still, there is little activity in this sector. These<br />
prices have caused some buyers to come off the sidelines<br />
but these buyers are users such as churches, and horizontal<br />
development has been proposed in the residential sector.<br />
Commercial land has been slow with well located parcels<br />
selling quickly and poorly located properties almost<br />
unsellable at any price.<br />
Functional warehouse and industrial properties have shown<br />
strong appeal to businesses in the market, and are currently<br />
selling at bargain prices. Flex space has proven to be difficult<br />
for business to operate in due to the condominium nature<br />
of most projects, lack of dock height bays and yard storage.<br />
Total Population<br />
Median Age<br />
38<br />
Total Population<br />
Median Age<br />
43<br />
Jacksonville At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
N/A<br />
$ 18.12<br />
$ 14.00<br />
N/A<br />
$ 18.50<br />
$ 13.00<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
24.00<br />
17.00<br />
N/A<br />
21.00<br />
17.50<br />
N/A<br />
$ 18.49<br />
$ 16.89<br />
N/A<br />
$ 20.34<br />
$ 16.81<br />
N/A<br />
18.90%<br />
10.60%<br />
N/A<br />
8.30%<br />
16.40%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
3.14<br />
N/A<br />
3.43<br />
$<br />
$<br />
7.29<br />
N/A<br />
12.71<br />
$<br />
$<br />
3.70<br />
N/A<br />
8.92<br />
10.40%<br />
N/A<br />
12.50%<br />
Downtown<br />
$ 8.50 $ 15.06 $ 11.78 3.10%<br />
Neighborhood Service Centers $ 11.16 $ 23.00 $ 13.44 12.40%<br />
Community Power Center<br />
$ 8.00 $ 21.10 $ 11.42 19.50%<br />
Regional Malls<br />
$ 14.57 $ 38.50 $ 16.64 5.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 875,000.00 $ 2,000,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
260,000.00<br />
108,000.00<br />
165,340.00<br />
$<br />
$<br />
$<br />
435,000.00<br />
216,000.00<br />
305,000.00<br />
Retail/Commercial Land<br />
Residential<br />
$ 130,680.00<br />
N/A<br />
$ 1,045,000.00<br />
N/A<br />
Martin/St. Lucie Counties At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 16.00<br />
$ 16.00<br />
$ 13.00<br />
$ 16.00<br />
$ 16.00<br />
$ 12.00<br />
$ 23.00<br />
$ 23.00<br />
$ 16.00<br />
$ 20.00<br />
$ 20.00<br />
$ 15.00<br />
$ 18.00<br />
$ 18.00<br />
$ 14.00<br />
$ 18.00<br />
$ 18.00<br />
$ 13.00<br />
20.00%<br />
20.00%<br />
20.00%<br />
30.00%<br />
30.00%<br />
30.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$ 5.00<br />
$ 5.00<br />
$ 5.00<br />
$<br />
$<br />
$<br />
8.00<br />
8.00<br />
8.00<br />
$<br />
$<br />
$<br />
6.00<br />
6.00<br />
5.00<br />
50.00%<br />
50.00%<br />
50.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$ 18.00<br />
$ 12.00<br />
$ 14.00<br />
N/A<br />
$ 26.00<br />
$ 16.00<br />
$ 18.00<br />
N/A<br />
$ 20.00<br />
$ 17.00<br />
$ 15.00<br />
N/A<br />
10.00%<br />
30.00%<br />
25.00%<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
$<br />
$<br />
$<br />
$<br />
$<br />
200,000.00<br />
150,000.00<br />
50,000.00<br />
50,000.00<br />
100,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
400,000.00<br />
250,000.00<br />
100,000.00<br />
250,000.00<br />
500,000.00<br />
Residential<br />
$ 10,000.00 $ 1,000,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 91
Miami, Florida<br />
Ocala/Gainesville, Florida<br />
Contact<br />
<strong>NAI</strong> Miami<br />
+1 305 938 4000<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
2,512,899<br />
2,584,427<br />
1,242,463<br />
$65,808<br />
$45,007<br />
37<br />
While most of the US remains mired in stagnation, Miami’s<br />
march towards world class status resumed in 2011. Pricing<br />
on both the leasing and sales side are improving in most<br />
sectors; residential occupancies and pricing are growing<br />
and the 1-2 growth punch hit with two major projects<br />
announced from the Miami CBD/Brickell Financial District.<br />
Hong Kong’s Swire Group premiered Brickell CitiCentre, a<br />
$2+ billion, 4 million SF project breaking ground in <strong>2012</strong>.<br />
Malaysia’s Genting Group purchased 20 acres in downtown,<br />
announcing a $3 billion casino/resort slated to start when<br />
gambling is legalized.<br />
Multifamily pricing should grow 10.0% to 20.0% for sales<br />
and lease rates. Foreign buyers dominate because of low<br />
relative prices and favorable exchange rates. Two new<br />
condominium projects were announced for downtown with<br />
2014 completion dates.<br />
Retail demand is balanced and vacancy rates are low. Well<br />
capitalized retailers continue to expand and large retailers<br />
like HH Gregg, added stores for the first time. Because of<br />
low vacancy rates, rental rates in preferred markets should<br />
grow 10.0+% and vacancy rates should decline.<br />
The office sector remains divergent; with the CBD, Brickell<br />
and other submarkets experiencing 20.0%+ vacancy.<br />
Rental rates are stabilizing and landlord concession<br />
packages remain generous. The only new construction,<br />
Coral Gables’ 396 Alhambra Circle, is nearing completion<br />
with few leases signed.<br />
Industrial markets are improving; vacancies declining and<br />
rates increasing. Both should benefit from continued export<br />
growth with Brazil, Miami’s largest trading partner and Port<br />
of Miami projects underway. The shipping channel is being<br />
dredged to 50’ to accommodate Post-Panamax ships and<br />
the new Cargo Tunnel is underway to move trucks directly<br />
to the Port of Miami instead of using downtown streets and<br />
clogging traffic which is what occurs today.<br />
Investment activity is led by cash buyers seeking opportunities<br />
and cautiously sifting through distressed assets and notes.<br />
Cap rates are down to 2007 levels for high quality properties.<br />
Spreads between asset classes is 150 to 200 basis points.<br />
Activity should increase from 2011 levels as global investors<br />
focus on Miami’s dynamic economy.<br />
Contact<br />
<strong>NAI</strong> Heritage<br />
+1 352 482 0777<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
789,511<br />
837,195<br />
350,240<br />
$55,213<br />
$40,941<br />
41<br />
<strong>NAI</strong> Heritage was formed in 2010. The Ocala/Gainesville<br />
office serves the north central Florida counties of Marion<br />
(Ocala), Alachua (Gainesville), Citrus (Crystal River), Levy and<br />
Gilchrist. 75% of the population resides or works in the cities<br />
of Ocala and Gainesville which has direct access to I-75 and<br />
is centrally located 90 minutes from Jacksonville, Orlando<br />
and Tampa. The current unemployment rate stands at 11%.<br />
The primary submarkets are quite different from each other<br />
in the Ocala/Gainesville market. The average age of an<br />
Ocala resident is 44. Ocala serves as a hub for regional<br />
retirement communities, the home of The College of Central<br />
Florida, the Horse Capital of the World due to the rich<br />
nutrients derived from the limestone base, has wages and<br />
workforce availability for manufacturing and also has the<br />
high quality of life necessary for many generations to call<br />
Ocala home.<br />
Gainesville’s average age is 29 and is home to the University<br />
of Florida, Shands Healthcare the regions top hospital and<br />
is the birthplace of Gatorade, Tom Petty and the Heartbreakers<br />
and Gatornationals drag racing. Cutting edge economic<br />
development and public/private ventures in North Central<br />
Florida have led to recent announcements launching a 400<br />
acre Ocala International Airport Business Park, a 650 acre<br />
Magna Industrial Park and a 12 acre Innovation Square<br />
development with an Innovation Hub facility offering ways<br />
to shorten the journey from discovery to the marketplace for<br />
Florida’s tech startup companies.<br />
The economic downturn has affected all counties however<br />
Gainesville has weathered it best due to the steady and<br />
increasing demand for higher education and advanced<br />
healthcare. Unemployment is currently at 12.7% and 8.3%<br />
for Ocala and Gainesville respectively with the majority of<br />
surrounding counties ranging from 10% to 12%.<br />
Home prices have declined 20% to 40% in the last few<br />
years with housing starts sputtering in most areas except<br />
for The Villages where residential retirement community<br />
construction continues to do well. While rates across the<br />
board have declined significantly, the trends appear to be<br />
leveling out and in some cases turning positive. There are<br />
great opportunities now and in the future for both first time<br />
and experienced investors.<br />
Miami At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
42.60<br />
31.32<br />
25.50<br />
40.08<br />
24.44<br />
53.86<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
46.50<br />
46.50<br />
35.92<br />
42.66<br />
42.66<br />
14.00<br />
$ 45.13<br />
$ 40.93<br />
$ 27.37<br />
$ 41.58<br />
$ 29.37<br />
$ 22.73<br />
48.50%<br />
27.90%<br />
19.50%<br />
23.20%<br />
22.30%<br />
13.40%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
1.50<br />
1.50<br />
$<br />
$<br />
18.85<br />
18.85<br />
$<br />
$<br />
6.89<br />
6.89<br />
8.20%<br />
8.20%<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
4.75<br />
8.00<br />
13.52<br />
38.67<br />
14.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
23.00<br />
45.00<br />
45.00<br />
50.00<br />
45.00<br />
$ 11.98<br />
$ 34.90<br />
$ 22.46<br />
$ 39.71<br />
$ 30.43<br />
10.80%<br />
3.50%<br />
5.90%<br />
1.50%<br />
3.30%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 3,250,000.00 $ 5,500,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
$<br />
$<br />
450,000.00<br />
450,000.00<br />
$<br />
$<br />
900,000.00<br />
675,000.00<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
175,000.00<br />
325,000.00<br />
100,000.00<br />
$ 1,000,000.00<br />
$ 5,500,000.00<br />
$ 5,500,000.00<br />
Ocala/Gainesville At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
11.00<br />
8.00<br />
2.00<br />
3.00<br />
N/A<br />
N/A<br />
12.00<br />
15.00<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
20.00<br />
16.00<br />
6.00<br />
8.00<br />
N/A<br />
N/A<br />
20.00<br />
35.00<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
15.00<br />
11.00<br />
4.00<br />
5.00<br />
N/A<br />
N/A<br />
16.00<br />
22.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
12.00%<br />
20.00%<br />
15.00%<br />
15.00%<br />
N/A<br />
N/A<br />
15.00%<br />
5.00%<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
N/A<br />
40,000.00<br />
40,000.00<br />
20,000.00<br />
$<br />
$<br />
$<br />
N/A<br />
500,000.00<br />
200,000.00<br />
500,000.00<br />
Retail/Commercial Land<br />
$ 50,000.00 $ 1,000,000.00<br />
Residential<br />
$ 20,000.00 $ 200,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 92
Orlando, Florida<br />
Palm Beach County, Florida<br />
Contact<br />
<strong>NAI</strong> Realvest<br />
+1 407 875 9989<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
2,184,763<br />
2,386,133<br />
1,147,210<br />
$70,031<br />
$52,721<br />
35<br />
The Orlando economy benefits from a tourism industry that<br />
had 51.5 million visitors in 2010. This sector alone has an<br />
economic impact of more than $27.6 billion. Life sciences<br />
are a major growth sector thanks to the Lake Nona Medical<br />
City which consists of; Sanford-Burnham Medical Research<br />
Institute, the UCF College of Medicine, M.D. Anderson –<br />
Orlando Cancer Research Institute, Nemours Children’s<br />
Hospital, Orlando VA Medical Center and the VA Medical<br />
Simulation Center of Excellence.<br />
The Orlando office market is improving with an overall<br />
vacancy rate of 13.7% at the end of Q3 2011. Year-to-date<br />
absorption was 811,570 SF. Absorption has been strongest<br />
in the CBD and University Research submarkets. Average<br />
rental rates are virtually unchanged over the previous year.<br />
A total of 457,500 SF is under construction marketwide.<br />
Office cap rates have averaged 8.4%. Price per square foot<br />
has averaged $73, down from $117 during the first half of<br />
2010.<br />
The Orlando industrial market ended Q3 2011 with a<br />
vacancy rate of 12.0%. The vacancy rate was down over<br />
the previous quarter, with net absorption totaling 1.2 million<br />
SF year-to-date. Absorption has been strongest among<br />
warehouse and distribution buildings. Average rental rates<br />
ended Q3 at $5.36/SF, no change over the previous quarter.<br />
Industrial building sales activity is up compared to the<br />
previous year. The average price is $46.64/SF. Cap rates<br />
have been higher, averaging 8.63%.<br />
Improvements continue in the retail market with an overall<br />
vacancy rate of 7.3% in Q3. Year-to-date net absorption is<br />
807,900 SF. Lease rates, however, have trended lower over<br />
the year. New construction is low at 123,000 SF. New<br />
tenants were gradually filling formerly vacant big box space<br />
as Borders closed its Orlando area stores. The Mall at<br />
Milenia submarket is the desired location for high-end<br />
retailers.<br />
Investment interest is strongest for well managed rental<br />
apartment communities with above average occupancy.<br />
With minimal new construction over the past three years,<br />
occupancy and lease rates are improving. Resurgence<br />
in job growth is expected to benefit the rental apartment<br />
market over the next year.<br />
Contact<br />
<strong>NAI</strong> Merin Hunter Codman<br />
+1 561 471 8000<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
1,343,541<br />
1,437,190<br />
650,283<br />
$84,446<br />
$56,120<br />
42<br />
Palm Beach County continues to suffer from the housing<br />
crash. As of August 2011 the median single family home<br />
price was 20.5% below August 2010 and unemployment<br />
stood at 11% representing a slight improvement over the<br />
12.3% in the prior year. The leisure, education and health<br />
sectors added 9,800 jobs. However, sustainable job growth<br />
is not yet on the horizon. This coupled with a significant<br />
increase in commercial foreclosures indicates a continuing<br />
struggle for commercial property.<br />
Stagnant job growth continues to challenge the office<br />
market. Vacancy remains flat at 20%. Most leasing consists<br />
of tenants upgrading to better buildings at discounted rates.<br />
Landlords compete fiercely with aggressive concession<br />
packages including free rent, TI upgrades and leasing<br />
bonuses. There is no new office development as current<br />
rents cannot support construction costs.<br />
Retail vacancy remains flat at 8% while rents have<br />
decreased 3.5% over the past year. However, there is good<br />
retail news as tenants like hhgregg Publix and Dollar Tree<br />
have begun to absorb vacant "big boxes". No new projects<br />
are under construction although a 250,000 SF Delray center<br />
should break ground soon.<br />
Industrial vacancy remains flat at 10%. Rents average<br />
$8.00/SF with flex at $10.70/SF and warehouse at<br />
$7.50/SF. Three 30,000 SF leases were completed in 2011<br />
and with less than 55,000 SF of new construction the<br />
prospect for modest rental growth is good.<br />
Palm Beach County remains a “Tale Of Two Cities” with<br />
respect to investment sales. Thanks to an abundant supply<br />
of capital chasing decreasing yields, Class A properties with<br />
strong tenants have sold for peak prices. City Place Tower<br />
(office, $425/SF, 5.5% cap rate), Mirasol Walk (retail,<br />
$244/SF, 7% cap rate) and the Premier Portfolio (industrial<br />
$92/SF) represent recent sales to institutional buyers at<br />
pre-crash prices. Conversely, properties with high vacancies<br />
and non credit tenants are selling for $50 to $80/SF.<br />
With the number of South Florida properties in CMBS<br />
Special Servicing growing from $1 billion to $2.5 billion<br />
between January and August, 2011, expect an increasing<br />
number of distressed sales. This will result in new landlords<br />
with reduced basis applying downward pressure on rents<br />
for the next several years.<br />
Orlando At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 26.00<br />
$ 16.00<br />
$ 14.00<br />
$ 18.00<br />
$ 16.00<br />
$ 12.00<br />
$ 28.00<br />
$ 32.00<br />
$ 26.00<br />
$ 24.00<br />
$ 28.00<br />
$ 24.00<br />
$ 26.75<br />
$ 23.50<br />
$ 19.90<br />
$ 23.00<br />
$ 21.85<br />
$ 17.80<br />
30.00%<br />
18.20%<br />
14.10%<br />
72.00%<br />
20.30%<br />
12.80%<br />
Bulk Warehouse<br />
$ 2.95 $ 6.50 $ 4.76 12.30%<br />
Manufacturing<br />
$ 1.50 $ 10.50 $ 4.00 11.00%<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$<br />
$<br />
8.50<br />
9.50<br />
$ 30.00<br />
$ 32.50<br />
$ 30.00<br />
$ 23.25<br />
5.20%<br />
4.10%<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$ 10.00<br />
$ 16.00<br />
$ 14.00<br />
$ 26.00<br />
$ 26.00<br />
$ 35.00<br />
$ 15.20<br />
$ 16.30<br />
$ 23.00<br />
11.30%<br />
7.20%<br />
5.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 1,307,000.00 $ 3,500,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
175,000.00<br />
108,900.00<br />
61,000.00<br />
218,000.00<br />
50,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
653,400.00<br />
218,000.00<br />
196,000.00<br />
700,000.00<br />
109,000.00<br />
Palm Beach County At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
Premium (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
30.00<br />
20.00<br />
N/A<br />
25.00<br />
20.00<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
50.00<br />
30.00<br />
N/A<br />
35.00<br />
28.00<br />
N/A<br />
$ 37.52<br />
$ 24.72<br />
N/A<br />
$ 30.86<br />
$ 23.26<br />
N/A<br />
19.40%<br />
18.60%<br />
N/A<br />
18.20%<br />
20.30%<br />
Bulk Warehouse<br />
Manufacturing<br />
$ 4.00<br />
N/A<br />
$ 9.50<br />
N/A<br />
$ 7.41<br />
N/A<br />
9.20%<br />
N/A<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
6.50<br />
12.50<br />
15.60<br />
13.35<br />
21.50<br />
$<br />
$<br />
$<br />
$<br />
$<br />
12.00<br />
40.00<br />
36.31<br />
18.00<br />
31.60<br />
$ 10.53<br />
$ 24.06<br />
$ 19.17<br />
$ 15.46<br />
$ 27.21<br />
12.20%<br />
5.00%<br />
3.80%<br />
9.00%<br />
9.60%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 93
Tampa Bay, Florida<br />
Atlanta, Georgia<br />
Contact<br />
<strong>NAI</strong> Tampa Bay<br />
+1 727 585 2070<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
2,818,189<br />
2,964,989<br />
1,401,254<br />
$66,821<br />
$48,650<br />
40<br />
The Tampa Bay market bottomed in late 2010 and has<br />
continued to recover at a slow but steady pace. The most<br />
active sector of the market is multifamily apartment and<br />
condominium investments of which our firm is a leader.<br />
The Tampa Bay apartment investment market recovery is in<br />
full swing. The market is on pace to double the number of<br />
transactions completed in 2010 with Class A assets trading<br />
at sub 6% cap rates. Class B apartments are selling for<br />
7% to 9% cap rates and Class C properties are trading<br />
between 10% to 12% cap rates. Rental rates have started<br />
to increase and concessions have all but diminished back<br />
to normal market conditions with average occupancies<br />
approaching 92% area wide. The REO product pipeline has<br />
started to slow and inventory is tight.<br />
The Tampa Bay office market has not seen any notable<br />
recovery as of the publishing date of this information. Class<br />
A market rents continue to see downward pressure as<br />
tenants jockey for deals in the market. Class B and suburban<br />
office buildings have experienced a small increase in<br />
occupancy but it appears to be from Class A tenants<br />
stepping down into lower rent assets.<br />
The Tampa Bay retail market continues to suffer the same<br />
fate as the office market with tenants shopping for price and<br />
terms. Several big box locations still remain dark in prime<br />
areas.<br />
The Tampa Bay Industrial market is a mixed bag of old and<br />
new product. The older, low ceiling facilities cannot compete<br />
with new 24 foot clear span tilt wall properties.<br />
Contact<br />
<strong>NAI</strong> Brannen Goddard<br />
+1 404 812 4000<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
5,310,331<br />
5,375,508<br />
2,837,378<br />
$68,635<br />
$55,315<br />
35<br />
Georgia has been continually growing since the late 1960s.<br />
The Atlanta metropolitan area currently boasts a population<br />
of more than 5.3 million, making it the seventh largest<br />
metropolitan area in the US. Atlanta continues to attract a<br />
talented workforce and is home to some of the nation’s top<br />
companies. The area draws companies eager to take<br />
advantage of low business and living costs, global<br />
connectivity through the airport, top research universities<br />
and a high quality of life.<br />
In the Atlanta office market, concessions reached a plateau<br />
and small to midsized firms looking for space were being<br />
affected. Larger tenants continue securing favorable terms<br />
as building owners are reluctant to subdivide bigger blocks<br />
of existing vacant space. With over 210 million SF of<br />
inventory, the Atlanta office market has recorded positive<br />
absorption of late with more space filled than vacant.<br />
Vacancy rates are averaging 19% and rental rates continue<br />
on a downward trend. Atlanta will see modest absorption<br />
gains in the coming quarters, most of which will be located<br />
in Class A buildings. Construction levels will remain low or<br />
non-existent.<br />
Atlanta’s industrial market, with over 10.7 million SF of<br />
leasing activity year-to-date, is on track to finish the year<br />
with the largest occupancy gains in several years. The<br />
increases are due to expansions, regional consolidations<br />
and some small new business growth. Currently there<br />
is over 575 million SF of inventory with 409,006 SF of<br />
deliveries year-to-date. Vacancy rates have dropped slightly<br />
to 13.6% and rental rates have decreased slightly from this<br />
time last year.<br />
Atlanta’s retail market, with over 348 million SF of inventory,<br />
has seen some positive momentum over the past couple of<br />
quarters. Shopping centers saw a majority of the activity as<br />
well as retailers backfilling some of the empty big boxes.<br />
Vacancy remains in the 10% range and no new construction<br />
projects are on the horizon. Modest activity should continue<br />
to keep the market positive and slowly reduce the amount<br />
of vacant space available.<br />
Atlanta’s top industry sectors are trade, transportation and<br />
utilities, professional and business services and government.<br />
Businesses include 10 FORTUNE 500 headquarters, over<br />
2,100 international companies and thousands of small<br />
businesses.<br />
Tampa Bay At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
Premium (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$ 23.00 $ 28.00 $ 25.00 30.00%<br />
$ 18.00 $ 28.00 $ 25.00 30.00%<br />
$ 10.00 $ 16.00 $ 13.00 15.00%<br />
$ 20.00 $ 24.00 $ 22.00 30.00%<br />
$ 15.00 $ 21.00 $ 18.00 30.00%<br />
$ 12.00 $ 18.00 $ 16.00 30.00%<br />
$ 2.50 $ 6.00 $ 4.00 25.00%<br />
$ 3.50 $ 6.50 $ 5.00 25.00%<br />
$ 4.50 $ 8.50 $ 7.50 10.00%<br />
$ 8.00 $ 12.00 $ 10.00 20.00%<br />
$ 8.00 $ 16.00 $ 14.00 20.00%<br />
$ 12.00 $ 18.00 $ 16.00 20.00%<br />
$ 21.00 $ 40.00 $ 35.00 15.00%<br />
Atlanta At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
24.50<br />
19.09<br />
14.88<br />
18.50<br />
19.78<br />
14.63<br />
$ 33.00<br />
$ 24.55<br />
$ 18.81<br />
$ 27.93<br />
$ 21.89<br />
$ 18.09<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
22.10%<br />
14.30%<br />
16.00%<br />
21.30%<br />
20.80%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
2.86<br />
2.00<br />
4.72<br />
$<br />
$<br />
$<br />
4.36<br />
4.00<br />
9.06<br />
N/A<br />
N/A<br />
N/A<br />
13.50%<br />
12.20%<br />
16.90%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
10.00<br />
9.42<br />
11.27<br />
16.00<br />
$ 40.00<br />
$ 23.67<br />
$ 27.11<br />
$ 55.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
7.80%<br />
15.10%<br />
9.80%<br />
5.80%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$ 30,000.00 $ 100,000.00<br />
$ 30,000.00 $ 100,000.00<br />
$ 25,000.00 $ 75,000.00<br />
$ 20,000.00 $ 50,000.00<br />
$ 75,000.00 $ 300,000.00<br />
$ 20,000.00 $ 120,000.00<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
$<br />
10.00<br />
50,000.00<br />
25,000.00<br />
35,000.00<br />
$<br />
$<br />
$<br />
$<br />
25.00<br />
200,000.00<br />
75,000.00<br />
150,000.00<br />
Urban Retail/Commercial Land $ 500,000.00 $ 3,000,000.00<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
75,000.00<br />
10,000.00<br />
$<br />
$<br />
400,000.00<br />
150,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 94
Savannah, Georgia<br />
Honolulu, Hawaii<br />
Contact<br />
<strong>NAI</strong> Savannah<br />
+1 912 358 5600<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
356,143<br />
389,596<br />
173,004<br />
$66,159<br />
$51,030<br />
34<br />
The Savannah MSA has had six consecutive quarters of<br />
recovery as of Q2 2011. Economic indicators show steady<br />
recovery through 2011 with stronger improvements<br />
beginning in early <strong>2012</strong>. The economic drivers are logistics,<br />
tourism, manufacturing (e.g., Gulfstream Aerospace,<br />
Mitsubishi Power Systems) and a large military and<br />
educational presence. The Port of Savannah was the second<br />
busiest US container port for export by tonnage in FY2011.<br />
Savannah had 11.4 million tourists spending $1.7 billion in<br />
2010.<br />
Demand in most sectors has seen some improvement over<br />
2010. Very little new development has been permitted with<br />
the exception of build-to-suit projects. The downtown CBD<br />
saw its first modern day Class A office building break<br />
ground. A 72,072 SF GSA build-to-suit will house the US<br />
Attorney's office on four of its six floors. Modest activity in<br />
all submarkets is reflected in the high teens to 20+ %<br />
vacancies.<br />
Industrial vacancy of around 7 million SF continues to<br />
gradually improve with almost 2 million SF of absorption in<br />
Q2 2011 and 900,000 SF in Q3. Large distribution space<br />
abounds with over 3 million SF of first generation space<br />
including five free standing Class A buildings over 400,000<br />
SF. Most leasing activity was port related 3PLs. Walmart took<br />
800,000 SF of space. Duke Realty, the largest industrial<br />
owner in Savannah, purchased an income producing<br />
330,000 SF building. Dollar Tree and Gulfstream Aerospace<br />
both have sizable expansions in progress.<br />
National retailers have resumed interest in Savannah.<br />
Whole Foods, Anthropologie and others are pursuing sites.<br />
Kohl’s is entering the market with an 80,000 SF space and<br />
Office Depot is relocating to 20,000 SF vacated by Books-<br />
A-Million. The overall vacancy is under 7% with highest<br />
vacancies in strip centers. Prime locations in the historic<br />
district and the Southside continue to garner significant<br />
interest.<br />
Multifamily has seen improvements with some land trades<br />
but little new construction. A notable project, Sustainable<br />
Fellwood, a public/private, LEED certified mixed income<br />
development composed of 220 Units on 27 acres has Phase<br />
I fully occupied.<br />
Hotel occupancy continues to improve with downtown<br />
occupancies over 85%. Sales revenue in the sector hit record<br />
highs through the first half of 2011 and room rates rose 11%.<br />
Contact<br />
<strong>NAI</strong> ChaneyBrooks<br />
+1 808 544 1600<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
975,811<br />
1,067,904<br />
467,817<br />
$88,098<br />
$71,068<br />
36<br />
During 2011, Hawaii’s economic indicators have been<br />
mixed. Tourism statistics, civilian wages and state general<br />
fund tax revenues have displayed positive growth over 2010,<br />
however private building permits and government contracts<br />
awarded have decreased. Hawaii’s unemployment rate<br />
(6.4%) is below the national average (9.1%) and has<br />
remained largely static from the previous year.<br />
In aggregate, the local economy has displayed gradual net<br />
gains that are expected to continue into <strong>2012</strong>. However,<br />
consumers fear economists’ predictions of a potential<br />
“double-dip” recession which could be triggered by ongoing<br />
domestic and international debt crises.<br />
The tourism industry experienced the beginnings of a<br />
recovery in 2011, buoyed by strong increases in visitors<br />
from Canada, China and Australia. However, during this<br />
period, visitors from Japan declined sharply, impacted by<br />
the March 2011 earthquake and tsunami. Tourism forecasts<br />
for <strong>2012</strong> include continued recovery, with total visitors,<br />
visitor days, and visitor expenditures forecasted by DBEDT<br />
to grow 2.9%, 2.7%, and 5.3%, respectively.<br />
Down from its 2006 peak, commercial real estate leasing<br />
exhibits improvement over 2010. The retail sector posted<br />
modest gains in occupancy over the past four quarters with<br />
statewide vacancy approximating 5%. Nevertheless, lease<br />
rates softened as weak gross sales continue to mirror<br />
prevailing economic conditions.<br />
The office market is negatively impacted by vacancy rates<br />
at a 10 year peak with corresponding decreasing rental<br />
rates. The construction declines severely impacted the<br />
industrial market yet statewide vacancy of -4.7% is well<br />
below the national average of 13.9%.<br />
Somewhat counter-intuitively, the investment market in<br />
Hawaii has performed relatively well over the past eight<br />
quarters. During this period, many of Hawaii’s asset classes<br />
have seen numerous “trophy” properties trade at<br />
compressed cap rates. Certain asset classes such as<br />
development land and lodging have experienced less activity<br />
as lenders continue to work out of their positions. Other<br />
notable activity includes the opening of the Aulani Disney<br />
resort in Ko Olina and the Asia Pacific Economic Cooperation<br />
(APEC) conference.<br />
Savannah At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
Class C<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
Class C<br />
IndustrIal<br />
$ 35.00<br />
N/A<br />
$ 18.00<br />
$ 14.00<br />
N/A<br />
$ 18.00<br />
$ 12.00<br />
$ 10.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
35.00<br />
N/A<br />
22.00<br />
18.00<br />
N/A<br />
22.00<br />
16.00<br />
16.00<br />
$ 35.00<br />
N/A<br />
$ 20.00<br />
$ 17.50<br />
N/A<br />
$ 18.50<br />
$ 14.00<br />
$ 12.00<br />
25.00%<br />
N/A<br />
22.00%<br />
18.00%<br />
N/A<br />
21.00%<br />
15.00%<br />
18.00%<br />
Bulk Warehouse<br />
Distribution<br />
Flex/Service<br />
retaIl<br />
$<br />
$<br />
$<br />
3.00<br />
3.25<br />
5.50<br />
$<br />
$<br />
$<br />
4.35<br />
4.35<br />
9.00<br />
$<br />
$<br />
$<br />
3.75<br />
3.95<br />
7.00<br />
22.80%<br />
15.50%<br />
10.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
deVeloPment land<br />
$ 18.00<br />
$ 10.00<br />
$ 10.25<br />
$ 25.00<br />
Low/Acre<br />
$<br />
$<br />
$<br />
$<br />
40.00<br />
24.00<br />
31.00<br />
50.00<br />
$ 20.00<br />
$ 18.00<br />
$ 25.00<br />
$ 35.00<br />
High/Acre<br />
7.00%<br />
9.00%<br />
1.10%<br />
1.00%<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$ 1,300,000.00 $ 2,800,000.00<br />
$ 125,000.00 $ 450,000.00<br />
$ 35,000.00 $ 150,000.00<br />
$ 30,000.00 $ 125,000.00<br />
$ 200,000.00 $ 650,000.00<br />
$ 15,000.00 $ 60,000.00<br />
Honolulu At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
31.20<br />
25.80<br />
N/A<br />
17.40<br />
13.20<br />
10.80<br />
11.88<br />
10.80<br />
21.60<br />
24.00<br />
41.40<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
34.80<br />
30.00<br />
N/A<br />
27.00<br />
21.00<br />
15.60<br />
12.60<br />
15.60<br />
36.00<br />
42.00<br />
55.80<br />
N/A<br />
$ 33.00<br />
$ 27.90<br />
N/A<br />
$ 22.20<br />
$ 17.10<br />
$ 13.20<br />
$ 12.04<br />
$ 13.20<br />
$ 28.80<br />
$ 33.00<br />
$ 48.60<br />
N/A<br />
13.20%<br />
11.00%<br />
N/A<br />
9.50%<br />
10.30%<br />
4.80%<br />
6.80%<br />
4.80%<br />
3.40%<br />
3.00%<br />
5.00%<br />
Regional Malls<br />
$ 33.60 $ 114.00 $ 73.80 1.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
N/A<br />
$ 1,000,000.00<br />
N/A<br />
$ 1,530,000.00<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
950,000.00<br />
780,000.00<br />
850,000.00<br />
30,000.00<br />
$ 1,060,000.00<br />
$ 1,020,000.00<br />
$ 1,250,000.00<br />
$ 3,700,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 95
Boise, Idaho<br />
Southeast (Idaho Falls/Pocatello), Idaho<br />
Contact<br />
<strong>NAI</strong> Pinnacle<br />
+1 208 947 0019<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
632,956<br />
698,548<br />
321,775<br />
$67,331<br />
$53,343<br />
33<br />
The Boise Valley commercial real estate is developing<br />
a number of bright spots in a market that has, in general,<br />
been hit hard by the nationwide recession. Plans for the<br />
construction of a new Class A 253,000 SF office and retail<br />
high rise development was just announced for downtown<br />
Boise. Tenants, whether large or small, are taking advantage<br />
of the opportunity to negotiate more favorable pricing,<br />
locations and facilities; or to purchase their existing facilities.<br />
Idaho and the Boise Valley in particular affords numerous<br />
advantages, including a low cost of living, reliable and<br />
inexpensive power, a high quality work force, a stable tax<br />
base, a progressive business climate, tremendous natural<br />
beauty and a high quality of life. Businesses are appreciating<br />
these advantages as they evaluate and move to Boise.<br />
Families and retirees choose the Boise Valley for its outdoor<br />
and family activities. The continuing success of the Boise<br />
State University Bronco’s, playing on the blue turf, is giving<br />
Boise greater visibility.<br />
Office vacancy rates, although less for Class A and B space,<br />
remain stubbornly high at 20% overall in the office sector.<br />
Downtown prime space is the exception. We expect both<br />
lease rates and lease terms to increase over the next 12<br />
months as the market continues to stabilize. However, in<br />
contrast to the last three years, we are seeing new<br />
construction either being planned or started in desirable<br />
locations.<br />
There has been little retail development over the last four<br />
years. Consequently tenants looking for class A product are<br />
having a difficult time finding suitable locations. In some<br />
cases tenants are waiting longer or having to settle for less<br />
desirable locations. There is high demand for pre-existing<br />
restaurant space and locations for discounters. New to Boise<br />
are grocers Whole Foods and Rosauer’s. Expanding in the<br />
area are Fred Meyer and Walmart. These major grocers<br />
should initiate new retail developments surrounding their<br />
locations.<br />
The industrial market in the Boise Valley appears to have<br />
stabilized with vacancy rates declining somewhat. There<br />
is a shortage of large industrial warehouses and class<br />
A industrial space, which should lead to industrial<br />
development in <strong>2012</strong>.<br />
Contact<br />
<strong>NAI</strong> Commerce One<br />
Real Estate<br />
+1 208 525 8088<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
322,445<br />
354,887<br />
157,199<br />
$58,462<br />
$46,643<br />
29<br />
The economy continues to stabilize in Eastern Idaho, with<br />
positive signs of growth across the region. Idaho Governor<br />
Butch Otter has accurately stated that Idaho boasts a low<br />
cost of living, reliable and inexpensive power, a high quality<br />
work force, a stable tax base, a progressive business<br />
climate, tremendous natural beauty and a high quality of life.<br />
Idaho ranks in the top five states in the nation in patents per<br />
capita and in manufacturing investment, and also ranks high<br />
in green job growth. Ridgeline Energy and BP Wind Energy’s<br />
wind farm, 10 miles east of Idaho Falls, is the state’s largest<br />
and is now running at full capacity on 11,000 acres with 83<br />
generators. The Idaho National Lab employs over 7,500<br />
scientists, researchers and support staff. In October 2011,<br />
the Nuclear Regulatory Commission issued a license to<br />
AREVA Enrichment Services LLC (AES) to construct<br />
and operate a $2.5 to $5 billion gas centrifuge uranium<br />
enrichment plant in Bonneville County, west of Idaho Falls.<br />
In Pocatello, retail growth continues with the addition of<br />
Dick’s Sporting Goods and several other retailers. Work is<br />
being completed on Allstate’s new $22 million customer<br />
information center that will employ around 500 workers. In<br />
2011, Idaho State University purchased the 200,000 SF<br />
state of the art Ballard Medical facility, which will be used<br />
as a high tech, multi-disciplinary research laboratory.<br />
Pocatello also boasts the opening of the beautiful new<br />
403,000 SF Portneuf Medical Center on the east bench and<br />
a $10 million dollar computer data center.<br />
Access to low cost, quality higher education has resulted in<br />
a well educated workforce. Boise State University, ISU and<br />
University of Idaho all have a presence in Idaho Falls through<br />
the Center for Advanced EnergyStudies (CAES), a public/<br />
private research partnership with the universities, the INL<br />
and private industry. BYU-Idaho, a private university in<br />
Rexburg owned by the Church of Jesus Christ of Latter-Day<br />
Saints, has grown to be the 10th largest employer in the<br />
state. Enrollment is expected to increase to 15,000 by<br />
2015.<br />
Boise At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
17.50<br />
15.10<br />
N/A<br />
14.83<br />
8.56<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
21.36<br />
17.31<br />
N/A<br />
21.49<br />
17.30<br />
N/A<br />
$ 19.40<br />
$1 6.20<br />
N/A<br />
$ 17.00<br />
$ 13.42<br />
N/A<br />
3.90%<br />
6.30%<br />
N/A<br />
13.30%<br />
15.60%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$ 2.28<br />
N/A<br />
N/A<br />
$ 6.97<br />
N/A<br />
N/A<br />
$ 4.99<br />
N/A<br />
N/A<br />
5.90%<br />
N/A<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
11.24<br />
4.34<br />
10.60<br />
9.62<br />
$<br />
$<br />
$<br />
$<br />
19.17<br />
14.24<br />
13.62<br />
16.53<br />
$ 16.97<br />
$ 10.61<br />
$ 13.39<br />
$ 11.69<br />
6.90%<br />
4.00%<br />
6.60%<br />
11.80%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 925,000.00 $ 1,170,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
181,000.00<br />
80,000.00<br />
75,000.00<br />
125,000.00<br />
7,500.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
795,000.00<br />
294,000.00<br />
321,000.00<br />
795,000.00<br />
35,000.00<br />
Idaho Falls/Pocatello At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
N/A<br />
$ 14.50<br />
$ 9.00<br />
N/A<br />
N/A<br />
$ 9.00<br />
N/A<br />
$ 16.00<br />
$ 12.00<br />
N/A<br />
N/A<br />
$ 12.00<br />
N/A<br />
$ 14.00<br />
$ 10.00<br />
N/A<br />
N/A<br />
$ 11.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$ 2.50<br />
$ 4.00<br />
$ 5.50<br />
$<br />
$<br />
$<br />
6.00<br />
6.50<br />
7.00<br />
$<br />
$<br />
$<br />
4.25<br />
5.75<br />
6.75<br />
N/A<br />
N/A<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$ 9.00<br />
$ 9.00<br />
$ 9.00<br />
$ 22.00<br />
$ 12.00<br />
$ 16.00<br />
$ 25.00<br />
$ 38.00<br />
$ 10.00<br />
$ 15.00<br />
$ 13.00<br />
$ 28.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
230,000.00<br />
130,000.00<br />
75,000.00<br />
25,000.00<br />
200,000.00<br />
15,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
360,000.00<br />
240,000.00<br />
100,000.00<br />
100,000.00<br />
650,000.00<br />
90,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 96
Chicago, Illinois<br />
Springfield, Illinois<br />
Contact<br />
<strong>NAI</strong> Hiffman<br />
+630 932 1234<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income$80,589<br />
Median<br />
Household Income<br />
9,574,523<br />
9,577,417<br />
5,025,583<br />
$65,761<br />
Chicago is the third largest metropolitan area in the US and<br />
the most influential economic region between the east and<br />
west coasts. Chicago’s advantageous location at the<br />
heart of the nation has fostered its development into an<br />
international center for banking, securities, high technology,<br />
distribution, business services, retail trade and manufacturing.<br />
Chicago is one of the principal trading centers for<br />
commodities, financial and derivative futures products with<br />
the Chicago Mercantile Exchange and Board of Trade.<br />
Historic buildings and modern high-rises define Chicago’s<br />
famous skyline, home to several of the tallest buildings in<br />
the country. Conditions in the downtown office market have<br />
been improving for the past year, the beginning of a modest<br />
recovery following a nearly two year period of rising vacancy<br />
rates when more than 5.3 million SF of vacant space was<br />
added to the market. During the year since, more than 43%<br />
of that vacant space has been absorbed through new leases<br />
and tenants expanding, pushing the vacancy rate down<br />
more than 160 basis points from its 17% peak.<br />
The Chicago suburban office market is comprised of several<br />
scattered pockets of corporate parks and high-rise office<br />
towers. Suburban vacancy rates, typically higher and more<br />
volatile than downtown, have not responded as favorably to<br />
the recovery as downtown rates have, as the market<br />
continues to respond to the overall economic situation. Any<br />
positive traction has been witnessed among high quality<br />
Class A properties, while Class B and Class C buildings<br />
continue to witness climbing vacancy rates and weak<br />
demand.<br />
The second largest industrial market and the most important<br />
transportation hub in the country, the Chicago industrial<br />
market has now been in a recovery phase for more than a<br />
year, evidenced by the absorption of vacant space and a<br />
declining vacancy rate. During the economic downturn and<br />
the months following its official end, 29.5 million SF of<br />
vacant space was introduced to the market between 2008<br />
and 2010. Nearly half of that space has been recovered<br />
since. The area’s intermodal developments continue to play<br />
an active role in the recovery, and now provide service with<br />
both the BNSF and Union Pacific Railroads.<br />
Contact<br />
<strong>NAI</strong> True<br />
+1 217 787 2800<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
247,487<br />
254,511<br />
132,665<br />
$66,782<br />
$53,268<br />
Springfield, the capitol of Illinois, accounts for approximately<br />
half of the population in the metropolitan areas of Sangamon<br />
and Menard counties. Springfield’s major employment<br />
sectors are government, medical, public service and small<br />
business. Money for commercial real estate loans is readily<br />
available. Springfield’s current economy has been impacted<br />
similar to that of the national economy.<br />
Government is the largest employer in the Springfield area.<br />
The two largest private employers in the region are St. Johns<br />
Hospital and Memorial Hospital, including SIU School of<br />
Medicine. Completed commercial developments in 2011<br />
include a new Westside YMCA/Memorial Sports Care facility<br />
with rehabilitation services and two new construction<br />
satellite medical clinics. Ground breaking for a new skilled<br />
care nursing rehab facility took place in October 2011.<br />
Higher education opportunities include the University of<br />
Illinois at Springfield, Southern Illinois University School of<br />
Medicine and Lincoln Land Community College. Robert<br />
Morris University and Benedictine University at Springfield<br />
are the private colleges in the area.<br />
Retail growth in Springfield is recovering slowly with the<br />
opening of Scheels sporting goods chain in August of 2011.<br />
National chain stores and big box users like Super Walmart,<br />
Menards and Gander Mountain have opened within the past<br />
36 months. An outlet shopping mall of 80 plus retailers<br />
encompassing +/- 340,000 SF is anticipated to break<br />
ground in the Q4 of 2011. Pepsi is relocating and expanding<br />
by building a new 50,000 SF facility on Springfield’s east<br />
side. Other national chain stores will continue to locate in<br />
Springfield.<br />
Farm land sale prices per acre are at a record high,<br />
approaching $12,000 per acre.<br />
Springfield has consistently been one of the most affordable<br />
communities in Illinois. Recreation opportunities in<br />
Springfield are plentiful with over 30 public parks offering<br />
tennis courts, ice rings and swimming pools. There are nine<br />
public golf courses, two country club golf courses,<br />
indoor/outdoor theatre venues and a 4,235 acre lake.<br />
Abraham Lincoln Museum and Library are two prestigious<br />
visitor/tourist attractions in Springfield.<br />
Total Population<br />
Median Age<br />
35<br />
Total Population<br />
Median Age<br />
40<br />
Chicago At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
Regional Malls<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks)<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land )<br />
Residential<br />
N/A N/A N/A N/A<br />
$ 32.00 $ 55.00 $ 42.00 15.40%<br />
$ 21.00 $ 35.00 $ 29.00 16.50%<br />
N/A N/A N/A N/A<br />
$ 25.00 $ 33.00 $ 26.00 21.30%<br />
$ 17.50 $ 23.00 $ 19.50 24.90%<br />
$ 2.25 $ 6.00 $ 4.10 10.50%<br />
$ 3.00 $ 6.25 $ 4.40 10.50%<br />
$ 5.75 $ 10.00 $ 7.40 10.50%<br />
$ 45.00 $ 195.00 N/A 8.20%<br />
$ 12.00 $ 22.00 N/A 9.60%<br />
$ 16.00 $ 24.00 N/A 9.80%<br />
$ 28.00 $ 80.00 N/A 8.00%<br />
$ 3,484,800.00 $21,780,000.00<br />
$ 275,000.00 $ 700,000.00<br />
$ 150,000.00 $ 350,000.00<br />
$ 50,000.00 $ 575,000.00<br />
$ 250,000.00 $ 1,000,000.00<br />
$ 50,000.00 $ 1,000,000.00<br />
Springfield At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A N/A N/A N/A<br />
$ 11.00 $ 15.00 $ 13.00 15.00%<br />
$ 8.00 $ 13.00 $ 11.00 20.00%<br />
$ 22.00 $ 30.00 $ 28.00 5.00%<br />
$ 15.00 $ 20.00 $ 16.00 10.00%<br />
$ 10.50 $ 16.00 $ 14.00 15.00%<br />
$ 2.50 $ 4.50 $ 4.00 10.00%<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
$ 8.00 $ 13.50 $ 10.50 20.00%<br />
$ 9.00 $ 23.00 $ 17.00 12.00%<br />
N/A N/A N/A N/A<br />
N/A N/A N/A N/A<br />
$ 450,000.00 $ 870,000.00<br />
$ 110,000.00 $ 300,000.00<br />
$ 35,000.00 $ 100,000.00<br />
$ 30,000.00 $ 200,000.00<br />
$ 130,000.00 $ 480,000.00<br />
$ 10,000.00 $ 25,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 97
Fort Wayne, Indiana<br />
Indianapolis, Indiana<br />
Contact<br />
<strong>NAI</strong> Harding Dahm<br />
+1 260 423 4311<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
419,733<br />
433,290<br />
220,696<br />
$61,766<br />
$50,495<br />
The economic climate of the Fort Wayne market has<br />
remained constant through 2011 with an unemployment<br />
rate in the six-county MASMSA at 8.1%. Fort Wayne<br />
continues to revitalize its downtown. A $30 million baseball<br />
stadium, 900-space parking garage and a $35 million<br />
Courtyard by Marriott have been completed. A $14.5 million<br />
residential condominium/retail complex is expected to break<br />
ground in <strong>2012</strong> along with a $15 million redevelopment of<br />
the Anthony Wayne Building.<br />
The retail market slowed in 2011 with overall vacancy rates<br />
increasing to 19%. The strongest major retail submarkets<br />
are on the Dupont and Lima Road corridors in the northern<br />
section of the city and along Illinois Road in the southwest<br />
section. The completed widening of Lima Road should help<br />
to increase retail activity along that corridor. Kroger has<br />
invested $80 million to rebuild two 125,000 SF <strong>Market</strong>place<br />
stores at Dupont and Coldwater Road and at the Village<br />
of Coventry at I69 and West Jefferson Boulevard. The<br />
Maplecrest Road extension, connecting the northeast<br />
residential markets with New Haven, will be completed by<br />
<strong>2012</strong> and should help lead to future retail development.<br />
The industrial market has seen an increase in activity of sale<br />
and lease transactions with vacancy rates in this sector<br />
decreasing to 9.6%. There has been very little construction<br />
in this sector over the past few years and little is planned<br />
for 2011. This should remain the constant until there are<br />
improvements in economic conditions and the financial<br />
markets.<br />
The office market is stable with vacancy rates remaining<br />
constant at 17%. There has been very little construction in<br />
the office industry, but the market is experiencing strong<br />
growth in the medical office space submarket as Parkview<br />
Hospital continues its construction of a new regional medical<br />
center in the I-69/Dupont interchange. Both Parkview and<br />
Lutheran Hospitals continue to expand with new medical<br />
office buildings on their respective campuses. We project<br />
this market will continue to remain status quo due<br />
to economic conditions over the next few years with<br />
unemployment remaining close to current levels within the<br />
six-county MASMSA.<br />
Contact<br />
<strong>NAI</strong> Meridian<br />
+1 317 875 8888<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
1,783,661<br />
1,893,503<br />
955,436<br />
$72,526<br />
$55,440<br />
The Indianapolis metro area continues to have a steady flow<br />
of transactions across all market segments. Although new<br />
construction in the multi-tenant sector is nonexistent.<br />
Consolidations are still influencing the market and while<br />
overall vacancies have seen little change, finding large<br />
tracks of space is becoming more difficult in both the office<br />
and industrial markets.<br />
The metro office markets are experiencing steady deal flow<br />
but little positive absorption. Many users are still downsizing<br />
or adding employees to their existing space reducing the<br />
need for more office space. While absorption is neutral, it is<br />
difficult to find large tracts of desirable space which will<br />
begin adding rental rate pressure to larger tenants in the<br />
market.<br />
The industrial market in metro Indianapolis has remained<br />
resilient in this challenging economic environment. YTD<br />
absorption has been 5,489,424 SF with an overall vacancy<br />
rate of 7.6%. The industrial market encompasses<br />
298,582,634 SF. New construction is slim with only 87,000<br />
SF underway. However, large tracts of space are difficult to<br />
find and we expect new construction to increase in the<br />
spring of <strong>2012</strong> to meet the demand of large users.<br />
The retail markets showed a slight uptick in Q3 2011 with<br />
a reduction in the vacancy rate from 7.85% to 7.68%.<br />
Positive absorption was 210,943 SF for the quarter, with<br />
just under 78,000 SF of new retail construction for the end<br />
of Q3. Vacant sublease space is still influencing this market<br />
segment with over 35,000 SF of sublease space on the<br />
market.<br />
Land in the CBD is currently at $135,939/acre low and<br />
$1,232,155/acre high. But there were no transactions of<br />
sold land in the CBD this year so these are historical<br />
numbers. There is one transaction pending for $3,254,237<br />
for 1.18 acres. Land in office parks is selling for<br />
$158,792/acre low and $181,137/acre high. Industrial park<br />
land is at $68,181/acre low and $218,978/acre high (value<br />
is higher due to future development potential.) Non park land<br />
sells at $31,645/acre low and $600,000/acre high. Land<br />
in the retail market is currently at $55,000/acre low and<br />
$419,463/acre high.<br />
Total Population<br />
Median Age<br />
35<br />
Total Population<br />
Median Age<br />
35<br />
Fort Wayne At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
15.00<br />
8.00<br />
13.00<br />
15.00<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
16.00<br />
12.00<br />
17.50<br />
19.00<br />
N/A<br />
$ 14.00<br />
$ 10.00<br />
$ 15.25<br />
$ 17.00<br />
N/A<br />
15.00%<br />
15.00%<br />
75.00%<br />
20.00%<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$<br />
$<br />
$<br />
$<br />
$<br />
8.00<br />
1.00<br />
2.75<br />
3.50<br />
7.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
10.50<br />
3.00<br />
4.75<br />
5.50<br />
12.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
9.25<br />
2.00<br />
3.63<br />
4.50<br />
9.50<br />
15.00%<br />
10.00%<br />
10.00%<br />
10.00%<br />
14.00%<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
5.00<br />
6.00<br />
10.00<br />
$<br />
$<br />
$<br />
18.00<br />
22.00<br />
35.00<br />
$ 11.50<br />
$ 14.00<br />
$ 22.50<br />
22.00%<br />
15.00%<br />
14.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
N/A<br />
110,000.00<br />
44,000.00<br />
65,000.00<br />
$<br />
$<br />
$<br />
N/A<br />
175,000.00<br />
125,000.00<br />
120,000.00<br />
Retail/Commercial Land<br />
$ 250,000.00 $ 1,000,000.00<br />
Residential<br />
$ 10,000.00 $ 40,000.00<br />
Indianapolis At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
16.00<br />
9.00<br />
N/A<br />
16.00<br />
10.00<br />
2.22<br />
3.61<br />
7.50<br />
6.00<br />
4.00<br />
4.50<br />
8.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
27.00<br />
15.00<br />
N/A<br />
24.00<br />
15.50<br />
6.17<br />
4.75<br />
14.25<br />
24.25<br />
26.50<br />
28.00<br />
35.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
19.06<br />
14.25<br />
N/A<br />
18.25<br />
14.00<br />
3.49<br />
4.17<br />
11.15<br />
13.40<br />
12.17<br />
13.76<br />
24.00<br />
N/A<br />
17.00%<br />
22.00%<br />
N/A<br />
21.00%<br />
24.00%<br />
7.00%<br />
4.00%<br />
14.00%<br />
32.00%<br />
18.00%<br />
17.00%<br />
13.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 135,939.00 $ 1,232,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
158,700.00<br />
68,100.00<br />
31,600.00<br />
55,000.00<br />
5,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
181,100.00<br />
218,900.00<br />
600,000.00<br />
419,400.00<br />
32,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 98
Cedar Rapids/Iowa City, Iowa<br />
Davenport/Bettendorf, Iowa and Rock Island/Moline, Illinois<br />
Contact<br />
<strong>NAI</strong> Iowa Realty<br />
Commercial<br />
+1 319 363 2337<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
415,823<br />
436,938<br />
235,638<br />
$68,021<br />
$52,993<br />
The Eastern Iowa Corridor; Cedar Rapids, Iowa City/Coralville<br />
and Waterloo/Cedar Falls continues the rebuilding process<br />
from the historic floods of 2008. Currently over $3.5 billion<br />
of public/private projects are either underway or in the<br />
planning stages to replace buildings and infrastructure lost.<br />
This coupled with an upswing in commodity prices and<br />
related industries has strengthened the economy beyond<br />
national levels. Commercial real estate values have held<br />
steady and are now beginning a gradual move up.<br />
Commercial real estate in the Eastern Iowa corridor has<br />
been a mixed bag. Class A office space which has seen little<br />
new construction for the last several years remains strong<br />
with vacancy rates in the 5% to 6% range and rates at an<br />
average of $14.50/SF base. Minimal new construction is<br />
forecast in the coming year other than private use medical.<br />
Class B and C space have had a slight decrease in rates<br />
with Class B dropping to the $9.00 to $10.50/SF range.<br />
Class C remains in the $6.00 to $8.00/SF range and overall<br />
vacancy for this style is 20% to 25%. Consolidation by users<br />
has had a major impact. The CBD mirrors the above with<br />
slightly more vacancy in each class as re-tenanting continues<br />
from the floods of 2008.<br />
Warehouse/industrial remains a bargain with rates from<br />
$3.75 to $5.50/SF for good quality warehouse. Currently<br />
Cedar Rapids has over 600,000 SF of industrial/warehouse<br />
available in all sizes and styles. This market was overbuilt<br />
but is now being absorbed and bargains are available for<br />
user/owners.<br />
Retail space has held strong during the tough economic<br />
times. First generation space in strip and shadow anchored<br />
malls has averaged $14.50/SF. Second and third generation<br />
has normalized at $9.50 to $12.00/SF and overall vacancy<br />
has been about 12% to 15%.<br />
The overall strength of the economy in Eastern Iowa has led<br />
to minimal investment grade turnover and minimal lender<br />
REO. Little change is expected in <strong>2012</strong>. Multi-family cap<br />
rates run 8% to 9% depending on the age and quality of the<br />
property. Little deviation from these trends is predicted for<br />
<strong>2012</strong>.<br />
Contact<br />
<strong>NAI</strong> Ruhl & Ruhl<br />
Commercial Company<br />
+1 563 355 4000<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
381,521<br />
388,826<br />
200,443<br />
$64,293<br />
$50,076<br />
38<br />
The Quad Cities; Davenport, Bettendorf, Moline and Rock<br />
Island, the four cities bordering the Mississippi River,<br />
continue to be a vibrant community in which to do business.<br />
The area’s largest employer, the Rock Island Arsenal,<br />
continues to create and add jobs. Employment and activity<br />
in the manufacturing sectors seem to be improving in 2011.<br />
There has been some improvement in the office leasing<br />
sector though tenants continue to negotiate attractive new<br />
lease terms as well as attractive renewals. Landlords remain<br />
highly motivated to fill space. Rental abatement, increased<br />
improvement dollars funded by the landlord and flexible<br />
lease terms are commonplace. Medical office space is a<br />
bright spot in the office market with numerous deals being<br />
completed in the 1,800 to 12,000SF range. A new 60,000<br />
+ SF office tower is under construction in Moline, Illinois<br />
with the anchor tenant being Kone, an international elevator<br />
and escalator manufacturer.<br />
Although retail has been challenged nationally, the Quad<br />
Cities has not seen the large run of closings that other areas<br />
have experienced. Industrial real estate activity is showing<br />
slight improvement in 2011. Supplier/providers to John<br />
Deere, Alcoa and other large employers in the industrial<br />
segment are <strong>report</strong>ing excellent activity and several are in<br />
an expansion mode. There is still a significant amount<br />
of large space available for lease though there remains a<br />
shortage of large buildings available for sale in the immediate<br />
Quad City region. We are seeing more contract sales, lease<br />
options, SBA financing and very few conventionally financed<br />
deals.<br />
With land sales being very quiet since the economic<br />
downturn, we are delighted to <strong>report</strong> some recent land sale<br />
activity in retail, multifamily and industrial segments.<br />
Multifamily land sales are being driven by HUD financed<br />
moderate income projects which developers have flocked<br />
to due to lack of available financing for traditional development.<br />
We are also seeing strong activity in creative reuse of older<br />
multi-story warehouse buildings in the downtown areas<br />
utilizing tax credit financing for repurposing as loft style<br />
housing.<br />
Total Population<br />
Median Age<br />
33<br />
Cedar Rapids/Iowa City At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
Premium (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
15.00<br />
14.00<br />
9.00<br />
16.00<br />
14.00<br />
9.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
17.00<br />
16.00<br />
10.50<br />
18.00<br />
16.00<br />
10.50<br />
$ 16.00<br />
$ 15.00<br />
$ 10.00<br />
$ 17.00<br />
$ 15.00<br />
$ 10.00<br />
5.00%<br />
5.00%<br />
20.00%<br />
7.00%<br />
5.00%<br />
20.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
3.00<br />
4.75<br />
$<br />
$<br />
5.00<br />
6.50<br />
$<br />
$<br />
3.75<br />
5.50<br />
18.00%<br />
15.00%<br />
High Tech/R&D<br />
retaIl<br />
$ 10.50 $ 12.00 $ 11.00 5.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
$<br />
$<br />
5.00<br />
7.50<br />
$<br />
$<br />
9.00<br />
10.00<br />
$<br />
$<br />
8.00<br />
9.00<br />
25.00%<br />
12.00%<br />
Sub Regional Centers<br />
Regional Malls<br />
$<br />
$<br />
12.00<br />
15.00<br />
$<br />
$<br />
15.00<br />
18.00<br />
$ 13.50<br />
$ 17.00<br />
15.00%<br />
5.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
75,000.00<br />
32,500.00<br />
80,000.00<br />
160,000.00<br />
16,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
305,000.00<br />
65,000.00<br />
160,000.00<br />
305,000.00<br />
20,000.00<br />
Davenport/Bettendorf, Iowa and Rock Island/Moline, Illinois At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
13.00<br />
7.00<br />
13.50<br />
13.00<br />
10.50<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
18.00<br />
12.00<br />
16.50<br />
16.50<br />
13.00<br />
N/A<br />
$ 14.00<br />
$ 10.50<br />
$ 15.50<br />
$ 14.50<br />
$ 11.50<br />
N/A<br />
15.00%<br />
20.00%<br />
10.00%<br />
12.00%<br />
15.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
1.75<br />
3.00<br />
6.50<br />
$<br />
$<br />
$<br />
3.50<br />
6.00<br />
8.50<br />
$<br />
$<br />
$<br />
2.75<br />
5.00<br />
7.50<br />
15.00%<br />
5.00%<br />
10.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
$<br />
$<br />
6.00<br />
12.00<br />
$<br />
$<br />
12.00<br />
16.50<br />
$ 10.00<br />
$ 14.50<br />
10.00%<br />
7.00%<br />
Community Power Center<br />
Regional Malls<br />
$ 4.00<br />
N/A<br />
$ 12.00<br />
N/A<br />
$ 6.00<br />
N/A<br />
10.00%<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
$<br />
$<br />
$<br />
$<br />
$<br />
261,360.00<br />
217,800.00<br />
43,560.00<br />
43,560.00<br />
348,480.00<br />
$ 348,480.00<br />
$ 392,040.00<br />
$ 108,900.00<br />
$ 108,900.00<br />
$ 609,840.00<br />
Residential<br />
$ 43,560.00 $ 87,120.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 99
Des Moines, Iowa<br />
Sioux City, Iowa<br />
Contact<br />
<strong>NAI</strong> Ruhl & Ruhl<br />
Commercial Company<br />
+1 515 309 4002<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
581,477<br />
628,841<br />
330,190<br />
$76,481<br />
Des Moines’ growth for the past twenty years has been closely<br />
tied to the insurance and finance industries. Therefore the<br />
recent softness in those same industries has had a more<br />
pronounced effect on our market. While our unemployment<br />
rate remains well below the national average (6.0% vs. 9.1%),<br />
the quality of the jobs that have been trimmed has had a larger<br />
impact on our local consumer base than the loss of entry level<br />
positions.<br />
Conditions of the Des Moines office market remain favorable<br />
for tenants as landlords continue to offer high level incentives,<br />
such as free rent, moving allowances and T.I.’s. With so many<br />
options, tenants have no sense of urgency believing they have<br />
the upper hand; if one landlord won’t meet their deal, another<br />
will. However, not every landlord has the ability to offer aggressive<br />
lease terms. With lender involvement continuing to rise, some<br />
find themselves constricted on the terms they can offer a<br />
tenant. <strong>Market</strong> conditions in the CBD will continue to slowly<br />
improve throughout 2011 and <strong>2012</strong> as additional competitive<br />
space is removed from the current inventory and converted<br />
into apartments.<br />
Industrial occupancy remained stable with limited new<br />
construction. The flex market remains soft; a majority of the<br />
activity within this sector will continue to be driven by users in<br />
the 3,000 to 10,000 SF range. Lease rates have declined<br />
slightly and will remain flat for the next 18 months.<br />
New retail projects are still few and far between in the Greater<br />
Des Moines area. Most retailers remain cautious, delaying<br />
expansion plans for an improved economic climate. But, retail<br />
activity is picking up at the Prairie Trail development in Ankeny.<br />
The 1,000+ acre master plan calls for two retail components<br />
covering approximately a half million SF. Town Center at Prairie<br />
Trail will feature fashion anchors, a wide variety of restaurants<br />
and a mix of regional and national merchants. Plaza Shoppes<br />
at Prairie Trail will be anchored by a Hy-Vee grocery store. The<br />
community will also feature a vast network of trails, parks and<br />
bike paths, approximately 2,500 homes, the city library, police<br />
headquarters and three new schools.<br />
Contact<br />
<strong>NAI</strong> LeGrand & Company<br />
+1 712 277 1070<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
145,000<br />
182,562<br />
95,998<br />
$61,916<br />
Site Selection magazine has ranked the Sioux City area #1<br />
nationally in economic activity among metro areas under<br />
200,000 people in 2007 and 2008, #2 in 2009 and #3 in<br />
2010. Strong activity in the agricultural and food processing<br />
sectors are responsible for the high ranking. The metropolitan<br />
area includes Sioux City, Iowa; South Sioux City, Nebraska<br />
and North Sioux City, South Dakota.<br />
The industrial market totals 15.4 million SF with a 6%<br />
vacancy rate. A 1.6 location quotient indicates demand for<br />
industrial space is likely to continue. Work continues on a<br />
$400 million expansion by Beef Products, Inc. in South Sioux<br />
City, which is the largest single investment ever made in<br />
Nebraska. The most significant industrial news is a proposed<br />
$10 billion, 400,000 barrel oil refinery by Hyperion<br />
Resources of Dallas that would be the second largest<br />
construction project in the history of the United States. The<br />
company has renewed options on 4,700 acres and received<br />
an air quality permit from the State of South Dakota.<br />
Construction must begin by mid 2013.<br />
Sioux City is the dominant retail center in the region with 6.1<br />
million SF of space. Retail sales steadily increased due to a<br />
large amount of space coming online that effectively<br />
increased the trade area, but it was only a matter of time<br />
until overbuilding outpaced demand. Many properties have<br />
experienced rising vacancy rates and falling rents, creating<br />
a favorable leasing market.<br />
The office market consists of 5.7 million SF, and has<br />
maintained a split personality. The professional sector<br />
remains weak due to the lack of white collar job growth,<br />
while the medical market is more robust, accounting for half<br />
of all office construction since 2000. The Dakota Dunes<br />
submarket thrives with 2.8% vacancy rate, while the CBD<br />
struggles due to corporate downsizing.<br />
The Sioux City area will experience an unprecedented boom<br />
if the Hyperion Energy Center goes forward. A research study<br />
estimates the project would result in 14,000 new jobs and<br />
add $14 billion in annual economic activity to the local<br />
market.<br />
Median<br />
Household Income<br />
$60,444<br />
Median<br />
Household Income<br />
$48,862<br />
Total Population<br />
Median Age<br />
35<br />
Total Population<br />
Median Age<br />
39<br />
Des Moines At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
Premium (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
17.00<br />
13.00<br />
12.75<br />
16.00<br />
12.00<br />
3.00<br />
1.50<br />
4.50<br />
3.00<br />
4.00<br />
6.00<br />
13.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
24.00<br />
16.00<br />
16.50<br />
23.00<br />
16.00<br />
5.50<br />
7.00<br />
10.80<br />
16.00<br />
15.00<br />
18.00<br />
23.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
14.40%<br />
23.70%<br />
N/A<br />
9.70%<br />
16.90%<br />
6.60%<br />
8.20%<br />
6.50%<br />
12.70%<br />
14.00%<br />
16.00%<br />
10.40%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
94,500.00<br />
5,700.00<br />
6,900.00<br />
7,500.00<br />
45,000.00<br />
14,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
480,900.00<br />
450,000.00<br />
165,000.00<br />
500,000.00<br />
964,000.00<br />
30,000.00<br />
Sioux City At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$<br />
N/A<br />
12.00 $<br />
N/A<br />
14.50<br />
N/A<br />
$ 13.00<br />
N/A<br />
20.00%<br />
Class B (Secondary)<br />
suburban offIce<br />
$ 7.50 $ 10.00 $ 8.00 10.00%<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$<br />
$<br />
15.00<br />
12.00<br />
$<br />
$<br />
20.00<br />
20.00<br />
$ 15.50<br />
$ 13.00<br />
15.00%<br />
5.00%<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
7.50<br />
1.50<br />
1.50<br />
N/A<br />
$<br />
$<br />
$<br />
11.00<br />
5.25<br />
3.50<br />
N/A<br />
$<br />
$<br />
$<br />
9.00<br />
3.75<br />
3.00<br />
N/A<br />
6.50%<br />
10.00%<br />
4.00%<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
5.00<br />
8.00<br />
10.00<br />
20.00<br />
$<br />
$<br />
$<br />
$<br />
12.00<br />
18.50<br />
22.00<br />
40.00<br />
$ 10.00<br />
$ 13.00<br />
$ 16.00<br />
$ 30.00<br />
30.00%<br />
10.00%<br />
11.00%<br />
7.50%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
130,000.00<br />
25,000.00<br />
10,000.00<br />
260,000.00<br />
15,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
260,000.00<br />
55,000.00<br />
218,000.00<br />
870,000.00<br />
45,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 100
Wichita, Kansas<br />
Lexington, Kentucky<br />
Contact<br />
<strong>NAI</strong> John T. Arnold<br />
Associates<br />
+1 316 263 7242<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
635,018<br />
682,557<br />
332,077<br />
$64,545<br />
$49,973<br />
34<br />
The major components of the local economy continue to be<br />
aerospace, energy, healthcare and agriculture. While the<br />
unemployment rate fell modestly to 7.9% as the aerospace<br />
manufacturing sector began to rebound, the recovery is<br />
slow. Most of the growth has occurred in the service sectors.<br />
Local manufacturing, dominated by the aerospace industry,<br />
is experiencing marked improvement in certain sectors.<br />
Although the production of business and private aircraft has<br />
been generally contracting, the sales of military and<br />
commercial planes are vastly improved. In 2011, Boeing<br />
set a sales record for the 777 aircraft, including an<br />
unprecedented $18 billion order from United Arab Emirates.<br />
In addition, Boeing was awarded the $35 billion Air Force<br />
Refueling Tanker contract which is expected to add 7,500<br />
jobs in Kansas. This growth has led to increased demand<br />
for aerospace-related engineering services.<br />
With the increasing growth of the wind energy industry, BP<br />
announced plans to construct an $800 million, 419<br />
megawatt (MW) wind farm spread across 66,000 acres in<br />
central Kansas. Servicing this growing wind industry,<br />
Siemens Energy opened a 74,000 SF wind power distribution<br />
facility in Wichita.<br />
The improvement in manufacturing and distribution has<br />
lowered the vacancy of bulk warehouse, exceeding 50,000<br />
SF, to 8%. Office occupancy and rental rates have remained<br />
stable, with little new space coming on the market. In the<br />
downtown area, Cargill Inc. opened its $15 million, 75,000<br />
SF Innovation Center devoted to research, development and<br />
marketing Cargill meat products.<br />
Retail rates and occupancy remained stagnant with new<br />
construction limited primarily to two new Menards Home<br />
Improvement stores, seven Walmart neighborhood centers<br />
and a new Cabellas Sporting Goods store. Sales of<br />
development land remain sluggish, consisting primarily of<br />
healthcare related uses.<br />
In <strong>2012</strong>, Wichita State University’s business research<br />
department predicts the local economy will slowly start<br />
moving again, with job growth of about 1.3%, or 3,800 jobs.<br />
New commercial construction is expected to be centered<br />
predominantly on the remainder of the $370 million school<br />
bond issue for new schools, elder care facilities and<br />
industrial expansion.<br />
Contact<br />
<strong>NAI</strong> Isaac<br />
+1 859 224 2000<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
582,155<br />
614,851<br />
312,621<br />
62,446<br />
48,836<br />
36<br />
The Lexington market is attractive to a variety of industries.<br />
The broad based economy, interstate system access and<br />
quality of life are significant market draws. Lexington<br />
received the #1 ranking by FORBES magazine in “The Best<br />
Cities for Finding a Job.” Absorption increased in most<br />
market segments and speculative construction halted which<br />
led Lexington office and retail markets to achieve stabilization<br />
in 2011.<br />
Leasing activity in both the CBD and suburban office market<br />
has increased. The activity level has been partially<br />
camouflaged by some larger blocks of space hitting the<br />
sublease market. Lack of speculative new construction and<br />
continued economic improvement has helped reduce the<br />
vacancy rate and stabilize rents.<br />
Leasing and sales activity in Lexington’s industrial market<br />
gradually increased over the course of 2011. Smaller<br />
facilities, flex and R&D lead the activity. Properties<br />
near Lexington’s core present attractive redevelopment<br />
opportunities. Stability is anticipated for the industrial market<br />
in <strong>2012</strong> with absorption increasing.<br />
Retail rents have increased modestly in well located centers<br />
and occupancy has stabilized in Class B and Class C<br />
centers. There hasn’t been any substantial development in<br />
2011 however there are a few projects in the early planning<br />
phases. Value oriented retailers and restaurants are active<br />
in the market.<br />
There are +/-6,700 acres available for development and<br />
+/-6,000 acres suitable for redevelopment. 13 of the 17<br />
commercial land sales over the past year were less than<br />
two acres. The most recent land activity has been in student<br />
housing, medical/assisted living centers and small retail<br />
sites.<br />
The Lexington area commercial real estate investment<br />
market is segmented. The high quality properties are achieving<br />
pre-recession cap rates. Well priced distressed properties<br />
are also selling. The liquid investor with a good track record<br />
has a variety of financing options available from Lexington’s<br />
banks.<br />
Student housing is the most active area of the multifamily<br />
market with several projects completed and several more<br />
submitted for planning review. <strong>Market</strong> rate housing has little<br />
activity outside of the projects started in pre-recession years.<br />
Hospitality experienced an uptick in activity from previous<br />
years with several new projects.<br />
Wichita At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
15.00<br />
8.00<br />
23.00<br />
18.00<br />
12.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
18.00<br />
12.00<br />
25.00<br />
23.50<br />
13.00<br />
N/A<br />
$ 16.00<br />
$ 10.50<br />
$ 24.00<br />
$ 20.75<br />
$ 12.50<br />
N/A<br />
7.00%<br />
15.00%<br />
4.50%<br />
8.50%<br />
15.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$<br />
$<br />
$<br />
3.50<br />
3.50<br />
5.00<br />
N/A<br />
$<br />
$<br />
$<br />
4.50<br />
5.00<br />
8.00<br />
N/A<br />
$<br />
$<br />
$<br />
4.00<br />
4.25<br />
6.50<br />
N/A<br />
8.00%<br />
10.00%<br />
5.60%<br />
12.60%<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
10.00<br />
12.00<br />
N/A<br />
$<br />
$<br />
12.00<br />
20.00<br />
N/A<br />
$ 11.50<br />
$ 16.00<br />
N/A<br />
9.00%<br />
6.00%<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
N/A<br />
$ 130,680.00<br />
$ 435,600.00<br />
$ 174,240.00<br />
Land in Industrial Parks<br />
$ 65,340.00 $ 130,680.00<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$ 130,680.00<br />
$ 348,480.00<br />
N/A<br />
$ 217,800.00<br />
$ 435,600.00<br />
N/A<br />
Lexington At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
17.00<br />
13.50<br />
N/A<br />
16.00<br />
14.00<br />
2.50<br />
3.75<br />
7.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
20.00<br />
16.00<br />
N/A<br />
19.00<br />
16.00<br />
4.50<br />
5.00<br />
18.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
19.90%<br />
13.90%<br />
N/A<br />
14.20%<br />
14.20%<br />
18.00%<br />
11.50%<br />
8.20%<br />
Downtown<br />
$ 10.00 $ 20.00 N/A 28.90%<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
11.00<br />
15.00<br />
30.00<br />
$<br />
$<br />
$<br />
20.00<br />
25.00<br />
65.00<br />
N/A<br />
N/A<br />
N/A<br />
12.00%<br />
6.10%<br />
0.20%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 1,000,000.00 $ 3,000,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
300,000.00<br />
80,000.00<br />
120,000.00<br />
$<br />
$<br />
$<br />
520,000.00<br />
210,000.00<br />
500,000.00<br />
Retail/Commercial Land<br />
$ 450,000.00 $ 1,155,000.00<br />
Residential<br />
$ 25,000.00 $ 350,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 101
Baton Rouge, Louisiana<br />
Lake Charles, Louisiana<br />
Contact<br />
<strong>NAI</strong> Latter & Blum<br />
+1 225 295 0800<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
818,694<br />
883,222<br />
411,425<br />
$65,989<br />
$49,076<br />
New developments like the $357 million casino and numerous<br />
expansions in the petro chemical industry along the Mississippi<br />
River have continued to keep Baton Rouge afloat through the<br />
recession. Those factors coupled with robust healthcare and<br />
education industries will keep the Baton Rouge MSA<br />
population increasing as non-farm jobs are expected to grow<br />
modestly through 2013.<br />
The industrial market has been one of the bright spots with<br />
petro chemical plants like Westlake Chemical, Georgia<br />
Pacific, Honeywell and Formosa Plastics expanding and<br />
others like Nucor building a new plant along the Mississippi<br />
River. Bulk warehouse seems to maintain a higher vacancy<br />
although the stand alone buildings between 8,000 to<br />
40,000 SF have had resurgence in demand.<br />
Office remains one of the weaker sectors with an MSA<br />
vacancy rate for both Class A and Class B properties dipping<br />
back to 2003 levels or 17%. Several large blocks of space<br />
have been leased recently due to the engineering demand<br />
levied by new plant business and privatization of some state<br />
agencies. Medical has been the only new construction with<br />
local hospitals like Our Lady of the Lake and Baton Rouge<br />
General announcing expansions in 2011.<br />
Power Centers and large anchored centers are performing<br />
relatively well while the smaller neighborhood centers that<br />
suffered so much in 2009 and 2010 are beginning to back<br />
fill some of those vacancies. The casino will be a big boost<br />
to Baton Rouge as well as infill and re-development projects<br />
which are starting to receive funding and finally break<br />
ground.<br />
The apartment sector has remained quite strong with Class<br />
A vacancies less than 5% throughout the recession.<br />
Investment grade sales flirted with the 7% cap rate range<br />
and outside investors have taken a strong interest in Baton<br />
Rouge and its projected future growth. Student housing<br />
around Louisiana State University has been very active both<br />
on the development and purchasing sides with new<br />
developments fairing very well thus far.<br />
Contact<br />
<strong>NAI</strong> Lake Charles<br />
+1 337 310 7333<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
202,789<br />
215,575<br />
99,693<br />
$62,247<br />
$45,917<br />
Located between Houston and New Orleans, in the far<br />
southwestern corner of Louisiana, Lake Charles is the fifth<br />
largest Metropolitan Statistical Area in Louisiana, comprising<br />
two parishes; Calcasieu and Cameron. The MSA population<br />
is approximately 195,000. Lake Charles is dominated by<br />
three key industries; petrochemical (Citgo, Conoco, PPG,<br />
Westlake Chemical, SASOL and Cameron LNG to name a<br />
few), casino gaming and aircraft repair at Chennault<br />
Industrial Airpark (Northrop Grumman and Aeroframe).<br />
Regional economist Dr. Loren Scott projects the Lake<br />
Charles MSA will be the fastest growing in the state over<br />
<strong>2012</strong> and 2013 largely due to a remarkable $10 to $20<br />
billion in new construction. What is behind this? According<br />
to Dr. Scott, the answer is that this region is poised for a<br />
run of construction projects that exceed any previous<br />
record for the southwestern part of the state. Among these<br />
projects are Cheniere Energy, Leucadia, Mojito Pointe,<br />
Sasol, IFG, Lake Charles Memorial Hospital and a hangar<br />
at Chennault Airkpark. Cheniere Energy has obtained<br />
approval to convert its LNG import terminal to an export<br />
terminal. The construction of this $6.5 billion liquefaction<br />
plan is set to start in January <strong>2012</strong>.<br />
Leucadia plans to pull the trigger on its $2.2 billion<br />
synthetic natural gas plant in early <strong>2012</strong>. Mojito Pointe<br />
plans to open its 400 room hotel and casino in early 2013.<br />
Sasol has a $175 million expansion project underway that<br />
is slated to be finished in mid 2013. IFG is constructing<br />
the first Greenfield grain elevator in the US in the last<br />
25 years. IFG will spend $59.5 million on Phase 1 of this<br />
project and plans to spend another $50 million in Phase<br />
II. Lake Charles Memorial Hospital has a $20 million<br />
expansion underway that it slated to be completed in<br />
mid <strong>2012</strong>.<br />
Recently, Governor Jindal announced sizeable state funding<br />
for a new $18.5 million hangar at Chennault Airpark. This<br />
enormous increase in construction spending represents a<br />
huge injection of funds into the MSA’s economy and means<br />
significant job creation. Scott projects an increase of<br />
2,500 jobs in <strong>2012</strong> and 2,700 jobs in 2013 for the Lake<br />
Charles MSA.<br />
Total Population<br />
Median Age<br />
33<br />
Total Population<br />
Median Age<br />
35<br />
Baton Rouge At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
23.00<br />
20.00<br />
13.00<br />
N/A<br />
18.00<br />
12.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
28.00<br />
23.00<br />
17.00<br />
N/A<br />
22.00<br />
16.00<br />
$ 25.00<br />
$ 22.00<br />
$ 15.45<br />
N/A<br />
$ 19.50<br />
$ 14.25<br />
15.00%<br />
20.00%<br />
33.00%<br />
N/A<br />
15.00%<br />
26.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$ 3.00<br />
N/A<br />
N/A<br />
$ 5.15<br />
N/A<br />
N/A<br />
$ 4.00<br />
N/A<br />
N/A<br />
15.10%<br />
N/A<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
12.00<br />
8.00<br />
21.00<br />
12.00<br />
$<br />
$<br />
$<br />
$<br />
24.00<br />
22.00<br />
30.00<br />
80.00<br />
$ 16.00<br />
$ 15.00<br />
$ 25.00<br />
$ 35.00<br />
6.00%<br />
15.00%<br />
4.00%<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 900,000.00 $ 1,500,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
180,000.00<br />
100,000.00<br />
80,000.00<br />
$<br />
$<br />
$<br />
350,000.00<br />
260,000.00<br />
350,000.00<br />
Retail/Commercial Land<br />
$ 350,000.00 $ 1,250,000.00<br />
Residential<br />
$ 10,000.00 $ 50,000.00<br />
Lake Charles At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
N/A<br />
12.00<br />
12.00<br />
N/A<br />
N/A<br />
11.00<br />
$<br />
$<br />
$<br />
N/A<br />
16.00<br />
15.00<br />
N/A<br />
N/A<br />
16.00<br />
N/A<br />
$ 14.00<br />
$ 13.00<br />
N/A<br />
N/A<br />
$ 14.00<br />
N/A<br />
25.00%<br />
15.00%<br />
N/A<br />
N/A<br />
10.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
$ 2.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 4.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 3.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
5.00%<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Sub Regional Centers<br />
Regional Malls<br />
$<br />
$<br />
8.00<br />
20.00<br />
$<br />
$<br />
26.00<br />
30.00<br />
$ 15.00<br />
$ 25.00<br />
15.00%<br />
10.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
300,000.00<br />
N/A<br />
45,000.00<br />
60,000.00<br />
$<br />
$<br />
$<br />
450,000.00<br />
N/A<br />
135,000.00<br />
150,000.00<br />
Retail/Commercial Land<br />
$ 200,000.00 $ 1,000,000.00<br />
Residential<br />
$ 45,000.00 $ 350,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 102
Monroe, Louisiana<br />
New Orleans, Louisiana<br />
Contact<br />
<strong>NAI</strong> Faulk & Foster<br />
+1 318 807 4666<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
198,975<br />
206,094<br />
92,620<br />
$54,359<br />
$38,861<br />
36<br />
The Northeast Louisiana Region has continued to grow<br />
due in large part to ongoing efforts in business advocacy,<br />
infrastructure development and workforce development.<br />
This has resulted in slow but steady growth for the region’s<br />
commercial real estate market both in number of<br />
transactions as well as overall transaction values.<br />
Commercial property values, as well as commercial lease<br />
rates have shown no notable decreases over the last year.<br />
Completed and ongoing infrastructure enhancements such<br />
as the expansion of the Greater Ouachita Port as well as<br />
the extension of interstate service roads will open up<br />
additional development opportunities within the region. The<br />
extension of the service roads will allow for both retail and<br />
industrial expansion.<br />
Monroe corporate headquartered CenturyLink’s recent<br />
acquisition of Qwest Communications, resulting in<br />
approximately 800 new direct jobs and will subsequently<br />
create approximately 1,170 indirect jobs for a total<br />
of 1,970 new jobs created over the next five years.<br />
Acquisition of Qwest Communications will result in<br />
CenturyLink being the largest Fortune 500 company<br />
headquarted in Louisiana. Other companies making an<br />
impact on the region by expanding and adding new jobs<br />
are Gardner Denver Thomas as well as Con-Agra Lamb<br />
Weston. Both companies investment in the region in<br />
“bricks and mortar” as well as in the labor force have<br />
allowed the region to continue to grow.<br />
The recent $10.8 million capital investment by Angus<br />
Chemical Company, a wholly owned subsidiary of Dow<br />
Chemical Company, for modernizing its manufacturing<br />
facility in the region is a positive sign of future growth for<br />
the region. Another project that will bring commercial<br />
real estate expansion opportunities is the new 700 acre<br />
industrial park. The site is the first certified site in Northeast<br />
Louisiana and is the largest development-ready site in<br />
Louisiana.<br />
Over the last few years the region has been focused<br />
on the creation and maintenance of a business friendly<br />
environment. These efforts have included building and<br />
expanding infrastructure and the developing of a trained<br />
and productive workforce. These efforts are ongoing and<br />
the region is now beginning to experience and enjoy the<br />
results of those efforts.<br />
Contact<br />
<strong>NAI</strong> Latter & Blum<br />
+1 504 569 9300<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
1,195,638<br />
1,222,948<br />
591,961<br />
$66,567<br />
$50,659<br />
36<br />
2011 has been an exciting year in New Orleans as the city<br />
continues it resurgence after the catastrophic levee<br />
failures of 2005. A combination of new developments, a<br />
unique local culture and a reviving tourism market have<br />
kept the city somewhat insulated from the economic<br />
problems that have surfaced nationally.<br />
The office market remains resilient and stable, with<br />
downtown Class A office space roughly 89% leased at<br />
rates of $17 to $20/SF. The suburban market is at 90.6%<br />
occupancy, with rates of $22 to $24/SF.<br />
On the industrial side, there are currently 6,361,978 SF<br />
available, which is to say that the demand of the post-<br />
Katrina 2006 boom has abated.<br />
Retail has been caught in the downturn being experienced<br />
nationally, but there are more than a few national tenants<br />
shopping around for space.<br />
A general overview of the New Orleans lodging market has<br />
to first begin with the reopening of the Hyatt Regency in<br />
2011. Consequently, the supply of hotel rooms in the city<br />
is now approximately equal to Pre-Katrina levels. Moreover,<br />
convention center occupancy and attendance is also<br />
currently at 2004/2005 levels with approximately<br />
1,100,000 definite room nights on the books for 2011,<br />
and an increase in RevPAR (TTM) as of October 2011<br />
of approximately 9% year-over-year ($97 2011 vs. $89<br />
2010).<br />
New Orleans ranks third in the top 25 markets with respect<br />
to “change in room value” in 2011 from 2010 (an increase<br />
of $34,000 per room). New Orleans change in value per<br />
room from 2010 to 2015 is expected to be approximately<br />
$114,000 per room (US average is $85,000.) Lastly,<br />
supply of new hotel product in the New Orleans market is<br />
projected to increase less than 1% per annum from 2010<br />
to 2015.<br />
The area’s multifamily market has strengthened somewhat<br />
over the past year and now stands at 90% occupancy. The<br />
housing market is gradually improving.<br />
Monroe At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
12.00<br />
N/A<br />
17.00<br />
10.00<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
15.00<br />
N/A<br />
22.00<br />
14.00<br />
N/A<br />
N/A<br />
$ 13.50<br />
N/A<br />
$ 19.50<br />
$ 12.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$ 2.75<br />
N/A<br />
N/A<br />
N/A<br />
$ 4.50<br />
N/A<br />
N/A<br />
N/A<br />
$ 3.50<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
Regional Malls<br />
$<br />
$<br />
6.00<br />
12.00<br />
N/A<br />
$<br />
$<br />
15.00<br />
18.00<br />
N/A<br />
$ 10.50<br />
$ 15.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
$<br />
N/A<br />
N/A<br />
10,000.00 $<br />
N/A<br />
N/A<br />
45,000.00<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
130,000.00<br />
425,000.00<br />
N/A<br />
$ 450,000.00<br />
$ 650,000.00<br />
N/A<br />
New Orleans At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
16.00<br />
13.00<br />
N/A<br />
20.00<br />
16.00<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
19.50<br />
17.50<br />
N/A<br />
23.00<br />
20.00<br />
N/A<br />
$ 17.95<br />
$ 15.37<br />
N/A<br />
$ 22.30<br />
$ 17.93<br />
N/A<br />
84.90%<br />
78.00%<br />
N/A<br />
91.90%<br />
86.80%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
2.00<br />
2.50<br />
N/A<br />
$<br />
$<br />
4.00<br />
6.50<br />
N/A<br />
$<br />
$<br />
3.75<br />
4.50<br />
N/A<br />
N/A<br />
15.00%<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
15.00<br />
12.00<br />
15.00<br />
20.00<br />
$<br />
$<br />
$<br />
$<br />
40.00<br />
18.00<br />
29.00<br />
62.50<br />
$ 27.50<br />
$ 15.00<br />
$ 22.00<br />
$ 41.25<br />
1.00%<br />
1.50%<br />
2.10%<br />
5.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 1,500,000.00 $ 6,500,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
150,000.00<br />
350,000.00<br />
90,000.00<br />
$<br />
$<br />
$<br />
812,500.00<br />
650,000.00<br />
175,000.00<br />
Retail/Commercial Land<br />
$ 261,360.00 $ 2,178,000.00<br />
Residential<br />
$ 30,000.00 $ 650,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 103
Greater Portland, Maine<br />
Baltimore, Maryland<br />
Contact<br />
<strong>NAI</strong> The Dunham Group<br />
+1 207 733 7100<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
548,055<br />
547,313<br />
304,520<br />
$70,216<br />
$55,768<br />
Southern Maine’s hub is the city of Portland. Portland is the<br />
largest city in the state with a current population of 66,194.<br />
With a metro population of over 500,000, Greater Portland<br />
is home to more than a third of Maine’s total population.<br />
Portland is considered the states’ social and economic<br />
capital. Most national financial service organizations such<br />
as Bank of America, Key Bank, Fidelity Investments, Anthem,<br />
TD Bank and Unum base their Maine operations in Portland.<br />
The office market has remained relatively unchanged over<br />
the past year. Existing tenants have taken advantage of<br />
incentives from landlords to remain in their spaces. Medical<br />
space absorption has been strong. The major development<br />
in the market was the redevelopment of 254 Commercial<br />
Street, a former waterfront storage building that was<br />
converted into 95,000 SF of Class A office space. Pierce<br />
Atwood has relocated into 75,000 SF, making this a<br />
win-win for Portland’s waterfront redevelopment.<br />
The retail market has remained moderate. Large box<br />
closings have declined as landlords have renegotiated rents<br />
to keep properties full. The downtown market has remained<br />
stable with its quaint Old Port shops <strong>report</strong>ing limited<br />
vacancy. New tenants have been primarily in the food sector,<br />
catering to the ever-increasing cruise ship traffic. We<br />
anticipate the market will remain stable, but would not count<br />
out more “thinning out” of competing big box retailers if the<br />
economy remains flat over the holidays.<br />
The level of leasing activity in the industrial market has<br />
increased, but there is still an over-supply of available space.<br />
Smaller spaces have not been in demand and make up a<br />
bulk of the over-supply. Landlords and sellers need to lower<br />
their expectations and negotiate aggressively to fill empty<br />
spaces and limit their cash flow losses. The over-supply of<br />
existing inventory is distracting buyers and tenants from<br />
considering new construction. The cost of new space cannot<br />
compete with current market prices.<br />
In summary, the Greater Portland real estate market is<br />
weathering the economic storm. Maine’s current appeal for<br />
tourism coupled with the new administration’s emphases<br />
on pro-business, makes us feel that the state’s real estate<br />
market will start to gain momentum heading into <strong>2012</strong>.<br />
Contact<br />
<strong>NAI</strong> KLNB<br />
+1 410 321 0100<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
2,728,911<br />
2,803,598<br />
1,456,334<br />
$90,145<br />
$68,745<br />
The Baltimore metro area should experience improving<br />
conditions short term, followed by expansion thereafter as<br />
the impact of BRAC benefits the area during <strong>2012</strong> combined<br />
with the solid, continuing performance of the area’s health<br />
care industry led by Johns Hopkins. Although the Baltimore<br />
metro area could feel the pinch of the Federal government<br />
scaling back its budget, BRAC impact including workers and<br />
contractors will continue to be felt at least for the next<br />
several years.<br />
The BRAC program in Harford and Anne Arundel counties<br />
has now finally officially ended and the majority of transfers<br />
have been made, which should help move some available<br />
space around Fort Meade and Aberdeen Proving Ground off<br />
the market, even as more is added. Net absorption overall<br />
was in positive territory boosted by several pre-leased<br />
deliveries and relatively steady leasing activity. Although the<br />
vacancy rate is down over the past year, it remained elevated<br />
enough to put pressure on asking rents. Asking rents inched<br />
down slightly in 2011.<br />
Tenants moving into large blocks of space in 2011 included;<br />
GSA moving into 125,130 SF at 324 Sentinel Way; Booz<br />
Allen Hamilton, Inc. moving into 96,000 SF at 308 Sentinel<br />
Drive, both at National Business Park and law firm Ober,<br />
Kaler, Grimes & Shriver moving into 92,778 SF at<br />
Transamerica Tower. Others included the 234,000 SF lease<br />
signed by Maryland Department of Health and Mental<br />
Hygiene at 1770 Ashland Avenue in the Baltimore City East<br />
market; the 115,900 SF deal signed by PNC Bank at One<br />
East Pratt Street in the Baltimore City CBD market and the<br />
97,392 SF lease signed by TESSCO Technologies Incorporated<br />
at The Atrium Bldg in the north Baltimore County market.<br />
In the industrial market, the largest lease signings occurring<br />
in 2011 included the 302,687 SF lease signed by<br />
LifeScience Logistics at Gateway Commerce Center in the<br />
Columbia market; the 161,112 SF deal signed by A&S<br />
Services Group LLC at 5003 Holabird Ave in the Baltimore<br />
City market and the 146,104 SF lease signed by Fabrication<br />
Designs Inc. at 7463 New Ridge Rd in the BWI market.<br />
Rents have seen little movement over the past year.<br />
Total Population<br />
Median Age<br />
42<br />
Total Population<br />
Median Age<br />
37<br />
Greater Portland At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
16.00<br />
15.00<br />
8.00<br />
14.00<br />
10.00<br />
8.00<br />
3.25<br />
3.75<br />
4.75<br />
16.00<br />
10.00<br />
8.00<br />
15.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
21.00<br />
18.00<br />
15.00<br />
18.00<br />
14.00<br />
10.00<br />
5.50<br />
5.50<br />
8.00<br />
30.00<br />
18.00<br />
20.00<br />
30.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
20.25<br />
17.00<br />
12.50<br />
16.00<br />
13.00<br />
9.00<br />
4.40<br />
4.60<br />
6.00<br />
25.00<br />
14.00<br />
16.00<br />
23.00<br />
5.00%<br />
10.50%<br />
14.00%<br />
5.00%<br />
11.00%<br />
7.00%<br />
7.00%<br />
5.00%<br />
5.00%<br />
5.00%<br />
5.00%<br />
7.00%<br />
4.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
14.00<br />
120,000.00<br />
70,000.00<br />
70,000.00<br />
200,000.00<br />
65,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
20.00<br />
200,000.00<br />
150,000.00<br />
150,000.00<br />
500,000.00<br />
300,000.00<br />
Baltimore At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 22.50<br />
$ 18.00<br />
$ 12.00<br />
N/A<br />
$ 15.00<br />
$ 10.00<br />
$ 22.50<br />
$ 36.00<br />
$ 25.00<br />
N/A<br />
$ 32.00<br />
$ 30.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
22.50<br />
24.00<br />
17.50<br />
N/A<br />
25.50<br />
20.00<br />
N/A<br />
16.90%<br />
9.70%<br />
N/A<br />
13.60%<br />
11.70%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
3.00<br />
N/A<br />
4.00<br />
$ 12.00<br />
N/A<br />
$ 30.00<br />
$<br />
$<br />
4.50<br />
N/A<br />
9.50<br />
9.80%<br />
N/A<br />
10.30%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$ 15.00<br />
$ 15.00<br />
$ 10.00<br />
N/A<br />
$ 50.00<br />
$ 50.00<br />
$ 16.00<br />
N/A<br />
$<br />
$<br />
$<br />
20.00<br />
24.00<br />
15.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
$<br />
$<br />
$<br />
500,000.00<br />
125,000.00<br />
25,000.00<br />
$ 2,000,000.00<br />
N/A<br />
$ 3,000,000.00<br />
Office/Industrial Land - Non-park $ 50,000.00 $ 700,000.00<br />
Retail/Commercial Land<br />
Residential<br />
$ 250,000.00<br />
N/A<br />
$ 5,000,000.00<br />
N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 104
Suburban Maryland<br />
Boston, Massachusetts<br />
Contact<br />
<strong>NAI</strong> Michael<br />
+1 301 459 4400<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
2,813,253<br />
2,956,880<br />
1,563,559<br />
$105,590<br />
$82,432<br />
Suburban Maryland is comprised of two primary and three<br />
secondary counties: Prince George’s and Montgomery have the<br />
largest populations surrounding Washington, DC; Calvert, Charles<br />
and St. Mary's counties are south and have smaller populations.<br />
Overall the markets for office, industrial, retail and land sales for<br />
these areas have either remained consistent or improved, which<br />
directly reflects the resilience of a region in which the Federal<br />
Government is both the major employer and leaser of space.<br />
Office rental rates in Prince George's County decreased slightly<br />
for Class A and Class B space initially in 2011, but bounced back<br />
during the second half of the year to levels similar to or above<br />
the year prior. The second largest employer in the county, Joint<br />
Base Andrews, dedicated a new building this year as part of the<br />
Pentagon’s Base Realignment and Closure program, which will<br />
ultimately grow the base even further and boost the surrounding<br />
economy through retail utilization and contractor leasing activity.<br />
As development surrounding mass-transit continues to gain<br />
steam, the Maryland Department of Housing and Community<br />
Development announced plans to move to a metro oriented office<br />
park in the county. A newly elected County Executive has aimed<br />
to make the county more business friendly in an effort to attract<br />
additional growth.<br />
Industrial rental rates in the county began high, but have<br />
decreased slightly throughout the year. However, rates still<br />
remained higher than the same periods last year. Vacancy rates<br />
decreased slightly.<br />
Retail rental showed a slight but steady decline throughout<br />
the year. Two new retail projects in the county near the Capital<br />
Beltway offered activity, and will continue to deliver new space<br />
throughout <strong>2012</strong> and 2013.<br />
Residential land sales volume doubled in 2011. The<br />
corresponding price per acre increased as well, to prices well<br />
over the 2010 averages. Significant transactions included the<br />
Smith Home Farm, a 624 acre development that sold in Q2.<br />
Montgomery County has remained stable in office rental rates<br />
and vacancy throughout the year. The industrial sections of<br />
the county, which are mostly in Silver Spring and Gaithersburg,<br />
had slightly decreased rental rates, and slightly increased<br />
vacancy rates.<br />
Contact<br />
<strong>NAI</strong> Hunneman<br />
+1 617 457 3400<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
5,116,940<br />
5,191,387<br />
2,830,913<br />
$91,555<br />
$69,887<br />
The Massachusetts economy was stable in 2011 amid<br />
the uncertainty facing the US and global markets. The<br />
unemployment rate in Massachusetts is 7.3%, down from<br />
8.3% a year ago. Metro Boston’s diverse economy has<br />
helped landlords withstand the economic downturn. Growth<br />
is coming out of the biotech, high-tech and medical<br />
industries. Start-ups feed the demand for smaller blocks of<br />
space, while growing high-tech and biotech companies<br />
search out locations based on amenities and pricing.<br />
Metro Boston’s office market contains 200 million ± SF. The<br />
vacancy rate is 14%, which is unchanged from last year.<br />
Despite the apparent stagnation, there are pockets of activity<br />
where demand is meeting a lack of new supply. The result<br />
will continue to put pressure on rents in certain submarkets<br />
in <strong>2012</strong>. Boston’s Back Bay and Cambridge are the tightest<br />
submarkets with single-digit vacancy and high rents. Large<br />
users from these submarkets have begun to look at Boston’s<br />
Seaport District, as a price and lifestyle alternative. This was<br />
evident by Boston’s largest deals, including Vertex’s 1 million<br />
SF lease at Fan Pier in the Seaport.<br />
In the suburbs, Burlington has won many deals including<br />
Ascend Learning’s 90K SF lease. Burlington is attracting<br />
tenants with its selection of Class A product and a superior<br />
amenity base. Large blocks of space are dwindling, so <strong>2012</strong><br />
might see speculative development at sites that have been<br />
on hold for years.<br />
The Industrial market contains 174 million ± SF with 11%<br />
vacancy. While some tenants are consolidating to better their<br />
space situation, demand continues to grow for quality<br />
medtech flex space and good warehouse and distribution<br />
space. A significant lease saw Trader Joes take 132,298 SF<br />
at 30 Commerce Blvd in Middleboro.<br />
The investment sales market has improved since 2009.<br />
Demand is coming from investment groups looking for Class<br />
A assets in low-risk locations. This demand and the low<br />
cost of financing have compressed cap rates for trophy<br />
properties. 33 Arch Street in Boston sold for $65.75 million.<br />
The 600,000 SF tower traded at a <strong>report</strong>ed 4.73% cap rate.<br />
If market f undamentals remain stable, then <strong>2012</strong> should<br />
see continued improvement.<br />
Total Population<br />
Median Age<br />
36<br />
Total Population<br />
Median Age<br />
38<br />
Suburban Maryland At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 14.50<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 50.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 29.73<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
16.00%<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 9.50 $ 51.74 $ 23.39 15.00%<br />
Bulk Warehouse<br />
$ 4.40 $ 22.28 $ 6.72 15.00%<br />
Manufacturing<br />
$ 6.50 $ 9.75 $ 7.94 9.00%<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$ 4.50<br />
N/A<br />
$ 28.94<br />
N/A<br />
$ 6.93<br />
N/A<br />
12.00%<br />
N/A<br />
Neighborhood Service Centers<br />
Community Power Center<br />
$<br />
$<br />
7.46<br />
7.00<br />
$ 60.00<br />
$ 45.00<br />
$ 21.17<br />
$ 20.48<br />
9.00%<br />
6.00%<br />
Regional Malls<br />
$ 12.31 $ 35.00 $ 18.09 2.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
N/A<br />
N/A<br />
N/A<br />
$ 121,212.12<br />
$ 432,360.74<br />
N/A<br />
N/A<br />
N/A<br />
$ 1,428,571.43<br />
$ 18,281,250.00<br />
Residential<br />
$ 8,582.34 $ 18,281,250.00<br />
Boston At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
Premium (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
38.00<br />
34.00<br />
23.00<br />
24.00<br />
22.00<br />
17.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
55.00<br />
45.00<br />
30.00<br />
32.00<br />
29.00<br />
24.00<br />
$ 47.00<br />
$ 38.00<br />
$ 27.00<br />
$ 29.00<br />
$ 26.00<br />
$ 21.00<br />
9.00%<br />
12.70%<br />
10.60%<br />
12.80%<br />
16.20%<br />
15.20%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
4.55<br />
5.05<br />
6.28<br />
$<br />
$<br />
$<br />
7.87<br />
8.40<br />
15.87<br />
$<br />
$<br />
$<br />
5.63<br />
5.90<br />
9.11<br />
11.60%<br />
12.50%<br />
13.40%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
15.00<br />
9.48<br />
7.13<br />
18.19<br />
$<br />
$<br />
$<br />
$<br />
91.29<br />
32.18<br />
18.13<br />
51.86<br />
$ 47.75<br />
$ 15.30<br />
$ 11.62<br />
$ 26.94<br />
2.60%<br />
7.10%<br />
4.40%<br />
3.60%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
105 <strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 105
Greater Springfield, Massachusetts<br />
Detroit, Michigan<br />
Contact<br />
<strong>NAI</strong> Samuel D. Plotkin<br />
Associates<br />
+1 413 781 8000<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
691,681<br />
687,680<br />
357,184<br />
$68,651<br />
$52,549<br />
38<br />
In 2011 the western Massachusetts real estate market was<br />
stagnant in all sectors. Overall our problem remains no new<br />
companies entering the market and local companies not<br />
expanding. There are several publicly funded projects<br />
underway in western Massachusetts that could help drag<br />
us from the economic abyss we’ve been in for the past three<br />
years.<br />
On the list of developments are; the $70 million renovation<br />
of the train station, the equally expensive state backup data<br />
center, high speed rail and a public/private “high speed<br />
computer center” being built in Holyoke at a cost of $170<br />
million. Everyone is crossing their fingers that these<br />
developments will bring permanent jobs to the area.<br />
Of the 40 million SF of industrial space in western<br />
Massachusetts, there are easily 6 to 8 million vacant SF. We<br />
believe this represents 10 years of inventory. This is tough<br />
to predict. By today’s activity it could easily be 15 years but<br />
if we get back to 2005 activity it may be eight years. The<br />
point being, we have a lot of vacant industrial space.<br />
Because western Massachusetts has its roots in over<br />
a century of manufacturing, a large percentage of the<br />
industrial inventory is obsolete manufacturing space. With<br />
the northeast trending toward warehouse and distribution<br />
businesses, western Massachusetts seldom makes the site<br />
selectors short list.<br />
Activity in the retail sector stayed mainly in Class B locations<br />
due to pricing and rates are still down 20% to 30%. Many<br />
new developments were put on hold when the financial<br />
markets crashed. Office tenants enjoy a very competitive<br />
leasing environment and continue to get healthy landlord<br />
concessions. Landlords with leases rolling over can be found<br />
hiding under their desks.<br />
Investment sales are soft although cap rates remain 6.5%<br />
to 7% for credits and 9% to 12% for non-credit deals due<br />
to low interest rates. Multifamily investments are still sought<br />
after however the unfavorable lending requirements are<br />
preventing acquisition. Overall 2011 has been a very tough<br />
year for our market.<br />
Contact<br />
<strong>NAI</strong> Farbman<br />
+1 248 353 0500<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
4,226,281<br />
3,969,296<br />
2,123,912<br />
$71,132<br />
$54,599<br />
37<br />
The Detroit real estate market has benefited from positive<br />
momentum throughout 2011 with measured economic<br />
improvement from the automotive and manufacturing<br />
sectors. An influx of capital and corporate relocations to the<br />
Detroit CBD has greatly improved market fundamentals and<br />
generated a welcome increase in deal velocity. Vacancy<br />
rates have continued to remain stable but are still near<br />
historical highs and the leasing environment through the<br />
suburbs remains soft with select areas of strength.<br />
In the office market, the leasing environment remains soft<br />
throughout the suburbs but has shown improvement<br />
throughout the CBD primarily because Quicken Loans,<br />
DTE and Blue Cross Blue Shield have all completed their<br />
relocations to downtown. This momentum is attracting other<br />
corporations to follow suit. Medical office continues to<br />
remain a growing sector with supportive demographics<br />
driving an expansion of medical systems and private practices.<br />
Retail leasing remains slow with many power and strip<br />
centers suffering from the continued reduction in consumer<br />
spending.<br />
Continuing last year’s positive momentum, industrial net absorption<br />
remained positive (6 million square feet) throughout<br />
Metro Detroit, signaling continued improvement and stability.<br />
Warehouse and flex space throughout Wayne and Oakland<br />
counties that is well located remains in demand and offers<br />
affordable solutions for companies desiring to expand their<br />
business. Michigan’s technology and alternative energy<br />
investments continue to provide support for the industrial<br />
market with start-up companies finding favorable tax<br />
incentives and a qualified labor pool.<br />
In the investment market, REO properties and distressed<br />
notes continue to attract investors as they seek out an<br />
opportunistic investment thesis. It will continue to be a<br />
buyers’ market throughout <strong>2012</strong>, as more loan defaults<br />
work their way into the REO market and landlords continue<br />
to struggle under the soft leasing environment. The CBD will<br />
continue to attract the most attention for acquisitions.<br />
Detroit multifamily assets continue to benefit from strong<br />
demand from local and national investors as the market for<br />
these assets continues to attract buyers. Student housing<br />
remains the brightest spot within the multifamily market.<br />
Greater Springfield At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
N/A<br />
$ 13.50 $<br />
N/A<br />
20.00 $<br />
N/A<br />
16.75<br />
N/A<br />
18.00%<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
$ 9.00<br />
N/A<br />
$ 12.00<br />
N/A<br />
$ 10.50<br />
N/A<br />
25.00%<br />
N/A<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 15.00<br />
$ 10.00<br />
$<br />
$<br />
26.00<br />
16.00<br />
$<br />
$<br />
20.50<br />
14.00<br />
10.00%<br />
12.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
$<br />
$<br />
$<br />
$<br />
$<br />
1.50<br />
2.25<br />
4.25<br />
6.00<br />
7.50<br />
$<br />
$<br />
$<br />
$<br />
$<br />
3.50<br />
6.00<br />
8.00<br />
15.00<br />
10.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
2.50<br />
4.00<br />
6.00<br />
10.00<br />
8.50<br />
20.00%<br />
15.00%<br />
8.00%<br />
15.00%<br />
15.00%<br />
Community Power Center<br />
Regional Malls<br />
$ 13.00<br />
$ 20.00<br />
$<br />
$<br />
16.00<br />
30.00<br />
$<br />
$<br />
14.00<br />
25.00<br />
10.00%<br />
10.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
50,000.00<br />
50,000.00<br />
40,000.00<br />
60,000.00<br />
15,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
70,000.00<br />
70,000.00<br />
100,000.00<br />
700,000.00<br />
200,000.00<br />
Detroit At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
19.00<br />
11.00<br />
N/A<br />
17.00<br />
13.00<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
23.00<br />
18.00<br />
N/A<br />
25.00<br />
20.00<br />
N/A<br />
$ 21.00<br />
$ 15.00<br />
N/A<br />
$ 21.00<br />
$ 18.00<br />
N/A<br />
18.00%<br />
22.00%<br />
N/A<br />
18.00%<br />
25.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
2.00<br />
1.00<br />
2.00<br />
$<br />
$<br />
$<br />
9.00<br />
6.00<br />
11.00<br />
$<br />
$<br />
$<br />
4.50<br />
3.25<br />
7.50<br />
13.00%<br />
20.00%<br />
16.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
11.00<br />
9.00<br />
12.00<br />
5.00<br />
$<br />
$<br />
$<br />
$<br />
35.00<br />
25.00<br />
35.00<br />
25.00<br />
$ 17.00<br />
$ 12.00<br />
$ 20.00<br />
$ 15.00<br />
14.00%<br />
15.00%<br />
9.00%<br />
10.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
50,000.00<br />
50,000.00<br />
50,000.00<br />
75,000.00<br />
5,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
250,000.00<br />
250,000.00<br />
300,000.00<br />
700,000.00<br />
100,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 106
Grand Rapids, Michigan<br />
Lansing, Michigan<br />
Contact<br />
<strong>NAI</strong> West Michigan<br />
+1 616 776 0100<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
1,322,233<br />
1,322,067<br />
690,695<br />
$61,589<br />
$50,372<br />
The West Michigan region has stabilized over the past 12<br />
months. Unemployment has decreased, real estate prices<br />
have not continued their erosion and occupancy rates have<br />
slightly increased. The health science industries continue to<br />
grow as evidenced by the completion of the Michigan State<br />
University Medical School ($90 million) and The Helen DeVos<br />
Children’s Hospital (464,000 SF). Wind turbine and electric<br />
vehicle battery manufacturers have helped improve the<br />
manufacturing outlook in the region.<br />
The industrial market experienced positive net absorption<br />
over the last 12 months. There is demand for Class A large<br />
industrial properties, as owners see the tremendous<br />
value in existing buildings versus new construction. The<br />
resurgence of a profitable automotive industry has benefited<br />
the tier one and two suppliers in West Michigan. There has<br />
been very little new construction, and little is anticipated in<br />
the near future. Vacant fully-improved industrial land is<br />
available in abundance at bargain prices. The number of<br />
industrial commercial real estate transactions increased<br />
slightly over the last 12 months.<br />
The retail sector experienced little change in the past year.<br />
Neighborhood shopping centers continue to be challenged<br />
by the difficulties that local retailers face in a tough<br />
economy. Lease renewals provide tenants the opportunity<br />
to reduce rent and terms on their lease. Regional shopping<br />
centers have for the most part maintained occupancy rates.<br />
On the positive side there are new and expanding retailers<br />
in the market that include O'Reilly Auto Parts, Smash Burger,<br />
Panera, Goodwill Industries and Newks. We don't expect that<br />
occupancy and rental rates will increase in the near term.<br />
The office market is evaluated in two distinct markets. The<br />
first market is suburban, which for the most part has seen<br />
vacancy increase and rates decrease, especially for Class<br />
B and Class C properties. Landlords with cash for tenant<br />
improvements are winning tenants, those without are in<br />
trouble. The second market is downtown office. Rates<br />
have stabilized and demand is up a bit. The growth and<br />
development of an active entertainment district and of<br />
reasonably priced housing have helped solidify downtown<br />
rates and occupancy.<br />
Contact<br />
<strong>NAI</strong> Mid-Michigan<br />
Vlahakis Commercial<br />
+1 517 487 9222<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
467,049<br />
481,234<br />
244,417<br />
$64,184<br />
$51,171<br />
The Greater Lansing area is comprised of Ingham, Eaton<br />
and Clinton counties and has a population of approximately<br />
450,000 people. While market conditions show signs of<br />
recovery with increased leasing activity, we continue to see<br />
the investment and development markets dry up, mostly due<br />
to unwilling lenders and too much inventory impacting all<br />
markets. Unemployment went from a low of 5.4% in 2007<br />
to currently almost 15%<br />
The Lansing market consists of more than 15 million SF of<br />
Class A, B and C office space. The majority of the space is<br />
located between the central Lansing and east Lansing<br />
submarkets. The office market has been impacted the worst<br />
as rates continue to fall by as much as 60% and vacancy<br />
hovers near 25%.<br />
Eaton County represents the majority of the industrial<br />
building in the marketplace with nearly 50%. Lansing’s<br />
industrial market has seen negative net absorption<br />
specifically in the central and east Lansing submarkets.<br />
General Motors currently owns or leases over 30% of the<br />
total industrial space within the tri-county region. There has<br />
not been much change in the industrial sector as the influx<br />
of new users is minimal.<br />
The Lansing retail markets consist mostly of regional malls,<br />
power centers and strip centers totaling over 10 million SF<br />
of space spread evenly across the market. The retail market<br />
seems to have rebounded with positive absorption, but<br />
with a downside of reduced rates and increase landlord<br />
incentives. Retail has been able to stay strong, despite<br />
consumer confidence and the highest unemployment rate<br />
in over a decade.<br />
The cost of prime land continues to drop as few new<br />
developments have entered the market. There has been<br />
a dramatic decline in interest from all markets except for<br />
Medical which has been driving the few new vacant land<br />
developments in this market.<br />
Overall the majority of the market activity and growth has<br />
come from the retail and the industrial sectors. Michigan<br />
continues to exhaust all efforts to attract and retain new and<br />
existing business to the area.<br />
Total Population<br />
Median Age<br />
36<br />
Total Population<br />
Median Age<br />
33<br />
Grand Rapids At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
$ 15.00 $ 25.00 $ 20.00 20.00%<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
12.00<br />
5.00<br />
12.00<br />
10.00<br />
5.00<br />
2.00<br />
2.25<br />
3.75<br />
7.50<br />
7.00<br />
8.00<br />
14.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
20.00<br />
10.00<br />
18.50<br />
15.00<br />
10.00<br />
3.50<br />
3.50<br />
4.75<br />
20.00<br />
10.00<br />
18.00<br />
35.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
16.00<br />
7.50<br />
15.25<br />
12.50<br />
7.50<br />
2.75<br />
2.90<br />
4.25<br />
13.75<br />
8.50<br />
13.00<br />
24.50<br />
20.00%<br />
20.00%<br />
25.00%<br />
25.00%<br />
25.00%<br />
10.00%<br />
10.00%<br />
10.00%<br />
10.00%<br />
15.00%<br />
10.00%<br />
5.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 1,000,000.00 $ 5,000,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
75,000.00<br />
40,000.00<br />
30,000.00<br />
75,000.00<br />
5,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
200,000.00<br />
100,000.00<br />
75,000.00<br />
400,000.00<br />
15,000.00<br />
Lansing At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
16.00<br />
14.00<br />
8.00<br />
16.00<br />
10.00<br />
6.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
19.00<br />
18.00<br />
12.00<br />
18.00<br />
14.00<br />
12.00<br />
$ 17.00<br />
$ 16.00<br />
$ 10.00<br />
$ 17.00<br />
$ 12.00<br />
$ 10.00<br />
15.00%<br />
14.00%<br />
25.00%<br />
15.00%<br />
20.00%<br />
26.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
1.25<br />
2.00<br />
4.00<br />
$<br />
$<br />
$<br />
4.00<br />
5.50<br />
6.50<br />
$<br />
$<br />
$<br />
3.00<br />
4.50<br />
5.25<br />
15.00%<br />
15.00%<br />
12.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
6.50<br />
4.00<br />
8.00<br />
15.00<br />
$<br />
$<br />
$<br />
$<br />
18.00<br />
16.00<br />
14.00<br />
30.00<br />
$ 12.25<br />
$ 10.00<br />
$ 10.00<br />
$ 18.00<br />
8.00%<br />
12.00%<br />
8.00%<br />
12.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD)<br />
Land in Office Parks<br />
Land in Industrial Parks)<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 107
Minneapolis/St. Paul, Minnesota<br />
Jackson, Mississippi<br />
Contact<br />
<strong>NAI</strong> <strong>Global</strong><br />
+1 609 945 4000<br />
Everest Real Estate<br />
Advisors<br />
+1 612 424 7542<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
3,313,924<br />
3,454,156<br />
1,901,441<br />
$86,226<br />
$66,937<br />
The Twin Cities Metro Area (TCMA) enjoys a diverse<br />
employment base of medical technology, finance, agriculture,<br />
food processing, printing and publishing, manufacturing,<br />
health care, education, arts and entertainment. Although<br />
manufacturing plays a major role in the economy<br />
Minneapolis hosts a large white-collar employment sector,<br />
a large high-technology sector, a well-educated work force,<br />
high household incomes and rates of population growth<br />
more than twice the overall rate for the Midwest.<br />
A gradual recovery is taking place in the TCMA office<br />
market. Vacancy has decreased slightly with asking rates<br />
up slightly year-over-year. However, owners are offering 3<br />
to 12 months free rent impacting the effective rate. Notable<br />
transactions include a 153,750 SF lease by Ecolab University,<br />
76,728 SF lease by Agri and a 75,121 SF lease by Wells<br />
Fargo.<br />
In the industrial market, only 290,000 SF of new space<br />
came online in 2011; this subdued activity prevented<br />
vacancy from getting out of hand. Vacancy, while still<br />
elevated, has decreased slightly and rent growth has<br />
improved slightly. Notable leases included the 129,508 SF<br />
lease by Great Northern and the 129,120 SF lease by<br />
Magno.<br />
The apartment market is flourishing, ranking as one of the<br />
top markets in the country. With absorption surging to 6,400<br />
units in 2010 and the vacancy rate below 3% across the<br />
market, the fundamentals are strong. The net market rate<br />
absorption through September was 2,950 units. There were<br />
just 560 units of new supply. Vacancy in the TCMA ended<br />
Q3 at just 2.3%, down 190 bps. 10,000 units have been<br />
announced for delivery over the next 12 to 36 months which<br />
will impact demand over the next two to four years.<br />
The 64 million SF retail centers are experiencing high<br />
vacancy rates and lower rental rates. Owners are putting<br />
more money into TI’s in order to get deals done. Positive<br />
signs in the market include Target’s acquisition of up to 220<br />
leases of Zellers, Dish Network’s purchase of Blockbuster<br />
Video’s assets after its bankruptcy and Whole Foods’<br />
addition of two locations in the TCMA. It is expected that<br />
progress in this market sector will be slow in <strong>2012</strong>.<br />
Contact<br />
<strong>NAI</strong> Mark S. Bounds<br />
Realty Partners<br />
+1 601 856 7377<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
541,749<br />
551,830<br />
265,335<br />
$63,736<br />
$45,770<br />
Jackson, Mississippi, anchor of the metro area, ranked third out<br />
of America’s 100 largest metro areas for the best “Bang for Your<br />
Buck” city according to Forbes magazine. The study considered<br />
affordability, housing rates, etc. Jackson’s economy finds<br />
its stability and strength in three main sectors: government,<br />
healthcare and education. The state has continued success in<br />
drawing companies that service the auto manufacturing,<br />
telecommunications and government industries with a new<br />
sector seeing light: clean energy.<br />
Five companies, four of them new to Mississippi, are committed<br />
to manufacturing clean energy or clean energy related products<br />
in different areas of the state. Lockheed Martin has assumed<br />
33,000 SF on the 4th floor of the former WorldCom building<br />
(South Pointe Business Park) as a new mission support center.<br />
Laclede Chain Manufacturing Company has bought a former<br />
automotive plant in Ceres Industrial Park (Vicksburg) with full<br />
production to begin within a year. Capital City Beverages signed<br />
a 10,000 SF lease located in the Madison/Ridgeland market.<br />
Fred’s Discount Store began its lease of a 17,000 SF space in<br />
Ridgeland, as well.<br />
Across the board, vacancy rates have increased while rental<br />
rates have decreased for the industrial, office and retail<br />
sectors. The average asking rental rate for all types of office<br />
space in the Jackson Metropolitan Statistical Area is<br />
$16.81/SF per year with a vacancy rate of 11.2%, an increase<br />
from the 10.9% rate seen in Q4 of 2010. The average asking<br />
rental rate for industrial space is $3.50/SF per year. The overall<br />
vacancy rate for industrial space stands at 14.2%, up from<br />
12.7% in Q4 of 2010. Flex space has a vacancy rate of 15.4%<br />
(14% Q4 2010) and warehouse space has a vacancy rate of<br />
14.1% (12.6% Q4 2010). The average asking rental rate for<br />
retail space is $9.27/SF per year; this reflects a 7.87%<br />
decrease from $10/SF in Q4 2010 and is a 2.1% decrease<br />
from $9.47/SF in Q2 2011.<br />
Total Population<br />
Median Age<br />
35<br />
Total Population<br />
Median Age<br />
33<br />
Minneapolis/St. Paul At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
N/A<br />
$ 10.00 $<br />
N/A<br />
35.00<br />
N/A<br />
$ 15.08<br />
N/A<br />
12.80%<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
$ 5.00<br />
N/A<br />
$ 30.00<br />
N/A<br />
$ 13.69<br />
N/A<br />
19.80%<br />
N/A<br />
Class A (Prime)<br />
$ 10.00 $ 34.00 $ 19.12 15.90%<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 5.00 $ 30.00 $ 16.10 15.50%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
3.50<br />
4.00<br />
2.00<br />
$<br />
$<br />
$<br />
5.35<br />
9.50<br />
25.00<br />
$<br />
$<br />
$<br />
4.55<br />
7.50<br />
5.40<br />
10.70%<br />
10.10%<br />
20.20%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
$<br />
$<br />
$<br />
5.00<br />
5.00<br />
6.10<br />
$<br />
$<br />
$<br />
55.00<br />
30.00<br />
30.00<br />
$ 19.17<br />
$ 15.99<br />
$ 17.29<br />
17.90%<br />
10.30%<br />
7.70%<br />
Regional Malls<br />
$ 11.23 $ 25.74 $ 18.04 4.30%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Jackson At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
Flex<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
25.00<br />
25.00<br />
14.00<br />
25.00<br />
16.67<br />
13.33<br />
2.82<br />
2.00<br />
4.02<br />
N/A<br />
6.13<br />
14.00<br />
15.43<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
30.00<br />
30.00<br />
17.00<br />
30.00<br />
25.46<br />
16.58<br />
5.85<br />
3.00<br />
9.04<br />
N/A<br />
14.48<br />
18.45<br />
32.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
25.00<br />
27.00<br />
17.00<br />
27.00<br />
19.46<br />
15.89<br />
3.22<br />
2.50<br />
7.75<br />
N/A<br />
8.75<br />
17.22<br />
21.05<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
17.70%<br />
10.50%<br />
14.10%<br />
N/A<br />
15.40%<br />
N/A<br />
11.10%<br />
1.50%<br />
1.50%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
217,800.00<br />
108,900.00<br />
20,000.00<br />
87,120.00<br />
217,800.00<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
348,480.00<br />
152,460.00<br />
60,000.00<br />
174,240.00<br />
348,480.00<br />
N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 108
Kansas City, Missouri<br />
St. Louis, Missouri<br />
Contact<br />
<strong>NAI</strong> Capital Realty<br />
Kansas City<br />
+1 913 469 4600<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
2,044,888<br />
2,081,972<br />
1,108,660<br />
$74,054<br />
$58,283<br />
Kansas City straddles the Missouri/Kansas border. The<br />
region continues to show positive signs of recovery over the<br />
last year. Private education, engineering, financial services,<br />
healthcare and auto sectors provided recent gains and the<br />
services sector should lead future employment gains.<br />
According to a recent <strong>report</strong>, Missouri and Kansas are top<br />
10 pro-business states which will improve job growth.<br />
The industrial sector has been positively impacted with an<br />
increased demand by auto manufacturing suppliers<br />
supporting both the General Motors Fairfax plant in the<br />
Wyandotte County submarket and the Ford Claycomo facility<br />
in the Clay/Platte County submarket. In aggregate, over<br />
1,000,000 SF of space has been leased over the last 18<br />
months to this industry segment. This trend should continue<br />
in the coming year with Ford’s new labor agreement which<br />
includes a commitment by Ford to invest $1.1 billion and<br />
create 1,600 new jobs in the Kansas City area.<br />
The office market worsened in 2011 as vacancy increased<br />
to 19.1% from 18.6%. Class A improved to 15.5% from<br />
16.7% and Class B increased from 19.8% to 21.1%. Flight<br />
to quality continued with pricing pressure in all classes.<br />
Larger submarkets improved in Class A vacancy. Both<br />
Midtown/Plaza and South Kansas City fell over 4%. Incentives<br />
from states and municipalities drove shifts from Missouri to<br />
Kansas, and to a lesser extent, vice versa. The incentive<br />
practice is controversial as typically metro employment is<br />
not increased. Johnson County, Kansas attracted many<br />
deals with South Kansas City, Missouri, a distant second.<br />
We expect continued drops in Class A vacancies in dynamic<br />
submarkets with rents increasing incrementally by year end.<br />
Absent of improved employment, metrowide Class B<br />
vacancy rates will face pressure throughout <strong>2012</strong>.<br />
The retail market has improved, somewhat buoyed by<br />
continued repositioning of several centers and the arrival<br />
of new retailers. The Legends Center near the Kansas<br />
Speedway converted to an outlet format. New retailers to<br />
the area include Trader Joe’s (two locations), Nordstrom<br />
Rack and Buy Buy Baby. Both Legoland Discovery and<br />
Merlin Entertainment Aquarium have committed to Crown<br />
Center in the CBD.<br />
Contact<br />
<strong>NAI</strong> DESCO<br />
+1 314 994 4444<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
2,842,793<br />
2,868,012<br />
1,494,129<br />
$64,336<br />
$52,709<br />
Through 2011, the St. Louis metro area employment has<br />
expanded an average of 0.1% per month, mirroring and slightly<br />
outperforming the national trend. Key industries that have<br />
experienced stronger than average growth in 2011 include<br />
transportation/distribution, health/education, manufacturing<br />
and other services such as retail trade and administration. In<br />
the second half of 2011 the Missouri coincident economic<br />
activity index has begun to increase appreciably, pointing<br />
towards the potential for improved growth in <strong>2012</strong>.<br />
After dropping below 8% at year end 2010, industrial vacancy<br />
rates climbed to 8.8% during 2011. Less than 40,000 SF of<br />
new space was delivered in 2011, a historic low, however<br />
absorption stands at negative (912,892) SF for the year. This<br />
has placed further downward pressure on asking rates which<br />
have dropped by nearly 4%. Significant transactions in 2011<br />
include Walgreens (500,000 SF), Cenevo Inc. (220,000 SF),<br />
Waters of America (145,000 SF) and American Tire Distributors<br />
(123,000 SF). A 139,000 SF building with 0% space<br />
pre-leased is the only new project currently in development.<br />
Office vacancy rates rose 1% in 2011 and rental rates are<br />
still declining slightly; tenants continue to obtain lease<br />
concessions. The high end Class A market is the brightest spot<br />
in St. Louis’ office market, with positive growth seen in the<br />
delivery of the National Records & Archives building (474,690<br />
SF), which is 100% leased, and the 100% pre-leased BJC<br />
Healthcare HQ (300,000 SF) currently under construction.<br />
Other significant transactions include Peabody Energy<br />
(215,362 SF), Amdocs (117,000 SF) and Emerson Electric<br />
(72,000 SF).<br />
In the retail sector both vacancy and asking rates have<br />
stabilized over the past year. Mid-box stores have stepped up<br />
their market activity. Discount retailers in particular are<br />
expanding, including Big Lots, Aldi, Weekends Only Furniture<br />
and Dollar stores. Walmart and Sam’s Club are planning<br />
multiple new stores in the St. Louis metro. Kohls and Menards<br />
are opening new locations in outstate Missouri. Nordstrom<br />
opened its second St. Louis location, with a second Nordstrom<br />
Rack to open in <strong>2012</strong>. Two significant outlet malls are<br />
proposed for the west St. Louis submarket, continuing the<br />
trend of discount retail expansion.<br />
Total Population<br />
Median Age<br />
36<br />
Total Population<br />
Median Age<br />
37<br />
Kansas City At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
Premium (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
18.25<br />
14.00<br />
29.50<br />
18.75<br />
14.50<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
23.50<br />
21.00<br />
29.50<br />
32.00<br />
27.00<br />
N/A<br />
$ 18.30<br />
$ 15.87<br />
$ 29.50<br />
$ 21.80<br />
$ 17.16<br />
N/A<br />
15.40%<br />
25.60%<br />
100.00%<br />
15.20%<br />
18.50%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
3.25<br />
2.75<br />
4.00<br />
$<br />
$<br />
$<br />
5.85<br />
6.05<br />
16.50<br />
$<br />
$<br />
$<br />
3.85<br />
3.35<br />
7.52<br />
6.50%<br />
8.30%<br />
13.80%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
10.00<br />
8.75<br />
14.00<br />
13.00<br />
$<br />
$<br />
$<br />
$<br />
24.25<br />
26.00<br />
23.65<br />
35.00<br />
$ 13.59<br />
$ 12.32<br />
$ 17.35<br />
$ 25.75<br />
5.80%<br />
14.30%<br />
6.80%<br />
6.60%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 1,829,520.00 $ 3,789,720.00<br />
Land in Office Parks<br />
$ 163,350.00 $ 588,060.00<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
40,000.00<br />
30,000.00<br />
$<br />
$<br />
175,000.00<br />
200,000.00<br />
Retail/Commercial Land<br />
Residential<br />
$ 40,000.00<br />
N/A<br />
$ 1,089,000.00<br />
N/A<br />
St. Louis At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
16.00<br />
11.00<br />
30.00<br />
20.00<br />
15.50<br />
2.75<br />
2.00<br />
7.25<br />
7.00<br />
8.00<br />
8.00<br />
12.75<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
23.00<br />
16.00<br />
35.00<br />
30.00<br />
20.00<br />
5.50<br />
5.95<br />
12.00<br />
20.50<br />
22.00<br />
20.00<br />
39.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
19.25<br />
14.60<br />
31.00<br />
23.25<br />
17.50<br />
3.80<br />
2.75<br />
9.00<br />
11.20<br />
12.60<br />
13.40<br />
15.95<br />
N/A<br />
12.10%<br />
17.50%<br />
4.20%<br />
10.50%<br />
11.70%<br />
8.80%<br />
31.00%<br />
33.00%<br />
4.20%<br />
10.70%<br />
8.90%<br />
8.80%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
N/A<br />
174,240.00<br />
87,120.00<br />
45,000.00<br />
$<br />
$<br />
$<br />
N/A<br />
392,040.00<br />
324,522.00<br />
304,920.00<br />
Retail/Commercial Land<br />
$ 174,240.00 $ 2,215,000.00<br />
Residential<br />
$ 21,780.00 $ 522,720.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 109
Billings, Montana<br />
Bozeman, Montana<br />
Contact<br />
<strong>NAI</strong> Business Properties<br />
+1 406 256 5000<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
161,619<br />
175,892<br />
87,109<br />
$63,824<br />
Billings is Montana’s largest city located in the heart of the<br />
Northern Rockies. Billings is an urban trade center with the<br />
most diverse economy in the state, highlighted by the<br />
healthcare industry and energy development. Retailers<br />
continue to see growth in the market. The industrial sector<br />
has seen positive absorption primarily due to the proximity<br />
to the Bakken oil field in eastern Montana and western North<br />
Dakota.<br />
The office market saw a 15% to 20% decrease in rental<br />
rates and demand. Vacancy rates stayed somewhat level.<br />
Smaller transactions dominated the activity. Vacancy rates<br />
dropped in the overall market from 12.51% to 9.92% in<br />
2011.<br />
The industrial market continued to see a decrease in the<br />
availability of space as energy firms and distributors slowly<br />
absorbed product. Wilson Supply was the largest lease at<br />
18,000 SF. The total available square footage decreased to<br />
approximately 549,000. This is the lowest level since 2003.<br />
No new spec projects were announced.<br />
The retail market started to gain momentum as retailers<br />
increased their expansion into the market. Carmike<br />
Cinemas, Cabela’s and Sam’s Club were the notable entries.<br />
The first “de-mall” in the state of Montana was commenced<br />
in 2009 at the former West Park Plaza in Central Billings.<br />
The project is anchored by Sears and Hastings. Vacancy<br />
rates in the retail sector were below 5% in the power center<br />
areas as Billings continued to service a regional retail trade<br />
area of over 300,000. This trade area is unique to the region<br />
as Billings is the largest city for 500 miles in any direction.<br />
Investments were slow in the market due to lack of product<br />
available for sale. Owners continued to keep product out of<br />
the market for fear that replacement properties could not<br />
be found. Multifamily product showed low vacancy rates in<br />
the market and new product continued to come on line in<br />
2011. Unemployment remained between 7% and 8% for<br />
the Yellowstone County.<br />
Contact<br />
<strong>NAI</strong> Landmark<br />
+1 406 556 5005<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
98,729<br />
104,807<br />
58,328<br />
$62,344<br />
Bozeman is the primary urban center in southwestern<br />
Montana and is the seat of Gallatin County with a population<br />
of 90,000. Located just 90 miles north of Yellowstone<br />
National Park and only 45 miles north of the Big Sky resort<br />
community, Bozeman represents an attractive primary and<br />
secondary home market. Gallatin County continues to be<br />
the fastest growing county in the state.<br />
Anchored by an economy rich in agriculture, the greater<br />
Bozeman market has emerged as a trade region built on the<br />
business spin-offs of research successes of Montana State<br />
University, making Bozeman one of the leading smaller<br />
urban centers in the nation. Bozeman’s economy continues<br />
to be a primary performer in the state with 2.1% annual<br />
growth. Major employers are Montana State University,<br />
RightNow Technologies and Ligocyte Pharmaceuticals.<br />
While the southwest Montana economy is somewhat<br />
cushioned from the volatility experienced nationally, there<br />
has been a softening in demand for office and retail product<br />
that will likely slow the absorption of a small oversupply.<br />
Vacancy is estimated at 8% in the office segment and 7%<br />
in the retail markets. <strong>Market</strong> rents have firmed from the<br />
2009 highs, in the range of $14 to $16/SF per year for Class<br />
A space, but softened to $7 to $10/SF per year for Class B<br />
space. Recent retail tenants to ink deals are REI for 30,000<br />
SF, Kohl’s, Ulta Cosmetics and Shoe Carnival.<br />
In the industrial sector, warehouse demand has weakened<br />
slightly with the decline in new housing starts. Demand is<br />
limited for high-tech flex and R&D space. In 2011, the local<br />
commercial markets can anticipate a more aggressive entry<br />
of bank-owned property with the potential for a further<br />
softening of property values through the bank sell-off period.<br />
The historic downtown Bozeman retail and office markets<br />
remain one of the state’s finest. New private investment<br />
downtown has been stimulated by a $12 million, 435-car<br />
parking garage. A natural gas explosion in March of 2009<br />
destroyed a quarter of a city block that is now in redevelopment.<br />
Median<br />
Household Income<br />
$ 50,726<br />
Median<br />
Household Income<br />
$48,724<br />
Total Population<br />
Median Age<br />
37<br />
Total Population<br />
Median Age<br />
39<br />
Billings At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
24.00<br />
16.00<br />
10.00<br />
18.00<br />
12.00<br />
9.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
28.00<br />
22.00<br />
14.00<br />
26.00<br />
16.00<br />
12.00<br />
$ 26.00<br />
$ 19.00<br />
$ 12.00<br />
$ 20.00<br />
$ 14.00<br />
$ 10.00<br />
N/A<br />
4.00%<br />
16.00%<br />
15.00%<br />
10.00%<br />
11.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
2.25<br />
3.50<br />
$<br />
$<br />
4.75<br />
6.00<br />
$<br />
$<br />
3.50<br />
5.00<br />
6.00%<br />
4.00%<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
14.00<br />
8.00<br />
9.00<br />
14.00<br />
22.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
16.00<br />
14.00<br />
13.00<br />
19.00<br />
28.00<br />
$ 15.00<br />
$ 12.00<br />
$ 11.00<br />
$ 16.50<br />
$ 25.00<br />
N/A<br />
11.00%<br />
9.00%<br />
5.00%<br />
5.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 875,000.00 $ 1,100,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
217,800.00<br />
87,000.00<br />
100,000.00<br />
305,000.00<br />
60,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
304,000.00<br />
200,000.00<br />
120,000.00<br />
609,000.00<br />
175,000.00<br />
Bozeman At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$<br />
$<br />
12.00<br />
14.00<br />
$<br />
$<br />
17.00<br />
16.00<br />
$ 14.50<br />
$ 15.00<br />
2.00%<br />
8.00%<br />
Class B (Secondary)<br />
suburban offIce<br />
$ 7.00 $ 9.00 $ 8.00 8.00%<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$<br />
$<br />
13.00<br />
10.00<br />
$<br />
$<br />
14.00<br />
12.00<br />
$ 13.50<br />
$ 11.00<br />
9.00%<br />
15.00%<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
$<br />
7.00<br />
3.75<br />
4.25<br />
6.50<br />
$<br />
$<br />
$<br />
$<br />
10.00<br />
4.75<br />
5.00<br />
9.00<br />
$<br />
$<br />
$<br />
$<br />
8.50<br />
4.25<br />
4.75<br />
7.75<br />
18.00%<br />
18.00%<br />
15.00%<br />
7.00%<br />
Downtown<br />
$ 13.00 $ 18.00 $ 15.50 7.00%<br />
Neighborhood Service Centers $ 8.00 $ 10.00 $ 9.00 8.00%<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
16.00<br />
18.00<br />
$<br />
$<br />
25.00<br />
25.00<br />
$ 20.50<br />
$ 21.50<br />
8.00%<br />
3.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 850,000.00 $ 1,200,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
185,000.00<br />
98,000.00<br />
85,000.00<br />
275,000.00<br />
12,500.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
218,000.00<br />
175,000.00<br />
165,000.00<br />
435,000.00<br />
40,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 110
Missoula, Montana<br />
Lincoln, Nebraska<br />
Contact<br />
<strong>NAI</strong> Crowley Moore<br />
+1 406 721 1111<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
110,961<br />
117,590<br />
62,210<br />
$57,760<br />
$43,637<br />
Missoula is known as the “Garden City” and is Montana’s<br />
second largest city, with a population of approximately<br />
64,000. Missoula is the center of higher education,<br />
medicine, business, retail shopping, entertainment, culture<br />
and recreation for Western Montana. According to Salish<br />
Tribal History the word “Missoula” means “the cold chilling<br />
waters”.<br />
Traditionally timber and mining were the primary industries<br />
throughout the state. Over the last two decades Missoula’s<br />
economy has diversified with major growth in tourism, retail,<br />
medicine, manufacturing, trucking and customer service<br />
centers. Missoula is located on Interstate 90 approximately<br />
198 miles east of Spokane, Washington and 352 miles west<br />
of Billings, Montana. Missoula is located at the junction of<br />
Interstate 90 and Highway 93.<br />
Residential home sales are slow. The Old Saw Mill District<br />
located across the Clark Fork River from Missoula’s CBD is<br />
expected to receive subdivision approval in <strong>2012</strong>. The motel<br />
sector is still expanding with the construction of a new<br />
Holiday Inn Express. The Stimson lumber mill in Bonner<br />
closed in 2008 and the site is now under contract for sale<br />
to a local developer. Missoula’s Trade Area population<br />
continues to grow with the 2011 tertiary trade area<br />
estimated at over 361,000.<br />
Retail expansion is slow on North Reserve Street despite the<br />
additions of Harbor Freight Tools and Tuesday Morning.<br />
Macy’s downtown location is vacant. National restaurant<br />
expansion continues with the addition of Buffalo Wild Wings<br />
adjacent to Home Depot. One brewery and two brew pubs<br />
have been added to the downtown market.<br />
Missoula County Development Park located adjacent to<br />
the Missoula County International Airport has only a few<br />
remaining lots for sale. A sewer main extension has been<br />
constructed along Highway 10 to the Wye, allowing for<br />
commercial and residential development. Development in<br />
multifamily units has increased with nearly 400 units under<br />
construction. Vacancy rates average approximately 4%. The<br />
average rental rate for a one bedroom apartment is $ 675<br />
per month. The unemployment rate is 7.1%.<br />
Contact<br />
<strong>NAI</strong> FMA Realty<br />
+1 402 441 5800<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
306,090<br />
326,247<br />
176,853<br />
$65,499<br />
$53,061<br />
Lincoln’s market continues to fare better than many larger<br />
cities in the US with its diverse stable economy and skilled<br />
workforce. Unemployment remains among the lowest in the<br />
country. The capital city appeals to start-ups and industry<br />
leading companies eager to take advantage of its business<br />
climate and quality of life. Advanced manufacturing, finance<br />
and healthcare are major growth industries. Recent publicprivate<br />
developments have led to more construction cranes<br />
in the CBD than in decades.<br />
Post-recession the office markets have been the slowest to<br />
recover. Leasing activity, however, started to pick up in Q2<br />
2011, with overall vacancy now at 11.6%. Competitive rates<br />
and incentive packages spurred office deals to close. Office<br />
sales to end-users and investors are increasing. One of the<br />
largest lease signings was Gallup Inc. (29,000 SF) for a redevelopment<br />
project in the southeast submarket.<br />
The retail market experienced a rebound in 2011 and remains<br />
the strongest sector. Overall the vacancy rate declined to 8.3%<br />
with net absorption of 382,583 SF in the last year. Much of<br />
this positive movement was driven by attractive rental rates<br />
and little new development. Vacant Class A locations have<br />
backfilled quickly. Sam’s Club announced a second location<br />
in south Lincoln while Natural Grocers by Vitamin Cottage,<br />
Cheddar’s Casual Café, Topper’s Pizza, Dickey’s BBQ and<br />
White House Black <strong>Market</strong> entered the market.<br />
Lincoln’s industrial market showed signs of life as the overall<br />
vacancy rate declined to the lowest level <strong>report</strong>ed at 8.0%<br />
since its peak at 12.2% Q2 2010. Nevertheless lower vacancy<br />
has not translated into higher lease rates or new construction.<br />
Rates will remain soft until additional jobs are created. Northwest,<br />
the hardest hit submarket during the recession that<br />
peaked at 1.8 million SF vacant, is gaining interest from tenants.<br />
Industrial sales activity remains mostly limited to users<br />
looking for bargains.<br />
The investment market intensified as local investors competed<br />
with national investors for properties. Significant transactions<br />
were Casey’s General Stores acquisition of 44-convenience<br />
store chain for $45.8 million; two CBD office transactions over<br />
$5 million; and notably, the $22 million paid for a 152,000<br />
SF office 100% leased to Dell Perot Systems.<br />
Total Population<br />
Median Age<br />
33<br />
Total Population<br />
Median Age<br />
31<br />
Missoula At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$ 16.00<br />
$ 14.00<br />
$ 10.00<br />
N/A<br />
$ 12.00<br />
$ 23.00<br />
$ 18.00<br />
$ 15.00<br />
N/A<br />
$ 16.00<br />
$ 16.00<br />
$ 15.00<br />
$ 11.00<br />
N/A<br />
$ 13.50<br />
16.00%<br />
7.00%<br />
6.00%<br />
N/A<br />
7.00%<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 9.00 $ 14.00 $ 12.00 7.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
1.00<br />
1.00<br />
N/A<br />
$<br />
$<br />
6.00<br />
8.00<br />
N/A<br />
$<br />
$<br />
4.00<br />
5.00<br />
N/A<br />
8.00%<br />
6.00%<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
$<br />
$<br />
9.00<br />
9.00<br />
$ 21.00<br />
$ 13.00<br />
$ 15.00<br />
$ 11.00<br />
10.00%<br />
9.00%<br />
Community Power Center<br />
Regional Malls<br />
$ 15.00<br />
$ 16.00<br />
$ 18.00<br />
$ 30.00<br />
$ 16.00<br />
$ 25.00<br />
3.00%<br />
2.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
$ 1,306,800.00<br />
N/A<br />
$ 2,178,000.00<br />
N/A<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
150,000.00<br />
100,000.00<br />
300,000.00<br />
50,000.00<br />
$<br />
$<br />
$<br />
$<br />
200,000.00<br />
170,000.00<br />
500,000.00<br />
125,000.00<br />
Lincoln At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
14.75<br />
8.00<br />
12.50<br />
17.00<br />
8.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
20.00<br />
22.00<br />
21.00<br />
23.00<br />
22.00<br />
N/A<br />
$ 16.16<br />
$ 15.27<br />
$ 18.35<br />
$ 20.64<br />
$ 15.52<br />
N/A<br />
7.30%<br />
17.30%<br />
62.20%<br />
7.20%<br />
13.40%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$<br />
$<br />
$<br />
$<br />
2.00<br />
2.00<br />
4.00<br />
6.00<br />
$<br />
$<br />
$<br />
$<br />
8.00<br />
5.00<br />
12.00<br />
19.00<br />
$<br />
$<br />
$<br />
$<br />
4.27<br />
2.30<br />
6.45<br />
8.75<br />
8.10%<br />
8.10%<br />
8.20%<br />
12.50%<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
6.00<br />
6.00<br />
23.00<br />
$<br />
$<br />
$<br />
25.00<br />
25.00<br />
35.00<br />
$ 13.19<br />
$ 11.76<br />
$ 25.18<br />
11.40%<br />
10.10%<br />
17.10%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
N/A<br />
55,000.00<br />
40,000.00<br />
65,000.00<br />
$<br />
$<br />
$<br />
N/A<br />
280,000.00<br />
110,000.00<br />
326,000.00<br />
Retail/Commercial Land<br />
$ 230,000.00 $ 1,800,000.00<br />
Residential<br />
$ 25,000.00 $ 100,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 111
Omaha, Nebraska<br />
Las Vegas, Nevada<br />
Contact<br />
<strong>NAI</strong> NP Dodge<br />
+1 402 255 6060<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
881,493<br />
946,003<br />
483,004<br />
Located in the middle of the US, the greater Omaha market<br />
(consisting of nearly one million people) has remained relatively<br />
stable. In fact, Brookings Institution recently ranked Omaha as<br />
one of the “20 strongest performing metro areas” (Brookings<br />
Institution – September 2011). And Yahoo! ranked Omaha as<br />
the number three place with “good jobs and cheap housing.<br />
(Yahoo! Finance – July 2011).<br />
In Q3 of 2011, Omaha's office market experienced its first<br />
quarter of negative absorption in more than two years.<br />
However, this is not necessarily the result of a weakened<br />
market, as the leasing activity remains strong. The Class A<br />
vacancy rate remains consistently under 7% while the Class<br />
B appears stable around 16 %.<br />
The recent retail deals have been smaller in size with more<br />
landlord concessions being given. With the exception of new<br />
product, rental rates have fallen slightly. There have been more<br />
deals done with non-traditional retailers, such as Goodwill<br />
Industries and local colleges and churches. Borders recently<br />
closed a few stores in the market and several once strong retail<br />
projects, such as Crossroads Mall, are now being planned for<br />
redevelopment due to high vacancy rates. Overall retail<br />
vacancy for Omaha is 11.5%. Restaurants seem to be the<br />
most active, with new concepts continuing to be brought to<br />
Omaha.<br />
The Omaha industrial market experienced its fifth consecutive<br />
quarter of positive absorption. Owner-user sales accounted for<br />
a significant percentage of the positive absorption in Q3.<br />
Tenants are looking for and finding (in some cases) space that<br />
is already built out to reduce their cost of moving. Rates<br />
are low and stable. Incentives and free rents are firming<br />
up. Virtually no spec building is occurring which is making<br />
suitable available inventory harder to obtain but causing<br />
existing inventory to become leased up, thus the decrease in<br />
vacancy rate from 6.7% to 5.9%.<br />
Contact<br />
<strong>NAI</strong> Las Vegas<br />
+1 702 796 8888<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
2,003,765<br />
2,238,165<br />
1,048,594<br />
Despite having lead the nation in many categories in 2011,<br />
such as unemployment and foreclosures, southern Nevada<br />
made other headlines that suggest the market is bouncing<br />
along the bottom. On a year-over-year basis gaming revenue,<br />
visitor volume and taxable sales have increased. Auction.com<br />
held one of the largest commercial real estate auctions in US<br />
history in May putting $1 billion worth of local REO and notes<br />
on the block. Roughly 90% of the assets traded.<br />
Property sales in southern Nevada have increased in 2011<br />
as compared to the past few years. By Q3 approximately 2.75<br />
million SF traded at an average price of $67/SF. The most<br />
notable activity could be largely attributed to one group. MIG<br />
Real Estate based in Newport Beach, California invested more<br />
than $62 million in Las Vegas. Their acquisition activity is<br />
comprised of four office complexes and a shopping center.<br />
MIG resold one of the office complexes, comprised of<br />
100,000 SF, for $14.5 million in July. MIG paid 68% less for<br />
the property 10 months prior.<br />
Through Q3 of 2011 office vacancy ended at 19.3%. Total<br />
inventory was approximately 60,500,000 SF with 334,000<br />
SF of positive net absorption. Average asking rental rates for<br />
all classes was $20.64/SF per year. 10 new buildings were<br />
completed totaling 664,227 SF with 592,677 SF under<br />
construction.<br />
Industrial vacancy decreased to 15.3%. Total inventory is<br />
approximately 112,264,620 SF with -253,771 SF of net<br />
absorption. Rental rates ended at $6.28/SF per year. Two new<br />
building were completed totaling 44,938 SF with 0 SF under<br />
construction.<br />
Retail vacancy decreased to 10.9%. Total inventory<br />
comprised of all property classes is approximately<br />
115,905,499 SF with -426,623 SF of net absorption.<br />
Average asking rents have fallen to $17.63 SF per year. Eight<br />
new buildings were completed totaling 44,938 SF with<br />
400,743 SF currently under construction.<br />
Household<br />
Average Income<br />
$70,745<br />
Household<br />
Average Income<br />
$76,550<br />
Median<br />
Household Income<br />
$57,900<br />
Median<br />
Household Income<br />
$59,706<br />
Total Population<br />
Median Age<br />
34<br />
Total Population<br />
Median Age<br />
34<br />
Omaha At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
18.00<br />
12.50<br />
N/A<br />
19.75<br />
9.25<br />
N/A<br />
$ 25.00<br />
$ 18.50<br />
N/A<br />
$ 30.81<br />
$ 25.00<br />
N/A<br />
$ 20.00<br />
$ 14.74<br />
N/A<br />
$ 24.80<br />
$ 18.72<br />
N/A<br />
7.20%<br />
17.20%<br />
N/A<br />
6.50%<br />
15.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
1.75<br />
1.00<br />
$<br />
$<br />
4.66<br />
3.65<br />
$<br />
$<br />
3.00<br />
2.33<br />
7.30%<br />
2.80%<br />
High Tech/R&D<br />
retaIl<br />
$ 3.50 $ 12.00 $ 5.99 9.20%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
3.25<br />
9.30<br />
7.53<br />
6.00<br />
$ 25.00<br />
$ 19.81<br />
$ 22.29<br />
$ 34.00<br />
$ 10.27<br />
$ 11.97<br />
$ 15.30<br />
$ 11.93<br />
5.00%<br />
13.00%<br />
11.30%<br />
19.50%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 1,655,280.00 $ 1,655,280.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
196,020.00<br />
87,000.00<br />
N/A<br />
N/A<br />
N/A<br />
$<br />
$<br />
522,720.00<br />
196,000.00<br />
N/A<br />
N/A<br />
N/A<br />
Las Vegas At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
16.20<br />
9.00<br />
N/A<br />
18.60<br />
9.20<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
30.00<br />
24.00<br />
N/A<br />
30.72<br />
24.00<br />
N/A<br />
$ 23.00<br />
$ 16.50<br />
N/A<br />
$ 30.12<br />
$ 20.40<br />
N/A<br />
6.80%<br />
6.50%<br />
N/A<br />
30.50%<br />
21.50%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
4.32<br />
4.20<br />
6.00<br />
$<br />
$<br />
$<br />
8.52<br />
6.00<br />
9.48<br />
$<br />
$<br />
$<br />
4.80<br />
5.10<br />
7.74<br />
10.20%<br />
14.70%<br />
29.70%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
5.04<br />
14.04<br />
11.88<br />
N/A<br />
$<br />
$<br />
$<br />
14.76<br />
21.12<br />
23.88<br />
N/A<br />
$ 13.32<br />
$ 16.32<br />
$ 19.32<br />
N/A<br />
18.80%<br />
13.70%<br />
11.00%<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
172,413.00<br />
100,443.00<br />
160,000.00<br />
100,000.00<br />
100,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
802,238.00<br />
212,000.00<br />
430,000.00<br />
501,279.00<br />
430,633.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 112
Reno, Nevada<br />
Manchester, New Hampshire<br />
Contact<br />
<strong>NAI</strong> Alliance<br />
+1 775 336 4600<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
894,424<br />
949,205<br />
487,973<br />
$72,127<br />
$57,821<br />
The Reno economy has traditionally been based on gaming<br />
and tourism with warehousing and manufacturing as the<br />
lead non-gaming industry. During good economic times,<br />
Reno’s unemployment rate was below the national average.<br />
It is now 13.4%. Overall activity in 2011 increased in office<br />
and industrial with retail remaining stable compared to the<br />
prior year’s numbers. With election year politicking and the<br />
European debt issues, we anticipate a stable <strong>2012</strong> as<br />
companies wait to see a clearer economic direction.<br />
A slight increase in the vacancy rates of the Central Reno<br />
and Airport submarkets was not deep enough to cut into the<br />
overall positive quarters that the Reno/Sparks office market<br />
experienced. If this trend in positive net absorption continues,<br />
we should see a 2% drop in vacancy. These decreased<br />
vacancy rates were the result of positive net absorption in<br />
the South Meadows and Downtown submarkets, with<br />
30,391 SF and 17,127 SF respectively. Until the office<br />
market experiences several consecutive quarters of declining<br />
vacancy, rental rates should stay relatively flat. A slight<br />
decrease in rental rates could even be on the horizon in<br />
some submarkets.<br />
After an increase in Q1 vacancy, the industrial market<br />
showed signs of hope as Q2 ended with strong numbers.<br />
Reality hit with a disappointing Q3 and Q4 performance. The<br />
number of deals was down, but more notably, the average<br />
transaction size dropped by 38%. The good news is company<br />
closures slowed, leading to a drop in new space being<br />
vacated and enabling the quarter to end with positive net<br />
absorption. This, combined with a strong Q2, led to a reduction<br />
in vacancy over the past year from 15.1% to 14.6%.<br />
Although market activity has taken a breather, the market<br />
is still headed in the right direction, albeit slowly.<br />
The retail market overall vacancy rate is 17.8%, up slightly<br />
from 17.4% in mid-year 2010. Walmart is under construction<br />
with a super store in Lemmon Valley expected to open in<br />
Q4 2011. Lowes is under construction with a store in the<br />
Legends at the Sparks Marina. Other new retailers to the<br />
area include America’s Furniture 4 Less, Fitness for $10,<br />
Planet Fitness, Famous Dave’s and Total Wine.<br />
Contact<br />
<strong>NAI</strong> Norwood Group<br />
+1 603 668 7000<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
399,869<br />
396,471<br />
229,368<br />
$88,834<br />
$71,241<br />
Why chose the “Live Free or Die” state? The first indicator is<br />
the low tax burden, with no broad-base personal income tax,<br />
sales, use, inventory or capital gains taxes. We continue to<br />
lead the nation in economic recovery as the unemploymentrate<br />
of 4.9% is at its lowest level since 2008, compared to<br />
a national rate of more than 9%. New Hampshire has been<br />
voted as the Most-Livable-State in the US for the last five<br />
consecutive years.<br />
Although the question of when the markets will see real<br />
growth is elusive, the forecast for most markets in the<br />
Manchester area is positive for the coming year as many<br />
projects have been completed or will be completed within<br />
the next year. While not improving, we have seen vacancy<br />
rates remain flat. There is an amount of “shadow” vacancy<br />
that will need to be absorbed as companies burn off leases<br />
with larger square footages. To balance this, sectors of the<br />
economy including small manufacturing, healthcare and<br />
high-tech continue to grow. This has kept New Hampshire’s<br />
unemployment rate low and the vacancy rates in line.<br />
Phase I of the Northwest Business Park, a 425 acre<br />
business/industrial park currently being developed in the<br />
northwestern portion of Manchester is now being marketed.<br />
This phase consists of 12 lots on 130 acres ranging from<br />
2.8 to 26.3 acres. Approvals are in place for buildings<br />
ranging in size from 20,000 to 150,000 SF. Also expected<br />
to be completed in 2011 is a downtown Manchester,<br />
120,000 SF <strong>Market</strong> Basket Store.<br />
There is strong support from our state for the Capital Corridor<br />
Commuter Rail. This would connect Concord with Boston and<br />
has future plans for a high speed rail line connection from<br />
Montreal to Boston. State agencies have received two grants<br />
from the Federal Government totaling $4.3 million to study<br />
and plan the Capital Corridor.<br />
In Merrimack, New Hampshire, developers expect to have<br />
the phase I of the Merrimack Premium Outlet Mall completed<br />
by the summer of <strong>2012</strong>. This $100 million project will include<br />
100 retail stores and create over 800 jobs.<br />
Total Population<br />
Median Age<br />
39<br />
Total Population<br />
Median Age<br />
37<br />
Reno At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
19.80<br />
12.00<br />
N/A<br />
19.80<br />
12.00<br />
N/A<br />
$ 24.00<br />
$ 19.40<br />
N/A<br />
$ 24.00<br />
$ 17.40<br />
N/A<br />
$ 21.90<br />
$ 14.70<br />
N/A<br />
$ 21.90<br />
$ 14.70<br />
N/A<br />
18.00%<br />
20.00%<br />
N/A<br />
17.00%<br />
21.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
2.28<br />
2.40<br />
4.20<br />
$<br />
$<br />
$<br />
4.20<br />
4.92<br />
7.20<br />
$<br />
$<br />
$<br />
3.00<br />
3.10<br />
6.00<br />
17.90%<br />
12.10%<br />
27.20%<br />
Downtown<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
Regional Malls<br />
$<br />
$<br />
$<br />
10.80<br />
9.60<br />
12.00<br />
N/A<br />
$ 27.00<br />
$ 24.00<br />
$ 24.00<br />
N/A<br />
$ 18.00<br />
$ 18.00<br />
$ 20.40<br />
N/A<br />
N/A<br />
15.00%<br />
20.00%<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 479,160.00 $ 1,437,480.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
348,480.00<br />
87,120.00<br />
43,560.00<br />
108,900.00<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
522,720.00<br />
304,920.00<br />
217,800.00<br />
958,320.00<br />
N/A<br />
Manchester At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
NA<br />
$ 13.00 $<br />
NA<br />
17.00<br />
NA<br />
$ 14.00<br />
NA<br />
20.00%<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
$ 8.00<br />
N/A<br />
$ 13.00<br />
N/A<br />
$ 10.00<br />
N/A<br />
15.00%<br />
N/A<br />
Class A (Prime)<br />
$ 12.00 $ 14.00 $ 13.00 15.00%<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 8.00 $ 13.00 $ 10.00 10.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
3.75<br />
4.00<br />
6.00<br />
$<br />
$<br />
$<br />
5.50<br />
6.00<br />
9.00<br />
$<br />
$<br />
$<br />
4.75<br />
5.00<br />
8.00<br />
14.00%<br />
14.00%<br />
14.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$ 10.00<br />
$ 10.00<br />
N/A<br />
N/A<br />
$<br />
$<br />
20.00<br />
25.00<br />
N/A<br />
N/A<br />
$ 13.00<br />
$ 17.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
N/A<br />
75,000.00<br />
125,000.00<br />
75,000.00<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
N/A<br />
100,000.00<br />
200,000.00<br />
200,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 113
Portsmouth, New Hampshire<br />
Atlantic County, New Jersey<br />
Contact<br />
<strong>NAI</strong> Norwood Group<br />
+1 603 431 3001<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
294,546<br />
291,874<br />
170,840<br />
$94,347<br />
$78,717<br />
40<br />
The New Hampshire Seacoast area’s economy appears to<br />
be holding steady. Portsmouth’s unemployment rate<br />
dropped slightly from 4.6% to 4.4%. Last year’s planned<br />
projects are well underway and new plans for <strong>2012</strong> are on<br />
the horizon. Portsmouth’s City Action Plan is specifically<br />
targeting investors and business tenants by investing in<br />
improvements and new construction.<br />
The Portwalk Project that was put on hold in 2009, resumed<br />
in 2011 and is nearly complete. The mixed use building will<br />
hold retail space on the ground level and residential units<br />
in the upper portion. Originally the plans included office<br />
space, but as the needs of the market changed, so did the<br />
plans. Another project in the works is the Service Credit<br />
Union World Headquarters on Route 1 in Portsmouth. This<br />
brand new facility is 100,000 SF and will be completed in<br />
the summer of <strong>2012</strong>. In July 2011 the<br />
Memorial Bridge in Portsmouth was closed indefinitely due<br />
to deterioration. The transportation department said the<br />
closure was unavoidable. As of October 2011 the contract<br />
to rebuild the bridge was awarded and the expected date<br />
for the bridge to reopen is July 2013, a full year ahead of<br />
the original plan. Speculation indicates that for Portsmouth<br />
this means a potential 10% to 15% hit to businesses. On<br />
the other side of the coin this could mean more business<br />
stays in town rather than crossing over the bridge to Maine.<br />
The Memorial Bridge is a main corridor for Route 1 traffic<br />
between Portsmouth and Kittery. Regardless, both sides of<br />
the bridge real estate remain to be in high demand.<br />
Compared to the rest of the country, New Hampshire’s<br />
economy is still considered robust. In a recent survey New<br />
Hampshire residents showed they have more confidence<br />
in their local economy than any other state. Among<br />
other things, the state boasts one of the highest median<br />
household incomes in the country at $61,042.<br />
Contact<br />
<strong>NAI</strong> Mertz<br />
+1 856 234 9600<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
276,592<br />
284,805<br />
144,947<br />
$75,939<br />
$58,391<br />
39<br />
The Southern New Jersey shore area has traditionally been<br />
dominated by the casino and tourism industries. Although<br />
revenues at existing casinos have been greatly impacted<br />
by increased competition from neighboring states, Atlantic<br />
City and the State of NJ are aggressively working on<br />
protecting their market. The area is diversifying and becoming<br />
less dependent on just casinos and tourism. There has been<br />
recent growth in the areas of healthcare, aviation research<br />
technology, education and retail.<br />
The newly created Casino and Entertainment Tourism<br />
District will provide incentives and infrastructure for new<br />
development. The new Revel Casino is scheduled to open<br />
in <strong>2012</strong>. In addition, recently passed legislation allows for<br />
three smaller casinos, needing only 200 rooms and<br />
200,000 SF of gaming space. The previous law required<br />
500 hotel rooms and 500,000 SF of gaming space.<br />
In healthcare, the area’s two major hospitals; Atlantic Care<br />
in Atlantic City and Shore Memorial Hospital in Somers<br />
Point, have both expanded on site.<br />
At the Atlantic City Airport, infrastructure has begun on the<br />
Next Genn Aviation Research and Technology Park which is<br />
geared to provide engineering and research critically<br />
needed to support the FAA. This will create many high<br />
paying, non-casino related jobs.<br />
The retail segment continues to grow. The Walk outlets in<br />
Atlantic City added to their market with a just completed<br />
second expansion. In Egg Harbor Township, plans have<br />
recently been approved for Oak Tree Plaza, a Walmart<br />
anchored center consisting of 270,170 SF scheduled for<br />
<strong>2012</strong>.<br />
The Atlantic County industrial market has picked up velocity<br />
in 2011. Some landlords have claimed 100% occupancy<br />
in their warehouse portfolios, many over 100,000 SF, while<br />
others maintained vacancy due to new tenants occupying<br />
older, vacant space and current tenants coming due on<br />
lease terms without renewing. Landlords in this market<br />
continue to be creative to secure tenants and generate<br />
income. Lease terms vary widely throughout each lease,<br />
averaging one year to five years. The average rental rate<br />
in the Atlantic County industrial market ranges from<br />
$7.00/SF NNN down to $3.50/SF NNN with an average<br />
of $5.50/SF NNN, up from the previous year.<br />
Portsmouth At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
15.00<br />
10.00<br />
N/A<br />
9.00<br />
N/A<br />
N/A<br />
4.00<br />
N/A<br />
25.00<br />
10.00<br />
N/A<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
30.00<br />
13.00<br />
N/A<br />
20.00<br />
N/A<br />
N/A<br />
8.00<br />
N/A<br />
35.00<br />
15.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
15.00%<br />
15.00%<br />
N/A<br />
10.00%<br />
N/A<br />
N/A<br />
10.00%<br />
N/A<br />
5.00%<br />
15.00%<br />
N/A<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Atlantic County At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
21.00<br />
15.00<br />
12.00<br />
17.00<br />
16.00<br />
12.00<br />
$ 24.00<br />
$ 18.00<br />
$ 15.00<br />
$ 20.00<br />
$ 18.00<br />
$ 15.00<br />
$ 22.50<br />
$ 16.50<br />
$ 13.50<br />
$ 18.50<br />
$ 17.00<br />
$ 13.50<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
3.50<br />
2.00<br />
$<br />
$<br />
7.00<br />
4.25<br />
$<br />
$<br />
5.50<br />
3.12<br />
14.00%<br />
14.00%<br />
High Tech/R&D<br />
retaIl<br />
$ 6.00 $ 11.00 $ 8.50 14.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
8.00<br />
10.00<br />
12.00<br />
22.00<br />
$ 30.00<br />
$ 14.00<br />
$ 20.00<br />
$ 30.00<br />
$ 19.00<br />
$ 12.00<br />
$ 16.00<br />
$ 26.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
N/A<br />
50,000.00<br />
70,000.00<br />
10,000.00<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
N/A<br />
75,000.00<br />
95,000.00<br />
50,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 114
Middlesex/Somerset Counties, New Jersey<br />
Northern New Jersey<br />
Contact<br />
<strong>NAI</strong> DiLeo-Bram & Co.<br />
+1 732 985 3000<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
1,146,121<br />
1,200,105<br />
609,909<br />
$117,118<br />
$89,718<br />
38<br />
The central New Jersey real estate market still remains<br />
challenged as 2011 comes to a close, however there are<br />
positive indications that the worst is behind. The most<br />
positive sign comes from the industrial sector as it continues<br />
to stabilize with positive net absorption throughout<br />
the region. The retail sector has shown signs of increased<br />
activity among national, regional and local tenants. The<br />
office market, the sector most directly affected by<br />
unemployment, remains stagnant.<br />
The industrial market is ending the year on the upswing.<br />
Vacancy rates continue to decline from 10.6% at the<br />
beginning of the year to 9.6%. While it is still a tenant’s<br />
market, the fundamentals indicate a more favorable vision<br />
of the future. The gap between what tenants are willing to<br />
pay and what landlords will accept is closing. The “panic”<br />
deals of the past 24 months are gone. Landlords are still<br />
giving concessions of free rent and Tenant Improvement<br />
Allowances, however the trend indicates that more tenants<br />
are willing to relocate for the right deal and commit to longer<br />
terms.<br />
In the retail sector, rents have stabilized at 30% less than<br />
the peaks of 2007 and vacancy rates are at 10%. There<br />
is still a healthy amount of national and regional chains<br />
seeking locations, especially in the food services industry.<br />
A majority of the leases are with tenants taking spaces of<br />
20,000 SF or less, many of them independent or franchised<br />
chains. Any type of spec building in the retail sector<br />
is non-existent. The Route 18 retail corridor, considered<br />
one of the best retail markets in the region, is <strong>report</strong>ing<br />
vacancy rates of 18% which is above the general market<br />
vacancy rate.<br />
The office market remains the most problematic. In the<br />
last four quarters, vacancy rates have risen to 23%. It will<br />
take years, if ever, before this sector will see significant<br />
absorption of space. Large blocks of vacant corporate<br />
spaces still remain, creating challenges for owners to divide<br />
into smaller units. Steady job growth will be the ultimate key<br />
to any real positive turnaround or achieving any significant<br />
stabilization in this sector.<br />
Contact<br />
<strong>NAI</strong> James E. Hanson<br />
+1 201 488 5800<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
4,845,976<br />
5,047,261<br />
2,543,777<br />
$98,350<br />
$73,841<br />
37<br />
The Northern New Jersey marketplace continues to be<br />
extremely active. Our market is closely tied to the national<br />
economy. Northern New Jersey boasts one of the largest<br />
and most diverse commercial real estate markets in the<br />
country. Insurance, financial, pharmaceutical, telecom,<br />
manufacturing, retail and international companies are the<br />
backbone of our marketplace.<br />
The industrial sector remains active. Modern facilities are<br />
in demand with growth in the international import/export<br />
businesses. Less modern buildings aggressively compete<br />
for deals. Demand for flex/R&D is vibrant with older buildings<br />
being converted to data centers. The build-to-suit market<br />
has returned. Notable transactions include Kenco leasing<br />
500,000 SF, Wakefern Foods and Goya Foods constructing<br />
over 1,050,000 SF and 600,000 SF respectively and I/O<br />
Communication leasing 830,000 SF as a data center.<br />
Overall vacancies stand at 9.0% to 9.5%.<br />
The office market is brisk. The Waterfront (Jersey City,<br />
Hoboken and Weehawken) has strong growth while<br />
suburban locations struggle. Overall vacancies have been<br />
falling and currently stand at 14.5%. Notable transactions<br />
include Novo Nordisk leasing 770,000 SF in Princeton,<br />
Atlantic Health 190,000 SF in Morristown, Fidelity and<br />
Merrill Lynch 180,000 SF and 250,000 SF respectively in<br />
Jersey City with a lease renewal of 1,000,000 SF plus by<br />
UBS in Weehawken. The NJ office market is great for<br />
companies seeking to upgrade space.<br />
Our retail sector has been slow to recover. Retailers are<br />
cautious to open new stores while others vacate. Vacancies<br />
have leveled to 6.5%. Malls continue to do well while<br />
downtown locations suffer. There is minimal new construction<br />
throughout our market.<br />
Investors have an insatiable appetite for core assets and are<br />
looking at all opportunities that fit their portfolios. Multifamily<br />
and industrial remain most active. Cap rates can break 5%<br />
for A+ multifamily properties and 6.5% to 7.5% for core<br />
institutional properties. With borrowing rates at historic lows,<br />
we see this continuing throughout the year.<br />
Overall, there is reason to be optimistic about the New<br />
Jersey real estate market as it remains a strategic location<br />
to do business. Economic growth locally and nationally will<br />
be crucial for any sustained recovery.<br />
Middlesex/Somerset Counties At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
N/A<br />
22.00<br />
17.00<br />
12.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 28.00<br />
$ 24.00<br />
$ 16.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 23.00<br />
$ 19.00<br />
$ 14.00<br />
N/A<br />
N/A<br />
N/A<br />
20.00%<br />
21.00%<br />
30.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
2.50<br />
2.50<br />
5.00<br />
$<br />
$<br />
$<br />
6.00<br />
6.00<br />
9.00<br />
$<br />
$<br />
$<br />
4.00<br />
4.00<br />
7.00<br />
9.60%<br />
9.60%<br />
9.60%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
16.00<br />
12.00<br />
17.00<br />
40.00<br />
$ 25.00<br />
$ 22.00<br />
$ 24.00<br />
$ 80.00<br />
$ 20.00<br />
$ 17.00<br />
$ 19.00<br />
$ 50.00<br />
10.00%<br />
10.00%<br />
13.00%<br />
8.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
200,000.00<br />
200,000.00<br />
100,000.00<br />
250,000.00<br />
50,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
400,000.00<br />
300,000.00<br />
300,000.00<br />
900,000.00<br />
150,000.00<br />
Northern New Jersey At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
33.00<br />
22.00<br />
14.00<br />
28.00<br />
21.00<br />
14.00<br />
$ 44.00<br />
$ 35.00<br />
$ 21.50<br />
$ 36.00<br />
$ 35.00<br />
$ 22.00<br />
$ 35.00<br />
$ 27.50<br />
$ 17.00<br />
$ 30.00<br />
$ 28.00<br />
$ 19.00<br />
5.00%<br />
13.50%<br />
16.50%<br />
35.00%<br />
12.50%<br />
15.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
2.75<br />
3.00<br />
$<br />
$<br />
6.00<br />
5.50<br />
$<br />
$<br />
4.75<br />
4.25<br />
9.00%<br />
8.00%<br />
High Tech/R&D<br />
retaIl<br />
$ 6.50 $ 13.00 $ 9.50 7.50%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
15.00<br />
14.00<br />
14.00<br />
25.00<br />
$ 40.00<br />
$ 25.00<br />
$ 25.00<br />
$ 50.00<br />
$ 25.00<br />
$ 19.00<br />
$ 20.00<br />
$ 42.00<br />
9.50%<br />
13.00%<br />
7.00%<br />
2.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
N/A<br />
100,000.00<br />
60,000.00<br />
75,000.00<br />
$<br />
$<br />
$<br />
N/A<br />
350,000.00<br />
350,000.00<br />
300,000.00<br />
Retail/Commercial Land<br />
$ 150,000.00 $ 1,000,000.00<br />
Residential<br />
$ 40,000.00 $ 400,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 115
Ocean/Monmouth Counties (“Shore <strong>Market</strong>”), New Jersey<br />
Princeton/Mercer County, New Jersey<br />
Contact<br />
<strong>NAI</strong> Atlantic Coast Realty<br />
+1 732 736 1300<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
1,206,559<br />
1,206,324<br />
603,753<br />
$97,586<br />
$73,872<br />
The Shore markets were divided amongst distressed deals<br />
which sold quickly, and at-par deals which have traded<br />
thinly. The leasing market was significantly stronger, and the<br />
Shore business had another fantastic season with favorable<br />
weather. Despite a very decent tourist season, the market<br />
malaise has remained. The bright spot is our Governor, Chris<br />
Christie, who skyrocketed to national fame as he slashed<br />
government payrolls and commanded the public respect for<br />
staying home to finish the job rather than making a run for<br />
the White House.<br />
The residential market showed signs of life in the spring of<br />
2011, and stalled shortly after Memorial Day. Local job<br />
creation was challenging, which continued to put pressure<br />
on the office market. Medical leasing was brisk, with <strong>NAI</strong><br />
Atlantic Coast filling more than a few buildings in 2011.<br />
Retail trades were very thin as good cash flowing properties<br />
were held, and properties with weaker anchors looked to<br />
reposition. Value retailers dominated the year as Dollar<br />
General, Five Below and others took advantage of sub<br />
$14.00 rents in good locations.<br />
Industrial activity showed some early promise, but like the<br />
residential market, had all but stalled by Q3 2011. Industrial<br />
buys are still stalled at the bid-ask gate as sellers demand<br />
$65+ on Class B+ buildings where rents are available in<br />
the $4 range. The dominant purchasers are the owner users<br />
with longer holding period expectations.<br />
Multifamily dominated the regional landscape, but multifamily<br />
development in the Shore Region is either old obsolete<br />
product (40+ years), or is newer Class A product which is<br />
not trading absent huge premiums. The equity returns on<br />
multifamily are at all time lows, but low interest financing<br />
and the prospect of rent growth, are driving trailing cap rates<br />
sub 7% in most submarkets.<br />
<strong>NAI</strong> expects that landlords will feel better in <strong>2012</strong> as leasing<br />
velocity continues in all sectors. No major new construction<br />
is expected but solid buys in 2009 through <strong>2012</strong> will<br />
produce great returns over the next five to seven years as<br />
the economy stabilizes.<br />
Contact<br />
<strong>NAI</strong> Fennelly<br />
Associates.<br />
+1 609 520 0061<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
367,726<br />
372,661<br />
195,053<br />
$104,908<br />
$ 74,237<br />
The Greater Princeton real estate market showed signs of<br />
recovery as two impact transactions were completed. Novo<br />
Nordisk and Church & Dwight leased 750,000 SF of new<br />
office headquarters space. Princeton has experienced a long<br />
history in the pharmaceutical and consumer products business.<br />
The speculative market also presented opportunities with<br />
Rubinstein Organization purchasing Princeton South for<br />
$145/SF. These two new buildings were 50% leased.<br />
Novo Nordisk (diabetic industry) has leased 550,000 SF of<br />
the former Merrill Lynch site in Plainsboro complete with a<br />
$220 million renovation. Church & Dwight (consumer<br />
products) signed a fifteen year lease at Princeton South to<br />
build a new 250,000 SF office headquarters. The vacancy<br />
rate for office is slowing lowering into a manageable rate of<br />
19% to 20%. New construction has begun at 300 Carnegie<br />
Center for an 82,000 SF Class A office building in Carnegie<br />
Center with asking rents of $36/SF.<br />
The industrial markets after a long recovery are showing a<br />
slight improvement with over 2,000,000 SF leasing at the<br />
North East Business Park at Exit 7A. Recent deals include a<br />
build to suit to Ritchie & Page (150,000 SF refrigerated<br />
warehouse for $15,000,000) and Matrix buying 4 Applegate<br />
drive (265,000 SF) for $38.00/SF in the Exit 7A area of the<br />
turnpike.<br />
The investment market is still suffering from lowering rents<br />
and elevated cap rates. Forrestal Village sold for $130/SF<br />
(a multi- tenanted office retail park) or an 8% cap rate.<br />
Investment sales are occurring again as well as user<br />
purchases. There have been more than seven office buildings<br />
sold in the range of $24/SF and of $165/SF.<br />
The Greater Princeton real estate market has a well balanced<br />
diversified employment base with medical, government,<br />
educational, technology and industrial uses that have started<br />
to show upward positive results which will lead to stronger<br />
rents and values over the next twelve months.<br />
Total Population<br />
Median Age<br />
41<br />
Total Population<br />
Median Age<br />
37<br />
Ocean/Monmouth Counties (“Shore <strong>Market</strong>”) At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
23.00<br />
21.00<br />
17.50<br />
23.00<br />
21.00<br />
17.50<br />
$ 33.00<br />
$ 30.00<br />
$ 24.00<br />
$ 33.00<br />
$ 30.00<br />
$ 24.00<br />
$ 24.00<br />
$ 23.00<br />
$ 20.00<br />
$ 24.00<br />
$ 23.00<br />
$ 20.00<br />
N/A<br />
13.00%<br />
15.00%<br />
12.00%<br />
13.80%<br />
14.70%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
3.50<br />
4.25<br />
$<br />
$<br />
6.00<br />
7.50<br />
$<br />
$<br />
4.50<br />
5.25<br />
10.10%<br />
8.20%<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
6.00<br />
19.00<br />
10.00<br />
9.00<br />
30.00<br />
$ 14.00<br />
$ 30.00<br />
$ 22.00<br />
$ 25.00<br />
$ 50.00<br />
$ 10.50<br />
$ 22.00<br />
$ 14.00<br />
$ 18.00<br />
$ 40.00<br />
11.00%<br />
15.00%<br />
11.00%<br />
7.00%<br />
3.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
200,000.00<br />
100,000.00<br />
100,000.00<br />
200,000.00<br />
150,000.00<br />
50,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
750,000.00<br />
325,000.00<br />
225,000.00<br />
500,000.00<br />
425,000.00<br />
350,000.00<br />
Princeton/Mercer County At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 39.00<br />
$ 36.00<br />
$ 24.00<br />
$ 34.00<br />
$ 28.00<br />
$ 20.00<br />
$ 42.00<br />
$ 40.00<br />
$ 28.00<br />
$ 36.00<br />
$ 32.00<br />
$ 26.00<br />
$ 40.00<br />
$ 38.00<br />
$ 26.00<br />
$ 35.00<br />
$ 30.00<br />
$ 23.00<br />
14.00%<br />
9.00%<br />
10.00%<br />
5.00%<br />
18.00%<br />
22.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
2.75<br />
2.00<br />
4.00<br />
$<br />
$<br />
$<br />
4.25<br />
3.95<br />
5.50<br />
$<br />
$<br />
$<br />
3.75<br />
2.90<br />
4.75<br />
14.00%<br />
16.00%<br />
12.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$ 25.00<br />
$ 18.00<br />
$ 16.00<br />
$ 22.00<br />
$ 50.00<br />
$ 26.00<br />
$ 30.00<br />
$ 50.00<br />
$ 36.00<br />
$ 22.00<br />
$ 23.00<br />
$ 36.00<br />
10.00%<br />
11.00%<br />
15.00%<br />
9.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
400,000.00<br />
250,000.00<br />
125,000.00<br />
80,000.00<br />
150,000.00<br />
125,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
1,000,000.00<br />
400,000.00<br />
250,000.00<br />
150,000.00<br />
400,000.00<br />
400,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 116
Southern New Jersey<br />
Albuquerque, New Mexico<br />
Contact<br />
<strong>NAI</strong> Mertz<br />
+1 856 234 9600<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
1,316,676<br />
1,322,041<br />
704,130<br />
$85,577<br />
$70,267<br />
38<br />
Southern New Jersey’s education and healthcare sectors<br />
continue to grow as they expand their presence in the area,<br />
providing a positive impact on the market. This growth is<br />
predicted to continue for the next several years. As mortgage<br />
companies improve due to historically low interest rates,<br />
financial firms are experiencing modest growth. Landlords<br />
continue to rely heavily on free rent concessions to close<br />
deals in office, retail and industrial sectors.<br />
The Southern New Jersey office market leasing activity<br />
steadily improved, reducing the overall vacancy rate. Rental<br />
rates are stabilizing and the differential between Class A and<br />
Class B is broadening again. Debt on the largest office building<br />
of 222,329 SF was purchased and foreclosed upon this year<br />
in a JV between Fortress and Madison Capital. With their<br />
low basis, the new owners offering generous tenant<br />
improvement packages and attractive rates.<br />
Virtua Health in Voorhees opened its new 680,000 SF<br />
regional medical center. An adjacent 300,000 SF ambulatory<br />
care center that is 92% pre-leased is scheduled to open<br />
Spring, <strong>2012</strong>. Capital is starting to flow into the market<br />
again.<br />
The retail sector of Southern New Jersey showed some<br />
signs of promise early in 2011. However, due to unemployment<br />
and cautious consumer spending, several national chain<br />
stores closed stores where the market is weak. More activity<br />
from start up companies needing retail space resulted in<br />
landlords dropping rental rates to accommodate them,<br />
decreasing vacancy rates slightly in these areas. Mixed uses<br />
in centers are becoming common place with pizzerias and<br />
medical facilities side by side. Power Centers of 740,000<br />
SF and 868,000 SF are taking shape in Woolwich Twp,<br />
southern Gloucester County.<br />
The Southern New Jersey industrial vacancy rate in 2011<br />
remained fairly stable at approximately 13.5% between<br />
Gloucester, Burlington and Camden counties. Camden<br />
County saw the most vacancy at 16.4% attributed to lower<br />
ceiling heights and older buildings. The largest industrial to<br />
close in 2011 was Performance Food Group, which signed<br />
a lease for 150,000 SF in Swedesboro. The largest user sale<br />
was Mapei Corporation which purchased 231,800 SF in<br />
Bridgeport from Liberty property Trust.<br />
Contact<br />
<strong>NAI</strong> Maestas & Ward<br />
+1 505 878 0001<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
912,450<br />
1,013,837<br />
463,107<br />
$65,031<br />
$49,947<br />
35<br />
Ranked the 57th largest metropolitan area according to the<br />
US Census, the Albuquerque Metropolitan Statistical Area<br />
remains one of the fastest growing cities nationally with<br />
approximately half of the New Mexico population residing in<br />
the Albuquerque area. <strong>Market</strong>s continue to recover with<br />
medical and apartment sectors remaining the performance<br />
leaders. The retail market continues recovery with reasonable<br />
absorption and lower vacancy. Some absorption is occurring<br />
in the industrial and office sectors, however they continue to<br />
experience stagnation.<br />
Presbyterian Healthcare purchased a 133,000 SF office<br />
building with 15 acres of land from CitiCorp for $9.95 million.<br />
Albuquerque Health Partners purchased the 81,700 SF<br />
building they had been leasing in northeast Albuquerque for<br />
$8.7 million. REO activity in the market is moderately active.<br />
Morgan Stanley executed a lease for 18,000 SF for $1.7<br />
million in the northeast quadrant of the city. Chickasaw<br />
Nation Industries completed a 28,700 SF lease. Radiology<br />
Associates expanded their current location to 36,000 SF.<br />
Under construction projects include the $165 million<br />
Presbyterian Hospital in Rio Rancho; the estimated $25<br />
million, 103,000 SF build-to-suit lease for the US Forest<br />
Service Building; and the new corporate headquarters for<br />
the REDW accounting firm which will be 45,000 SF with<br />
estimated value of $9 million. These projects are all in the<br />
northeast and northwest quadrants.<br />
The north I-25 and Journal Center trade area continues to<br />
be an active submarket with more medium to larger scale<br />
single user office developments expected. K-Tech sold their<br />
company to Raytheon in a deal that included the sale of<br />
K-Techs real estate to an investor group with a 10 year lease<br />
back to Raytheon. Industrial vacancy rates increased from<br />
9.1% to 9.4% in Q2 but industrial leasing for space greater<br />
than 10,000 SF was the strongest in two years. Albuquerque<br />
was rated by Moody’s as one of the healthiest industrial<br />
markets in the US.<br />
Apartments continue to outperform other sectors with 97%<br />
occupancy rates. With no new projects being developed and<br />
continued metropolitan growth, rental rates will continue<br />
to rise at 5% per year. Retail activity, especially in the<br />
far northeast and southwest quadrants, continues to be<br />
surprisingly strong.<br />
Southern New Jersey At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
N/A<br />
21.00<br />
20.00<br />
10.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 25.00<br />
$ 24.00<br />
$ 17.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 23.00<br />
$ 22.50<br />
$ 13.50<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
12.00%<br />
13.70%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
3.00<br />
2.50<br />
5.25<br />
$<br />
$<br />
$<br />
4.50<br />
4.45<br />
9.25<br />
$<br />
$<br />
$<br />
3.75<br />
3.48<br />
7.25<br />
9.00%<br />
9.40%<br />
9.80%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
9.00<br />
10.00<br />
16.00<br />
N/A<br />
$ 33.00<br />
$ 20.00<br />
$ 40.00<br />
N/A<br />
$ 21.00<br />
$ 15.00<br />
$ 28.00<br />
N/A<br />
8.00%<br />
9.00%<br />
7.00%<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A<br />
N/A<br />
$ 123,000.00 $ 213,000.00<br />
$ 7,000.00 $ 69,000.00<br />
$ 6,000.00 $ 358,000.00<br />
$ 75,000.00 $ 300,000.00<br />
N/A<br />
N/A<br />
Albuquerque At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
18.50<br />
12.50<br />
23.00<br />
18.50<br />
14.50<br />
2.25<br />
5.00<br />
5.50<br />
8.00<br />
10.06<br />
18.50<br />
20.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
21.50<br />
16.50<br />
25.00<br />
21.00<br />
16.00<br />
5.50<br />
8.25<br />
11.25<br />
24.00<br />
17.58<br />
27.00<br />
40.00<br />
N/A<br />
$ 20.27<br />
$ 16.93<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 14.67<br />
$ 19.45<br />
$ 30.00<br />
N/A<br />
15.40%<br />
18.10%<br />
30.00%<br />
18.00%<br />
18.00%<br />
11.00%<br />
11.00%<br />
11.00%<br />
18.90%<br />
14.70%<br />
1.30%<br />
12.60%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 1,089,000.00 $ 2,178,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
175,000.00<br />
175,000.00<br />
85,000.00<br />
220,000.00<br />
25,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
435,600.00<br />
350,000.00<br />
200,000.00<br />
500,000.00<br />
600,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 117
Las Cruces, New Mexico<br />
Albany, New York<br />
Contact<br />
<strong>NAI</strong> 1st Valley<br />
+1 575 521 1535<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
238,792<br />
256,847<br />
107,966<br />
$44,736<br />
$32,353<br />
Following decades of sustained growth, growth which<br />
consistently defied business cycle downturns and<br />
recessions alike, current indicators confirm the Las Cruces<br />
economy remains influenced by the unprecedented<br />
confluence of external factors associated with the global<br />
financial crisis some two years after its official end.<br />
While relatively mild, in both depth and duration, such<br />
uncharacteristic weakness remains cause for caution in<br />
each and every local commercial, investment real estate<br />
sector.<br />
Mirroring national economic downturn and trends, the broad<br />
Las Cruces office market has seen deteriorating fundamentals.<br />
Layoffs in heavy office using employment sectors resulted in<br />
diminished demand yielding a 330 basis point increase in<br />
vacancies and 4% decline in market average rental rates<br />
on a year-over-year basis. Looking at longer trends, vacancy<br />
rates have risen 9.6% from their low in 2008 with lease<br />
rates falling 1% below their 2007 to 2011 period average.<br />
Amid news of declining net worth and consumer sentiment,<br />
it has been said "Flat is the new Up.” In this light, it can be<br />
said things are looking up for the Las Cruces retail market.<br />
With vacancy rates down and gross receipts from retail trade<br />
posting moderate increases, owners and their agents should<br />
enjoy certain latitude for lease rate increases to prerecession<br />
levels going forward. Numerous major retail players<br />
whose strategy has been to delay entry and/or expansion<br />
into the market have indicated they'll be moving dirt and<br />
opening doors here in 2011 and <strong>2012</strong>. If we can rely upon<br />
the veracity and sophistication of their market analytics, this<br />
too provides further evidence that operating fundamentals<br />
in this consumer/consumption driven sector are headed in<br />
the right direction.<br />
Within a perfect storm of scant new supply and heightened<br />
demand from increasing household formation, the Las<br />
Cruces multifamily market continues to register positive<br />
operating results. A 3.1% year-over-year increase in rents<br />
coupled with a 97.2% market average occupancy rate, a<br />
310 basis point improvement over the already admirable<br />
2001 to 2011 period average of 94.1%, make this the best<br />
performing Las Cruces commercial real estate sector.<br />
Contact<br />
<strong>NAI</strong> Platform<br />
+1 518 465 1400<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
1,398,032<br />
1,446,225<br />
735,584<br />
$71,328<br />
$55,817<br />
The Capital Region continues to be a smart bet for tech type<br />
research companies, due to the construction of the $2 billion<br />
chip fabrication plant being built in Malta, NY. Slated to<br />
employ 1,400 tech-related workers, the more attractive<br />
positive will be the 5,000+ support jobs coming into the<br />
area. Real estate in and around the park is beginning to<br />
benefit from the increased demand for close, convenient<br />
space to house these support services.<br />
The CBD office market continues to struggle with a glut of<br />
Class B or lower inventory approaching 30% in some recent<br />
polls. Functionally obsolete buildings with floor plates that<br />
require substantial capital to renovate, litter the downtown<br />
marketplace, leaving only the Class A spaces to vie for the<br />
few office tenants that need to be situated within a stone’s<br />
throw of the government process. Residential re-development<br />
is being called for to breathe new life into some of these<br />
buildings, but lack of ability to secure acquisition and<br />
construction cost loans have sidelined this initiative.<br />
Continuing the trend, the suburban office parks are performing<br />
well and continuing to experience lower vacancy rates<br />
between 10% to 12% overall. Large office tenants have<br />
made out well with several options available including<br />
attractive rates for build to suits.<br />
The industrial marketplace has been the leading segment<br />
in our marketplace, with brisk activity and stable rates.<br />
Vacancy rates are in the 8% to 12% range overall in spaces<br />
of 25,000 to 50,000 SF and slightly better numbers for new<br />
construction and flex spaces that offer a quality office<br />
component. Retail activity has picked up again. Shop Rite<br />
Grocery Store chain has decided to build three new stores<br />
within the region with facilities ranging from 40,000 to<br />
55,000 SF.<br />
Investment and multifamily offerings have also picked up<br />
their volume as the uncertainty in the stock market has<br />
driven investors to seek more stable, predictable returns.<br />
Cap rates are down slightly to an average of 7% overall. As<br />
a strong tertiary marketplace, the Capital Region has<br />
remained a stable and safe environment to live, work and<br />
invest in.<br />
Total Population<br />
Median Age<br />
34<br />
Total Population<br />
Median Age<br />
40<br />
Las Cruces At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 3.00<br />
N/A<br />
N/A<br />
$ 12.50<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 5.00<br />
N/A<br />
N/A<br />
$ 16.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 14.23<br />
N/A<br />
$ 24.02<br />
$ 17.79<br />
$ 4.00<br />
N/A<br />
N/A<br />
$ 14.00<br />
$ 15.76<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
8.90%<br />
N/A<br />
6.80%<br />
18.10%<br />
9.50%<br />
N/A<br />
N/A<br />
9.50%<br />
8.30%<br />
N/A<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
217,800.00<br />
196,020.00<br />
25,000.00<br />
25,000.00<br />
392,040.00<br />
10,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
348,480.00<br />
261,360.00<br />
35,000.00<br />
35,000.00<br />
522,720.00<br />
80,000.00<br />
Albany At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
18.00<br />
16.00<br />
6.00<br />
18.00<br />
14.00<br />
6.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
25.00<br />
22.00<br />
16.00<br />
22.00<br />
19.00<br />
16.00<br />
$ 21.00<br />
$1 8.00<br />
$ 13.00<br />
$ 20.00<br />
$ 17.00<br />
$ 14.00<br />
12.00%<br />
15.00%<br />
30.00%<br />
12.00%<br />
12.00%<br />
20.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
2.00<br />
3.00<br />
$<br />
$<br />
4.00<br />
6.00<br />
$<br />
$<br />
3.50<br />
5.00<br />
15.00%<br />
8.00%<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
7.00<br />
N/A<br />
8.00<br />
12.00<br />
15.00<br />
$<br />
$<br />
$<br />
$<br />
15.00<br />
N/A<br />
25.00<br />
25.00<br />
35.00<br />
$ 12.00<br />
N/A<br />
$ 18.00<br />
$ 15.00<br />
$ 25.00<br />
5.00%<br />
N/A<br />
10.00%<br />
13.00%<br />
20.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
$<br />
150,000.00<br />
200,000.00<br />
100,000.00<br />
100,000.00<br />
$<br />
$<br />
$<br />
$<br />
275,000.00<br />
350,000.00<br />
250,000.00<br />
300,000.00<br />
Retail/Commercial Land<br />
Residential<br />
$ 300,000.00<br />
N/A<br />
$ 1,000,000.00<br />
N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 118
Long Island, New York<br />
New York City, New York<br />
Contact<br />
<strong>NAI</strong> Long Island<br />
+1 631 270 3000<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
5,023,919<br />
4,879,773<br />
2,616,956<br />
$104,291<br />
Long Island continues to feel the effects of the recession<br />
but tenants, owners and investors remain optimistic but<br />
cautious. Unemployment rates remain at 6.9%, below the<br />
national average but high by local standards. High real<br />
estate taxes and the lack of affordable housing continue<br />
to be the largest problems for the region and obstacles to<br />
significant job growth<br />
Long Island’s huge buying power has caused the retail<br />
sector to improve. Equity One broke ground on a 330,000<br />
SF retail project in Westbury, the largest development in<br />
the region scheduled for completion in late <strong>2012</strong>. Although<br />
most of their requirements have changed, tenants are<br />
aggressively looking for locations. LA Fitness opened four<br />
locations, Shop-Rite opened several new locations and BJ’s<br />
Warehouse committed to 120,000 SF in Garden City.<br />
While there is activity in the office sector, vacancy has<br />
increased slightly to 11.7% for Class A and 10.8% for Class<br />
B. A significant amount of sublet space continues to exist<br />
leaving choices for tenants. Landlords continue to offer large<br />
rent concessions to attract tenants. Two of the larger deals<br />
were the lease of 55,000 SF by Astoria Federal in Jericho<br />
and the sale of 538 Broad Hollow Road, a 184,000 SF office<br />
building In Melville.<br />
Industrial vacancy has dropped to 5.2% from a year ago,<br />
mainly due to the lack of capital preventing users from<br />
buying. However, rents remain low in this sector. By far the<br />
largest project is Steel Equities’ purchase of 100 acres in<br />
Bethpage previously occupied by Grumman. Activity has<br />
been brisk for the site which contains 2.4 million SF of<br />
existing and new space.<br />
Activity in the investment market remains low as lenders<br />
continue with lengthy workouts on defaulted loans. Because<br />
of the lack of distressed sales, institutional investors have<br />
flocked to stable investments that have come to market as<br />
evidenced by the $24 million sale of 1600 Stewart Avenue,<br />
the $41 million sale of 5000 Corporate Court in Holtsville<br />
and the $43.5 million sale of Independence Shopping<br />
Center in Selden.<br />
Contact<br />
<strong>NAI</strong> <strong>Global</strong> New York City<br />
+1 212 405 2500<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
18,875,151<br />
18,849,334<br />
9,670,017<br />
$97,364<br />
With over 425 million SF of office space, Manhattan is by<br />
far the largest office market in the United States. It is the<br />
quintessential international hub for media, fashion, technology,<br />
law, culture, healthcare and higher education; the home of<br />
the global financial services industry and the headquarters<br />
for more Fortune 500 corporations than any other city in the<br />
country. Over the past year, New York City has had a slow<br />
but steady economic recovery. However, the economic<br />
recovery has yet to result in meaningful employment growth<br />
in the city, with the city’s unemployment rate, currently at<br />
8.7% (2011) vacillating between 8.6% and 8.8% throughout<br />
September 2011.<br />
The economic recovery spurred historically high levels of<br />
leasing activity in the first half of 2011, with vacancy rates<br />
declining and asking rents rising throughout most of<br />
Manhattan. Over the past twelve months asking rents in the<br />
Midtown Class A market have increased by 12% to<br />
$64.48/SF while vacancy rates have declined by 8.5% to<br />
13%. Meanwhile, asking rents in Midtown South’s Class B<br />
market have increased by 10% to $44.29/SF while vacancy<br />
rates declined by 26% to 7.8%, one of the lowest vacancy<br />
rates in the country. Downtown, however, has yet to turn the<br />
corner toward improvement, with Class A asking rents<br />
declining by $0.12 to $39.81/SF and vacancy rates increasing<br />
by 22% to 17.4%.<br />
Manhattan’s retail market continues to perform strongly,<br />
especially in the city’s high-end retail corridors, where luxury<br />
retailers are attracting foreign tourists flocking to New York<br />
City to take advantage of the dollar’s depreciating value.<br />
Manhattan’s investment sales market surged in 2011, as<br />
strong market fundamentals triggered aggressive pursuits<br />
for core assets with stabilized cash flows and potential for<br />
long-term capital growths. The strong demand has resulted<br />
in a 237% increase in investment sales volume (as of<br />
Q3 2011) and significant cap rate compression, with most<br />
Manhattan properties trading with a cap rate of 3% to 5%.<br />
Median<br />
Household Income<br />
$80,812<br />
Median<br />
Household Income<br />
$65,799<br />
Total Population<br />
Median Age<br />
39<br />
Total Population<br />
Median Age<br />
37<br />
Long Island At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
N/A<br />
30.00<br />
26.00<br />
22.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 36.00<br />
$ 32.00<br />
$ 26.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 33.00<br />
$ 29.00<br />
$ 24.00<br />
N/A<br />
N/A<br />
N/A<br />
11.70%<br />
11.70%<br />
10.80%<br />
Bulk Warehouse<br />
Manufacturing<br />
$ 4.50<br />
N/A<br />
$ 7.00<br />
N/A<br />
$ 5.75<br />
N/A<br />
10.70%<br />
N/A<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
14.00<br />
N/A<br />
18.00<br />
20.00<br />
60.00<br />
$ 18.00<br />
N/A<br />
$ 28.00<br />
$ 40.00<br />
$ 120.00<br />
$ 16.00<br />
N/A<br />
$ 23.00<br />
$ 30.00<br />
$ 90.00<br />
16.60%<br />
N/A<br />
5.00%<br />
5.00%<br />
5.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
$<br />
N/A<br />
500,000.00<br />
N/A<br />
$ 1,000,000.00<br />
Land in Industrial Parks<br />
$ 300,000.00 $ 600,000.00<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
500,000.00<br />
800,000.00<br />
N/A<br />
$ 1,000,000.00<br />
$ 2,500,000.00<br />
N/A<br />
New York City At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
mIdtoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
mIdtoWn soutH offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
retaIl<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
37.00<br />
24.00<br />
N/A<br />
35.00<br />
24.00<br />
N/A<br />
29.00<br />
23.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
145.00<br />
70.00<br />
N/A<br />
65.00<br />
65.00<br />
N/A<br />
72.00<br />
48.00<br />
N/A<br />
$ 64.48<br />
$ 42.47<br />
N/A<br />
$ 57.04<br />
$ 44.29<br />
N/A<br />
$ 39.81<br />
$ 35.83<br />
N/A<br />
13.00%<br />
11.30%<br />
N/A<br />
7.00%<br />
7.80%<br />
N/A<br />
8.20%<br />
16.70%<br />
Midtown<br />
$ 43.00 $ 2,500.00 $ 146.00 4.60%<br />
Midtown South<br />
Downtown<br />
$<br />
$<br />
30.00<br />
39.00<br />
$<br />
$<br />
575.00<br />
300.00<br />
$ 102.00<br />
$ 106.00<br />
3.80%<br />
3.20%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 119
Westchester, New York<br />
Asheville, North Carolina<br />
Contact<br />
<strong>NAI</strong> Friedland<br />
+1 914 968 8500<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
944,818<br />
944,424<br />
486,422<br />
$133,215<br />
$80,322<br />
39<br />
Westchester County remains the county with the highest<br />
property taxes in the nation, not a particularly positive<br />
statistic. Businesses continue to leave here for better<br />
economic opportunities in the south, and if they need to be<br />
close to New York City, New Jersey continues to be a very<br />
good alternative. Economic incentives from both New Jersey<br />
and Connecticut have been effective in causing businesses<br />
to relocate out of the state.<br />
Large deals which have taken years to close (zoning/<br />
planning and building permit delays) are finally closing, so<br />
there has been some absorption, but there remains a<br />
significant amount of space in the major Westchester<br />
markets. Many national retailers left the market a few years<br />
back and 99-cent stores took spaces previously occupied<br />
by high-end retailers. With Borders, Blockbuster, Pathmark<br />
and A&P recently vacating large spaces, we do not see<br />
change coming in the near future. We are, however, seeing<br />
more short-term/seasonal businesses popping up all over<br />
town.<br />
The office market has seen price reduction as owners try<br />
to fill up empty space, but there continues to be almost 6<br />
million SF vacant along the I-287 corridor where a majority<br />
of the Class A office space in the county is located. Prices<br />
today are similar to those of 10 to 15 years ago. Owners<br />
have been unable to upgrade aging facilities, primarily<br />
because rents necessary to pay for renovations would<br />
be far higher than what would be obtainable. Owners are<br />
looking to the county and state for tax incentives so that<br />
upgrades can occur, but in these economic times, the types<br />
of benefits necessary are not available. As a result, most of<br />
the office deals being done are renewals.<br />
The industrial market in Westchester continues to be flat.<br />
Prices have dropped to early 2000 rates, but the amount of<br />
vacant space continues to rise. There are virtually no sales<br />
comps; prices remain high. Businesses are staying where<br />
they are, occasionally looking around, but ultimately making<br />
a deal with their current landlord in order to avoid the cost<br />
of moving or closing shop.<br />
Contact<br />
<strong>NAI</strong> Beverly-Hanks<br />
+1 828 210 3940<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
469,411<br />
515,060<br />
230,852<br />
$56,736<br />
$42,628<br />
43<br />
During 2011, our market witnessed increases in listing<br />
activity and overall transaction volume. We’ve seen a<br />
narrowing of the “expectation gap” (bid/ask) between buyers<br />
and sellers, and tenants and landlords. Medical office space<br />
(a key CRE class in our market) remains stable with respect<br />
to occupancy levels, lease rates and sales prices. Very little<br />
new product is being delivered or planned in our market with<br />
the exception of several public sector projects (hospital,<br />
university expansions, etc).<br />
The strong presence of the medical community in<br />
Buncombe County and the surrounding areas has long been<br />
a supporting force behind our commercial office markets.<br />
That trend has continued through the recent recessionary<br />
period, lending critical support to many segments of an<br />
otherwise soft office market. As economic conditions slowly<br />
improved during Q1 to Q3 2011, we’ve seen incremental<br />
increases in absorption of professional and medical office<br />
space. Increased supply and softer demand during the<br />
recession has placed greater importance than ever on<br />
location, quality, amenities and pricing.<br />
Asheville’s local restaurant and retail landscape has been<br />
one of survival of the fittest. Yet strong restaurants and<br />
retailers in solid locations and with well-positioned price<br />
points have remained profitable. Overbuilding in some<br />
submarkets during the “go-go” days from 2002 to 2007 led<br />
to pressure on lease rates and other deal points during the<br />
downward cycle. Excess retail space is being absorbed and<br />
rental rates have stabilized, however tenant expectations<br />
are forcing landlords to be very competitive with regard to<br />
incentives.<br />
The Asheville MSA has experienced its share of industrial<br />
closures, relocations and consolidations in recent years. Q2<br />
and Q3 of 2011 however, have brought news of existing<br />
companies expanding, as well as announcements of new<br />
corporations bringing critical base jobs to our area (Linimar<br />
Corp. in late June 2011).<br />
Local multifamily assets remain stable. The multifamily<br />
sector has sustained strong occupancy levels and cap rates.<br />
During 2011, several significant properties changed hands<br />
and in Q2 2011, ground was broken on a 350 unit new<br />
apartment facility in the south submarket, with deliveries of<br />
units occurring currently in Q4.<br />
Westchester At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
mIdtoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl (midtown)<br />
Central Business District<br />
Neighborhood Service Centers<br />
Community Power Center<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
25.00<br />
20.00<br />
N/A<br />
18.00<br />
12.00<br />
8.00<br />
8.00<br />
12.00<br />
20.00<br />
25.00<br />
25.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
39.00<br />
24.00<br />
N/A<br />
25.00<br />
20.00<br />
12.00<br />
12.00<br />
15.00<br />
70.00<br />
50.00<br />
50.00<br />
N/A<br />
$ 26.00<br />
$ 22.00<br />
N/A<br />
$ 21.00<br />
$ 16.00<br />
$ 10.00<br />
$ 10.00<br />
$ 13.50<br />
$ 45.00<br />
$ 37.50<br />
$ 37.50<br />
N/A<br />
19.00%<br />
19.00%<br />
N/A<br />
21.00%<br />
21.00%<br />
12.50%<br />
12.50%<br />
15.00%<br />
15.00%<br />
15.00%<br />
15.00%<br />
Regional Malls<br />
$ 75.00 $ 100.00 $ 82.50 15.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Asheville At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
20.00<br />
16.00<br />
12.00<br />
20.00<br />
18.00<br />
12.00<br />
$ 24.00<br />
$ 22.00<br />
$ 20.00<br />
$ 30.00<br />
$ 26.00<br />
$ 20.00<br />
$ 21.00<br />
$ 20.00<br />
$ 16.00<br />
$ 24.00<br />
$ 22.00<br />
$ 18.00<br />
12.60%<br />
12.90%<br />
14.40%<br />
18.00%<br />
16.50%<br />
15.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
1.75<br />
3.00<br />
5.00<br />
$<br />
$<br />
$<br />
3.50<br />
6.00<br />
9.00<br />
$<br />
$<br />
$<br />
3.15<br />
4.25<br />
6.00<br />
14.00%<br />
14.00%<br />
12.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
10.00<br />
12.50<br />
10.00<br />
12.00<br />
$ 18.00<br />
$ 24.00<br />
$ 26.00<br />
$ 44.00<br />
$ 14.00<br />
$ 16.00<br />
$ 16.00<br />
$ 22.00<br />
14.00%<br />
11.00%<br />
9.00%<br />
14.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 450,000.00 $ 1,200,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
225,000.00<br />
95,000.00<br />
50,000.00<br />
$<br />
$<br />
$<br />
450,000.00<br />
190,000.00<br />
125,000.00<br />
Retail/Commercial Land<br />
$ 450,000.00 $ 1,200,000.00<br />
Residential<br />
$ 35,000.00 $ 200,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 120
Charlotte, North Carolina<br />
Greensboro/High Point/Winston-Salem, North Carolina<br />
Contact<br />
<strong>NAI</strong> Southern Real Estate<br />
+1 704 375 1000<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
1,973,615<br />
2,200,775<br />
1,067,573<br />
$67,663<br />
$51,844<br />
The Charlotte area continues to attract newcomers to the<br />
market every year. One of the driving factors is the airport,<br />
which accommodates 700 flights daily. Other factors include<br />
the proximity to the mountains and beaches, as well as the<br />
accessibility to major cities along the East Coast. Nine<br />
Fortune 500 companies call the region home. Many<br />
businesses are relocating or expanding in the area including<br />
Time Warner, Celgard and Fifth Third Bank.<br />
The overall vacancy in the office market increased from<br />
17.1% to 17.9% over the past year. In Ballantyne Corporate<br />
Park, the Bissell Companies continue to defy odds and are<br />
under construction with three speculative buildings totaling<br />
790,000 SF. The three premier submarkets in Charlotte;<br />
Downtown, Southpark and Ballantyne, continue to attract the<br />
majority of newer, high-end tenants.<br />
The industrial market has puttered along in recent years.<br />
Thankfully, supply has been extremely limited resulting in the<br />
vacancy rate hovering around 14% for the last 10 quarters.<br />
Most of the moves have been within the market versus<br />
companies moving to the region. Several build-to-suit<br />
prospects are considering sites in the region. However, there<br />
is not enough demand, nor is the financing attractive enough<br />
to get developers to consider building speculative buildings.<br />
After rising for three years, retail vacancies finally improved<br />
a modest 0.3%. Some of the larger shopping centers traded<br />
hands and the new owners were able to entice tenants by<br />
lowering lease rates. Generous concessions have been<br />
offered throughout the area. The market is waiting to see<br />
whether or not Childress Klein and General Growth Properties<br />
are able to pull off the development of the 1,300,000 SF<br />
Bridges of Mint Hill.<br />
The investment business continued to improve from an<br />
anemic 2008 and 2009. High profile properties in each asset<br />
class traded hands, with multifamily leading the way. Investor<br />
demand pushed multifamily cap rates to the 5.5% to 6.0%<br />
range. Class A office, industrial and retail properties traded<br />
between 7% and 8%.<br />
Contact<br />
<strong>NAI</strong> Piedmont Triad<br />
+1 336 373 0995<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
1,537,612<br />
1,625,907<br />
796,721<br />
$57,680<br />
$44,513<br />
The Piedmont Triad market is slowly emerging from the<br />
economic downturn. The biggest news in the region is the<br />
announcement of a $426 million Caterpillar manufacturing<br />
facility in eastern Forsyth County, employing 510 people in<br />
an 850,000 SF facility in <strong>2012</strong>. In addition, TIMCO Aerosystems<br />
opened an aircraft seat manufacturing plant employing 500<br />
in northern Davidson County in November, 2011.<br />
The Piedmont Triad industrial market saw an improvement<br />
in 2011, however industrial vacancies remain high with<br />
distribution center space over 200,000 SF exceeding<br />
6,000,000 SF. Flex space is also very soft with vacancies<br />
exceeding 20% and rental rates falling. Increased demand<br />
for warehouse space between 20,000 and 40,000 SF is the<br />
lone bright spot in the $3.00 to $3.50 range.<br />
The retail sector has shown marginal improvement in 2011.<br />
Rents continue to decline, but there are active prospects<br />
looking in the market. Restaurant and convenience store<br />
activity has been brisk. Big box and grocery anchored shopping<br />
center developments are non-existent.<br />
The office market followed other market segments, with no<br />
net absorption in 2011. Activity is emerging, with 30,000<br />
to100,000 SF deals touring the market with <strong>2012</strong> space<br />
requirements. Vacancy is over 20% in all suburban markets.<br />
Downtown areas have vacancy rates approaching 7% for<br />
Class A space, but rental rates and lending requirements<br />
make new construction difficult.<br />
Infrastructure improvements bode well for the future of<br />
the region. Expansion of a third runway and major road<br />
improvements have resulted in a $300 million FedEx<br />
Mid-Atlantic hub opening at the airport and a 400,000 SF<br />
FedEx Ground sorting facility in Kernersville. Honda Jet has<br />
opened a headquarters and R&D facility at the Airport.<br />
Honda recently announced 417 new jobs in an $80 million<br />
maintenance facility to be located adjacent to its headquarters.<br />
Public sector investment is strong, with UNC-G and NC<br />
A&T universities completing a $60 million center for<br />
Nanotechnology in east Greensboro. Growth continues in<br />
Winston-Salem, with significant expansions at Wake Forest<br />
Baptist and the center for regenerative medicine.<br />
Total Population<br />
Median Age<br />
36<br />
Total Population<br />
Median Age<br />
39<br />
Charlotte At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
23.00<br />
16.00<br />
24.00<br />
20.00<br />
15.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
34.00<br />
24.00<br />
28.00<br />
28.00<br />
21.00<br />
N/A<br />
$ 27.00<br />
$ 21.00<br />
$ 27.00<br />
$ 22.70<br />
$ 19.00<br />
N/A<br />
10.20%<br />
20.00%<br />
22.00%<br />
16.80%<br />
18.50%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
2.50<br />
2.75<br />
6.00<br />
$<br />
$<br />
$<br />
3.50<br />
3.90<br />
10.00<br />
$<br />
$<br />
$<br />
2.80<br />
3.15<br />
7.00<br />
14.30%<br />
8.50%<br />
9.50%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
18.00<br />
14.00<br />
13.00<br />
16.00<br />
$<br />
$<br />
$<br />
$<br />
35.00<br />
26.00<br />
23.00<br />
25.00<br />
$ 25.00<br />
$ 17.50<br />
$ 17.44<br />
$ 19.08<br />
22.80%<br />
9.50%<br />
8.50%<br />
5.30%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 1,000,000.00 $ 2,100,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
100,000.00<br />
40,000.00<br />
75,000.00<br />
$<br />
$<br />
$<br />
250,000.00<br />
125,000.00<br />
200,000.00<br />
Retail/Commercial Land<br />
$ 100,000.00 $ 1,500,000.00<br />
Residential<br />
$ 10,000.00 $ 60,000.00<br />
Greensboro, High Point, Winston-Salem At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
22.00<br />
18.50<br />
11.00<br />
21.00<br />
18.50<br />
11.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
28.00<br />
21.00<br />
15.00<br />
26.00<br />
22.00<br />
16.00<br />
$ 25.00<br />
$ 19.50<br />
$ 13.50<br />
$ 23.00<br />
$ 19.00<br />
$ 13.00<br />
N/A<br />
N/A<br />
25.00%<br />
N/A<br />
15.00%<br />
20.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
2.00<br />
3.50<br />
N/A<br />
$<br />
$<br />
3.50<br />
4.75<br />
N/A<br />
$<br />
$<br />
3.25<br />
4.00<br />
N/A<br />
15.00%<br />
10.00%<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
8.00<br />
12.00<br />
16.00<br />
22.00<br />
$<br />
$<br />
$<br />
$<br />
23.00<br />
20.00<br />
24.00<br />
40.00<br />
$ 16.00<br />
$ 18.00<br />
$ 20.00<br />
$ 28.00<br />
15.00%<br />
20.00%<br />
12.00%<br />
12.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 700,000.00 $ 2,000,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
100,000.00<br />
75,000.00<br />
50,000.00<br />
125,000.00<br />
20,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
300,000.00<br />
150,000.00<br />
100,000.00<br />
250,000.00<br />
75,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 121
Raleigh/Durham, North Carolina<br />
Fargo, North Dakota<br />
Contact<br />
<strong>NAI</strong> Carolantic Realty<br />
+1 919 832 0594<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
1,928,033<br />
2,155,657<br />
1,019,281<br />
$61,323<br />
$46,941<br />
36<br />
Based on several metrics, Raleigh was ranked number one<br />
in Businessweek.com’s first Best Cities ranking. It is no<br />
surprise considering the region is home to three major<br />
universities; North Carolina State University, Duke University<br />
and the University of North Carolina at Chapel Hill. Also<br />
helping the area get high marks is The Research Triangle<br />
Park, one of the most successful R&D centers in the<br />
world featuring microelectronics, environmental sciences,<br />
pharmaceuticals and biotechnology companies.<br />
The local office market experienced a slight decrease in<br />
office vacancy at the end of the Q3 2011 with 15% for<br />
suburban Class A, down from 17%; and 24% for suburban<br />
Class B, down from 25%. Net absorption totaled 100,000+<br />
SF over the past 12 months and rental rates remained flat.<br />
Approximately 133,000 SF of office space was under<br />
construction at the end of the Q3 2011. The largest office<br />
sales transaction was Fidelity Investments’ purchase of four<br />
office buildings in The Research Triangle Park. Fidelity paid<br />
$34.3 million for the buildings in late September. LED<br />
lighting company Cree bought another office building near<br />
its Durham headquarters, a 59,902 SF building for $3.65<br />
million.<br />
In the industrial market, vacancy dropped slightly from the<br />
previous quarter to a rate of 21%. Net absorption was down<br />
in the warehouse category, but the flex market had<br />
175,000 SF absorbed over a twelve month period. Rental<br />
rates remained in the $4 to $10 range depending on<br />
product type. No new construction is underway at the end<br />
of Q3 2011. In the flex market, 11 buildings in Keystone<br />
Technology Park were sold to The Lionstone Group for<br />
$88.8 million. In September, Duke Realty paid just under<br />
$31 million for four industrial warehouses and two flex<br />
office buildings totaling 371,600 SF, and 66 acres of land.<br />
The retail market had a slight increase in vacancy to 9%<br />
with positive absorption over 12 months of 60,000 SF.<br />
Despite two store closings (a Kmart and a Kroger store),<br />
several new tenants expanded at The Streets at Southpoint<br />
Mall in Durham. In addition, a 360,000+ SF shopping<br />
center was opened this fall in Cary anchored by a Target<br />
and buybuyBaby. Rental rates in the market dropped<br />
slightly.<br />
Contact<br />
<strong>NAI</strong> North Central<br />
+1 701 364 0244<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
216,073<br />
245,226<br />
129,087<br />
$64,707<br />
$48,706<br />
31<br />
Fargo-Moorhead remains a vibrant population center as well<br />
as a key transportation hub in the upper Midwest. Fargo-<br />
Moorhead’s economic outlook is promising. Both the labor<br />
and education are here to sustain future business growth as<br />
the population approaches, and soon exceeds, 200,000. This<br />
includes more than 26,000 college students enrolled in three<br />
major colleges. The Fargo-Moorhead population epitomizes<br />
the Midwestern values of hard work, honesty, integrity and<br />
something we call “Minnesota-North Dakota Nice.”<br />
Fargo-Moorhead’s business climate enjoys consistent<br />
growth through world class education, research, unique<br />
advanced facilities, strong industry-university partnerships,<br />
sophisticated business infrastructure and skilled and<br />
productive employees. Our companies are competing<br />
globally and profiting in a community that is fully engaged<br />
in deliberate, cooperative and business focused planning<br />
and execution.<br />
The regional agricultural and agribusiness base is solid.<br />
Producers-growers throughout the Red River Valley have<br />
realized near record yields and revenues for the last several<br />
years. Companies such as Amity Technology, Bobcat and<br />
Case IH continue to make in-roads into export markets. Labor<br />
negotiations have made recent news between American<br />
Crystal Sugar and its labor union(s).<br />
Fargo-Moorhead is a major transportation center for regional,<br />
national and international shipping. Major trucking concerns,<br />
such as Magnum and Valley Express, maintain operations<br />
here. Cross-dock facilities are also available. Agricultural<br />
commodities and manufactured goods are distributed<br />
worldwide by rail, truck and air. Hector International Airport<br />
allows for air freight to overseas markets and BNSF Railway<br />
maintains an intermodal center in Dilworth, MN.<br />
Health care continues to expand with Sanford Health. It is<br />
expected Sanford Health will soon break ground at a new<br />
campus after consolidating its merger with Meritcare. This<br />
new project will enhance real estate values in south Fargo<br />
while adding jobs to the health care industry.<br />
Special mention is given this year to the energy boom taking<br />
place in the Bakken Oil Field of western North Dakota. The<br />
tremendous growth taking place in this region will have a<br />
direct impact on businesses of all types serving the energy<br />
sector. Fargo-Moorhead will realize benefits as the drive to<br />
develop this resource progresses in the years ahead.<br />
Raleigh/Durham At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
25.00<br />
19.00<br />
15.00<br />
22.00<br />
18.00<br />
12.00<br />
$ 28.95<br />
$ 25.00<br />
$ 18.00<br />
$ 30.00<br />
$ 24.00<br />
$ 16.50<br />
$ 26.98<br />
$ 22.00<br />
$ 16.50<br />
$ 26.00<br />
$ 21.00<br />
$ 14.25<br />
N/A<br />
6.00%<br />
16.00%<br />
N/A<br />
15.00%<br />
25.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
2.50<br />
3.00<br />
$<br />
$<br />
5.00<br />
5.00<br />
$<br />
$<br />
3.75<br />
4.00<br />
21.00%<br />
21.00%<br />
High Tech/R&D<br />
retaIl<br />
$ 6.50 $ 10.00 $ 7.50 17.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
8.00<br />
8.50<br />
14.00<br />
21.00<br />
$ 21.00<br />
$ 14.00<br />
$ 22.00<br />
$ 45.00<br />
$ 14.50<br />
$ 11.25<br />
$ 18.00<br />
$ 33.00<br />
9.00%<br />
9.00%<br />
9.00%<br />
9.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 2,178,000.00 $ 3,920,400.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
135,000.00<br />
75,000.00<br />
60,000.00<br />
152,460.00<br />
12,500.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
200,000.00<br />
150,000.00<br />
200,000.00<br />
750,000.00<br />
75,000.00<br />
Fargo At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
$ 14.00 $ 20.00 $ 18.00 14.00%<br />
Class A (Prime)<br />
$ 9.50 $ 16.00 $ 14.50 8.50%<br />
Class B (Secondary)<br />
suburban offIce<br />
$ 7.50 $ 10.00 $ 9.00 8.00%<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 14.00<br />
$ 12.00<br />
$ 10.00<br />
$ 16.00<br />
$ 16.00<br />
$ 12.00<br />
$ 16.00<br />
$ 14.00<br />
$ 10.00<br />
10.00%<br />
7.00%<br />
8.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
4.40<br />
4.75<br />
$<br />
$<br />
6.25<br />
7.00<br />
$<br />
$<br />
5.40<br />
6.50<br />
8.50%<br />
7.00%<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$<br />
$<br />
9.50<br />
9.00<br />
$ 16.00<br />
$ 16.00<br />
$ 14.50<br />
$ 14.50<br />
N/A<br />
11.50%<br />
Neighborhood Service Centers $ 10.50 $ 12.50 $ 11.00 12.00%<br />
Sub Regional Centers<br />
$ 8.00 $ 10.00 $ 8.00 11.00%<br />
Regional Malls<br />
$ 15.00 $ 20.00 $ 18.00 2.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
370,260.00<br />
78,408.00<br />
65,340.00<br />
76,230.00<br />
156,816.00<br />
20,910.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
662,112.00<br />
152,460.00<br />
98,010.00<br />
126,324.00<br />
235,224.00<br />
55,539.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 122
Akron, Ohio<br />
Canton, Ohio<br />
Contact<br />
<strong>NAI</strong> Cummins<br />
Real Estate<br />
+1 330 535 2661<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
704,319<br />
708,753<br />
379,289<br />
$65,167<br />
$50,068<br />
38<br />
As a key location in northeastern Ohio, the Akron area has<br />
continued to weather the economic downturn. In 2011,<br />
increased activity for the industrial sector included Alcoa<br />
($21 million expansion), German-based Rochling Automotive<br />
($15 million), Diebold Inc. ($100 million new HQ), Involta<br />
LLC ($20 million), and Goodyear’s World HQ to be completed<br />
in 2013 ($160 million). The new 136 acre “Seasons Greene<br />
Eco-Industrial Park” in Hudson is the first of its kind in Ohio.<br />
Industrial park redevelopment is underway at the former<br />
167 acre Twinsburg Chrysler Plant. The City of Green<br />
acquired funding for a 200 acre expansion of the Akron-<br />
Canton Airport Industrial Park.<br />
The medical community continues on a rapid expansion with<br />
Summa Hospital Systems ($17 million) and Akron General<br />
Medical ($32 million) both opening new locations in Green.<br />
On the southern extremes of the county, Timken has<br />
partnered with Stark State College ($9.6 million) for a<br />
renewable wind power facility.<br />
The University of Akron continues to be a solid partner for<br />
Akron’s development. Currently under construction are two<br />
new residence projects totaling $47 million. Downtown,<br />
Akron is continuing with its development of the Biomedical<br />
Corridor, including the construction of Austen BioInnovation<br />
Institute’s facility and the FMI Medical Systems’ facility ($16<br />
million), funded by a Chinese investment group.<br />
The retail sector continues to go at a slow but steady pace,<br />
with vacancies starting to improve. Walmart is planning to<br />
replace an existing store with a new Super Center/Sams<br />
Club. On the south side Walmart is expanding an existing<br />
store by 35,000 SF to create another Super Center.<br />
The office market continues to struggle with current overall<br />
vacancy rates approaching the 24% range, and 12% in the<br />
CBD. Rates continue to be lower and creative deals are<br />
becoming the norm. Corporations continue to be cautious<br />
and are still downsizing. There has been little to no new<br />
office development over the past two years.<br />
The state economic development department has been<br />
privatized into several regional offices. They fall under the<br />
new Jobs Ohio program, which is funded by a $100 million<br />
annual seed fund to help grow and attract businesses<br />
to Ohio.<br />
Contact<br />
<strong>NAI</strong> Spring<br />
+1 330 966 8800<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
402,664<br />
395,348<br />
206,014<br />
$59,295<br />
$46,695<br />
40<br />
The commercial real estate market in Canton has remained<br />
relatively stable in 2011. Canton, located just 60 miles south<br />
of Cleveland, offers businesses an educated labor force, low<br />
cost of living and a great place to raise a family. Canton’s<br />
growth during the second half of 2011 centered around the<br />
oil and gas industry. The influx of tenants for both warehouse<br />
and office space helped stabilize rates and fill mostly vacant<br />
industrial buildings, land and warehouse.<br />
Much of the vacant industrial space with acreage has been<br />
absorbed by the oil and gas industry in association with<br />
drilling and exploration of the Utica and Marcellus Shales.<br />
In addition, we have seen growth in manufacturing as well.<br />
Suarez Corporation leased approximately 200,000 SF in<br />
North Canton for manufacturing the EdenPURE heater.<br />
Office space is still abundant in downtown Canton and<br />
Belden Village. Buyers in 2011 continue to see excellent<br />
deals and tenants very reasonable rates. VXI <strong>Global</strong><br />
Solutions purchased the former Ohio Bell building to locate<br />
their regional call center, eventually bringing 1,000 jobs to<br />
Canton. Diebold also announced in May that they will be<br />
building a new corporate headquarters in the area. Location<br />
and timing is still to be determined. The Pro Football Hall of<br />
Fame is also in the middle of a two year, $23.6 million<br />
expansion.<br />
Retail growth has seen a very slight upturn, but developer<br />
Stark Enterprises is in talks to create a new retail sector<br />
north of the current strip center. The Akron Canton Airport<br />
(CAK) continues to grow, meeting record numbers every<br />
year. The airport just completed an interior renovation and<br />
they are in the midst of a significant parking expansion. All<br />
local colleges including Stark State, Kent State-Stark, Walsh<br />
University and Malone University continue to grow with on<br />
and off campus expansions of educational facilities and<br />
cooperative ventures with local businesses.<br />
<strong>2012</strong> looks bright with the oil and gas industry creating new<br />
jobs and opportunities in all sectors including industrial,<br />
office, retail and land. Also, the Timken Company, a major<br />
corporation in the area is looking at construction of a new<br />
corporate office.<br />
Akron At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
19.00<br />
14.00<br />
9.50<br />
17.50<br />
14.50<br />
8.50<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
23.00<br />
19.00<br />
19.00<br />
21.00<br />
20.00<br />
14.00<br />
$ 16.50<br />
$ 16.00<br />
$ 14.07<br />
$ 18.50<br />
$ 18.50<br />
$ 12.00<br />
N/A<br />
11.00%<br />
13.00%<br />
N/A<br />
15.00%<br />
23.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
2.25<br />
2.75<br />
7.00<br />
$<br />
$<br />
$<br />
4.00<br />
3.75<br />
8.00<br />
$<br />
$<br />
$<br />
3.25<br />
3.25<br />
7.50<br />
14.00%<br />
12.00%<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
7.00<br />
6.00<br />
10.00<br />
20.00<br />
$<br />
$<br />
$<br />
$<br />
17.00<br />
30.00<br />
17.00<br />
30.00<br />
$ 12.00<br />
$ 13.50<br />
$ 14.00<br />
$ 25.00<br />
8.00%<br />
14.00%<br />
14.00%<br />
4.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
350,000.00<br />
140,000.00<br />
60,000.00<br />
55,000.00<br />
100,000.00<br />
15,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
525,000.00<br />
250,000.00<br />
100,000.00<br />
90,000.00<br />
300,000.00<br />
20,000.00<br />
Canton At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
14.00<br />
11.00<br />
8.00<br />
14.00<br />
11.00<br />
8.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
18.00<br />
16.00<br />
12.00<br />
22.00<br />
18.00<br />
12.00<br />
$ 16.00<br />
$ 14.00<br />
$ 10.00<br />
$ 18.00<br />
$ 14.00<br />
$ 10.00<br />
N/A<br />
12.00%<br />
28.00%<br />
N/A<br />
15.00%<br />
17.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
1.50<br />
2.00<br />
6.00<br />
$<br />
$<br />
$<br />
4.00<br />
3.50<br />
12.00<br />
$<br />
$<br />
$<br />
2.75<br />
2.75<br />
9.00<br />
8.00%<br />
10.00%<br />
8.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
8.00<br />
6.00<br />
8.00<br />
15.00<br />
$<br />
$<br />
$<br />
$<br />
16.00<br />
30.00<br />
14.00<br />
30.00<br />
$ 12.00<br />
$ 12.00<br />
$ 10.00<br />
$ 20.00<br />
15.00%<br />
13.00%<br />
10.00%<br />
8.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
75,000.00<br />
100,000.00<br />
20,000.00<br />
20,000.00<br />
200,000.00<br />
20,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
150,000.00<br />
250,000.00<br />
100,000.00<br />
200,000.00<br />
850,000.00<br />
200,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 123
Cincinnati, Ohio<br />
Cleveland, Ohio<br />
Contact<br />
<strong>NAI</strong> Bergman<br />
+1 513 769 1700<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
2,125,952<br />
2,113,487<br />
1,115,297<br />
$72,204<br />
$55,705<br />
36<br />
Slow and steady with a lot of patience is the <strong>2012</strong> mantra.<br />
The Greater Cincinnati economic outlook remains focused<br />
on recovery, anticipating slight increases from the 2011<br />
anemic growth. Housing inventory dropped to a more<br />
market-manageable norm. Low inflation is expected to keep<br />
the local economy improving. The signs of improvement<br />
continue to require a great measure of nurturing. Cincinnati<br />
received significant 2011 recognition being named #10 -<br />
Kiplinger’s Top 10 Value Cities and #5 - List of America’s<br />
Most Affordable Cities.<br />
The 2011 Cincinnati office market witnessed the much<br />
anticipated CBD tenant shuffle. Great American Insurance<br />
Group (563,300 SF); Frost Brown Todd L.L.C. (103,000 SF);<br />
Vorys, Sater, Seymour, & Pease LLP (75,000 SF) moved to<br />
the Great American Tower at Queen City Square, the<br />
825,000 SF downtown centerpiece located at 301 East<br />
Fourth Street. Other large downtown players were<br />
Dunhumby USA, First Financial Bank and Rendigs, Fry, Kiely,<br />
& Dennis. Children’s Hospital Medical Center moved to the<br />
newly renovated Vernon Manor Hotel (156,000 SF). The<br />
largest suburban transaction was Humana RightSource at<br />
the Executive Center I building (173,884 SF). The <strong>2012</strong><br />
office market challenge will be to maintain Cincinnati’s major<br />
economic players, fill the space blocks left vacant by the<br />
Great American Tower opening and create rent stability.<br />
Retail vacancy increased in 2011. Rents were slightly down<br />
year-over-year. We expect vacancy rates to improve overall<br />
in <strong>2012</strong>. Target completed two new stores at 9023 Plainfield<br />
Rd (138,568 SF) and 120 Pavilion Parkway (134,500 SF);<br />
and Jungle Jim’s added an Eastgate location (175,000 SF).<br />
Other active retail tenants included Hobby Lobby, Remke,<br />
Dunham’s Sports, Aveda Institute, buybuy Baby, Aldi and<br />
Smashburger.<br />
While the overall industrial vacancy rate is stable, high<br />
vacancy in manufacturing is expected to continue throughout<br />
<strong>2012</strong>. The rental rates in distribution appear to be stabilizing.<br />
A spec 550,000 SF distribution center by IDI may be a clue<br />
to rising rental rates. Significant sales included 8741<br />
Jacquemin Drive (601,065 SF) at $47/SF, 4520 LeSaint<br />
Court (299,600 SF) at $41/SF and 1700 Carillon Blvd<br />
(335,770 SF) at $49/SF. Significant leases included<br />
Spiraledge (390,000 SF), Southwest Stainless (166,400 SF)<br />
and The Wornick Company (150,000 SF).<br />
Contact<br />
<strong>NAI</strong> Daus<br />
+1 216 831 3310<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
2,229,639<br />
2,193,489<br />
1,165,494<br />
$73,099<br />
$57,705<br />
39<br />
The Cleveland marketplace continued to show a general<br />
improvement, but the recovery has been anything but<br />
smooth and characterized by a series of ‘good news bad<br />
news’ scenarios. The over-riding good news included a<br />
noticeable increase in leasing velocity as well as the gradual<br />
loosening in the financing market. But nearly all of the<br />
leasing activity was smaller in terms of square footage and<br />
term, and the number of distressed commercial properties<br />
continued to mount.<br />
The overall office vacancy rate ended the year at 13%.<br />
Leasing rates were flat and net absorption was slightly<br />
positive. But the landscape will change in the next 24<br />
months. Eaton Corporation, Ernst & Young and American<br />
Greetings will all move into new facilities. This will be a boom<br />
for the immediate areas they are moving to, but it could be<br />
a bust to the immediate areas they are leaving behind. The<br />
completion of the new medical mart and Horseshoe Casino<br />
will help increase activity downtown; their collective impact<br />
on the downtown office market will be closely watched.<br />
Cleveland’s economic fortune has been closely tied to the<br />
industrial sector. Bolstered by steady improvement across<br />
the automotive, construction and transportation segments,<br />
the region’s industrial sector was stable. Rents were slightly<br />
softer, overall vacancy was under 10%, which is relatively<br />
unchanged from 2010 and new construction was limited to<br />
a small handful of build-to-suit projects.<br />
The retail sector saw a similar scenario, slowly improving<br />
leasing activity, flat rents and limited new construction.<br />
It also saw good news, bad news. The good news are<br />
large-scale retail development projects announced by First<br />
Interstate in Cleveland Heights & South Euclid and by the<br />
Jacobs Group in Avon. The bad news is the continuing<br />
struggle among many retailers headlined by the bankruptcy<br />
filings of Borders Books and Blockbuster Video.<br />
Looking forward, <strong>2012</strong> will likely look a lot like 2011.<br />
Businesses will exercise caution when making any decision,<br />
particularly with regards to their real estate needs. Lending<br />
will continue to loosen and market rate sales will again<br />
be in short supply. The result will be a sustained slow<br />
improvement that stretches into 2013.<br />
Cincinnati At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
14.00<br />
11.00<br />
N/A<br />
12.46<br />
10.00<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
27.00<br />
18.00<br />
N/A<br />
20.97<br />
19.86<br />
N/A<br />
$ 20.50<br />
$ 14.50<br />
N/A<br />
$ 17.00<br />
$ 14.50<br />
N/A<br />
18.50%<br />
17.00%<br />
N/A<br />
18.80%<br />
15.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
2.15<br />
1.00<br />
N/A<br />
$<br />
$<br />
4.25<br />
7.00<br />
N/A<br />
$<br />
$<br />
2.90<br />
2.64<br />
N/A<br />
9.30%<br />
20.50%<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
9.00<br />
2.30<br />
5.00<br />
12.00<br />
$<br />
$<br />
$<br />
$<br />
12.50<br />
30.00<br />
30.00<br />
24.00<br />
$ 12.11<br />
$ 10.62<br />
$ 12.76<br />
$ 18.77<br />
2.40%<br />
19.10%<br />
11.00%<br />
12.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
100,000.00<br />
50,000.00<br />
26,000.00<br />
15,000.00<br />
150,000.00<br />
15,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
500,000.00<br />
400,000.00<br />
200,000.00<br />
400,000.00<br />
600,000.00<br />
85,000.00<br />
Cleveland At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
31.00<br />
17.00<br />
14.00<br />
24.00<br />
16.00<br />
12.00<br />
3.00<br />
2.75<br />
N/A<br />
N/A<br />
5.00<br />
6.00<br />
5.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
34.00<br />
24.00<br />
18.00<br />
26.00<br />
23.00<br />
16.00<br />
5.50<br />
5.75<br />
N/A<br />
N/A<br />
32.00<br />
30.00<br />
70.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
33.00<br />
17.90<br />
14.10<br />
22.00<br />
18.40<br />
15.20<br />
4.00<br />
3.75<br />
N/A<br />
N/A<br />
12.00<br />
14.00<br />
25.00<br />
44.00%<br />
13.50%<br />
22.50%<br />
28.20%<br />
12.00%<br />
11.90%<br />
9.20%<br />
9.00%<br />
N/A<br />
N/A<br />
18.30%<br />
16.40%<br />
7.60%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
$<br />
125,000.00<br />
100,000.00<br />
60,000.00<br />
80,000.00<br />
$<br />
$<br />
$<br />
$<br />
300,000.00<br />
400,000.00<br />
125,000.00<br />
150,000.00<br />
Retail/Commercial Land<br />
$ 60,000.00 $ 1,000,000.00<br />
Residential<br />
$ 6,000.00 $ 100,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 124
Columbus, Ohio<br />
Dayton, Ohio<br />
Contact<br />
<strong>NAI</strong> Ohio Equities<br />
+1 614 224 2400<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
1,950,778<br />
2,094,016<br />
1,038,444<br />
$71,754<br />
Columbus continues to lead the state in job growth,<br />
population growth and new development, due in large part<br />
to Columbus being the state capital and home to the Ohio<br />
State University, Battelle Memorial Research Institute, health<br />
industry leader Cardinal Health, Nationwide Insurance and<br />
the Limited Brand family of stores. Major hospital systems<br />
Ohio Health, University Hospitals and Mount Carmel Health<br />
Systems continue to compete for market share with new<br />
physician sourced medical office development.<br />
Downtown, Class A and Class B office product showed<br />
positive net absorption. The same was true in the suburbs,<br />
with Class B buildings out performing Class A product.<br />
Rental rates fell slightly in all office markets as a result of<br />
landlords aggressively chasing tenant renewals. Many office<br />
leases had rates reduced and terms extended, as tenants<br />
took advantage of landlords hoping to stabilize assets that<br />
would need refinancing in the next few years. Landlords<br />
offering gross leases continue to see the most leasing<br />
activity.<br />
Tepid absorption in all segments of the warehouse market<br />
is the good news, with vacancy decreasing slightly in bulk<br />
and manufacturing space. Interest from national retailers for<br />
new development has slowed substantially. The fast, casual<br />
restaurant category is the only segment of the retail market<br />
with new store growth. Retail rates remain stagnate with the<br />
exception of some newly announced boutique centers that<br />
are asking and getting net rates in the mid $20’s.<br />
Residential development of all kinds is virtually non-existent<br />
with the exception of a few urban based, for rent development<br />
projects Single family developers continue to pick up<br />
undeveloped blanks from lenders and competitors who hope<br />
to resume building once the existing inventory starts to be<br />
absorbed. Cap rates for all investment products seem to<br />
have stabilized. Properties that had been trading at 7%<br />
capitalization now hover around 9%.<br />
The central Ohio economy continues to chug along with the<br />
bulk of activity being generated by local operators not pulled<br />
down by economies outside our region.<br />
Contact<br />
<strong>NAI</strong> Dayton<br />
+1 937 294 7777<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
979,855<br />
978,802<br />
496,219<br />
$62,806<br />
The national capital markets have been selectively increasing<br />
credit for trophy and single tenant net leased properties. The<br />
recession has ended and vacancy rates in the industrial sector<br />
are finally leveling off. However, the office sector and retail<br />
sector have been subject to downsizing in addition to significant<br />
rent renegotiations.<br />
The Dayton office sector ended Q3 2011 with a vacancy rate<br />
of 14.3%, unchanged from the previous quarter, but an<br />
increase over 2010’s rate of 12.8%. There was positive<br />
absorption of 30.490 SF. Rental rates ended Q3 2011 at<br />
$14.30/SF an increase over the previous quarter, but a<br />
decrease over 2010’s rate of $14.42/SF. There were 52,507<br />
SF delivered in Q3 2011. The largest lease signing was for<br />
30,000 SF by a medical group at 10500 Innovation Drive. The<br />
strongest submarkets remain the south market.<br />
The Dayton industrial sector ended Q3 2011 with a vacancy<br />
rate of 13.6%, a reduction from the previous quarter, and a<br />
reduction over 2010’s rate of 14.1%. There was positive<br />
absorption of 1,474,211 SF for Q3 2011. Rental rates ended<br />
Q3 2011 at $3.28/SF, a decrease over the previous quarter<br />
and 2010’s rate of $3.48/SF. A total of 1,500,000 SF were<br />
delivered in Q3 2011 with no sites under construction. The<br />
largest lease signing was for 84,200 SF by Macy’s at IWC East<br />
Extension. The strongest submarkets remain the south market.<br />
The Dayton retail sector ended Q3 2011 with a vacancy rate<br />
of 8.9%, a reduction from the previous quarter and 2010’s rate<br />
of 9.2%. There was negative net absorption of 42,360 SF for<br />
the Q3 2011. Rental rates ended Q3 2011 at $9.23/SF, an<br />
increase over the previous quarter, but a decrease over 2010’s<br />
rate of $9.34/SF. A total of 8,320 SF were delivered in Q3 2011<br />
with no sites under construction. The stronger submarkets<br />
remain the south and northeast markets.<br />
Median<br />
Household Income<br />
$58,502<br />
Median<br />
Household Income<br />
$50,890<br />
Total Population<br />
Median Age<br />
37<br />
Total Population<br />
Median Age<br />
38<br />
Columbus At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$<br />
N/A<br />
9.00 $<br />
N/A<br />
20.00<br />
N/A<br />
$ 14.00<br />
N/A<br />
14.20%<br />
Class B (Secondary)<br />
suburban offIce<br />
$ 6.00 $ 16.95 $ 8.00 17.60%<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$<br />
$<br />
15.00<br />
10.00<br />
$<br />
$<br />
18.50<br />
16.50<br />
$ 15.00<br />
$ 11.00<br />
50.00%<br />
15.80%<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
$<br />
5.00<br />
1.00<br />
1.00<br />
3.50<br />
$<br />
$<br />
$<br />
$<br />
12.95<br />
3.25<br />
3.95<br />
7.95<br />
$<br />
$<br />
$<br />
$<br />
7.00<br />
2.20<br />
1.75<br />
5.75<br />
15.70%<br />
15.20%<br />
5.20%<br />
17.10%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
10.00<br />
8.00<br />
9.00<br />
N/A<br />
$<br />
$<br />
$<br />
16.50<br />
35.00<br />
15.50<br />
N/A<br />
$ 12.50<br />
$ 12.00<br />
$ 11.50<br />
N/A<br />
35.00%<br />
11.50%<br />
10.00%<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 650,000.00 $ 1,100,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
125,000.00<br />
45,000.00<br />
35,000.00<br />
50,000.00<br />
34,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
175,000.00<br />
75,000.00<br />
150,000.00<br />
500,000.00<br />
50,000.00<br />
Dayton At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
Premium (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$<br />
$<br />
$<br />
$<br />
$<br />
15.50<br />
12.00<br />
6.00<br />
15.00<br />
12.50<br />
$<br />
$<br />
$<br />
$<br />
$<br />
21.00<br />
18.25<br />
12.50<br />
20.00<br />
18.00<br />
$ 17.25<br />
$ 15.25<br />
$ 10.45<br />
$ 17.25<br />
$ 14.25<br />
22.50%<br />
18.00%<br />
12.00%<br />
15.50%<br />
16.30%<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
$<br />
$<br />
$<br />
$<br />
$<br />
5.00<br />
1.65<br />
N/A<br />
4.50<br />
5.00<br />
4.50<br />
$<br />
$<br />
$<br />
$<br />
$<br />
10.00<br />
4.50<br />
N/A<br />
12.00<br />
12.00<br />
14.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
7.25<br />
3.55<br />
N/A<br />
9.75<br />
7.50<br />
9.65<br />
10.50%<br />
12.50%<br />
N/A<br />
21.50%<br />
9.00%<br />
19.30%<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
11.00<br />
15.00<br />
$<br />
$<br />
14.00<br />
32.00<br />
$ 11.75<br />
$ 21.00<br />
6.40%<br />
7.20%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
$<br />
182,500.00<br />
20,000.00<br />
22,200.00<br />
14,000.00<br />
$<br />
$<br />
$<br />
$<br />
478,000.00<br />
165,000.00<br />
54,550.00<br />
42,500.00<br />
Retail/Commercial Land<br />
$ 50,000.00 $ 1,150,000.00<br />
Residential<br />
$ 2,500.00 $ 135,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 125
Oklahoma City, Oklahoma<br />
Tulsa, Oklahoma<br />
Contact<br />
<strong>NAI</strong> Sullivan Group<br />
+1 405 840 0600<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
1,350,615<br />
1,463,724<br />
682,889<br />
$63,807<br />
$49,397<br />
Oklahoma City continues to lead the nation in low<br />
unemployment at 5.5%. The energy sector is continuing to<br />
add jobs at a rapid pace. Continental Resources announced<br />
it will be relocating to Oklahoma City bringing 400 jobs,<br />
Devon will finish its 53 story $750 million tower in <strong>2012</strong><br />
and Chesapeake Energy continues rapid expansion of its<br />
Oklahoma City campus. Oklahoma City continues to expand<br />
with its one cent sales tax adding over $100 million in public<br />
buildings and improvements annually.<br />
The office market continues to lead the demand sector as<br />
energy companies continue to expand. Overall office market<br />
vacancy is at 9.4% with lease rates for Class A space above<br />
$19/SF in the suburban market. Chesapeake Energy<br />
has acquired over 2 million SF of office space in addition<br />
to expanding its corporate campus. The CBD is also<br />
experiencing growth with the addition of Sand Ridge Energy<br />
and the energy sector in general, fueling lower vacancies<br />
and higher rates.<br />
The industrial market has had very little new construction<br />
in four years as rates for bulk warehouse space remain at<br />
a consistent $3.86/SF level. Warehouse space is beginning<br />
to tighten, especially for large users. Overall vacancy on bulk<br />
warehouse space is 5.5% while the overall warehouse<br />
market is at 6.4%. We will see a lot of upward pressure on<br />
rates as no new construction is taking place.<br />
The retail market remains active with new entries into the<br />
Oklahoma City market especially for food service. Whole<br />
Foods also opened their first Oklahoma store. A 300,000<br />
SF outlet mall also opened this year. Retail vacancy is below<br />
8% and rates have upward pressure.<br />
The multifamily market has experienced the most construction<br />
activity adding 1,500 units. Sales of larger, newer<br />
complexes also drive the multifamily market with cap rates<br />
averaging 8%.<br />
The overall investment markets remains sluggish outside<br />
multifamily sales as investors look to larger markets and<br />
more value add plays. The local economy never suffered<br />
through this recession as the rest of the country did and<br />
therefore no "bargains" are currently on the market.<br />
Contact<br />
<strong>NAI</strong> Commercial<br />
Properties<br />
+1 918 745 1133<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
952,215<br />
1,011,162<br />
486,803<br />
$64,122<br />
$48,185<br />
Tulsa’s market in 2011 remains stable with some moderate<br />
improvements in most sectors. While lending and tightened<br />
credit conditions have stifled investment and acquisition<br />
activity over the last few years, Tulsa’s 6.3% unemployment<br />
continues to outpace the nation. Tulsa’s lower unemployment<br />
has contributed to a noticeable uptick in lease activity thus<br />
helping lower vacancies from 2010. Tulsa’s energy and<br />
manufacturing tied industries continue to lead Tulsa’s<br />
improving market conditions.<br />
The office market remains stable despite a percentage drop<br />
in vacancy. The overall vacancy for Tulsa is 75.8% in a<br />
market totaling 22 million SF, which is down from 76.8%<br />
last year. The average rental rate is $14.54/SF with the<br />
suburban sector pushing averages of $15.08/SF with Class<br />
A and Class B property rents at or near $20/SF. The vacancy<br />
rates should see improvement by Q1 or Q2 <strong>2012</strong> as more<br />
demand and less supply for larger 20,000 blocks of space.<br />
Tulsa’s retail market is starting to see new national tenants<br />
to the market despite an unchanged vacancy rate from<br />
2010 at around 12.11% for an 18.8million SF market.<br />
Newer power centers are seeing new national retailer<br />
interest from BuyBuy Baby, Dick’s Sporting Goods, Northern<br />
Tools and a variety of specialty grocers like Sprouts, Green<br />
Acres and Sunflower <strong>Market</strong>. Weighted average rents for<br />
Tulsa retail centers have increased slightly to $11.59/SF for<br />
2011. With development and a good job market, Tulsa’s<br />
retail market should be poised for continued positive growth.<br />
The industrial market in contrast has shown positive absorption<br />
in 2011 with 500,000 SF in a 74 million SF market. The<br />
overall vacancy has dropped to 8% compared to 10.4% in<br />
2010. Average lease rates experienced a slight increase up<br />
to $4.55/SF. Lease activity is strongest in the manufacturing<br />
sector (energy and oilfield related), particularly with crane<br />
facilities, accounting for 90% of the year-to-date absorption.<br />
Bulk warehouse and flex service building vacancies did see<br />
a slight increases to 26% and 14% respectively.<br />
Investment/land hospitality was not active for the Tulsa<br />
market in 2011. Downtown Tulsa continues to see stronger<br />
demand from retail, hospitality, mixed use and residential<br />
from ongoing public and private revitalization efforts.<br />
Total Population<br />
Median Age<br />
36<br />
Total Population<br />
Median Age<br />
35<br />
Oklahoma City At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
21.00<br />
18.00<br />
14.00<br />
19.00<br />
18.00<br />
14.50<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
23.00<br />
20.00<br />
15.50<br />
23.00<br />
19.00<br />
16.00<br />
$ 22.00<br />
$ 19.00<br />
$ 14.75<br />
$ 21.00<br />
$ 18.50<br />
$ 15.25<br />
14.10%<br />
14.20%<br />
9.70%<br />
14.40%<br />
12.60%<br />
9.20%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$<br />
$<br />
$<br />
3.25<br />
3.50<br />
7.00<br />
N/A<br />
$<br />
$<br />
$<br />
4.50<br />
5.00<br />
9.50<br />
N/A<br />
$<br />
$<br />
$<br />
3.86<br />
4.25<br />
8.25<br />
N/A<br />
5.50%<br />
14.00%<br />
17.60%<br />
N/A<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
Regional Malls<br />
$<br />
$<br />
$<br />
8.50<br />
13.00<br />
13.50<br />
$<br />
$<br />
$<br />
11.50<br />
14.00<br />
16.50<br />
$ 10.50<br />
$ 13.50<br />
$ 15.00<br />
7.20%<br />
3.20%<br />
20.10%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
265,000.00<br />
400,000.00<br />
100,000.00<br />
275,000.00<br />
135,000.00<br />
8,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
655,000.00<br />
550,000.00<br />
125,000.00<br />
425,000.00<br />
300,000.00<br />
18,000.00<br />
Tulsa At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
NA<br />
14.00<br />
11.00<br />
19.00<br />
13.50<br />
11.50<br />
$<br />
$<br />
$<br />
$<br />
$<br />
NA<br />
19.00<br />
15.00<br />
26.00<br />
22.00<br />
16.00<br />
NA<br />
$ 16.34<br />
$ 12.76<br />
$ 22.00<br />
$ 19.80<br />
$ 15.04<br />
NA<br />
8.10%<br />
31.60%<br />
N/A<br />
7.40%<br />
18.20%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$<br />
$<br />
$<br />
$<br />
4.00<br />
3.15<br />
5.00<br />
6.00<br />
$<br />
$<br />
$<br />
$<br />
5.25<br />
5.50<br />
9.00<br />
26.00<br />
$<br />
$<br />
$<br />
4.34<br />
4.03<br />
6.43<br />
N/A<br />
26.00%<br />
8.00%<br />
14.00%<br />
N/A<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
6.00<br />
12.00<br />
20.00<br />
$<br />
$<br />
$<br />
28.00<br />
28.00<br />
40.00<br />
$ 11.59<br />
$ 14.27<br />
N/A<br />
15.10%<br />
14.40%<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 300,000.00 $ 1,306,800.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
200,000.00<br />
33,000.00<br />
30,000.00<br />
$<br />
$<br />
$<br />
785,000.00<br />
217,800.00<br />
239,580.00<br />
Retail/Commercial Land<br />
$ 237,400.00 $ 1,220,000.00<br />
Residential<br />
$ 15,000.00 $ 52,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 126
Portland, Oregon<br />
Allentown/Bethlehem/Easton, Pennsylvania<br />
Contact<br />
<strong>NAI</strong> Norris, Beggs<br />
& Simpson<br />
+1 503 223 7181<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
2,254,428<br />
2,368,028<br />
1,219,167<br />
$75,468<br />
$57,948<br />
36<br />
Portland metropolitan area unemployment fell to near the<br />
national average of about 9% during 2011, down from a peak<br />
of more than 11% at the height of the recession. Job creation<br />
will continue to be a key area of focus for local leaders in<br />
<strong>2012</strong>. Technology and renewable energy companies continue<br />
to expand and invest in the area; these companies included<br />
Subaru, SoloPower, eBay and ON Semiconductor.<br />
Despite economic conditions, Portland’s CBD office market<br />
has remained fairly healthy, with vacancy between 12% and<br />
13% in 2011. Downtown landlords are converting a number<br />
of historic buildings with higher vacancy into LEED-certified<br />
creative space, including the Spalding and Yeon Buildings.<br />
The suburban office submarkets have not fared as well,<br />
with vacancy above 23% in 2011, but showed a slight<br />
improvement near year-end. Vancouver got a boost as<br />
PeaceHealh leased 162,000 SF at Columbia Tech Center for<br />
its new headquarters.<br />
The industrial market saw considerable improvement in the<br />
second half of 2011. Subaru moved into a 413,700 SF facility<br />
it built on 20 acres at Rivergate Corporate Center III, and<br />
SoloPower leased 225,250 SF at Marine Drive Distribution<br />
Center. Both of the ports in Portland and Vancouver continue<br />
to flourish; United Grain Corporation set out on a $72 million<br />
expansion in Vancouver that is expected to nearly double the<br />
port’s grain exports.<br />
The retail market was flat during 2011, with vacancy hovering<br />
around 6.3%. Grocery anchored centers continue to be a<br />
preferred center type and Beaverton’s Progress Ridge Town<br />
Square, anchored by New Seasons <strong>Market</strong>, delivered in 2011.<br />
Grocers from Walmart to WinCo to New Seasons, a local<br />
chain, are seeking new locations around the metro area.<br />
Portland’s multifamily market, one of the strongest in the<br />
nation, saw vacancy under 3% throughout 2011. With rents<br />
rising significantly, concessions falling and little new<br />
development in the past four years, developers are purchasing<br />
land to build on in <strong>2012</strong> and 2013. Institutional investors are<br />
also ramping up acquisitions, especially of high quality, core<br />
properties, which are trading at low cap rates.<br />
<strong>2012</strong> should see continued strength in Portland’s multifamily<br />
market, and gradual improvement in the office, industrial and<br />
retail sectors. Portland’s concentration of green and tech<br />
companies, educated workforce and location will continue<br />
to attract new businesses and investment.<br />
Contact<br />
<strong>NAI</strong> Summit<br />
+1 610 264 0200<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
829,337<br />
862,088<br />
431,309<br />
$75,075<br />
$59,068<br />
39<br />
The Lehigh Valley, located in eastern Pennsylvania, offers<br />
all of the amenities of the major urban areas. The Lehigh<br />
Valley is the third largest region in Pennsylvania. It is well<br />
situated, 95 miles to New York City and 53 miles north of<br />
Philadelphia. The Lehigh Valley is an excellent location for<br />
business and industry. The Lehigh Valley has 11 higher<br />
learning institutions and national recognized healthcare<br />
facilities.<br />
The area consists of an enterprising and diversified economy<br />
that has led to higher-income jobs, a growing and thriving<br />
population and tremendous commercial and industrial<br />
growth in the region. The Lehigh Valley is home to some of<br />
the world’s top corporations in a variety of fields, including<br />
Air Products and Chemicals Inc., B. Braun Medical Inc.,<br />
Binney & Smith, Olympus and many others.<br />
Excellent transportation access also exerts an important<br />
influence on the Lehigh Valley. The most important highways<br />
are Route 22, Interstate 78, which connects the Lehigh<br />
Valley with Harrisburg to the west and New Jersey to the<br />
east, and major roadways such as Interstate 81 and 83 to<br />
the north. Route 22 provides fast, limited access between<br />
Allentown, Bethlehem and Easton. The Extension of the<br />
Pennsylvania Turnpike and Route 309 can also be accessed<br />
off Route 22 and Interstate 78, which connects Philadelphia<br />
with Wilkes-Barre and Scranton areas. The area is also<br />
served by the Lehigh Valley International Airport.<br />
The Lehigh Valley remains an attractive market to investors,<br />
importers, exporters, manufacturers and high-tech companies.<br />
Developers, enticed by abundant land, favorable taxes, the<br />
lure of railway access and infrastructure, continue to secure<br />
land positions along Route 22 and Interstate 78 corridors.<br />
Rental rates in all markets are competitive and have<br />
remained relatively stable.<br />
The industrial and healthcare markets continue to be one<br />
of the nation’s largest growth areas. Modern shopping malls,<br />
big-box and lifestyle centers remain popular. Several<br />
developments have recently been completed, included<br />
Airport Plaza located at the interchange of Route 22 and<br />
Airport Road in Allentown and Bethlehem Plaza in Bethlehem<br />
along Route 191.<br />
Portland At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
16.26<br />
8.52<br />
20.00<br />
15.00<br />
5.72<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
31.61<br />
26.00<br />
21.00<br />
34.65<br />
26.69<br />
N/A<br />
$ 25.20<br />
$ 19.91<br />
$ 20.08<br />
$ 24.29<br />
$ 18.23<br />
N/A<br />
9.30%<br />
14.10%<br />
N/A<br />
25.20%<br />
21.70%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
4.48<br />
4.48<br />
$<br />
$<br />
11.34<br />
13.86<br />
$<br />
$<br />
5.20<br />
5.91<br />
14.40%<br />
10.80%<br />
High Tech/R&D<br />
retaIl<br />
$ 6.00 $ 23.32 $ 10.32 18.20%<br />
Downtown<br />
$ 8.00 $ 140.00 $ 21.26 8.40%<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
12.00<br />
22.00<br />
16.00<br />
$<br />
$<br />
$<br />
35.00<br />
40.00<br />
32.00<br />
$ 12.30<br />
$ 19.80<br />
$ 20.98<br />
7.40%<br />
5.00%<br />
6.90%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 2,432,218.00 $ 17,674,419.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
239,580.00<br />
153,000.00<br />
131,000.00<br />
$<br />
$<br />
$<br />
653,400.00<br />
240,000.00<br />
261,000.00<br />
Retail/Commercial Land<br />
$ 174,240.00 $ 1,306,800.00<br />
Residential<br />
$ 200,000.00 $ 750,000.00<br />
Allentown/Bethlehem/Easton At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 16.00<br />
$ 10.00<br />
$<br />
$<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
21.00<br />
15.00<br />
$<br />
$<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
17.00<br />
13.50<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
14.10%<br />
16.10%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
$<br />
$<br />
$<br />
1.80<br />
N/A<br />
N/A<br />
N/A<br />
8.00<br />
3.00<br />
$<br />
$<br />
$<br />
8.50<br />
N/A<br />
N/A<br />
N/A<br />
28.00<br />
19.00<br />
$<br />
$<br />
$<br />
3.95<br />
N/A<br />
N/A<br />
N/A<br />
13.00<br />
10.50<br />
10.40%<br />
N/A<br />
N/A<br />
N/A<br />
10.20%<br />
9.60%<br />
Regional Malls<br />
$ 10.00 $ 35.00 $ 12.00 2.70%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
165,000.00<br />
100,000.00<br />
65,000.00<br />
200,000.00<br />
50,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
300,000.00<br />
200,000.00<br />
150,000.00<br />
500,000.00<br />
110,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 127
Berks County, Pennsylvania<br />
Bucks County, Pennsylvania<br />
Contact<br />
<strong>NAI</strong> Keystone<br />
Commercial & Industrial<br />
+1 610 779 1400<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
564,838<br />
585,397<br />
289,225<br />
$61,593<br />
$49,726<br />
40<br />
Food processing, plastics, metals, battery manufacturing<br />
and the packaging industry are all growing industries in<br />
Berks County. PCA just completed a 225,000 SF flagship<br />
corrugated box plant in Muhlenberg Township. Medical and<br />
institutional users are key office drivers with less little growth<br />
coming from new construction. After three years of negative<br />
absorption the office market is flat with gains made in the<br />
Wyomissing/Spring Ridge area offsetting the negative<br />
absorption in Downtown Reading.<br />
Industrial vacancies, excluding subleases, are flat after two<br />
years of negative absorption of one million SF. Several new<br />
construction projects have emerged and rates remain stable<br />
with landlord concessions routine. Leasing activity remains<br />
up as many users cannot obtain financing to purchase.<br />
Gross sales of industrial product were down $8 million over<br />
the prior year to $15 million total. Sale prices were down<br />
only slightly with a range of $45 to $19/SF for Class A to<br />
Class C respectively.<br />
Overall office rates remain down but are stable and quality<br />
downtown space can be found at $10/SF gross which<br />
should bring deals in from the suburbs. Developers have<br />
700,000 SF of office space planned and approved just<br />
waiting for demand. Medical and financial activities account<br />
for most deals.<br />
The number of residential units sold is down 7.5% and<br />
average sale prices are down 8% from the prior year.<br />
Developers continue to sit on projects with more than 2,000<br />
approved, but unimproved lots ready.<br />
The Route 61/I-78 interchange continues to grow rapidly<br />
with retail and hotel projects created from the millions of<br />
visitors that sporting goods giant Cabelas attracts. Planning<br />
has slowed for large centers but continues for pharmacies<br />
and value based grocery stores. The BOSS 2020 program<br />
is projected to enhance the traffic flow in Sinking Spring and<br />
transform the retail and commercial area. A Technology Park<br />
is planned for development at the Reading/Berks Airport and<br />
watch for the emergence of Bryne Eyre, a 3,000 acre PRD<br />
at the I-176 and PA Turnpike interchange.<br />
Contact<br />
<strong>NAI</strong> Mertz<br />
+1 215 221 1100<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
627,026<br />
634,201<br />
342,367<br />
$97,028<br />
$77,111<br />
40<br />
Inventory for leases remains readily available while<br />
properties for sale were in greater supply than the previous<br />
year. Sale prices declined another 5% to 10% and product<br />
has remained on the market for a considerably longer period<br />
of time. Lease rates remain aggressive but with less landlord<br />
concessions. The office market has marked improvement<br />
due to the growing healthcare industry. The industrial<br />
market improved and with the help of hi-tech and heavy<br />
manufacturing interest, this trend should continue.<br />
Bucks County continues to receive global interest as heavy<br />
manufacturing/hi-tech/alternative energy companies seek<br />
power, rail, port and economic incentives offered within<br />
Keystone Industrial Port Complex (KIPC) in Morrisville. <strong>NAI</strong><br />
Mertz works with <strong>NAI</strong> <strong>Global</strong> as exclusive agent for KIPC. A<br />
designated KOIZ, it adds 1,259 acres of heavy industrial<br />
zoned land to the 44,000 acres of developable land within<br />
Pennsylvania’s KOZs. The industrial market totals<br />
58,000,000 SF. Vacancy rates decreased 1% last year to<br />
10% including all sublease opportunities. The market<br />
showed a positive absorption of 750,000± SF this year,<br />
outperforming its neighbors. Notable transactions include<br />
Costco’s 150,000 SF build to suit on 15+ acres in Warminster;<br />
150,000 SF sale at 1 Progress Drive, Morrisville; and sale<br />
of 110,000 SF at 1050 Wheeler Way in Langhorne.<br />
The Bucks County office market is strong. Activity is<br />
steadfast and rates have stabilized. The troubled financial<br />
sector created a large percentage of vacancies which are<br />
being absorbed by the rapidly growing healthcare industry.<br />
Notable lease transactions include former ICT Headquarters<br />
of 35,400 SF in Newtown Corporate Center to Waste<br />
Management of Pennsylvania, ITT Technical Institute<br />
leased 28,063 SF at I-95 Technology Center in Levittown,<br />
Northwestern Human Services leased 20,000 SF in Trevose<br />
and Penndel Mental Health leased 18,333 SF at Bucks<br />
County Business Park in Langhorne.<br />
The retail market showed similarities with Philadelphia<br />
County with the slight reduction of rental rates and rise of<br />
vacancies during 2011. Retail attractions such as New<br />
Hope, Washington’s Crossing and Peddler’s Village are<br />
partially supported by tourism. New projects under way are<br />
Hilltown Promanade, a 475,000 SF power center in Hilltown,<br />
a 50,000 SF addition at Richland <strong>Market</strong>place and a<br />
440,000 SF center in Quakertown.<br />
Berks County At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
15.00<br />
12.00<br />
8.00<br />
18.00<br />
16.00<br />
13.50<br />
$ 18.00<br />
$ 15.50<br />
$ 12.50<br />
$ 21.00<br />
$ 21.00<br />
$ 18.00<br />
$ 17.00<br />
$ 14.25<br />
$ 12.00<br />
$ 19.00<br />
$ 18.00<br />
$ 15.30<br />
N/A<br />
7.00%<br />
23.50%<br />
N/A<br />
13.90%<br />
12.10%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$<br />
$<br />
$<br />
$<br />
2.00<br />
2.50<br />
6.00<br />
8.00<br />
$<br />
$<br />
$<br />
4.00<br />
4.00<br />
8.50<br />
N/A<br />
$<br />
$<br />
$<br />
3.35<br />
3.25<br />
7.50<br />
N/A<br />
17.10%<br />
17.00%<br />
10.00%<br />
12.00%<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
18.00<br />
11.00<br />
10.00<br />
$ 30.00<br />
$ 15.00<br />
$ 16.67<br />
$ 24.50<br />
$ 13.00<br />
$ 13.33<br />
16.00%<br />
12.00%<br />
18.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
N/A<br />
50,000.00<br />
50,000.00<br />
40,000.00<br />
$<br />
$<br />
$<br />
N/A<br />
90,000.00<br />
80,000.00<br />
60,000.00<br />
Retail/Commercial Land<br />
N/A $ 1,250,000.00<br />
Residential<br />
$ 15,000.00 $ 40,000.00<br />
Bucks County At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
N/A<br />
N/A<br />
N/A<br />
$ 18.35<br />
$ 16.75<br />
N/A<br />
N/A<br />
N/A<br />
$ 26.58<br />
$ 33.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 23.34<br />
$ 24.87<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
32.00%<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 6.50 $ 27.58 $ 19.04 17.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
2.75<br />
2.75<br />
6.50<br />
$<br />
$<br />
$<br />
4.75<br />
6.50<br />
8.50<br />
$<br />
$<br />
$<br />
3.75<br />
4.00<br />
6.50<br />
10.00%<br />
8.00%<br />
5.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$ 12.00<br />
$ 15.00<br />
$ 20.00<br />
N/A<br />
$ 30.00<br />
$ 20.00<br />
$ 35.00<br />
N/A<br />
$ 21.00<br />
$ 17.50<br />
$ 27.50<br />
N/A<br />
10.00%<br />
9.50%<br />
9.00%<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
N/A<br />
130,000.00<br />
125,000.00<br />
90,000.00<br />
N/A<br />
N/A<br />
$<br />
$<br />
$<br />
N/A<br />
490,000.00<br />
175,000.00<br />
175,000.00<br />
N/A<br />
N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 128
Harrisburg/York/Lebanon, Pennsylvania<br />
Lancaster, Pennsylvania<br />
Contact<br />
<strong>NAI</strong> CIR<br />
+1 717 761 5070<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
1,136,796<br />
1,211,743<br />
612,747<br />
$69,122<br />
$56,829<br />
39<br />
With variable economic conditions nationally, the Central<br />
Pennsylvania market, with strong ties to the manufacturing<br />
and medical sectors, has shown no signs of significant<br />
economic retrenchment. Rental rates have remained static<br />
and vacancy rates have slightly decreased by 1% or 2%.<br />
Large national companies including Hershey Foods, Rite-<br />
Aid, Graham Packaging and Giant foods, combined with a<br />
large government sector, help provide stability to our area.<br />
Occupancy for the CBD and the suburban office continues<br />
to hover at approximately 90%. The office market is<br />
showing signs of movement with a significant purchase in<br />
Carlisle of two medical office buildings totaling 38,810<br />
SF and Trans Core leasing 46,000 SF of office space in<br />
Harrisburg. The Central Pennsylvania office market rates<br />
remain relatively low allowing tenants to find competitive<br />
rates that fit their needs.<br />
The Industrial market remains the largest segment of<br />
economic development in Central Pennsylvania. With major<br />
highways, Rt. 81, 83, and the Pennsylvania Turnpike (I-76),<br />
the region offers a centralized hub for distribution. Volvo<br />
Construction Equipment is in the process of a $100 million<br />
project to move operations from North Carolina to Central<br />
Pennsylvania. This follows a 2007 renovation of 200,000<br />
SF of warehouse space. Additionally, Volvo added another<br />
28,800 SF for office space. Also in the region, Menlo<br />
Logistics, a leader in worldwide truck logistics, expanded<br />
regionally and leased another 201,600 SF in Harrisburg.<br />
New development has not dramatically rebounded within<br />
the past year. However, the lack of new projects has<br />
contributed to an overall lowering of vacancy rates across<br />
all sectors. The second half of 2011 has evidenced<br />
occasional signs of development with 7.67 acres of land<br />
being developed for retail in Carlisle and 9.7 acres being<br />
developed for office space in the suburban East Shore of<br />
Harrisburg. Central Pennsylvania is currently poised in a<br />
strong regional position as a leader in pushing through the<br />
current economic rebound.<br />
Contact<br />
<strong>NAI</strong> Commercial<br />
Partners<br />
+1 717 283 0600<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
528,756<br />
565,996<br />
275,192<br />
$70,730<br />
$56,486<br />
37<br />
Lancaster’s CBD continues to see new investment on the<br />
heels of the Convention Center opening including the<br />
acquisition of the former Pennsylvania Academy of Music<br />
by Millersville University as well as redevelopment of the<br />
Historic East Side into a mix of retail, office and residential<br />
uses. Lease rates/property values within the city have<br />
stabilized as a result of lower vacancy rates and migration<br />
of many businesses into the city attracted by an urban<br />
environment’s amenities.<br />
Lease rates for all classes of suburban offices have<br />
remained fairly consistent over the previous 12 months with<br />
some positive absorption in Class B and C spaces but overall<br />
vacancy levels remain historically high. Any new projects<br />
being developed are coming from the institutional sectors<br />
and include a new county forensic center and the new Ann<br />
B. Barshinger Cancer Center being developed at Lancaster<br />
General Hospital’s Health Campus.<br />
The industrial market has seen the most activity throughout<br />
2011 with significant demand coming from established<br />
business owners that have taken advantage of attractive<br />
pricing and financing to acquire existing buildings that have<br />
come on the market. Lease rates have remained fairly<br />
constant throughout the industrial market with modest<br />
positive absorption being realized. Industrial land sales have<br />
been virtually non-existent as buyers look to revitalize<br />
existing buildings rather than incur the time and expense of<br />
ground up construction.<br />
Retail occupancy rates for anchored centers have risen,<br />
while unanchored centers have experienced mild negative<br />
absorption as a continuation of performance of 2010.<br />
Anchored retail center absorption was a positive 11,927 SF<br />
for the first half of 2011 creating an overall vacancy rate of<br />
5%. The market continues to be under served, but is<br />
progressing with examples such as Mill Creek Square’s<br />
lease-up (Kohl’s, Bed Bath & Beyond anchored) adding<br />
Staples, along with Red Robin in the prominent pad position.<br />
Also boosting retail growth is the county’s second Target<br />
entry which opened in Lititz. CBD leasing activity remains<br />
soft, but suburban and regional demand is on a gradual<br />
upswing evidenced by backfilling of the vacant Circuit City<br />
and Linens N Things by HH Gregg and Home Goods<br />
respectively.<br />
Harrisburg/York/Lebanon At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
17.50<br />
16.00<br />
14.00<br />
19.50<br />
16.75<br />
12.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
24.00<br />
22.00<br />
17.50<br />
21.00<br />
20.00<br />
17.00<br />
$ 20.75<br />
$ 19.00<br />
$ 15.75<br />
$ 20.25<br />
$ 18.37<br />
$ 14.75<br />
N/A<br />
6.00%<br />
8.00%<br />
N/A<br />
13.00%<br />
20.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
1.25<br />
1.00<br />
4.00<br />
$<br />
$<br />
$<br />
4.00<br />
3.00<br />
9.00<br />
$<br />
$<br />
$<br />
2.75<br />
2.50<br />
6.50<br />
17.00%<br />
10.00%<br />
12.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
12.00<br />
6.00<br />
15.00<br />
13.00<br />
$<br />
$<br />
$<br />
$<br />
15.00<br />
20.00<br />
25.00<br />
25.00<br />
$ 13.50<br />
$ 13.00<br />
$ 18.00<br />
$ 18.00<br />
13.00%<br />
12.00%<br />
12.00%<br />
12.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
75,000.00<br />
125,000.00<br />
80,000.00<br />
100,000.00<br />
150,000.00<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
150,000.00<br />
225,000.00<br />
135,000.00<br />
250,000.00<br />
1,750,000.00<br />
N/A<br />
Lancaster At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$<br />
N/A<br />
11.00 $<br />
N/A<br />
13.00<br />
N/A<br />
$ 12.00<br />
N/A<br />
N/A<br />
Class B (Secondary)<br />
suburban offIce<br />
$ 7.50 $ 9.00 $ 8.25 12.00%<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
18.00<br />
14.00<br />
10.00<br />
$<br />
$<br />
$<br />
22.00<br />
18.00<br />
12.00<br />
$ 20.00<br />
$ 16.00<br />
$ 11.00<br />
N/A<br />
17.00%<br />
21.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$<br />
$<br />
$<br />
$<br />
3.50<br />
3.50<br />
6.75<br />
6.00<br />
$<br />
$<br />
$<br />
$<br />
5.50<br />
4.50<br />
8.25<br />
10.00<br />
$<br />
$<br />
$<br />
$<br />
4.50<br />
4.00<br />
7.50<br />
8.00<br />
5.00%<br />
19.00%<br />
9.00%<br />
N/A<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
10.00<br />
16.00<br />
18.00<br />
$<br />
$<br />
$<br />
13.00<br />
22.00<br />
22.00<br />
$ 11.50<br />
$ 19.00<br />
$ 20.00<br />
12.00%<br />
6.00%<br />
9.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
125,000.00<br />
80,000.00<br />
60,000.00<br />
175,000.00<br />
20,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
250,000.00<br />
110,000.00<br />
80,000.00<br />
450,000.00<br />
40,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 129
Philadelphia, Pennsylvania<br />
Philadelphia Suburbs, Pennsylvania<br />
Contact<br />
<strong>NAI</strong> Geis Realty<br />
Group<br />
+1 215 568 7222<br />
<strong>NAI</strong> Mertz<br />
+1 215 221 1100<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
5,987,739<br />
6,086,531<br />
3,104,793<br />
$83,835<br />
On the heels of a strong Q4 of 2010, the market was poised<br />
for a respectable rebound in 2011. The year showed early<br />
promise but continued national economic weakness and<br />
Washington’s dysfunction resulted in a lackluster market.<br />
Rates barely moved, absorption was positive in the CBD but<br />
vacancy is still over 14%. The market activity could be<br />
described as “musical chairs”, with the healthcare sector once<br />
again leading the way with real expansion.<br />
Notable transactions include: Children’s Hospital of<br />
Pennsylvania renewed and expanded a lease at 100 Penn<br />
Square West for 252,000 SF; Janney Montgomery Scott<br />
relocated to Three Logan Square leasing 125,000 SF<br />
and Glaxo Smith Kline is moving from the CBD to the<br />
Philadelphia Navy Yard for a 205,000 SF build to suit.<br />
Philadelphia continues to receive interest on a global basis as<br />
heavy manufacturing, hi-tech, drug and alternative energy<br />
companies seek labor, power, rail, port and economic<br />
incentives offered specifically within The Philadelphia Naval<br />
Yard and other industrial sites under the control of the<br />
Philadelphia Industrial Development Corporation. The Naval<br />
Yard was designated a KOIZ adding 1200 acres of industrially<br />
zoned land with port and rail facilities to the 44,000 acres of<br />
developable land designated within Pennsylvania's KOZs<br />
throughout the state. Notable transactions include the sale<br />
of 150 acres for Teva Pharmaceutical’s 1,000,000 SF<br />
distribution center; completion of the 700,000 SF Produce<br />
Terminal and Car Vision’s lease of 736,640 SF. Liberty<br />
Property Trust is building two 51,000 SF flex buildings within<br />
the former Navy Yard on speculation.<br />
Retail has experienced little change and remained resilient in<br />
2011. Food related business openings continue to lead the<br />
market. In Center City, several national retailers and local<br />
entrepreneurs have turned vacant locations into successful<br />
business locations. Notable transactions include the purchase<br />
of the 70,000+ SF former Please Touch Museum on<br />
Race Street in Center City. In Northeast Philadelphia, Giant<br />
Supermarket, LA Fitness and Bottom Dollar Supermarket have<br />
recently opened.<br />
Contact<br />
<strong>NAI</strong> Geis Realty<br />
Group<br />
+1 215 568 7222<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
1,942,193<br />
2,014,910<br />
1,060,872<br />
$106,424<br />
A slow recovery continues in the Philadelphia suburban<br />
office market where a slight positive absorption is<br />
encouraging. The recovery, however, seems isolated to just<br />
a few submarkets. The overall vacancy rate is near 20%,<br />
but markets such as Conshohocken, Plymouth Meeting<br />
Main Line and Jenkintown have experienced positive<br />
absorption and increased asking rates.<br />
Sale activity is significantly down as most of the action<br />
seems to be owners involved in “workouts”, or properties<br />
being taken over by special servicers looking to stabilize<br />
their assets. Due to a lack of speculative construction, large<br />
blocks of space (50,000 SF+) are difficult to find and could<br />
create potential build to suite activity. Significant lease<br />
activity includes Brokerage Concepts relocated to Lakeside<br />
I in Blue Bell for 43,000 SF, Larsen Allen LLP relocated to<br />
610 Germantown Pike in Plymouth Meeting for 28,000 SF,<br />
NRC relocated to 2100 Renaissance Boulevard in King of<br />
Prussia for 80,000 SF and PJM Interconnection leased<br />
2750 Monroe Boulevard in Valley Forge for 105,846 SF.<br />
The Philadelphia industrial suburban market is a diversified<br />
and balanced economy and remains active with a decrease<br />
of vacancy to 6%. Rates are holding steady and large blocks<br />
of space are hard to find. Significant activity includes GE<br />
Infrastructure leased 33,000 SF in Bensalem, Estee Lauder<br />
leased 241,000 SF in Bristol and National Fulfillment<br />
Services leased 125,000 SF in Delaware County.<br />
The retail market is moving in the right direction, but some<br />
of the players are changing. big box users such as Best<br />
Buy, Staples and Target are becoming more conservative;<br />
Wegmans and Walmart continue to grow and open new<br />
locations. Traditionally strong retail centers such as King of<br />
Prussia, Cherry Hill and Oxford Valley are now experiencing<br />
big box vacancies and supermarket closings have increased<br />
due to over saturation and Wegmans growth in the market.<br />
Median<br />
Household Income<br />
$62,375<br />
Median<br />
Household Income<br />
$81,028<br />
Total Population<br />
Median Age<br />
37<br />
Total Population<br />
Median Age<br />
39<br />
Philadelphia At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
24.00<br />
17.00<br />
27.00<br />
25.00<br />
16.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
32.00<br />
23.00<br />
35.00<br />
33.00<br />
23.00<br />
N/A<br />
$ 27.00<br />
$ 20.00<br />
$ 31.00<br />
$ 29.00<br />
$ 19.00<br />
N/A<br />
12.00%<br />
11.00%<br />
25.00%<br />
17.00%<br />
18.50%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
1.50<br />
2.25<br />
5.50<br />
$<br />
$<br />
$<br />
4.50<br />
5.00<br />
8.50<br />
$<br />
$<br />
$<br />
3.00<br />
3.25<br />
6.00<br />
14.00%<br />
8.00%<br />
10.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
18.00<br />
12.00<br />
18.00<br />
N/A<br />
$<br />
$<br />
$<br />
80.00<br />
20.00<br />
38.00<br />
N/A<br />
$ 35.00<br />
$ 16.00<br />
$ 27.00<br />
N/A<br />
9.00%<br />
11.00%<br />
10.00%<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
80,000.00<br />
30,000.00<br />
90,000.00<br />
400,000.00<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
400,000.00<br />
200,000.00<br />
750,000.00<br />
2,000,000.00<br />
N/A<br />
Philadelphia Suburbs At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
N/A<br />
N/A<br />
N/A<br />
$ 27.00<br />
$ 25.00<br />
$ 16.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 35.00<br />
$ 33.00<br />
$ 23.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 31.00<br />
$ 29.00<br />
$ 19.00<br />
N/A<br />
N/A<br />
N/A<br />
25.00%<br />
17.00%<br />
18.50%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
2.50<br />
2.75<br />
$<br />
$<br />
4.75<br />
5.00<br />
$<br />
$<br />
4.00<br />
3.10<br />
8.00%<br />
7.00%<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$ 7.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 12.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
$ 8.50<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
8.00%<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
80,000.00<br />
30,000.00<br />
90,000.00<br />
400,000.00<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
400,000.00<br />
200,000.00<br />
750,000.00<br />
2,000,000.00<br />
N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 130
Pittsburgh, Pennsylvania<br />
Schuylkill County, Pennsylvania<br />
Contact<br />
<strong>NAI</strong> <strong>Global</strong><br />
+1 609 945 4000<br />
PWC Property Solutions<br />
+1 412 937 1925<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
2,356,285<br />
2,344,550<br />
1,139,340<br />
$63,485<br />
$46,700<br />
41<br />
Recently named “Best in the World <strong>2012</strong>” by National<br />
Geographic for its revolutionary transformation, Pittsburgh<br />
has continued its extreme metropolitan makeover with a<br />
balanced, innovation-driven economy based upon its history<br />
and strengths in advanced manufacturing, chemicals,<br />
computer technology, education and medicine (“eds and<br />
meds”), life sciences, financial services and energy. According<br />
to REIS Reports Q3 2011, over 20,000 jobs have been<br />
created this year. Now considered a global economy,<br />
Pittsburgh is also home to eight Fortune 500 companies.<br />
One of the newest and fastest growing industries is natural<br />
gas. Covering a large percentage of Western Pennsylvania’s<br />
land mass, the Marcellus Shale is the largest unconventional<br />
natural gas reserve formation in the world. The development<br />
of this energy resource is producing dramatic benefits<br />
across the Western Pennsylvania economy. Pittsburgh is<br />
also a national leader in green development. In <strong>2012</strong>, PNC<br />
Financial Services Group will begin construction on the 33<br />
story, $400 million PNC Tower, making it the greenest<br />
skyscraper in the United States.<br />
The Class A office market should continue to maintain single<br />
digit vacancy rates fueled by new space and expansion<br />
requirements of energy companies. In the CBD, Highwoods<br />
Properties made a significant purchase of the 1.5 million SF<br />
PPG Building complex with a $200 million investment. In<br />
addition to the new PNC Tower, Millcraft Industries will begin<br />
The Gardens, a high rise mixed-use development. Range<br />
Resources will also occupy a new 180,000 SF regional<br />
headquarters at Southpointe II in Canonsburg.<br />
During Q3 2011, four buildings totaling 34,209 SF were<br />
completed in the greater Pittsburgh market. There were<br />
251,788 SF of industrial space under construction at the<br />
end of the Q4 2011. UPMC signed a 150,000 SF lease<br />
in Cranberry’s Thorn Hill Industrial Park for storage and<br />
distribution.<br />
The retail market is now bearing the fruits of a lengthy pause<br />
in development, past developer restraint, favorable rates of<br />
occupancy, stable returns, and within the current national<br />
context, a reasonably healthy economy. A number of national<br />
retailers are opening stores in the metro area. Anthony’s<br />
Coal Fire Pizza recently opened in the popular Settler’s Ridge<br />
development with plans for another store in Monroeville. A<br />
new Whole Foods is set to open in Wexford. Net absorption<br />
numbers have been favorable with the total for the first half<br />
of 2011 at 165,000 SF.<br />
Contact<br />
<strong>NAI</strong> Keystone Commercial<br />
& Industrial<br />
+1 610 779 1400<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
148,898<br />
151,423<br />
70,704<br />
$54,360<br />
$43,850<br />
42<br />
Schuylkill County is shaking off its coal roots to emerge as<br />
a service, technology and small business based economy.<br />
The Marcellus Shale boom to the north is having very<br />
positive, albeit indirect business impact with goods, services<br />
and jobs being sought locally. The I-81 corridor hosts many<br />
Fortune 500 Companies who discovered its value and solid<br />
employee base. Industrial activity favors the High Ridge<br />
Business Park also along this corridor.<br />
Pottsville is this market’s largest city and anchors the<br />
medical system, professional and governmental offices and<br />
is also home to Yuengling, America’s oldest brewery. The<br />
office market is dominated by healthcare and governmental<br />
agencies with few leases or sales above 5,000 SF in size.<br />
Food production and distribution are well anchored here.<br />
Grocery giant Wegmans is adding a 500,000 SF, $65 million<br />
dollar addition to its regional distribution center which will<br />
add 219 jobs. Hy-Line, LLC is completing a 36,000 SF<br />
facility for egg laying & production. Solar Innovations<br />
continues to grow in the Pine Grove Industrial Park. The<br />
Empire Education Group continues to invest in the area by<br />
adding 150 jobs. St. Martin America opened a frameless<br />
cabinet production facility in Cressona. This company also<br />
has plants in Texas and China.<br />
Retail construction and leasing was stable through 2011,<br />
with those locations along the Route 61 corridor being the<br />
highest in demand.<br />
Industrial Development has been spearheaded by The<br />
Schuylkill County Economic Development Office which<br />
manages 12 industrial parks located across the county<br />
representing more than $1.2 billion in capital investment<br />
over 10 years.<br />
Residential sale volume is down 8% from the prior year with<br />
sale prices relatively stable, down 1%. The median home<br />
price is a low $79,900 further delivering value to the<br />
workforce.<br />
Schuylkill County, with its rural character and a sparse population<br />
within its 779 square mile area, exemplifies an essential<br />
quality of small town America; hard-working people<br />
doing their utmost to improve their quality of life. Now and<br />
again small packages produce big results. This is definitely<br />
true here.<br />
Pittsburgh At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
19.23<br />
22.57<br />
N/A<br />
21.00<br />
17.00<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
29.62<br />
24.00<br />
N/A<br />
24.00<br />
20.00<br />
N/A<br />
$ 20.13<br />
N/A<br />
N/A<br />
$ 21.74<br />
$ 17.69<br />
N/A<br />
10.30%<br />
12.90%<br />
N/A<br />
8.00%<br />
9.30%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
2.75<br />
2.75<br />
$<br />
$<br />
6.40<br />
13.00<br />
$<br />
$<br />
4.19<br />
3.75<br />
7.10%<br />
7.40%<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
$<br />
5.75<br />
14.00<br />
10.85<br />
14.93<br />
18.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
16.00<br />
40.00<br />
11.86<br />
15.46<br />
42.00<br />
$ 11.40<br />
$ 18.50<br />
$ 11.29<br />
$ 15.20<br />
$ 25.96<br />
N/A<br />
7.20%<br />
6.80%<br />
5.90%<br />
6.50%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 1,000,000.00 $ 4,000,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
100,000.00<br />
50,000.00<br />
75,000.00<br />
$<br />
$<br />
$<br />
200,000.00<br />
120,000.00<br />
500,000.00<br />
Retail/Commercial Land<br />
$ 50,000.00 $ 1,000,000.00<br />
Residential<br />
$ 10,000.00 $ 500,000.00<br />
Schuylkill County At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
$ 14.00 $ 18.00 $ 16.00 N/A<br />
Class A (Prime)<br />
$ 8.00 $ 12.00 $ 10.50 9.00%<br />
Class B (Secondary)<br />
suburban offIce<br />
$ 6.00 $ 10.00 $ 8.00 15.00%<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$ 17.50<br />
$ 12.00<br />
$ 20.00<br />
$ 15.00<br />
$ 18.50<br />
$ 13.50<br />
10.00%<br />
14.00%<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 6.00 $ 11.00 $ 8.00 14.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
2.50<br />
2.00<br />
4.75<br />
$<br />
$<br />
$<br />
4.00<br />
3.00<br />
4.75<br />
$<br />
$<br />
$<br />
3.25<br />
2.50<br />
5.50<br />
12.00%<br />
12.00%<br />
12.00%<br />
Downtown<br />
$ 8.00 $ 12.50 $ 10.00 10.50%<br />
Neighborhood Service Centers $ 13.00 $ 17.50 $ 15.00 15.00%<br />
Community Power Center<br />
Regional Malls<br />
$ 9.00<br />
N/A<br />
$ 16.00<br />
N/A<br />
$ 14.00<br />
N/A<br />
12.00%<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
30,000.00<br />
20,000.00<br />
125,000.00<br />
15,000.00<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
75,000.00<br />
60,000.00<br />
800,000.00<br />
30,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 131
Wilkes-Barre/Scranton/Hazleton, Pennsylvania<br />
Contact<br />
<strong>NAI</strong> Mertz of<br />
Pennsylvania<br />
+1 570 820 7700<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
809,159<br />
850,960<br />
407,477<br />
$60,623<br />
$48,854<br />
41<br />
Northeastern Pennsylvania has continued to experience a<br />
steady influx of energy companies. Wilkes-Barre, Scranton<br />
and Hazleton have benefitted from their location within the<br />
Marcellus Shale region, realizing increases in companies,<br />
jobs and revenue. A number of national and international<br />
powerhouses in the energy sector have set up shop in local<br />
communities. Vacancy rates for many industrial owners<br />
throughout the region have decreased. Shale activity has<br />
also increased the volume and size of many local<br />
businesses.<br />
Land sales have also risen due to the requirements of the<br />
natural gas firms. These companies and their service<br />
providers need a substantial amount of outside storage.<br />
Companies are leasing 5,000 SF but needing two acres of<br />
land to store materials and equipment. In addition to the<br />
shale play, the region continues to hold its own as a vital<br />
location for distribution.<br />
Companies such as Amazon.com and Archer Daniels<br />
Midland have recognized the potential for the area due to<br />
the incredible access to the entire Northeast. With<br />
interstates such as 80, 81, 84, 180, 380, and the Northeast<br />
Extension of the Pennsylvania Turnpike, Northeastern<br />
Pennsylvania is a logistics and supply chain hot spot. More<br />
distribution companies have moved into the area throughout<br />
2011. Some have moved into new construction, while others<br />
have taken advantage of lower lease rates. The office market<br />
has seen Lord & Taylor bring back call center jobs from<br />
overseas and Ciii expand their Tenant’s pharmaceutical<br />
fulfillment center.<br />
New office buildings in suburban settings have large<br />
sub-lease availabilities attributable to downsizing, while<br />
older office buildings in urban settings are finding it difficult<br />
to compete with hospital owned spaces for desirable<br />
professional leases. Users prefer to purchase rather than<br />
lease, and many investors are also seeking purchases.<br />
The retail market was affected by the fall flood of 2011, and<br />
one investor may have decided not to rebuild. This will<br />
reduce available retail space and tighten lease rates and<br />
concessions. Mid size space has been absorbed by “dollar”<br />
stores leaving a few large boxes and many small store<br />
spaces. New construction is unlikely but possible, with large<br />
single tenant/user space the likeliest prospect.<br />
The Commonwealth Medical College enrolled its first class<br />
in downtown Scranton, the first new medical school in three<br />
decades.<br />
Wilkes-Barre/Scranton/Hazleton At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
N/A<br />
$ 16.00<br />
$ 10.00<br />
N/A<br />
$ 14.00<br />
$ 12.00<br />
N/A<br />
$ 20.00<br />
$ 18.00<br />
N/A<br />
$ 20.00<br />
$ 20.00<br />
N/A<br />
$ 18.00<br />
$ 12.00<br />
N/A<br />
$ 16.00<br />
$ 15.00<br />
N/A<br />
20.00%<br />
22.00%<br />
N/A<br />
16.00%<br />
10.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
0.99<br />
0.99<br />
N/A<br />
$<br />
$<br />
4.25<br />
3.50<br />
N/A<br />
$<br />
$<br />
2.75<br />
2.15<br />
N/A<br />
10.00%<br />
10.00%<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
$<br />
$<br />
8.00<br />
3.50<br />
$ 18.00<br />
$ 18.00<br />
$ 13.00<br />
$ 12.00<br />
20.00%<br />
22.00%<br />
Community Power Center<br />
Regional Malls<br />
$ 12.00<br />
$ 18.00<br />
$ 20.00<br />
$ 44.00<br />
$ 15.00<br />
$ 25.00<br />
10.00%<br />
10.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
350,000.00<br />
60,000.00<br />
35,000.00<br />
20,000.00<br />
80,000.00<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
$<br />
650,000.00<br />
275,000.00<br />
125,000.00<br />
200,000.00<br />
450,000.00<br />
N/A<br />
Charleston, South Carolina<br />
Contact<br />
<strong>NAI</strong> Avant<br />
+1 843 720 4944<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
679,657<br />
739,764<br />
347,944<br />
$68,603<br />
$52,475<br />
34<br />
Charleston is a three county region with 664,607 people<br />
residing in the three counties; Charleston, Berkeley and<br />
Dorchester. It is home to the nation’s 10th largest container<br />
port, several major Department of Defense facilities, the<br />
Medical University of South Carolina, the Boeing Dreamliner<br />
production facility and the historic Charleston Peninsula which<br />
was <strong>report</strong>ed as the nation’s top American tourist destination<br />
according to the readers of Condé Nast Traveler magazine.<br />
Charleston has approximately 23.5 million SF of office space.<br />
Occupancy at mid year was 91.5%. Asking rents stabilized<br />
over the last year although landlords continued to provide<br />
concessions in the form of free rent and tenant improvement<br />
allowances. One 63,000 SF building is planned for delivery<br />
on the Peninsula in 2011.<br />
The retail market has an inventory of 39 million SF. Rents in<br />
Class A retail centers range from $15 to $23/SF. Rents in the<br />
Peninsula market range from $28 to $44/SF. Occupancy fell<br />
market wide by midyear to 91.9% largely as a result of several<br />
big box national tenants closing their stores. Several other<br />
grocery anchored centers are ready to begin construction<br />
around the region.<br />
The industrial market has 39.5 million SF of space available.<br />
Occupancy fell at year end to 89.7%. Rents have remained<br />
stable over the year. Several speculative buildings are planned<br />
in anticipation of increased demand from port related<br />
industries when the Panama Canal deepening is completed<br />
in 2013.<br />
The hospitality industry has stabilized and occupancy is<br />
currently at 76.4% with an inventory of 17,600 rooms and<br />
an average daily rate of $132. New developments that were<br />
delayed are beginning to move through the approval process<br />
with openings planned in early <strong>2012</strong>. Cruise ship dockings<br />
increased again in 2011 with up to 104 a year expected.<br />
In summary, the outlook for Charleston is positive.<br />
Employment has grown for 16 straight months. Tourism<br />
is strong, manufacturing is expanding especially in the<br />
aerospace sector and new knowledge industries continue<br />
to enter and expand in the market to take advantage of the<br />
workforce.<br />
Charleston At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
26.00<br />
28.00<br />
21.00<br />
N/A<br />
18.00<br />
13.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
30.00<br />
32.00<br />
23.00<br />
N/A<br />
26.00<br />
18.00<br />
$ 28.50<br />
$ 30.00<br />
$ 22.00<br />
N/A<br />
$ 22.00<br />
$ 15.50<br />
N/A<br />
4.90%<br />
4.20%<br />
N/A<br />
13.20%<br />
12.20%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$ 3.50<br />
N/A<br />
N/A<br />
$ 5.50<br />
N/A<br />
N/A<br />
$ 4.50<br />
N/A<br />
N/A<br />
10.10%<br />
N/A<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
22.00<br />
12.00<br />
12.00<br />
20.00<br />
$<br />
$<br />
$<br />
$<br />
34.00<br />
23.00<br />
23.00<br />
40.00<br />
$ 26.00<br />
$ 17.50<br />
$ 17.50<br />
$ 30.00<br />
8.10%<br />
11.50%<br />
11.50%<br />
9.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 1,100,000.00 $ 1,500,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
125,000.00<br />
55,000.00<br />
75,000.00<br />
$<br />
$<br />
$<br />
325,000.00<br />
175,000.00<br />
225,000.00<br />
Retail/Commercial Land<br />
$ 275,000.00 $ 1,400,000.00<br />
Residential<br />
$ 15,000.00 $ 110,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 132
Columbia, South Carolina<br />
Greenville/Spartanburg/Anderson Counties, South Carolina<br />
Contact<br />
<strong>NAI</strong> Avant<br />
+1 803 254 0100<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
789,733<br />
878,216<br />
403,260<br />
$65,236<br />
Columbia is a six county region with approximately 768,000<br />
people. It is the state capitol of South Carolina and the center<br />
of the state government with nearly 25,000 employees. It has<br />
two military bases, Fort Jackson and McIntire Joint National<br />
Guard Base which collectively employ 10,000 people. The<br />
region includes six universities that employ around 6,000<br />
persons and is a regional medical center with three major<br />
hospital systems, a VA hospital and medical school.<br />
Columbia has about 34 million SF of office space and has<br />
experienced a quarterly average absorption of 17,000 SF.<br />
Occupancy in Q3 2011 was 92.7%. Landlords have held rents<br />
steady over the last year but have been providing additional<br />
tenant improvement dollars and free rent as concessions.<br />
Activity in 2011 has been steady with several leases between<br />
20,000 and 50,000 SF executed; most in the CBD.<br />
The retail market has 53 million SF. Since 2008, an average<br />
of 36,000 SF has been absorbed quarterly. Rents in<br />
neighborhood retail centers range from $16 to $24/SF.<br />
Occupancy rose by midyear to 93.1% as several of the “big<br />
box” spaces were filled with new tenants.<br />
The industrial market has 49 million SF of warehouse and<br />
flex space. Occupancy remained steady at 89.3%. Rents have<br />
remained stable because there are a relatively small<br />
number of high quality buildings that meet current market<br />
requirements. The only recent development was a 1,000,000<br />
SF distribution center for Amazon.<br />
Activity in 2011 has increased dramatically from 2010 in all<br />
property types. Retail leasing continues to accelerate with retail<br />
sales growing again, albeit slowly. Industrial leasing and sales<br />
has increased as well with several large tenants entering the<br />
market. The office market continued to improve this year<br />
although activity mid-year slowed. Going forward, markets<br />
seem to be tracking job growth which just turned positive in<br />
the last two months. As this accelerates, expect all sectors of<br />
commercial real estate to improve.<br />
Contact<br />
<strong>NAI</strong> Earle Furman<br />
+1 864 232 9040<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
938,916<br />
1,004,005<br />
467,087<br />
$60,234<br />
The Upstate continues to be an attractive area for economic<br />
development with over $197 million in capital investment<br />
announced in Greenville County alone thus far in 2011.<br />
This includes several corporate headquarters, company<br />
expansions and new businesses moving to the area. Much of<br />
the companies are manufacturing based and will join over<br />
1,400 other companies who already call the Upstate home.<br />
The office market is continuing its climb back to stability with<br />
vacancy rates declining and a positive net absorption. Tenants<br />
are returning to the market and activity has increased. New<br />
businesses such as Perceptis Inc. have selected Greenville<br />
as their home. The company plans to create 200 new jobs.<br />
The retail sector is continuing a trend of declining vacancy<br />
and asking rates. Recreational Equipment Inc. (REI) has plans<br />
for its first South Carolina store in a portion of the former<br />
Circuit City on Woodruff Road in Greenville. In Spartanburg,<br />
Westgate Village has been redeveloped and is now occupied<br />
by Toy's/Babies R Us and Old Navy, both of which relocated<br />
from another center. The 500,000 SF Easley Town Center<br />
project is underway with Walmart and Kohl’s completed.<br />
Construction began on a $100 million two tower complex in<br />
downtown Greenville. The 185,000 SF, nine story first phase<br />
will house CertusBank’s headquarters, Anthropologie and<br />
additional office and retail users.<br />
Lease rates in the industrial sector have declined, however<br />
vacancy has decreased with a positive net absorption. BMW<br />
manufacturing is adding another $100 million investment<br />
and ZF Group plans to invest nearly $350 million in a new<br />
manufacturing facility in Laurens County. Construction of the<br />
950,000 SF ZF Group facility is underway.<br />
The multifamily sector has seen tightening supply as<br />
occupancies have grown, and construction remains limited.<br />
Occupancies have been on an upward trend for the past two<br />
years. Two new downtown Greenville apartment projects are<br />
under construction, with completion scheduled in mid-<strong>2012</strong>.<br />
Greenville still offers investors a lower than average price per<br />
unit with a stable tenant base.<br />
Median<br />
Household Income<br />
$50,628<br />
Median<br />
Household Income<br />
$45,807<br />
Total Population<br />
Median Age<br />
35<br />
Total Population<br />
Median Age<br />
37<br />
Columbia At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
17.00<br />
14.00<br />
N/A<br />
17.50<br />
14.00<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
20.00<br />
16.00<br />
N/A<br />
19.00<br />
16.50<br />
N/A<br />
$ 18.50<br />
$ 15.00<br />
N/A<br />
$ 18.25<br />
$ 15.25<br />
N/A<br />
10.00%<br />
10.50%<br />
N/A<br />
13.20%<br />
8.40%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
4.00<br />
2.50<br />
N/A<br />
$<br />
$<br />
4.50<br />
3.50<br />
N/A<br />
$<br />
$<br />
4.25<br />
3.00<br />
N/A<br />
11.10%<br />
15.20%<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
16.00<br />
12.00<br />
16.00<br />
25.00<br />
$<br />
$<br />
$<br />
$<br />
18.00<br />
18.00<br />
24.00<br />
45.00<br />
$ 17.00<br />
$ 15.00<br />
$ 20.00<br />
$ 35.00<br />
3.90%<br />
8.90%<br />
4.20%<br />
16.40%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 260,000.00 $ 1,300,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
120,000.00<br />
30,000.00<br />
25,000.00<br />
105,000.00<br />
5,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
350,000.00<br />
80,000.00<br />
40,000.00<br />
720,000.00<br />
20,000.00<br />
Greenville/Spartanburg/Anderson Counties At A Glance<br />
(Rent/SF/PY) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
22.00<br />
17.00<br />
14.00<br />
19.00<br />
14.00<br />
10.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
32.00<br />
25.00<br />
18.50<br />
22.00<br />
19.00<br />
16.00<br />
$ 25.00<br />
$ 19.00<br />
$ 16.00<br />
$ 20.00<br />
$ 16.50<br />
$ 13.00<br />
5.00%<br />
12.00%<br />
15.00%<br />
10.00%<br />
21.00%<br />
15.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
2.50<br />
3.00<br />
4.50<br />
$<br />
$<br />
$<br />
4.00<br />
5.00<br />
9.50<br />
$<br />
$<br />
$<br />
3.25<br />
4.00<br />
7.00<br />
9.80%<br />
12.00%<br />
12.50%<br />
Downtown<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
12.00<br />
10.00<br />
10.00<br />
22.00<br />
$<br />
$<br />
$<br />
$<br />
25.00<br />
18.00<br />
26.00<br />
38.00<br />
$ 16.25<br />
$ 15.00<br />
$ 18.00<br />
$ 32.00<br />
6.00%<br />
8.00%<br />
12.00%<br />
2.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
155,000.00<br />
36,000.00<br />
50,000.00<br />
200,000.00<br />
20,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
305,000.00<br />
76,000.00<br />
75,000.00<br />
850,000.00<br />
50,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 133
Sioux Falls, South Dakota<br />
Chattanooga, Tennessee<br />
Contact<br />
<strong>NAI</strong> Sioux Falls<br />
+1 605 357 7100<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
228,696<br />
230,687<br />
133,533<br />
$69,213<br />
$57,115<br />
One of the fastest growing areas of the United States during<br />
the past decade, Sioux Falls’ strong metro territory has<br />
brought hundreds of businesses to the region. Forbes has<br />
voted Sioux Falls first among US cities with populations<br />
between 50,000 and 177,000 as the best place for<br />
business and careers. Officials attribute Sioux Falls’ growth<br />
to a diversified economy and favorable business climate.<br />
Sioux Falls has no corporate or state income tax and no<br />
business inventory tax.<br />
The Sioux Falls area retail market remains steady with<br />
lowering vacancy rates. As with most regions of the country,<br />
there is very little speculative development. The Sioux Falls<br />
market is experiencing a nice trickle of interest from retail<br />
related companies expanding into our market. Street retail<br />
space is being steadily absorbed by existing businesses. Our<br />
regional shopping center is maintaining a healthy occupancy<br />
level as it is the primary destination for shoppers from a<br />
wide geographic area. Buffalo Wild Wings, Northern Tool<br />
and HOM furniture recently opened for business in a<br />
redevelopment of a former Sportsman’s Warehouse location.<br />
Big Lots has come to the market, and Kohl’s, Target and<br />
Sam’s club have all announced second locations. Sioux Falls<br />
is said to be the largest retail option between Minneapolis<br />
and Denver.<br />
Sioux Falls has seen steady absorption of office space with<br />
some sizeable transactions scheduled for completion during<br />
Q4 of 2011. Western Surety/CNA’s construction of a<br />
240,530 SF downtown office building is scheduled for April<br />
<strong>2012</strong> completion. The CBD is undergoing renovation and<br />
continues to add office space, restaurants, retail shopping<br />
and luxury lofts.<br />
The Industrial sector which features already low vacancy<br />
rates is also seeing steady absorption. At current absorption<br />
rates, a new user’s only option will soon be new construction.<br />
There has been an increase in inquiries from out of state<br />
companies, due mainly to the low tax environment of our<br />
state. The Year <strong>2012</strong> will most likely produce a continued<br />
absorption with a high possibility of an uptick in new<br />
construction.<br />
Contact<br />
<strong>NAI</strong> Charter Real Estate<br />
Corporation<br />
+1 423 267 6549<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
534,110<br />
557,929<br />
271,150<br />
$61,632<br />
$45,051<br />
In September 2011, Outside Magazine announced<br />
Chattanooga as the ultimate dream town. Chattanooga<br />
continues to receive good news on the economic development<br />
front. The Volkswagen plant is on-line and is building the<br />
“Passat” Sedan and 12 of Volkswagen’s suppliers have<br />
relocated to the Chattanooga area. Further, Amazon has started<br />
construction of a 500,000 SF fulfillment center and will provide<br />
over 1,250 full time jobs. The opening is scheduled for year<br />
end 2011.<br />
In 2011, several major warehouse leases were completed<br />
reducing the inventory of available properties. The largest was<br />
Chattem’s expansion to a 688,000 SF facility. Very few quality<br />
buildings are available in the range of 100,000 SF and up<br />
which is a notable change from 2010. There is however an<br />
ample supply of buildings under 50,000 SF.<br />
The office market in the CBD is still feeling the affects of<br />
BlueCross BlueShield of Tennessee’s relocation to its new<br />
950,000 SF corporate headquarters on the peripheral of<br />
downtown. BlueCross vacated over 450,000 SF in three<br />
different buildings almost doubling the vacancy in the CBD.<br />
Chestnut Tower is being renamed Liberty Tower and is under<br />
a $20 million renovation. A local law firm has been secured as<br />
the anchor tenant. The suburban market has two Class A office<br />
parks competing for tenants, which makes rates very attractive.<br />
Almost 40,000 SF was absorbed in 2010 and the trend<br />
continues.<br />
Retail development is extremely slow with only one new project<br />
announced in 2010; Khols in the Hixson submarket. The<br />
Hamilton Place Mall area remains the premier retail location<br />
with Northgate Mall in Hixson submarket as a strong second.<br />
Hamilton Place is renovating its common areas and locally<br />
based mall owner and developer CBL, has purchased<br />
Northgate Mall. Downtown Retail activity is non-existent;<br />
however, the North Shore market is active due to its public<br />
parks long the Tennessee River.<br />
Chattanooga promotes sustainable growth and with VW and<br />
Amazon pumping up new life in the industrial sector this<br />
combination will create a healthy local economy. Downtown is<br />
alive and there is a strong push by the local development<br />
authority to promote downtown retail.<br />
Total Population<br />
Median Age<br />
34<br />
Total Population<br />
Median Age<br />
38<br />
Sioux Falls At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 17.50<br />
$ 15.00<br />
$ 10.00<br />
$ 15.00<br />
$ 14.00<br />
$ 10.00<br />
$ 17.50<br />
$ 17.50<br />
$ 13.00<br />
$ 20.00<br />
$ 16.00<br />
$ 12.00<br />
$ 17.50<br />
$ 16.25<br />
$ 11.50<br />
$ 17.00<br />
$ 15.00<br />
$ 11.00<br />
N/A<br />
5.80%<br />
12.20%<br />
N/A<br />
8.00%<br />
14.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$ 3.00<br />
N/A<br />
N/A<br />
$ 5.00<br />
N/A<br />
N/A<br />
$ 4.00<br />
N/A<br />
N/A<br />
4.30%<br />
N/A<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
Regional Malls<br />
$<br />
$<br />
9.00<br />
8.50<br />
N/A<br />
N/A<br />
$ 10.00<br />
$ 12.00<br />
N/A<br />
N/A<br />
$ 9.50<br />
$ 10.25<br />
N/A<br />
N/A<br />
6.30%<br />
5.20%<br />
N/A<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Chattanooga At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
17.00<br />
12.00<br />
18.00<br />
18.00<br />
12.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
24.00<br />
16.00<br />
24.00<br />
20.00<br />
16.00<br />
N/A<br />
$ 19.00<br />
$ 14.00<br />
$ 20.00<br />
$ 19.00<br />
$ 14.00<br />
N/A<br />
7.00%<br />
12.00%<br />
10.00%<br />
10.00%<br />
15.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
2.25<br />
2.40<br />
6.00<br />
$<br />
$<br />
$<br />
3.25<br />
3.50<br />
10.00<br />
$<br />
$<br />
$<br />
2.50<br />
2.80<br />
7.00<br />
8.00%<br />
5.00%<br />
5.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
10.00<br />
12.00<br />
20.00<br />
21.00<br />
$<br />
$<br />
$<br />
$<br />
23.00<br />
20.00<br />
30.00<br />
50.00<br />
$ 18.00<br />
$ 18.00<br />
$ 24.00<br />
$ 37.00<br />
5.00%<br />
10.00%<br />
10.00%<br />
10.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 650,000.00 $ 1,200,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
125,000.00<br />
65,000.00<br />
100,000.00<br />
$<br />
$<br />
$<br />
250,000.00<br />
125,000.00<br />
300,000.00<br />
Retail/Commercial Land<br />
$ 200,000.00 $ 1,500,000.00<br />
Residential<br />
$ 60,000.00 $ 125,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 134
Clarksville, Tennessee<br />
Knoxville, Tennessee<br />
Contact<br />
<strong>NAI</strong> Clarksville<br />
+1 931 648 4700<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
280,688<br />
308,401<br />
120,157<br />
$56,972<br />
$46,654<br />
30<br />
Clarksville is the fifth largest city in the state of Tennessee and<br />
the 17th fastest growing city in the United States. The city of<br />
Clarksville, adjacent to Fort Campbell Military Base, enjoys an<br />
expanding and diverse industrial base, a vibrant residential<br />
market and is home to Austin Peay State University.<br />
Hemlock Semiconductor Corporation, one of the world’s<br />
leading suppliers of polycrystalline silicon products, is<br />
currently constructing a $1.5 billion facility which will<br />
become operational in late <strong>2012</strong>. Conwood Corporation, a<br />
subsidiary of R. J. Reynolds, recently purchased a 193 acre<br />
site and will invest $130 million expanding their existing<br />
operation in Clarksville. Bridgestone Metalpha and Winn<br />
Marine have also announced $75 million and $50 million<br />
expansions of their existing facilities. Other corporate<br />
citizens with manufacturing facilities in Clarksville include<br />
The Trane Company, Jostens, Florim, US Zinc and the Robert<br />
Bosch Corporation.<br />
Austin Peay State University is the fastest growing university<br />
in the Tennessee Board of Regents system with enrollment<br />
exceeding 10,000 students. APSU offers 57 majors allowing<br />
students to earn a bachelor’s, master’s or education<br />
specialist’s degree. In addition, the university boasts two<br />
accomplished Centers of Excellence and four Chairs of<br />
Excellence.<br />
There is a good supply of new land available for retail, office,<br />
industrial and residential development. Land prices are<br />
typically lower than those found in comparable markets.<br />
Currently there is a shortage of warehouse space primarily<br />
resulting from the entrance of Hemlock Semiconductor and<br />
related suppliers to the market.<br />
Construction of retail space has slowed due to the national<br />
economy. However, Clarksville enjoys a stable retail<br />
environment as evidenced by increased sales tax<br />
collections. CNN Money recently ranked Clarksville as the<br />
fourth best metro area to launch a business.<br />
Clarksville has been recognized as one of the 20 best<br />
performing cities in the country’s 200 largest metro areas.<br />
In 2010 Business Facilities Magazine ranked Clarksville as<br />
the number four city nationwide for Alternative Energy<br />
Industry leaders.<br />
Contact<br />
<strong>NAI</strong> Knoxville<br />
+1 865 777 3030<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
798,719<br />
842,042<br />
407,381<br />
$58,429<br />
$45,155<br />
40<br />
The Knoxville market has witnessed signs of improvement<br />
from 2010. General activity from prospective tenants and<br />
buyers remains low; however overall vacancy has decreased<br />
and Knoxville is experiencing positive absorption. A major<br />
hail storm in late April brought an influx of contractors to<br />
town to handle repairs resulting in a short term spike<br />
in absorption in the flex space market for spaces under<br />
3,000 SF.<br />
Businesses are starting to get a sense of optimism, and<br />
office leasing transactions during 2011 have started to<br />
return to the normal three and five year lease terms although<br />
concessions are still being provided in the form of free rent.<br />
Tenants are relocating to save rental costs, but very little<br />
expansion is occurring. The number of office sales has<br />
increased, however, except for Class A properties, prices are<br />
down 30% to 40% from pre-recession levels.<br />
Knoxville’s industrial market has shown some signs<br />
of recovery from 2010. The seemingly continual<br />
announcement of manufacturing businesses closing<br />
has ceased and the vacancy rate has improved. Some<br />
noteworthy positive activity includes Teledyne Brown<br />
Engineering, Inc. moving into a new 109,034 SF building<br />
and Midlab Inc. purchasing 100,000 SF. However, GE Energy<br />
closed a 360,000 SF distribution facility and activity remains<br />
slow as many businesses are unsure of what the future<br />
holds.<br />
Many new grocers have announced their entry into<br />
the Knoxville retail market. Some of these include Whole<br />
Foods, Trader Joe's, Publix and Costco. Other noteworthy<br />
transactions include a new 100,000 SF Kroger's and<br />
Target’s 110,000 SF store at the new NorthShore Town Center.<br />
Multifamily occupancy has risen steadily, encouraging both<br />
new developments and new investors to the area. The<br />
largest ground up developments are Amberleigh Bluff<br />
(Southwest Knox County) with 336 units and Legends at<br />
Oak Grove (North Knoxville) with 264 units. The largest<br />
transactions include Bristol Park with 208 units<br />
at $18,300,000 and Spring Meadow with 248 units at<br />
$11,525,000. <strong>2012</strong> is expected to bring several new<br />
multifamily development announcements as well as strong<br />
transactions for cash flowing, reposition and REO<br />
properties.<br />
Clarksville At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$<br />
$<br />
14.00<br />
12.00<br />
$<br />
$<br />
18.00<br />
14.00<br />
$ 16.00<br />
$ 13.00<br />
5.00%<br />
12.00%<br />
Class B (Secondary)<br />
suburban offIce<br />
$ 8.00 $ 10.00 $ 9.00 5.00%<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
17.00<br />
17.00<br />
14.00<br />
$<br />
$<br />
$<br />
22.00<br />
22.00<br />
16.00<br />
$ 19.50<br />
$ 19.50<br />
$ 15.00<br />
8.00%<br />
8.00%<br />
10.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
1.75<br />
3.00<br />
N/A<br />
$<br />
$<br />
4.25<br />
4.00<br />
N/A<br />
$<br />
$<br />
3.00<br />
3.50<br />
N/A<br />
3.00%<br />
5.00%<br />
N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
10.00<br />
14.00<br />
17.00<br />
20.00<br />
$<br />
$<br />
$<br />
$<br />
14.00<br />
18.00<br />
20.00<br />
30.00<br />
$ 12.00<br />
$ 16.00<br />
$ 18.00<br />
$ 25.00<br />
9.00%<br />
6.00%<br />
5.00%<br />
10.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
$<br />
$<br />
$<br />
$<br />
345,000.00<br />
215,000.00<br />
87,500.00<br />
N/A<br />
345,000.00<br />
$ 875,000.00<br />
$ 450,000.00<br />
$ 175,000.00<br />
N/A<br />
$ 650,000.00<br />
Residential<br />
$ 15,000.00 $ 55,000.00<br />
Knoxville At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
15.00<br />
12.00<br />
N/A<br />
19.00<br />
11.50<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
17.00<br />
15.00<br />
N/A<br />
24.50<br />
16.00<br />
N/A<br />
$ 16.00<br />
$ 13.00<br />
N/A<br />
$ 21.00<br />
$ 14.00<br />
N/A<br />
16.00%<br />
16.00%<br />
N/A<br />
15.40%<br />
17.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
1.90<br />
2.00<br />
$<br />
$<br />
3.50<br />
4.00<br />
$<br />
$<br />
2.95<br />
3.00<br />
12.00%<br />
12.00%<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
8.00<br />
8.00<br />
7.00<br />
12.00<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
20.00<br />
22.50<br />
19.00<br />
24.00<br />
N/A<br />
$ 12.50<br />
$ 15.25<br />
$ 14.50<br />
$ 19.00<br />
N/A<br />
6.00%<br />
8.00%<br />
15.00%<br />
10.00%<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
150,000.00<br />
N/A<br />
20,000.00<br />
30,000.00<br />
$<br />
$<br />
$<br />
260,000.00<br />
N/A<br />
80,000.00<br />
284,000.00<br />
Retail/Commercial Land<br />
Residential<br />
$ 190,000.00<br />
N/A<br />
$ 1,000,000.00<br />
N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 135
Memphis, Tennessee<br />
Nashville, Tennessee<br />
Contact<br />
<strong>NAI</strong> Saig Company<br />
+1 901 526 3100<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
1,329,141<br />
1,380,940<br />
665,857<br />
$64,835<br />
$47,974<br />
Memphis commercial real estate has outperformed the<br />
nation in its strongest segment, industrial. Southeast<br />
Memphis and DeSoto County saw the lion’s share of quality<br />
leasing activity. Meanwhile, Memphis’ office and retail<br />
segments often shadow the nation, so these segments had<br />
stable years at best. East Memphis and downtown Class A<br />
office saw the greatest activity in that segment while retail<br />
saw some movement based on large transactions.<br />
The Memphis industrial market, a pillar of the region, saw<br />
its second straight quarter of positive absorption putting<br />
direct vacancy at 14.3%. For 2011 large, new leases<br />
include Trane (625,000 SF), CEVA Logistics (623,500 SF),<br />
Nike (400,000 SF), Newegg (414,960 SF) and Cummins<br />
(371,233 SF), among others. Memphis has also been<br />
bolstered by several build-to-suit projects from Electrolux<br />
Home Products and Mitsubishi Electric Power Products. City<br />
Brewing Co. bought the former Coors brewery for $30<br />
million, opening a contract brewery. Mayfield Properties also<br />
purchased 4.2 million SF of Class B and Class C space at<br />
the Memphis Depot Business Park for $35.8 million.<br />
In the office market, expansions and a lack of new construction<br />
led to five straight quarters of positive absorption, with yearto-date<br />
absorption of 264,323 SF. The direct vacancy rate<br />
is 19.7%, down from 20.4% at the same time last year. One<br />
Commerce Square moved Pinnacle Airlines into 170,000<br />
SF downtown, followed by Electrolux (13,958 SF) and Great<br />
American Steamboat (6,944 SF). Other Class A leases<br />
include Education Realty Trust (27,000 SF), Regional<br />
Adjustment Bureau (47,830 SF), Le Bonheur Community<br />
Health and Well-Being (25,500 SF) and Qsource (18,000 SF).<br />
Memphis’ retail market was dominated by Kroger’s purchase<br />
of eight locations from Schnuck <strong>Market</strong>s, with<br />
333,404 SF now vacant across the market. This is on top<br />
of a fairly steady vacancy rate, currently at 14.3%. Local<br />
furniture dealer Samuel’s leased 25,000 SF in east Memphis,<br />
while DD’s Discounts entered the market with a<br />
32,000 SF Class B lease in north Memphis. Bass Pro Shops<br />
is moving forward with plans to occupy the Pyramid, a<br />
downtown arena. The $191 million public/private project is<br />
slated to open in 2013.<br />
Contact<br />
<strong>NAI</strong> Nashville<br />
+1 615 377 4747<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
1,702,694<br />
1,829,946<br />
908,532<br />
$64,590<br />
$51,360<br />
Middle Tennessee continues to enjoy moderate economic<br />
growth. Job growth has been steady with particular<br />
improvement seen due to the relocation of Jackson National<br />
Life to Franklin, Tennessee and Loews Corporation<br />
and ServiceSource to the downtown Nashville market.<br />
Construction of the 1.4 million SF Nissan Leaf battery plant<br />
in Smyrna is expected to be complete in <strong>2012</strong> and is a<br />
bright spot for manufacturing. Healthcare and service<br />
employment figures also continue to grow.<br />
Office occupancy and rental rates have seen little change<br />
in 2011. While rates and occupancy inched upward in the<br />
Cool Springs, Brentwood and West End markets, the Airport<br />
South, Airport North and Downtown areas continue to lag.<br />
The Cool Springs and West End areas continue to lead all<br />
others in occupancy. Landlord concessions continue to drive<br />
deals rather than considerable drops in base rental rates.<br />
Notable leases include HCA’s lease of 82,767 SF at Eight<br />
Corporate Center (Cool Springs) and Tractor Supply<br />
Company’s renewal of the Westwood South building (66,085<br />
SF) in Brentwood. Projects under construction include<br />
175,000 SF of Class A space in Meridian Cool Springs by<br />
Boyle Development and an additional 75,000 SF building<br />
for Healthspring in MetroCenter.<br />
The retail sector remains strong in a few submarkets (Green<br />
Hills, West End and Brentwood/Cool Springs) with vacancy<br />
rates in Class A product remaining low and rental rates<br />
remaining relatively high. In areas such as downtown and<br />
Antioch, vacancy levels continue to hover around 6.5%. The<br />
downtown retail market, while still recovering, has seen<br />
bright spots in the opening of Puckets Grocery in St. Cloud<br />
Corner and Margaritaville on Broadway. Optimism remains<br />
strong as the 1.2 million SF Convention Center continues<br />
construction.<br />
While the retail and office sectors remain steady, the<br />
industrial market continues to lag with an overall vacancy<br />
rate of 9.6% at the end of Q3 2011. Bright spots include a<br />
518,400 SF lease signed by Griffin at the Interchange<br />
Distribution Center in the southeast market and the 445,942<br />
SF deal signed by Amazon.com at Park 840 in Wilson<br />
County. Owner-occupant purchases have remained steady.<br />
Total Population<br />
Median Age<br />
34<br />
Total Population<br />
Median Age<br />
37<br />
Memphis At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)/<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
14.50<br />
7.00<br />
N/A<br />
11.60<br />
5.00<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
22.00<br />
20.00<br />
N/A<br />
28.75<br />
25.00<br />
N/A<br />
$ 18.88<br />
$ 15.93<br />
N/A<br />
$ 22.34<br />
$ 16.93<br />
N/A<br />
9.00%<br />
19.90%<br />
N/A<br />
11.10%<br />
22.20%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
1.25<br />
1.25<br />
2.25<br />
$<br />
$<br />
$<br />
4.25<br />
5.00<br />
12.50<br />
$<br />
$<br />
$<br />
2.41<br />
2.65<br />
6.14<br />
11.90%<br />
10.00%<br />
17.80%<br />
Downtown<br />
$ 2.76 $ 25.00 $ 12.79 27.50%<br />
Neighborhood Service Centers $ 6.00 $ 14.00 $ 7.00 48.90%<br />
Community Power Center<br />
$ 1.00 $ 22.00 $ 11.80 16.20%<br />
Regional Malls<br />
$ 4.00 $ 17.00 $ 9.60 20.90%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
90,000.00<br />
60,000.00<br />
7,143.00<br />
6,820.00<br />
30,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
283,000.00<br />
153,000.00<br />
98,000.00<br />
196,000.00<br />
281,500.00<br />
Nashville At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)/<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
23.50<br />
18.00<br />
8.40<br />
21.50<br />
17.00<br />
3.01<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
25.25<br />
26.50<br />
25.00<br />
30.00<br />
28.52<br />
59.72<br />
$ 23.61<br />
$ 20.96<br />
$ 16.28<br />
$ 25.41<br />
$ 21.68<br />
$ 18.23<br />
40.00%<br />
21.00%<br />
17.00%<br />
5.00%<br />
9.00%<br />
10.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
1.25<br />
1.25<br />
1.25<br />
$<br />
$<br />
$<br />
21.60<br />
9.50<br />
21.60<br />
$<br />
$<br />
$<br />
3.50<br />
2.28<br />
3.40<br />
12.00%<br />
7.00%<br />
10.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
7.00<br />
3.50<br />
11.00<br />
21.23<br />
$<br />
$<br />
$<br />
$<br />
22.00<br />
30.00<br />
40.00<br />
24.00<br />
$ 13.90<br />
$ 13.27<br />
$ 18.39<br />
$ 23.69<br />
47.00%<br />
19.00%<br />
9.00%<br />
15.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 136
Austin, Texas<br />
Beaumont, Texas<br />
Contact<br />
<strong>NAI</strong> REOC-Austin<br />
+1 512 346 5180<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
1,773,641<br />
2,004,139<br />
981,663<br />
$79,309<br />
$59,722<br />
It is only natural that the capital city for the state that added<br />
more people (nearly 4.3 million) than any other between the<br />
census counts of 2000 and 2010, ranked #8 for fastest<br />
growing city in the past decade (CNNMoney.com). Austin<br />
has also been recognized as one of the top performing cities<br />
in the nation ranking #1 on the list of Next Big Boom Towns<br />
(Forbes.com) and #1 for small business two years in a row<br />
(Bizjournals.com).<br />
Austin was recently named as one of the 10 “up and<br />
coming” commercial real estate markets by the American<br />
Law Media’s Real Estate Forum magazine. Limited<br />
speculative construction in all product types has been<br />
an important factor in the recovery of the market by keeping<br />
current demand directed at filling existing vacancies.<br />
Despite challenges, the Austin market continues to show<br />
improvement overall.<br />
Despite the closure of three Borders Books & Music stores<br />
as well as three Lack’s furniture stores in 2011, demand for<br />
well located retail space contributed to improved occupancy<br />
within the local retail market. Healthy leasing activity<br />
backfilled a number of big box vacancies including<br />
Nordstrom Rack (34,000 SF) at Sunset Valley Village<br />
Shopping Center and the combination of Sears Outlet and<br />
Gold’s Gym at the former Albertsons grocery store (61,000<br />
SF) in Anderson Arbor Shopping Center. In addition, Highland<br />
Mall, Austin’s oldest enclosed mall, was purchased by Austin<br />
Community College with plans to redevelop the property for<br />
the school’s use. Many new and expanding restaurant<br />
concepts have also contributed to the overall retail market<br />
performance.<br />
The Austin office market has not been as susceptible to the<br />
negative trends experienced in other regions of the country.<br />
Mid-sized and larger leases have generated strong positive<br />
absorption resulting in an improved vacancy rate. Activity<br />
within Austin’s industrial leasing market has supported a<br />
sustained recovery. A steady stream of tenant expansions<br />
coupled with a handful of new relocations in 2011 has<br />
generated healthy positive net absorption which has<br />
tightened the citywide vacancy rate. Quoted rental rates<br />
have remained stable, but as market conditions improve,<br />
the availability of concessions has begun to decline.<br />
Contact<br />
<strong>NAI</strong> Wheeler<br />
+1 409 899 3300<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
467,507<br />
494,874<br />
207,027<br />
$55,070<br />
$42,549<br />
The commercial real estate market in Southeast Texas has<br />
begun showing signs of life again in 2011. Leading the pack<br />
this year was office space, with continued expansion in the<br />
legal and medical fields pushing that market. Industrial and<br />
land have continued to trail due to excess supply and lack<br />
of available financing. Retail has picked up slightly with<br />
greater caution being exercised by retailers. Investment<br />
property is still in great demand.<br />
Office space has done quite well throughout the year as the<br />
legal field continues to expand along with medical users.<br />
We expect this trend to continue but slow slightly going into<br />
<strong>2012</strong>.<br />
Industrial real estate seems to still be lagging behind as<br />
many of the shorter term leases supporting the Motiva<br />
expansion project wind down and that space comes back<br />
on the market. We expect some of this excess space to<br />
start filling up thus creating a little more demand but do not<br />
foresee any new construction on the horizon unless it is of<br />
the build to suite type.<br />
Land is still very slow based on the lack of available financing.<br />
Certain areas are in demand and moving but overall land is<br />
slow and expected to remain so until the larger banks start<br />
lending again.<br />
Retail has held its own and has seen small amounts of<br />
absorption on a much slower and cautious pace. Feasibility<br />
times have extended as well as the amount of time it takes<br />
for them to make a decision on whether to even pursue a<br />
particular space or not. We believe this is starting to turn<br />
the corner and as the national economy picks up we will<br />
see more activity in this field.<br />
Investment property is still in demand but not moving as<br />
quickly based on the difference between asking and selling<br />
prices. The deals that are getting done are typically with out<br />
of state/town buyers. Investments priced correctly typically<br />
move quickly.<br />
Overall the Southeast Texas market has shown signs of<br />
improvement. We expect the growth to continue into <strong>2012</strong><br />
and beyond as the political environment stabilizes giving<br />
everyone more confidence in the market.<br />
Total Population<br />
Median Age<br />
32<br />
Total Population<br />
Median Age<br />
38<br />
Austin At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
N/A<br />
$ 24.00<br />
$ 20.00<br />
N/A<br />
$ 19.00<br />
$ 16.00<br />
N/A<br />
$ 46.00<br />
$ 34.00<br />
N/A<br />
$ 33.00<br />
$ 28.00<br />
N/A<br />
$ 35.08<br />
$ 26.17<br />
N/A<br />
$ 25.81<br />
$ 19.16<br />
N/A<br />
15.50%<br />
12.90%<br />
N/A<br />
20.60%<br />
18.50%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
3.96<br />
4.80<br />
$<br />
$<br />
5.76<br />
7.20<br />
$<br />
$<br />
5.56<br />
5.25<br />
19.70%<br />
15.00%<br />
High Tech/R&D<br />
retaIl<br />
$ 7.80 $ 11.40 $ 9.20 17.80%<br />
Downtown<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
Regional Malls<br />
$ 14.00<br />
$ 10.00<br />
$ 15.00<br />
N/A<br />
$ 41.00<br />
$ 32.00<br />
$ 36.00<br />
N/A<br />
$ 26.50<br />
$ 18.25<br />
$ 22.25<br />
N/A<br />
5.00%<br />
16.80%<br />
9.80%<br />
5.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 350,000.00 $ 1,200,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
90,000.00<br />
60,000.00<br />
40,000.00<br />
190,000.00<br />
20,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
400,000.00<br />
150,000.00<br />
200,000.00<br />
600,000.00<br />
100,000.00<br />
Beaumont At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
12.00<br />
10.00<br />
N/A<br />
12.00<br />
8.00<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
15.00<br />
12.00<br />
N/A<br />
16.00<br />
12.00<br />
N/A<br />
$ 13.50<br />
$ 11.00<br />
N/A<br />
$ 14.00<br />
$ 10.00<br />
N/A<br />
18.00%<br />
14.00%<br />
N/A<br />
9.00%<br />
11.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$<br />
$<br />
$<br />
2.25<br />
4.80<br />
6.00<br />
N/A<br />
$<br />
$<br />
$<br />
3.00<br />
7.00<br />
10.00<br />
N/A<br />
$<br />
$<br />
$<br />
2.63<br />
5.90<br />
8.00<br />
N/A<br />
14.00%<br />
10.00%<br />
10.00%<br />
N/A<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
8.00<br />
14.00<br />
12.00<br />
$<br />
$<br />
$<br />
12.00<br />
22.00<br />
18.00<br />
$ 10.00<br />
$ 18.50<br />
$ 15.00<br />
10.00%<br />
12.00%<br />
10.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
196,000.00<br />
32,000.00<br />
33,000.00<br />
130,000.00<br />
N/A<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
350,000.00<br />
110,000.00<br />
100,000.00<br />
750,000.00<br />
N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 137
Corpus Christi, Texas<br />
Dallas, Texas<br />
Contact<br />
<strong>NAI</strong> Cravey Real Estate<br />
Services<br />
+1 361 289 5168<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
435,351<br />
464,558<br />
204,865<br />
$61,057<br />
$44,086<br />
34<br />
The City of Corpus Christi is growing and its future is looking<br />
brighter. The industrial sector continues to drive the growth<br />
of the city. Many of the projects currently under construction<br />
are so large that it will take years to complete. This should<br />
guarantee many more years of sustained growth.<br />
Downtown Class A office space continues to be in high<br />
demand. Partly because there are only two Class A buildings<br />
and because of favorable rental rates. Most of the leasing<br />
has come from medical and engineering firms. Older Class<br />
C buildings still have the lowest occupancy rates that barely<br />
cover expenses. Recently the Prosperity Bank Building,<br />
a Class B building, was taken back by the lender. Several<br />
other Class B and Class C buildings are on the brink of foreclosure.<br />
The industrial sector continues to be the bright spot in the<br />
market. The oil and gas industry, which includes exploration,<br />
service and refining, are pumping millions of dollars into the<br />
economy. A Chinese owned firm, TIPCO, has broken ground<br />
for a billion dollar pipe manufacturing plant for the oil industry.<br />
The Corpus Christi Port Authority has begun dredging<br />
the 45 foot deep LaQuinta Trade Gateway Terminal Project,<br />
a 1,100 acre Greenfield site. There are plans for a three<br />
berth ship dock with cranes, rail yard, warehousing complex<br />
and cargo and container storage yard as a result of the<br />
Panama Canal expansion.<br />
Anchored retail centers are doing well. Smaller, unanchored<br />
centers have the highest vacancy. Three new Super<br />
Walmarts are due to open; in Flour Bluff, on the former<br />
Parkdale Plaza site and on Saratoga Boulevard. The<br />
proposed 700,000 SF outlet mall at the Nueces County<br />
Fairgrounds in Robstown is moving forward. The recently<br />
remodeled LaPalmera Mall is doing well, however Sunrise<br />
Mall that was taken back by IBC Bank several years ago has<br />
still not been sold. However, Planet Fitness has leased the<br />
former Mervyn’s space in Sunrise Mall.<br />
Contact<br />
<strong>NAI</strong> Robert Lynn<br />
+1 214 256 7100<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
6,474,711<br />
6,887,534<br />
3,424,361<br />
$79,063<br />
$57,898<br />
32<br />
The Dallas commercial real estate market is poised for what<br />
should be a remarkable run in the coming years with<br />
multiple billion dollar infrastructure projects geared toward<br />
serving an ever growing population and economy. Dallas<br />
Fort Worth is a united economic region with multiple cities<br />
and counties offering a variety of lifestyles and amenities.<br />
Fueled by job growth, owners and developers are turning<br />
optimistic, and there is quite a bit of speculation regarding<br />
new construction. Industrial will surely see activity in <strong>2012</strong>,<br />
and office should follow. Rates for Class A industrial have<br />
stabilized and are rising up, as the majority of new space<br />
has been absorbed or is about to be leased. The 11%<br />
vacancy is a bit misleading as most of the vacant product is<br />
Class B and Class C. Class A office tenants are willing to<br />
pay a premium for modern, green buildings as the highest<br />
rates in Dallas Fort Worth are still a fraction of those in other<br />
major markets.<br />
The downtown/uptown market has realized positive<br />
absorption with many leading companies gobbling up prime<br />
spaces, including a number of relocations from the<br />
suburban markets. Recent improvements to the arts district<br />
and addition of the deck park are transforming downtown<br />
and uptown to the vibrant, economic generation we all think<br />
it can become. In 2011 retail expansion continues to be led<br />
by discount stores and fast food. Lack of new construction<br />
will help fill existing vacancies. The average vacancy rate<br />
continued to go down in Dallas markets. Even non anchored<br />
convenience centers have seen their vacancy reduced. The<br />
Dallas area retail market should continue to see recovery<br />
into <strong>2012</strong>. The area has received a shot in the arm from<br />
Walmart, ALDI and Kroger which have together opened over<br />
20 stores in the past 12 months. The area is likely 24 to 36<br />
months away from seeing new development.<br />
Corpus Christi At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
N/A<br />
$ 17.00<br />
N/A<br />
$ 22.00<br />
N/A<br />
$ 19.50<br />
N/A<br />
18.00%<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
$ 9.00<br />
N/A<br />
$ 13.00<br />
N/A<br />
$ 11.00<br />
N/A<br />
28.00%<br />
N/A<br />
Class A (Prime)<br />
$ 13.00 $ 17.00 $ 15.00 14.00%<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 9.00 $ 13.00 $ 11.00 13.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
$ 3.60<br />
N/A<br />
$ 6.00<br />
N/A<br />
$ 4.80<br />
N/A<br />
6.00%<br />
N/A<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$<br />
$<br />
6.00<br />
6.00<br />
$ 12.00<br />
$ 11.00<br />
$<br />
$<br />
9.00<br />
8.50<br />
9.00%<br />
60.00%<br />
Neighborhood Service Centers $ 10.00 $ 28.00 $ 19.00 14.00%<br />
Sub Regional Centers<br />
Regional Malls<br />
$<br />
$<br />
9.00<br />
9.75<br />
$ 28.00<br />
$ 28.00<br />
$ 18.50<br />
$ 18.88<br />
12.00%<br />
52.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
348,480.00<br />
76,230.00<br />
76,230.00<br />
15,000.00<br />
196,020.00<br />
15,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
522,720.00<br />
196,000.00<br />
196,000.00<br />
108,900.00<br />
784,080.00<br />
350,000.00<br />
Dallas At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
N/A<br />
$ 15.00<br />
$ 10.00<br />
$ 21.00<br />
$ 14.00<br />
$ 11.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
35.00<br />
20.00<br />
35.00<br />
45.00<br />
27.00<br />
N/A<br />
$ 17.00<br />
$ 15.00<br />
$ 25.00<br />
$ 24.00<br />
$ 17.00<br />
N/A<br />
29.00%<br />
47.00%<br />
90.00%<br />
16.00%<br />
26.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
1.50<br />
1.50<br />
5.00<br />
$<br />
$<br />
$<br />
4.00<br />
4.00<br />
13.00<br />
$<br />
$<br />
$<br />
2.00<br />
2.00<br />
6.50<br />
11.00%<br />
11.00%<br />
13.00%<br />
Downtown<br />
$ 10.00 $ 30.00 $ 20.00 3.00%<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
$<br />
$<br />
6.00<br />
8.00<br />
$<br />
$<br />
60.00<br />
30.00<br />
$ 33.00<br />
$ 19.00<br />
8.00%<br />
13.00%<br />
Regional Malls<br />
$ 30.00 $ 60.00 $ 45.00 12.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
N/A<br />
N/A<br />
85,000.00<br />
70,000.00<br />
87,000.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 220,000.00<br />
$ 160,000.00<br />
$ 871,200.00<br />
N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 138
El Paso, Texas<br />
Fort Worth, Texas<br />
Contact<br />
<strong>NAI</strong> El Paso<br />
+1 915 859 3017<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
836,638<br />
966,654<br />
353,629<br />
$44,945<br />
The commercial real estate market in El Paso remains<br />
steady as we approach <strong>2012</strong>. The primary driver continues<br />
to be the expansion of the Ft. Bliss military base. According<br />
to Manpower publication, El Paso has the third highest<br />
employment outlook in the country as <strong>report</strong>ed in Q2 2011.<br />
Considerable office space has come on line in the<br />
CBD where a local REIT and Mills Plaza Properties are<br />
redeveloping over 700,000 SF. Office leasing downtown has<br />
been slow and several notable large tenants have vacated.<br />
Rates and occupancies for the suburban office market have<br />
been flat.<br />
Suburban retail has trended up a bit. We are experiencing<br />
an increase in national and regional tenants seeking space<br />
in El Paso. There has been a migration of affluent Mexican<br />
nationals to El Paso where they are establishing businesses<br />
and buying real estate. Construction is expected to<br />
commence for The Fountains. This will be a 600,000 SF<br />
lifestyle center on I-10 in central El Paso.<br />
The industrial market, comprised of mostly distribution<br />
space, has been lackluster but rates seem to be on the rise<br />
and occupancy is slowly tightening. No new construction in<br />
this category has taken place as rents remain low relative<br />
to construction cost.<br />
The multifamily sector has been the bright spot in El Paso<br />
in 2011. Through September construction has tripled<br />
compared to one year prior. Over 1,175 units were<br />
completed for this period making it the highest number for<br />
three quarters since the year 2000. Occupancy is about<br />
95% and rents have increased by 5% in the last year. Single<br />
family home sales under $200,000 has been relatively<br />
strong but higher segments have suffered. Some depreciation<br />
in the higher segments has been encountered but not as<br />
significantly as other markets.<br />
The El Paso commercial real estate market has remained<br />
steady throughout 2011 and is well positioned for <strong>2012</strong>. In<br />
El Paso the market is definitely improving.<br />
Contact<br />
<strong>NAI</strong> Robert Lynn<br />
+1 817 885 8333<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
1,854,600<br />
2,040,430<br />
975,524<br />
$75,870<br />
Fort Worth is the fifth largest city in Texas, the 17th largest<br />
city in the US and was voted one of America’s most livable<br />
communities. Fort Worth continues to post positive job<br />
growth due to its diversified economic base, relatively low<br />
cost of living and great labor pool. The growth should<br />
continue due to its pro-business attitude and solid<br />
infrastructure in place.<br />
Office rental rates in the Fort Worth CBD have remained<br />
steady and generally unaffected by the broader economy<br />
for multiple reasons, primarily low vacancy rates. The direct<br />
vacancy rate for Class A office space, which excludes<br />
sublease space, dropped and is relatively low compared to<br />
neighboring Dallas and the national average. With such<br />
modest vacant space available there is little pressure on<br />
landlords to reduce rates. However, there are bargains to be<br />
found for tenants in the otherwise steady Fort Worth office<br />
market if you know where to look. The most immediate<br />
impact of the general economy can be seen in the amount<br />
of available sublease space, which over the past 36 months<br />
has ranged from 18,815 SF to 1 million SF.<br />
The Fort Worth industrial market showed positive absorption<br />
for the second straight year. The overall vacancy rate fell<br />
from 12.4% to 10%. New development continues to be<br />
limited to owner users and not speculative construction. Few<br />
buildings are available for sale at discounted prices as the<br />
money sits on the sidelines. Slow cautious growth is<br />
projected for <strong>2012</strong>.<br />
The retail market started off 2011 very strong with substantial<br />
improvement in activity and reduction in vacancy from 2010.<br />
Activity did slow during the second quarter with the fear of<br />
another possible recession. During Q4 2011 activity has<br />
substantially picked up and stabilized. It is expected that<br />
leasing activity will continue to improve in <strong>2012</strong>. Along with<br />
Dallas, Fort Worth continues to be one of the top retail<br />
markets in Texas.<br />
Median<br />
Household Income<br />
$31,969<br />
Median<br />
Household Income<br />
$57,194<br />
Total Population<br />
Median Age<br />
34<br />
Total Population<br />
Median Age<br />
32<br />
El Paso At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
18.00<br />
14.00<br />
21.00<br />
16.00<br />
14.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
25.00<br />
18.00<br />
25.00<br />
20.00<br />
16.00<br />
N/A<br />
$ 21.00<br />
$ 16.00<br />
$ 23.00<br />
$ 17.00<br />
$ 15.00<br />
N/A<br />
20.00%<br />
10.00%<br />
5.00%<br />
6.00%<br />
12.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
2.90<br />
3.00<br />
4.50<br />
$<br />
$<br />
$<br />
3.80<br />
4.25<br />
7.00<br />
$<br />
$<br />
$<br />
3.50<br />
3.60<br />
5.20<br />
15.00%<br />
17.00%<br />
12.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
$<br />
$<br />
9.00<br />
9.00<br />
$<br />
$<br />
25.00<br />
18.00<br />
$ 11.00<br />
$ 12.00<br />
9.00%<br />
5.50%<br />
Community Power Center<br />
$ 6.00 $ 25.00 $ 9.00 7.00%<br />
Regional Malls<br />
$ 20.00 $ 40.00 $ 23.00 N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 1,300,000.00 $ 1,700,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
175,000.00<br />
87,000.00<br />
87,000.00<br />
218,000.00<br />
10,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
350,000.00<br />
150,000.00<br />
435,500.00<br />
435,500.00<br />
175,000.00<br />
Fort Worth At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
N/A<br />
$ 21.00<br />
$ 16.00<br />
N/A<br />
$ 18.00<br />
$ 16.00<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
28.00<br />
20.00<br />
N/A<br />
23.00<br />
20.00<br />
N/A<br />
$ 24.00<br />
$ 18.00<br />
N/A<br />
$ 19.00<br />
$ 17.00<br />
N/A<br />
9.00%<br />
17.00%<br />
N/A<br />
16.00%<br />
16.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
2.00<br />
2.00<br />
3.50<br />
$<br />
$<br />
$<br />
3.50<br />
3.50<br />
6.00<br />
$<br />
$<br />
$<br />
3.25<br />
3.00<br />
4.50<br />
11.00%<br />
9.00%<br />
12.00%<br />
Downtown<br />
$ 13.22 $ 38.00 $ 18.75 1.30%<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
$<br />
$<br />
5.25<br />
5.10<br />
$<br />
$<br />
30.00<br />
28.50<br />
$ 13.65<br />
$ 12.05<br />
9.70%<br />
12.10%<br />
Regional Malls<br />
$ 14.85 $ 30.00 $ 18.25 11.70%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 2,178,000.00 $ 3,267,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
220,000.00<br />
55,000.00<br />
50,000.00<br />
220,000.00<br />
20,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
600,000.00<br />
100,000.00<br />
100,000.00<br />
1,000,000.00<br />
196,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 139
Houston, Texas<br />
Contact<br />
<strong>NAI</strong> Houston<br />
+1 713 629 0500<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
6,106,419<br />
6,744,892<br />
3,106,316<br />
$79,886<br />
$57,045<br />
32<br />
Houston’s diverse economy is comprised of research firms,<br />
medical and biomedical technology, telecommunications,<br />
agriculture and other distinct businesses. The emphasis<br />
on international trade is expanding and is a prominent theme<br />
in the city’s continued economic development. Long<br />
recognized as the energy capital of the world with every<br />
major energy company represented locally, Houston is<br />
ranked second among US cities with the most Fortune 500<br />
headquarters.<br />
Houston’s office vacancy rate was 13.3% across all classes<br />
and 13.4% in the CBD. The average asking rental rate was<br />
$22.77/SF. A total of 33 buildings have been delivered to<br />
the market totaling 2,383,813 SF with 1,532,599 SF still<br />
under construction. The largest lease signings in 2011<br />
included the 298,060 SF lease signed by Chevron at<br />
Continental Center I (1600 Smith Street), the 190,209 SF<br />
lease signed by BG Group LLC at BG Group Place (811 Main<br />
Street) and the 189,000 SF lease signed by Nexen, Inc. at<br />
the Nexen Building (945 Bunker Hill Road).<br />
Houston’s industrial market has remained stable with an<br />
overall vacancy rate of 5.8% and an average asking rental<br />
rate of $5.30/SF per year. The largest lease signings in<br />
2011 included the 165,035 SF lease signed by UnitedTrans<br />
at 8935 <strong>Market</strong> Street, the 136,928 SF lease signed by<br />
Packwell, Inc. at 8786 Wallisville Road and the 132,913 SF<br />
lease signed by Mahindra USA, Inc. at 9020 Jackrabbit<br />
Road.<br />
The overall retail market in Houston is stable with a 12.4%<br />
vacancy rate. The average quoted asking rental rate is<br />
$19.20/SF. A total of 48 buildings have been delivered to<br />
the market totaling 937,858 SF, and 851,924 SF are still<br />
under construction. The largest lease signings in 2011<br />
included the 52,360 SF lease signed by Ashley Furniture at<br />
20020 Highway 59, the 51,252 SF lease signed by Joe V’s<br />
Smart Shop at Northwest Freeway and West 43rd and the<br />
34,233 SF lease signed by The Container Store at 1455<br />
Lake Woodlands Drive.<br />
Rio Grande Valley, Texas<br />
Contact<br />
<strong>NAI</strong> Rio Grande Valley<br />
+1 956 994 8900<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
2,031,800<br />
2,335,576<br />
792,602<br />
$45,655<br />
$31,205<br />
27<br />
(Brownsvile, Harlingen, McAllen, Edinburg,<br />
and Mission.)<br />
As global companies look to expand or relocate within the<br />
United States many of their operations require a young labor<br />
force, easy access to international sea, air and cargo ports<br />
of entry, low cost of living, and access to development<br />
opportunities. Hundreds of companies have taken a hard<br />
look at the Rio Grande Valley in south Texas.<br />
Commercial real estate has stabilized in the Rio Grande<br />
Valley after a series of down years. This makes the market<br />
one of the best in the nation and according to Forbes<br />
Magazine, the McAllen MSA ranked 4th for best mid-sized<br />
MSA for jobs while Bloomberg/Business Week ranked the<br />
MSA 4th in cost of living nationally. The Metropolitan Policy<br />
Program (MPP) at the Brookings Institution regularly lists<br />
the 20 strongest major metro areas in the US. It looks at<br />
fundamental economic issues; economic activity, housing<br />
and employment. The McAllen MSA was ranked in the top<br />
20 of the Strongest Metro Areas by the MPP.<br />
The local colleges and universities (University of Texas<br />
Brownsville and Pan American, South Texas College, Texas<br />
Southmost and Texas State Technical College), continue their<br />
growth not only in students enrolled but in construction of<br />
new buildings and acquisition of land to accommodate<br />
the enrollment growth and movement into research and<br />
development.<br />
The Dallas Federal Reserve recent data shows a slight<br />
increase in retail sales of 6%. With several big box retail<br />
stores set to open in late 2011 and early <strong>2012</strong>, the stage is<br />
set for a continued increase in retail sales. Bass Pro Shops<br />
will complete construction before the end of 2011 in<br />
Harlingen while in the McAllen MSA a Costco in Pharr will<br />
be completed in the spring of <strong>2012</strong>. Healthcare and<br />
government agencies continue to dominate the office<br />
market. Retail sales in 2010 in Hidalgo and Cameron<br />
counties reached $14.5 billion dollars confirming that the<br />
Rio Grande Valley remains a very healthy retail market.<br />
Houston At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$ 42.00<br />
$ 28.54<br />
$ 16.25<br />
$ 16.40<br />
$ 14.00<br />
$ 46.87<br />
$ 41.95<br />
$ 34.00<br />
$ 29.81<br />
$ 40.73<br />
$ 44.44<br />
$ 36.20<br />
$ 24.65<br />
$ 24.27<br />
$ 27.23<br />
40.00%<br />
12.00%<br />
13.00%<br />
36.00%<br />
14.00%<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 6.00 $ 49.65 $ 18.67 14.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
4.08<br />
4.00<br />
$<br />
$<br />
7.14<br />
9.00<br />
$<br />
$<br />
5.16<br />
6.60<br />
5.00%<br />
5.70%<br />
High Tech/R&D<br />
retaIl<br />
$ 5.40 $ 25.00 $ 5.30 7.40%<br />
Downtown<br />
$ 11.23 $ 49.74 $ 35.41 5.00%<br />
Neighborhood Service Centers $ 4.00 $ 40.00 $ 13.45 11.00%<br />
Sub Regional Centers<br />
Regional Malls<br />
$ 10.00<br />
$ 16.55<br />
$ 30.00<br />
$ 35.50<br />
$ 15.25<br />
$ 22.62<br />
7.00%<br />
7.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 293,750.00 $13,721,400.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
98,000.00<br />
39,204.00<br />
28,314.00<br />
$<br />
$<br />
$<br />
375,000.00<br />
206,910.00<br />
150,000.00<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
45,000.00<br />
22,000.00<br />
$ 6,000,000.00<br />
$ 1,550,000.00<br />
Rio Grande Valley At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
12.00<br />
8.00<br />
12.00<br />
10.00<br />
8.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
21.00<br />
12.00<br />
21.00<br />
21.00<br />
16.00<br />
N/A<br />
$ 16.50<br />
$ 10.00<br />
$ 16.50<br />
$ 15.50<br />
$ 12.00<br />
N/A<br />
0.60%<br />
0.20%<br />
0.30%<br />
0.30%<br />
0.10%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$<br />
$<br />
$<br />
$<br />
1.95<br />
2.45<br />
3.85<br />
3.95<br />
$<br />
$<br />
$<br />
$<br />
12.00<br />
9.00<br />
13.44<br />
11.40<br />
$<br />
$<br />
$<br />
$<br />
6.98<br />
5.73<br />
8.65<br />
7.68<br />
0.30%<br />
0.10%<br />
0.10%<br />
0.10%<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
8.45<br />
15.05<br />
25.00<br />
$<br />
$<br />
$<br />
27.00<br />
36.00<br />
75.00<br />
$ 17.73<br />
$ 25.53<br />
$ 50.00<br />
0.20%<br />
0.20%<br />
0.10%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
176,854.00<br />
55,267.00<br />
44,213.00<br />
243,600.00<br />
21,315.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
574,774.00<br />
132,640.00<br />
66,320.00<br />
928,481.00<br />
83,230.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 140
San Antonio, Texas<br />
Texarkana (Bowie County, Texas/Miller County, Arkansas), Texas<br />
Contact<br />
<strong>NAI</strong> REOC Partners<br />
+1 210 524 4000<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
2,216,091<br />
2,511,772<br />
1,059,947<br />
$67,252<br />
$50,831<br />
Despite challenges, commercial real estate in San Antonio<br />
continues to show improvement thanks to a stable economy<br />
that has outperformed the rest of the nation. This is evidenced<br />
by recent <strong>report</strong>s including Brookings Institute which listed<br />
the Alamo City among the Top Metro Areas for Economic<br />
Performance and Forbes’ list of Best Cities for Jobs Right Now.<br />
San Antonio’s competitive cost of living, positive business<br />
climate, strong workforce and great quality of life continue to<br />
attract companies to locate their operations here. In addition,<br />
the recent completion of a Base Realignment and Closure<br />
program at Fort Sam Houston is responsible for bringing<br />
12,000 new jobs to the area and establishing San Antonio<br />
as the home of joint military medical training and a center for<br />
military medical treatment and research.<br />
The city's 45.6 million SF of retail space maintains a vacancy<br />
rate of 13% and a citywide average quoted triple net rental<br />
rate of $18.21/SF with prime power center space averaging<br />
north of $24/SF. With the exception of the expansion of locally<br />
based grocer H-E-B, development has been limited but large<br />
retailers are starting to get active in the area with a new<br />
Target store currently under construction.<br />
In addition to a growing list of corporate facilities, the city<br />
offers nearly 28 million SF of competitive office space. Recent<br />
consolidations coupled with a migration of tenants away from<br />
multi-tenant space to build-to-suit facilities (including NuStar<br />
and Nationwide Insurance) softened the citywide vacancy rate<br />
to 19.9%. However, restrained speculative construction and<br />
an increased demand for space are expected to improve<br />
market conditions in the coming year.<br />
The area industrial market has seen activity amongst new<br />
“green technology” companies and, more significantly, oil field<br />
services companies related to the Eagle Ford Shale; an oil &<br />
gas field that sits in close proximity to the city and is expected<br />
to have a strong economic impact over the next 20 years.<br />
Contact<br />
<strong>NAI</strong> American Realty Co.<br />
+1 903 793 2666<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
136,458<br />
138,488<br />
64,103<br />
$56,312<br />
$41,470<br />
The economy in the Texarkana metro area, continues to<br />
remain vibrant and healthy, relative to most other areas of<br />
our country. The recognition of this has led to a series of<br />
articles and accolades in national publications acknowledging<br />
and touting the vitality and soundness of this area for<br />
economic growth and opportunity. A 2008 Forbes.com<br />
article ranked Texarkana as #2 on their list of small metro<br />
areas.<br />
The industrial base for the market area is diverse and<br />
includes two paper mills, Cooper Tire & Rubber Company,<br />
Christus St. Michael Health System and Red River Army<br />
Depot. The Depot has just recently transferred several<br />
thousand acres with buildings and infrastructure to the Red<br />
River Redevelopment Authority. Cooper Tire chose to expand<br />
in Texarkana. Construction continues on a new clean burning<br />
coal power plant as well as additional construction at Texas<br />
A & M University's 375-acre site.<br />
Projects under new construction are Copelands Steak<br />
House, Arista Garden Apartment Complex, State Bank of<br />
DeKalb and Modern Day Fitness. CVS is under contract to<br />
build in the Texarkana area. Also there is a plan for a New<br />
Master Planned Medical Facility to adjoin St. Michaels<br />
Hospital. Baskins Western Wear, Family Dollar, Dollar<br />
General, The Magnolia Nursing home, New Office Development<br />
Center, Sam’s Club addition of a new pharmacy, Buffalo Wild<br />
Wings, Genghis Grill, TexAna Bank, Peoples State Bank and<br />
Country Host Inn have recently opened for business. Amigo<br />
Juans Restaurant, Chappos Restaurant, Chicken Express<br />
Restaurant, Domino Federal Credit Union and Texarkana<br />
First Bank have opened second locations in Texarkana, Texas<br />
& Arkansas.<br />
Texarkana is located along the I-49 corridor. With the<br />
completion of current construction along Interstate 30 and<br />
US Highway 59, The service roads have converted to one<br />
way with two lanes. The Pavilion Parkway joining Walmart<br />
& Lowes on the south side to Target, Kohl’s, and Home<br />
Depot on the north side is now complete. The next project<br />
is to change I-30 from four lanes to six lanes. Texarkana has<br />
great potential for future development.<br />
Total Population<br />
Median Age<br />
33<br />
Total Population<br />
Median Age<br />
36<br />
San Antonio At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
Premium (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
18.00<br />
12.00<br />
N/A<br />
17.00<br />
15.50<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
23.00<br />
22.00<br />
N/A<br />
28.00<br />
26.00<br />
N/A<br />
$ 20.80<br />
$ 17.95<br />
N/A<br />
$ 25.30<br />
$ 20.87<br />
N/A<br />
17.40%<br />
24.50%<br />
N/A<br />
15.90%<br />
18.40%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
2.40<br />
N/A<br />
6.00<br />
$<br />
$<br />
4.80<br />
N/A<br />
16.75<br />
$<br />
$<br />
4.42<br />
N/A<br />
9.36<br />
12.30%<br />
N/A<br />
15.70%<br />
Downtown<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
Regional Malls<br />
$<br />
$<br />
$<br />
16.00<br />
6.00<br />
8.00<br />
N/A<br />
$<br />
$<br />
$<br />
36.00<br />
28.00<br />
40.00<br />
N/A<br />
$ 23.08<br />
$ 16.32<br />
$ 24.68<br />
N/A<br />
16.10%<br />
16.20%<br />
8.10%<br />
8.50%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 350,000.00 $ 1,200,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
80,000.00<br />
48,000.00<br />
40,000.00<br />
98,000.00<br />
20,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
410,000.00<br />
195,000.00<br />
320,000.00<br />
480,000.00<br />
150,000.00<br />
Texarkana At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$<br />
N/A<br />
10.50 $<br />
N/A<br />
12.50<br />
N/A<br />
$ 11.50<br />
N/A<br />
N/A<br />
Class B (Secondary)<br />
suburban offIce<br />
$ 5.50 $ 9.50 $ 7.50 85.00%<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$<br />
$<br />
12.00<br />
13.00<br />
$<br />
$<br />
18.00<br />
17.00<br />
$ 14.00<br />
$ 15.00<br />
10.00%<br />
5.00%<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
$<br />
8.00<br />
2.00<br />
2.50<br />
$<br />
$<br />
$<br />
11.00<br />
3.50<br />
4.50<br />
$<br />
$<br />
$<br />
9.50<br />
2.25<br />
2.75<br />
7.00%<br />
15.00%<br />
20.00%<br />
High Tech/R&D<br />
retaIl<br />
$ 13.00 $ 16.00 $ 14.50 N/A<br />
Downtown<br />
$ 4.00 $ 8.00 $ 6.00 20.00%<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
Regional Malls<br />
$<br />
$<br />
$<br />
7.00<br />
7.00<br />
6.00<br />
$<br />
$<br />
16.00<br />
18.00<br />
N/A<br />
$ 11.50<br />
$ 12.50<br />
$ 18.50<br />
15.00%<br />
10.00%<br />
15.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
25,000.00<br />
185,000.00<br />
7,000.00<br />
10,000.00<br />
200,000.00<br />
14,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
175,000.00<br />
250,000.00<br />
30,000.00<br />
25,000.00<br />
650,000.00<br />
70,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 141
Salt Lake City, Utah<br />
Washington County, Utah<br />
Contact<br />
<strong>NAI</strong> West (Salt Lake)<br />
+1 801 578 5555<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
1,569,133<br />
1,672,759<br />
817,427<br />
$82,997<br />
Salt Lake City is a vibrant, pro-business community with a<br />
highly educated populace. Healthcare, technology and<br />
education remain the primary drivers of the local economy.<br />
Unemployment is a relatively low at 7.4% compared to the<br />
national average. Salt Lake City continues to outperform the<br />
nation as a whole and remains one of the soundest<br />
economies in the US. Utah was recently ranked #1 by<br />
Forbes’ 5th annual “The Best States for Business and<br />
Careers.”<br />
The office market in the Salt Lake City metropolitan market<br />
remained close to levels experienced in 2010 with slight<br />
improvements across most submarkets. The total office<br />
market inventory is 32.3 million SF, one-third of which lies<br />
in the downtown submarket. Direct vacancy in the overall<br />
market increased slightly to 13.20%; vacancy downtown is<br />
14.96% and 15.12% in the suburban submarkets. Class A<br />
full-service rental rates have increased to an average of<br />
$25.94/SF for product downtown and an average of<br />
$21.31/SF for office space in the suburban submarkets.<br />
Leasing activity is nearly unchanged, with just six more<br />
office transactions in 2011 as compared to 2010.<br />
Salt Lake City is a key distribution hub with over 109 million<br />
SF of industrial space. Total availability in the industrial<br />
market decreased to 5.90% this year down from 6.16% in<br />
2010. Lease rates have continued to hover in the $.34/SF<br />
NNN (per month) since 2009. Industrial has been one of<br />
the strongest sectors with regard to leasing activity. The<br />
aggregate square footage leased in 2011 has increased<br />
8.62% when compared to 2010.<br />
The retail market has a total inventory of just over 38 million<br />
SF. Vacancy in the overall market stands at 8.58%. Rates<br />
are at $19.76/SF NNN in the CBD. Salt Lake City’s largest<br />
project is the City Creek Center mixed-use redevelopment<br />
in the CBD. The 20-acre development includes 1.5 million<br />
SF of office space, 800,000 SF of retail space, 700<br />
residential units and large swaths of open spaces. The<br />
development is scheduled for completion in <strong>2012</strong>.<br />
Contact<br />
<strong>NAI</strong> Utah Southern<br />
Region<br />
+1 435 628 1609<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
141,676<br />
155,964<br />
61,061<br />
$64,450<br />
The greater St. George area has seen an increase in<br />
economic activity during the last year. Residential homes<br />
are selling well, new home construction is growing and land<br />
has started selling again. The commercial and industrial<br />
sectors have seen vacancy rates stabilize as construction<br />
has stalled. Look for another year of very little construction<br />
and improved absorption before lease rates begin to rise.<br />
The industrial sector has shown improvement over the last<br />
year as industrial facilities over 50,000 SF continue to sell.<br />
Smaller, in-line warehouse and flex space continues to<br />
see high vacancy rates and depressed lease rates. As<br />
construction improves, demand for warehouse space will<br />
pick up.<br />
Anchored retail is strong while unanchored retail remains<br />
weak. Anchored centers are remaining full and premium<br />
locations can still get between $20 and $24/SF from<br />
national tenants. Unanchored strip centers languish with<br />
rents below $12/SF and vacancies approaching 20%. We<br />
expect anchored space to remain in strong demand and as<br />
the broader economy improves, unanchored space will start<br />
to improve.<br />
The office market has not seen any of the activity benefiting<br />
the retail and industrial sectors. Vacancy rates continue to<br />
rise and lease rates continue to soften. Class C tenants<br />
are moving to class B space and some class B tenants are<br />
moving to class A space. The slow migration to better space<br />
will continue until vacancies fall and lease rates start to<br />
increase.<br />
Those looking to acquire land at a discount should plan to<br />
buy in <strong>2012</strong>. Historically, 20% of our office transaction<br />
volume has been land sales for new development. While this<br />
market will not come back quickly, we have seen closings<br />
and a significant improvement in interest. With the recent<br />
closure of SunFirst Bank, the number of available land<br />
parcels will hold prices down and free up developable<br />
inventory that has been unable to come to market until this<br />
year.<br />
Median<br />
Household Income<br />
$65,043<br />
Median<br />
Household Income<br />
$51,088<br />
Total Population<br />
Median Age<br />
29<br />
Total Population<br />
Median Age<br />
31<br />
Salt Lake City At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
33.00<br />
19.60<br />
15.17<br />
18.75<br />
16.85<br />
10.57<br />
$ 33.00<br />
$ 34.70<br />
$ 23.00<br />
$ 24.00<br />
$ 27.98<br />
$ 24.68<br />
$ 33.00<br />
$ 25.94<br />
$ 21.69<br />
$ 22.10<br />
$ 21.31<br />
$ 17.07<br />
N/A<br />
12.30%<br />
16.70%<br />
N/A<br />
13.20%<br />
18.10%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
2.16<br />
1.47<br />
$<br />
$<br />
6.12<br />
7.56<br />
$<br />
$<br />
3.75<br />
3.48<br />
3.10%<br />
7.50%<br />
High Tech/R&D<br />
retaIl<br />
$ 4.07 $ 12.22 $ 6.25 N/A<br />
Downtown<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
13.09<br />
11.19<br />
15.75<br />
26.00<br />
$ 24.07<br />
$ 25.00<br />
$ 31.00<br />
$ 33.25<br />
$ 19.76<br />
$ 15.23<br />
$ 23.97<br />
$ 30.42<br />
8.10%<br />
10.80%<br />
5.90%<br />
1.90%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
N/A<br />
260,162.00<br />
75,611.00<br />
N/A<br />
$<br />
$<br />
N/A<br />
895,522.00<br />
243,506.00<br />
N/A<br />
Retail/Commercial Land<br />
Residential<br />
$ 272,279.00<br />
N/A<br />
$ 2,148,104.00<br />
N/A<br />
Washington County At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
Premium (AAA)<br />
N/A N/A N/A N/A<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
9.00<br />
N/A<br />
N/A<br />
7.00<br />
N/A<br />
$ 15.00<br />
N/A<br />
N/A<br />
$ 13.00<br />
N/A<br />
$ 12.00<br />
N/A<br />
N/A<br />
$ 11.00<br />
N/A<br />
18.00%<br />
N/A<br />
N/A<br />
15.00%<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$ 2.50<br />
N/A<br />
N/A<br />
N/A<br />
$ 4.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 3.50<br />
N/A<br />
N/A<br />
N/A<br />
21.00%<br />
N/A<br />
N/A<br />
N/A<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
Regional Malls<br />
$ 12.00<br />
N/A<br />
N/A<br />
$ 24.00<br />
N/A<br />
N/A<br />
$ 15.00<br />
N/A<br />
N/A<br />
8.00%<br />
N/A<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
300,000.00<br />
200,000.00<br />
75,000.00<br />
N/A<br />
350,000.00<br />
10,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
500,000.00<br />
450,000.00<br />
125,000.00<br />
N/A<br />
900,000.00<br />
30,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 142
Burlington, Vermont<br />
Lynchburg, Virginia<br />
Contact<br />
<strong>NAI</strong> J.L. Davis Realty<br />
+1 802 878 9000<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
250,369<br />
259,577<br />
145,683<br />
$72,750<br />
$58,434<br />
39<br />
The commercial real estate market for the greater Burlington<br />
area started the year showing little recovery from the<br />
previous years’ economic downturn. However, a recent<br />
upsurge in current market data indicates that we are well<br />
on our way to recovery and stabilization in all areas. In<br />
addition, several large real estate transactions have<br />
bolstered this upswing by generating a new confidence in<br />
the market.<br />
Vacancy rates for the area’s CBD have shown an increase<br />
with the closing of Borders Bookstore on the Church Street<br />
<strong>Market</strong>place. However, demand for this prime retail space<br />
is high and this increase should resolve itself shortly. A lease<br />
for 13,000 SF was recently signed with Boston-based City<br />
Sports, Inc. Retail rents are on the rise again with rates<br />
currently ranging from $18.00 to $32.00 in the CBD, and<br />
anywhere from $12.00 to $32.00 in suburban areas<br />
depending on property class.<br />
Announcement was made for the groundbreaking of the<br />
eagerly awaited Walmart in St. Albans, Vermont. Situated 30<br />
miles north of Burlington and 60 miles south of Montreal,<br />
Quebec, Canada, the 146,755 SF store will be Walmart’s<br />
largest in the state. Its opening is planned for Spring 2013.<br />
While the greater Burlington area was spared from the brunt<br />
of Hurricane Irene’s wrath, it did have a significant impact<br />
on the region’s office market. 130,000 SF plus of vacant<br />
office space was absorbed by the State of Vermont after<br />
flooding displaced over 1,500 of its employees. It is unclear<br />
at this time whether or not the state will make the<br />
recent moves permanent. Additionally, the successful Green<br />
Mountain Coffee Roasters has helped absorb over 100,000<br />
SF of both Class A and Class B office space. With the<br />
substantial decrease in vacancy rates produced by this<br />
activity, new interest may be sparked in the office<br />
development arena.<br />
Industrial vacancies have also seen a decline throughout the<br />
year. Rates have been steadily decreasing from their 10.6%<br />
high in June of 2010. A current vacancy rate of 8.75%<br />
reflects the area’s trend towards stabilization. Although, a<br />
limited supply of well-located, fully-serviced lots continues<br />
to pose problems for the industrial market.<br />
In closing, if recent trends continue as they are, the<br />
commercial real estate market for the greater Burlington<br />
area should well be on its way to recovery and an increased<br />
demand for new development.<br />
Contact<br />
<strong>NAI</strong> Liberty Commercial<br />
+1 434 851 1414<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
257,189<br />
275,299<br />
130,687<br />
$59,602<br />
$46,605<br />
39<br />
The Lynchburg market is a relatively stable market that has<br />
not experienced rising unemployment and real estate price<br />
declines to the same extent as other markets. Anchored<br />
by five colleges, a strong industry base and a revitalized<br />
downtown, Lynchburg is an attractive destination for<br />
families, students, job seekers and businesses. Although<br />
sales volume is down across the board, the real estate<br />
market remains relatively stable.<br />
Similar to the national market over the last several years,<br />
marketing times and vacancy rates have risen as rental and<br />
sales rates have declined. Lynchburg still remains a fairly<br />
stable market as it did not experience the rapid price<br />
increases and speculation that many hot markets did prior<br />
to the financial crisis. The difficulty of obtaining financing<br />
for new construction and renovation has stalled some<br />
of the growth in outer areas of the market as well as the<br />
revitalization of downtown.<br />
Speculative development has slowed down tremendously<br />
as investors and lenders alike remain cautious. Above<br />
normal vacancy rates have led some landlords to give<br />
certain rental concessions such as free rent for a period or<br />
a reduced rate. Most sellers in this market are sellers that<br />
have to sell for personal reasons or pressure from banks.<br />
A major portion of prospective buyers are bargain hunters<br />
looking to capitalize on market weakness. However, the<br />
buyers most likely to get a deal done are those with cash<br />
on hand, but these buyers are reluctant to put equity at risk<br />
while the national economic picture remains so uncertain.<br />
Like most markets, commercial sales volume has declined<br />
to such an extent that certain market segments have no<br />
recent sales data to analyze for cap rates and sale price<br />
trends. Data <strong>report</strong>ed for this market is from actual closed<br />
transactions rather than listing prices, which are numerous<br />
and not always based on a realistic view of our current<br />
market. Many sellers insist upon receiving rates and prices<br />
that could have been achieved in the pre-2007 market.<br />
Burlington At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$<br />
N/A<br />
12.50 $<br />
N/A<br />
18.00<br />
N/A<br />
$ 15.25<br />
N/A<br />
2.80%<br />
Class B (Secondary)<br />
suburban offIce<br />
$ 7.00 $ 11.00 $ 9.00 7.70%<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$<br />
$<br />
13.50<br />
12.50<br />
$<br />
$<br />
17.50<br />
16.50<br />
$ 15.50<br />
$ 14.50<br />
N/A<br />
9.80%<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
$<br />
6.00<br />
3.00<br />
4.25<br />
6.50<br />
$<br />
$<br />
$<br />
$<br />
10.00<br />
4.00<br />
5.75<br />
8.00<br />
$<br />
$<br />
$<br />
$<br />
8.00<br />
3.50<br />
5.00<br />
7.25<br />
9.00%<br />
8.00%<br />
8.80%<br />
5.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
$<br />
$<br />
$<br />
18.00<br />
12.00<br />
15.00<br />
$<br />
$<br />
$<br />
32.00<br />
15.00<br />
32.00<br />
$ 25.00<br />
$ 13.50<br />
$ 23.50<br />
8.00%<br />
4.00%<br />
3.00%<br />
Regional Malls<br />
$ 8.00 $ 11.00 $ 9.50 8.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
300,000.00<br />
90,000.00<br />
60,000.00<br />
50,000.00<br />
200,000.00<br />
6,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
600,000.00<br />
135,000.00<br />
120,000.00<br />
85,000.00<br />
500,000.00<br />
150,000.00<br />
Lynchburg At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
$<br />
N/A<br />
5.50<br />
N/A<br />
N/A<br />
$ 16.25<br />
N/A<br />
N/A<br />
$ 10.56<br />
N/A<br />
N/A<br />
7.00%<br />
N/A<br />
New Construction (AAA)<br />
$ 12.00 $ 21.00 $ 17.94 13.00%<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 5.70<br />
N/A<br />
$ 39.00<br />
N/A<br />
$ 11.73<br />
N/A<br />
8.00%<br />
N/A<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
2.95<br />
N/A<br />
2.95<br />
$<br />
$<br />
8.75<br />
N/A<br />
8.75<br />
$ 4.14<br />
N/A<br />
$ 4.47<br />
8.00%<br />
N/A<br />
6.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
$<br />
$<br />
$<br />
4.73<br />
6.00<br />
6.00<br />
$ 14.00<br />
$ 18.00<br />
$ 25.00<br />
$ 10.18<br />
$ 10.36<br />
$ 11.61<br />
2.00%<br />
10.00%<br />
10.00%<br />
Regional Malls<br />
$ 12.00 $ 12.00 $ 12.00 9.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park $<br />
N/A<br />
N/A<br />
N/A<br />
43,561.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 217,543.86<br />
Retail/Commercial Land<br />
Residential<br />
$ 100,000.00<br />
N/A<br />
$ 100,000.00<br />
N/A<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 143
Northern Virginia<br />
Seattle/Puget Sound, Washington<br />
Contact<br />
<strong>NAI</strong> KLNB<br />
+1 571 382 2100<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
2,296,558<br />
2,565,149<br />
1,303,626<br />
$118,837<br />
$95,082<br />
35<br />
The Northern Virginia office market experienced another<br />
year of modest improvement in almost all leasing categories<br />
durring 2011. Large tenant abandonments including<br />
Verizon’s move out of Courthouse in Arlington and company<br />
downsizing, contributed to the increase in vacancy rates and<br />
decline in net absorption. In addition, the effects from<br />
mergers and acquisitions across many industries were seen<br />
in the market as companies consolidated locations.<br />
The uncertainty by the Federal Government in the<br />
budget/deficit process has caused government and<br />
government affiliated contractors/tenants to slow down<br />
decision making about space needs. Since almost one-third<br />
of the Northern Virginia office market is driven by the<br />
government or government contractors, preparation for<br />
significant cutbacks is on the top of everyone’s minds.<br />
Northern Virginia maintains one of the healthiest unemployment<br />
rates in the nation and total vacancy dropped to its lowest<br />
point since 2008.<br />
The office market witnessed another year of positive total<br />
net absorption. The average asking rental rate continues to<br />
increase slightly as it reached $30.75/SF. BRAC relocations<br />
out were initiated in Arlington and Alexandria, creating<br />
several pockets of vacant space in those markets and<br />
driving vacancy rates higher, while many of the vacancy<br />
rates in the outer markets where some of the BRAC move<br />
transfers took place, saw a slight improvement.<br />
Large leasing activity during 2011 included Systems<br />
Planning & Analysis of 149,243 SF at 2001 N. Beauregard<br />
Street in the I-395 submarket; Boeing’s 134,776 SF at 460<br />
Herndon Parkway in the Herndon market; Capital One’s<br />
lease totaling 129,619 SF at 8020 Towers Crescent Drive<br />
in the Tyson’s Corner submarket and NJVC’s new lease at<br />
Plaza East for 120,000 SF in the Route 28 South submarket.<br />
Some of the largest industrial lease signings that occurred<br />
in 2011 included the 124,800 SF lease signed by American<br />
Tire Distributors at 10231 Harry J. Parrish Boulevard in the<br />
Manassas/I-66 market; the 112,500 SF deal signed by<br />
State Department at 10470 Furnace Rd in the<br />
Springfield/Newington market and the 95,578 SF lease<br />
signed by the DC Metropolitan Police Department at 2850<br />
New York Ave NE in the District of Columbia market.<br />
Contact<br />
<strong>NAI</strong> Puget Sound<br />
Properties<br />
+1 425 586 5600<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
3,500,232<br />
3,741,858<br />
1,908,714<br />
$88,147<br />
$66,607<br />
36<br />
The metro Seattle market, also known at Puget Sound, is<br />
poised for recovery. 2011 was a year of healing for all<br />
commercial real estate sectors. Because of a stable<br />
employment base, <strong>2012</strong> will show a healthy recovery lead<br />
by the multi-family sector with office, industrial and retail all<br />
showing positive absorption and strong national investor<br />
interest.<br />
The office market is enjoying higher occupancy both in Seattle<br />
and Bellevue, the two main core downtown areas in the<br />
market. <strong>2012</strong> will show gradual reducing of inventory and<br />
has the potential of rapidly shifting to a strong landlord<br />
market if one of the large employers decides they need<br />
space quickly.<br />
The Class A investment market was hot in 2011 and is<br />
expected to stay a favorite of national and international<br />
investors. Barriers to entry will remain high and the difficulty<br />
of adding product will benefit investors who should see<br />
increasing lease rates in <strong>2012</strong> and thereafter.<br />
Industrial demand remains stable and vacancy rates are<br />
projected to slowly decline in <strong>2012</strong>. Boeing is adding<br />
additional jobs to try and keep up with new plane orders as<br />
they increase capacity, which has a huge positive effect on<br />
the entire region. The Kent Valley is still the favored market<br />
for institutional investors. Investment demand remains high<br />
for quality product, although lease rates have been flat and<br />
are not expected to increase much in <strong>2012</strong>.<br />
Well located quality retail space is difficult to find for lease<br />
and it is priced relatively high because of consistent national<br />
and local demand. The top product shows cap rates as low<br />
as 5% .The demand is still high for suburban product<br />
and retailers find that strategically located space is rare.<br />
Landlords have started replacing tenants who want to renew<br />
in order to upgrade their tenant mix.<br />
Multifamily is the darling of the investment market. Demand<br />
is high for quality product and the cap rates continue to<br />
decline. We expect rental rates to jump 12% to 18% in<br />
<strong>2012</strong>.<br />
Northern Virginia At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
N/A<br />
N/A<br />
N/A<br />
$ 25.00<br />
$ 17.50<br />
$ 14.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 55.00<br />
$ 55.00<br />
$ 48.00<br />
N/A<br />
N/A<br />
N/A<br />
$ 44.00<br />
$ 32.50<br />
$ 28.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
13.20%<br />
12.80%<br />
Bulk Warehouse<br />
Manufacturing<br />
$ 2.00<br />
N/A<br />
$ 18.00<br />
N/A<br />
$ 6.75<br />
N/A<br />
10.50%<br />
N/A<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$ 5.00<br />
N/A<br />
$ 23.00<br />
N/A<br />
$ 11.50<br />
N/A<br />
15.00%<br />
N/A<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
Regional Malls<br />
$ 20.00<br />
N/A<br />
N/A<br />
$ 60.00<br />
N/A<br />
N/A<br />
$ 35.00<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
$<br />
N/A<br />
300,000.00<br />
N/A<br />
$ 13,000,000.00<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
160,000.00<br />
200,000.00<br />
$<br />
$<br />
845,000.00<br />
500,000.00<br />
Retail/Commercial Land<br />
Residential<br />
$ 300,000.00<br />
N/A<br />
$ 15,000,000.00<br />
N/A<br />
Seattle/Puget Sound At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 24.00<br />
$ 18.00<br />
$ 15.00<br />
$ 23.00<br />
$ 21.00<br />
$ 16.00<br />
$ 35.00<br />
$ 35.00<br />
$ 25.00<br />
$ 34.00<br />
$ 33.00<br />
$ 26.00<br />
$ 27.00<br />
$ 23.00<br />
$ 20.00<br />
$ 25.00<br />
$ 26.00<br />
$ 19.00<br />
17.00%<br />
13.80%<br />
13.00%<br />
18.00%<br />
12.50%<br />
14.60%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
3.20<br />
3.60<br />
$<br />
$<br />
4.60<br />
6.85<br />
$<br />
$<br />
4.20<br />
4.75<br />
7.30%<br />
7.80%<br />
High Tech/R&D<br />
retaIl<br />
$ 6.00 $ 12.50 $ 8.00 19.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Sub Regional Centers<br />
Regional Malls<br />
$ 28.00<br />
$ 14.00<br />
$ 19.00<br />
$ 30.00<br />
$ 75.00<br />
$ 36.00<br />
$ 32.00<br />
$ 75.00<br />
$ 45.00<br />
$ 24.00<br />
$ 28.00<br />
$ 42.00<br />
5.50%<br />
8.30%<br />
4.40%<br />
5.80%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
$ 4,800,000.00 $18,000,000.00<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
300,000.00<br />
180,000.00<br />
150,000.00<br />
$<br />
$<br />
$<br />
770,000.00<br />
420,000.00<br />
600,000.00<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
600,000.00<br />
230,000.00<br />
$ 3,200,000.00<br />
$ 1,800,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 144
Spokane, Washington<br />
Tri-Cities, Washington<br />
Contact<br />
<strong>NAI</strong> Black<br />
+1 509 623 1000<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
478,631<br />
508,237<br />
240,189<br />
$63,317<br />
$48,118<br />
Spokane is usually somewhat insulated from the ups and<br />
downs of the national economy here in eastern Washington.<br />
That has not been the case in this recession. Economic<br />
factors affecting the rest of the United States have also had<br />
an impact on our market. Lack of job growth and reduced<br />
consumer spending have affected many businesses here.<br />
Fortunately, we have not seen the dramatic down turn in<br />
real estate values that have affected many major markets.<br />
Our retail market has seen activity in some segments and<br />
stagnation in others. Many out of work individuals have<br />
opened new restaurants in our market. We have had interest<br />
by national and regional retailers looking once again at the<br />
Spokane market. Trader Joe’s opened a new store in<br />
Spokane which has driven retail vacancy in that submarket<br />
to below 5%. We anticipate that retail activity will continue<br />
to improve in <strong>2012</strong>.<br />
Spokane’s office market has remained flat this year. Vacancy<br />
rates remain at historically high levels especially in the<br />
Spokane Valley where vacancy is almost 24%. Rents have<br />
gone down roughly 10% to 15%. It has been a great market<br />
for existing tenants to renew at lower rents. Users continue<br />
to be a stable force in the sale of small office buildings.<br />
Small user purchased office buildings are averaging around<br />
$100/SF.<br />
Industrial vacancy has decreased with an estimated<br />
440,000 SF of net absorption which is a nice improvement.<br />
Building owners have used concessions to fill space and<br />
there have been no marked increases in rates. Due to the<br />
lack of readily available financing, the investment market<br />
has been at a standstill for the last several years. Cap rates<br />
on office building sales have been in the 9% to 10% range,<br />
apartment cap rates have been around 7%, retail cap rates<br />
range from 7% to 10% and there have been few industrial<br />
investment sales. Bank REO properties have sold in our<br />
market but prices have needed to be bargain basement to<br />
attract buyers.<br />
We are hopeful that the national economy will continue to<br />
recover in <strong>2012</strong> and increased consumer confidence will<br />
translate into increased market activity.<br />
Contact<br />
<strong>NAI</strong> Tri-Cities<br />
+1 509 943 5200<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
263,563<br />
304,461<br />
128,323<br />
$70,077<br />
$55,047<br />
The Tri-Cities is located in southeastern Washington and is<br />
comprised of Richland, Kennewick, Pasco and numerous<br />
surrounding rural communities. Three rivers, nine golf<br />
courses, and 300 days of sunshine offer a wide variety of<br />
recreational activities for our community. Easily accessible,<br />
the area is the service and occupational hub for the region.<br />
The economy is fueled by a variety of government contracted<br />
projects for environmental clean-up, scientific research and<br />
development, agricultural, food processing and healthcare.<br />
In 2011 the office, retail and industrial sectors remained<br />
strong due to the remaining $1.96 billion provided in the<br />
Economic Recovery Act over and above the $2 billion annual<br />
budget at the government sponsored Hanford Nuclear<br />
Reservation.<br />
The Tri-Cities has also been fortunate to experience one of<br />
the strongest housing markets in the nation with a forecasted<br />
3.4% increase in prices during 2011. Also unlike the national<br />
statistics, the unemployment rate is 7.4%. With the strong<br />
economy and job growth we have seen a number of new<br />
projects this year. New owner occupied office and medical<br />
buildings have been constructed in all three cities. We<br />
continue to see growth in the Tri-Cities Scientific Research<br />
District and WSU Tri-Cities both located in north Richland.<br />
Restaurants continue to outperform; new this year are Bob’s<br />
Burger and Brew, Texas Road House, Twigs and Sterling’s<br />
expanding with multiple locations. Gold’s Gym built a 60,000<br />
SF fitness facility in Richland. More Furniture for Less<br />
renovated the former Circuit City location of approximately<br />
34,000 SF. Several new apartment projects are currently<br />
under construction in Richland and Pasco mainly due to the<br />
96% occupancy rate. Several new hotels are in the permitting<br />
phase for locations in all three cities.<br />
Predictions for <strong>2012</strong> are positive as we continue to see<br />
businesses choosing to relocate into our strong market. We<br />
also feel that local access to capital will be more accessible<br />
to developers and investors looking for projects. Anticipation<br />
is high for an early spring ground breaking for the new<br />
Kennewick General Hospital $100+ million facility in the<br />
Southridge Master Plan Area in South Kennewick which has<br />
several hundred acres to develop.<br />
Total Population<br />
Median Age<br />
36<br />
Total Population<br />
Median Age<br />
32<br />
Spokane At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
N/A<br />
$ 16.00<br />
$ 12.00<br />
N/A<br />
$ 17.50<br />
$ 12.50<br />
N/A<br />
$ 20.00<br />
$ 16.50<br />
N/A<br />
$ 20.00<br />
$ 16.00<br />
N/A<br />
$ 19.08<br />
$ 15.10<br />
N/A<br />
$ 18.00<br />
$ 14.50<br />
N/A<br />
9.10%<br />
18.60%<br />
N/A<br />
10.70%<br />
12.80%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
2.64<br />
4.56<br />
5.76<br />
$<br />
$<br />
$<br />
3.60<br />
5.76<br />
7.56<br />
$<br />
$<br />
$<br />
3.00<br />
5.04<br />
6.00<br />
9.70%<br />
10.70%<br />
12.50%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
$<br />
$<br />
$<br />
9.00<br />
5.00<br />
6.00<br />
$ 30.00<br />
$ 24.00<br />
$ 26.00<br />
$ 22.00<br />
$ 18.00<br />
$ 16.00<br />
11.40%<br />
8.00%<br />
9.70%<br />
Regional Malls<br />
$ 12.00 $ 28.00 $ 20.00 9.40%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
$<br />
55.00<br />
300,000.00<br />
175,000.00<br />
100,000.00<br />
$<br />
$<br />
$<br />
$<br />
85.00<br />
500,000.00<br />
300,000.00<br />
900,000.00<br />
Retail/Commercial Land<br />
$ 400,000.00 $ 1,500,000.00<br />
Residential<br />
$ 75,000.00 $ 250,000.00<br />
Tri-Cities At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
$<br />
N/A<br />
N/A<br />
7.00<br />
N/A<br />
N/A<br />
$ 11.00 $<br />
N/A<br />
N/A<br />
9.00<br />
N/A<br />
N/A<br />
12.00%<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 21.00<br />
$ 18.00<br />
$ 12.00<br />
$ 24.00<br />
$ 22.00<br />
$ 16.00<br />
$ 22.50<br />
$ 20.00<br />
$ 14.00<br />
7.50%<br />
10.00%<br />
15.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$<br />
$<br />
$<br />
$<br />
3.60<br />
3.60<br />
3.60<br />
7.00<br />
$<br />
$<br />
$<br />
$<br />
6.60<br />
6.60<br />
6.60<br />
9.00<br />
$<br />
$<br />
$<br />
$<br />
5.10<br />
5.10<br />
5.10<br />
8.00<br />
12.50%<br />
5.00%<br />
2.00%<br />
13.00%<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$ 12.00<br />
$ 14.00<br />
N/A<br />
$ 17.00<br />
$ 18.00<br />
N/A<br />
$ 14.50<br />
$ 16.00<br />
N/A<br />
5.00%<br />
5.00%<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
250,000.00<br />
240,000.00<br />
60,000.00<br />
150,000.00<br />
225,000.00<br />
45,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
350,000.00<br />
375,000.00<br />
200,000.00<br />
250,000.00<br />
700,000.00<br />
75,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 145
Madison, Wisconsin<br />
Milwaukee, Wisconsin<br />
Contact<br />
<strong>NAI</strong> MLG Commercial<br />
+1 608 663 6000<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
574,836<br />
599,721<br />
418,000<br />
$78,090<br />
$60,960<br />
34<br />
Madison’s unemployment rate has ranged between 5.2%<br />
and 6.1% for most of the year, which is less than the State<br />
of Wisconsin and national unemployment averages. Madison<br />
benefits from the state government and the University of<br />
Wisconsin system, which provides the insulation necessary<br />
to keep the economy as stable as it can be. New construction<br />
has come to a halt except for the University, which continues<br />
to build or renovate campus facilities.<br />
Madison’s office market continues to be soft. Landlords are<br />
offering increased improvement dollars and free rent to<br />
attract new tenants. Current office vacancy is 14.1%, but a<br />
few suburban submarkets are seeing vacancies approach<br />
20%. The downtown market is actually quite healthy with<br />
vacancies of 6% to 7%. No new construction has taken<br />
place as anchor tenants are non-existent at this time and<br />
financing for these projects is not available.<br />
Madison’s industrial market remains healthy with a vacancy<br />
rate of 5.9% compared with 7.2% last year. There has been<br />
positive absorption of approximately 88,000 SF since<br />
the first of the year. Similar to the office market, industrial<br />
landlords are offering concessions and flexible lease terms<br />
to attract new tenants.<br />
Madison retail remains strong and vacancy remains<br />
unchanged, though deals include significant landlord<br />
concessions. Major lease transactions include Willy Street<br />
Coop on University Avenue, Ashley Furniture at Greenway<br />
Station and Pawn America and The Tile Shop on East<br />
Springs Drive. Downtown retail space remains in high<br />
demand as lease rates have remained unchanged. Several<br />
development projects are in the works and credit-worthy<br />
tenants continue to sign leases. Projects in the works<br />
include Target's Hilldale Mall location, a Woodman’s grocery<br />
store, a Marcus Theatre and a Costco in suburban Sun<br />
Prairie, as well as the Madison area’s second Hy-Vee<br />
grocery store location.<br />
Large and small investment buyers alike continue to look<br />
for value added opportunities, and cap rates vary from<br />
project to project depending on the credit worthiness of the<br />
existing tenants and vacancy levels. Office cap rates range<br />
from 8.5% to 10.5%, while retail cap rates range from 8%<br />
to 9%.<br />
Contact<br />
<strong>NAI</strong> MLG Commercial<br />
+1 262 797 9400<br />
(Brookfield)<br />
+1 414 347 9400<br />
(Milwaukee)<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
Total Population<br />
Median Age<br />
1,560,237<br />
1,577,538<br />
880,000<br />
$72,186<br />
$69,600<br />
36<br />
Milwaukee businesses have expressed optimism toward<br />
future economic growth in <strong>2012</strong>. The majority see gains in<br />
sales, profit and employment levels compared to year-ago<br />
levels. However, profit expectations expressed at the start<br />
of 2011 were tempered somewhat midway through 2011.<br />
Through May, 2011, jobs in the metro area have risen on a<br />
year-over-year basis for 11 consecutive months. (Source:<br />
MMAC)<br />
The Milwaukee office market remains relatively stable. The<br />
overall vacancy rate is 21%, the same as in the year prior.<br />
There has been positive absorption in the market over the<br />
course of the first half of 2011. Class A occupancy in<br />
Milwaukee’s downtown CBD remains at approximately 10%,<br />
which continues to prompt discussion of new Class A office<br />
development.<br />
The Milwaukee retail market has seen a slow but steady<br />
decline in vacancy rates. Lease rates have remained<br />
relatively flat from 2010. Retailers are continuing to<br />
show optimism for <strong>2012</strong> and beyond and are working to<br />
identify new sites in the market. Walmart remains on a very<br />
aggressive expansion pace and is working through<br />
approvals for numerous new sites throughout the market.<br />
Similarly, Target has broken ground on a Supercenter<br />
concept in Brookfield. Traditional grocers, faced with<br />
pressure from the likes of Walmart and Target, are continuing<br />
to expand their operations. Macy’s announced their new<br />
location at the Southridge Mall in Greendale that will open in<br />
<strong>2012</strong>. In addition, Von Maur is looking at a potential new site<br />
in Brookfield that would mark their entrance to the market.<br />
Milwaukee’s industrial market has seen continued absorption,<br />
stemming off of 2010's positive numbers. There have been<br />
multiple 100,000SF to 250,000 SF leases executed recently,<br />
with the balance of significant transactions being sales<br />
in the 20,000 SF to 40,000 SF range. Milwaukee is also<br />
experiencing a slight increase in user occupied new construction.<br />
Lease rates have continued to trend down and incentive<br />
packages, mostly rental abatement, have increased.<br />
Madison At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
N/A<br />
$ 13.00<br />
N/A<br />
$ 23.00<br />
N/A<br />
$ 18.00<br />
N/A<br />
6.60%<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
$ 6.00<br />
N/A<br />
$ 13.00<br />
N/A<br />
$ 9.50<br />
N/A<br />
6.10%<br />
N/A<br />
Class A (Prime)<br />
$ 10.00 $ 18.00 $ 14.00 12.50%<br />
Class B (Secondary)<br />
IndustrIal<br />
$ 6.00 $ 12.00 $ 9.00 16.80%<br />
Bulk Warehouse<br />
Manufacturing<br />
$<br />
$<br />
2.50<br />
4.15<br />
$<br />
$<br />
9.50<br />
9.50<br />
$<br />
$<br />
5.01<br />
5.85<br />
8.90%<br />
1.40%<br />
High Tech/R&D<br />
retaIl<br />
$ 3.00 $ 12.00 $ 7.67 10.00%<br />
Downtown<br />
$ 14.00 $ 35.00 $ 20.00 11.50%<br />
Neighborhood Service Centers $ 8.00 $ 18.00 $ 12.00 11.00%<br />
Community Power Center<br />
Regional Malls<br />
$ 12.00<br />
$ 14.00<br />
$ 30.00<br />
$ 50.00<br />
$ 15.00<br />
$ 27.00<br />
4.50%<br />
1.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
N/A<br />
$ 218,000.00<br />
N/A<br />
$ 523,000.00<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$ 30,500.00<br />
N/A<br />
$ 43,500.00<br />
N/A<br />
Retail/Commercial Land<br />
Residential<br />
$ 300,000.00<br />
N/A<br />
$ 1,650,000.00<br />
N/A<br />
Milwaukee At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
N/A<br />
$ 25.00<br />
$ 15.00<br />
N/A<br />
$ 22.00<br />
$ 15.00<br />
$<br />
$<br />
$<br />
$<br />
N/A<br />
32.00<br />
19.00<br />
N/A<br />
24.00<br />
19.00<br />
N/A<br />
$ 30.00<br />
$ 16.00<br />
N/A<br />
$ 22.00<br />
$ 16.00<br />
N/A<br />
10.00%<br />
32.00%<br />
N/A<br />
18.00%<br />
22.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
2.00<br />
3.00<br />
4.00<br />
$<br />
$<br />
$<br />
4.00<br />
4.50<br />
6.00<br />
$<br />
$<br />
$<br />
3.50<br />
3.75<br />
4.25<br />
7.90%<br />
7.90%<br />
7.90%<br />
Downtown<br />
$ 12.00 $ 30.00 $ 14.00 10.00%<br />
Neighborhood Service Centers<br />
Community Power Center<br />
$<br />
$<br />
6.00<br />
8.00<br />
$<br />
$<br />
25.00<br />
24.00<br />
$ 15.00<br />
$ 16.00<br />
8.00%<br />
7.00%<br />
Regional Malls<br />
$ 18.00 $ 60.00 $ 32.00 5.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
NA<br />
NA<br />
NA<br />
NA<br />
NA<br />
NA<br />
NA<br />
NA<br />
NA<br />
NA<br />
NA<br />
NA<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 146
Northeastern (Fox Valley/Green Bay), Wisconsin<br />
Casper, Wyoming<br />
Contact<br />
<strong>NAI</strong> MLG Commercial<br />
+1 920 997 9990<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
535,000<br />
551,000<br />
309,000<br />
$66,768<br />
$60,000<br />
The Northeastern Wisconsin market is heading towards<br />
stabilization and is experiencing growth in both multifamily<br />
and industrial markets. This will hopefully stimulate retail<br />
and office demand moving into <strong>2012</strong>. The perception of<br />
value in regard to commercial real estate as an investment<br />
has grown and lenders are re-entering the market with<br />
favorable rates and terms. That being the case, <strong>2012</strong> should<br />
have an increase in expansion, start-up and investment<br />
transactions.<br />
With the increase in foreclosures in the area, multifamily<br />
properties have experienced an increase in demand to the<br />
point where not only are investors purchasing existing<br />
properties, but developers are building new product and<br />
rehabbing older developments to satisfy the demand for<br />
nicer apartment projects.<br />
While multifamily and industrial use is trending upward,<br />
Northeastern Wisconsin is still experiencing sluggishness in<br />
office and retail use. The Fox River Mall and other big box<br />
developments still have a good demand, but in other areas<br />
the overabundance of product is evident and is keeping<br />
rents down. This is particularly true in the Appleton/Grand<br />
Chute and Oshkosh markets. This being the case, tenants<br />
are in a good position to create rent control with the general<br />
caveat that the term will increase as a concession, much<br />
like the market of 2010.<br />
Much like the rest of Wisconsin, the values in the area are<br />
still down, but it appears the bottom has been hit, and<br />
operators and investors are back out assessing the market<br />
to get the best deal. With many appraisals coming in under<br />
tax value, the buyers have the ability to purchase at record<br />
lows as well as an opportunity to appeal and reduce property<br />
taxes. Owners looking to sell investment office/retail<br />
properties (with non-credit tenants) are going to find cap<br />
rates in the 10% to 11% range.<br />
Multifamily investors are experiencing cap rates of<br />
approximately 9%. Raw land has continued to be stagnant<br />
with the exceptions of multifamily and in municipalities that<br />
are offering TIF dollars.<br />
Contact<br />
<strong>NAI</strong> Luker<br />
+1 307 265 8000<br />
Metropolitan Area<br />
Economic Overview<br />
2011<br />
Population<br />
2016 Estimated<br />
Population<br />
Employment<br />
Population<br />
Household<br />
Average Income<br />
Median<br />
Household Income<br />
91,335<br />
99,529<br />
49,713<br />
$69,542<br />
$55,838<br />
Casper has the amenities of a metro area with the<br />
convenience and accessibility of a smaller community. With<br />
a population of 75,000 in Natrona County, the Casper area<br />
is the largest Metropolitan Statistical Area in Wyoming and<br />
supports a vibrant economy. Casper cradles a broad industry<br />
base built around natural resources and is expanding<br />
to manufactures who desire low overhead with a central<br />
western presence.<br />
Industrial rents are $4 to $12/SF net, with a supply of 5<br />
Million SF and a vacancy rate of less than 3%. Office rents<br />
are $10 to $20/SF net, with a supply of 2 Million SF and a<br />
vacancy rate of around 15%. Retail rents are $12 to $30/SF<br />
net, with a supply of 2.25 Million SF and a vacancy rate of<br />
around 10% mainly due to a vacant big box site that was<br />
previously an Office Depot.<br />
There has been industrial, office and retail development on<br />
Casper’s east side. This area includes new Baker Hughes,<br />
Chesapeake Energy and Coca-Cola distributors. A new<br />
regional hospital accompanied by 300,000 SF of<br />
office/medical campuses and a 100,000 SF church are part<br />
of this mix. The 600,000 SF regional mall hosts, a Walmart,<br />
Sam's, Home Depot, Menards and Kohls in addition to five<br />
national hotel chains, four car dealers, an eight plex movie<br />
theatre, and a multitude of restaurants and smaller retail<br />
space. A 700 acre development is currently under way with<br />
rail spur access through Burlington Northern, close proximity<br />
to Natrona County International Airport and is located in a<br />
Foreign Trade Zone. This area is ideal for manufacturing and<br />
distribution.<br />
Drilling and oil service companies have continued to show<br />
strong demand in the market bringing employment and<br />
commerce to Casper. Casper’s location facilitates access to<br />
worldwide markets through an international airport, routes<br />
along I-25 and Burlington Northern railroad.<br />
Casper is a regional medical, finance and retail hub with<br />
a trade area encompassing central Wyoming and a high<br />
quality of life for its residents. Companies are opening new<br />
facilities, while established industries expand, create jobs,<br />
infuse capital, and solidify investment.<br />
Total Population<br />
Median Age<br />
36<br />
Total Population<br />
Median Age<br />
37<br />
Northeastern (Fox Valley/Green Bay), Wisconsin At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$<br />
N/A<br />
12.00 $<br />
N/A<br />
19.00<br />
N/A<br />
$ 13.50<br />
N/A<br />
N/A<br />
Class B (Secondary)<br />
suburban offIce<br />
$ 6.00 $ 12.00 $ 9.00 N/A<br />
New Construction (AAA)<br />
Class A (Prime)<br />
$<br />
$<br />
11.25<br />
12.00<br />
$<br />
$<br />
19.50<br />
19.00<br />
$ 15.50<br />
$ 14.50<br />
N/A<br />
N/A<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
$<br />
$<br />
$<br />
$<br />
$<br />
6.00<br />
2.00<br />
2.00<br />
4.00<br />
4.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
15.00<br />
4.00<br />
7.00<br />
7.00<br />
13.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
9.00<br />
3.00<br />
4.50<br />
5.50<br />
8.50<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
N/A<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
8.00<br />
12.00<br />
15.00<br />
$<br />
$<br />
$<br />
16.50<br />
18.00<br />
35.00<br />
$ 12.25<br />
$ 15.00<br />
$ 18.00<br />
N/A<br />
N/A<br />
N/A<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
$<br />
$<br />
$<br />
N/A<br />
20,000.00<br />
19,000.00<br />
50,000.00<br />
$<br />
$<br />
$<br />
N/A<br />
325,000.00<br />
200,000.00<br />
500,000.00<br />
Retail/Commercial Land<br />
$ 45,000.00 $ 1,000,000.00<br />
Residential<br />
$ 25,000.00 $ 45,000.00<br />
Casper At A Glance<br />
(Rent/SF/YR) low High effective avg. Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
18.00<br />
15.00<br />
10.00<br />
16.00<br />
15.00<br />
8.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
20.00<br />
20.00<br />
15.00<br />
19.00<br />
18.00<br />
14.00<br />
$ 19.00<br />
$ 17.50<br />
$ 12.50<br />
$ 18.00<br />
$ 17.00<br />
$ 10.00<br />
5.00%<br />
10.00%<br />
12.00%<br />
7.00%<br />
5.00%<br />
9.00%<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
$<br />
$<br />
$<br />
3.00<br />
4.00<br />
6.00<br />
$<br />
$<br />
$<br />
8.00<br />
12.00<br />
12.00<br />
$<br />
$<br />
$<br />
5.00<br />
7.00<br />
9.00<br />
3.00%<br />
3.00%<br />
3.00%<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
$<br />
$<br />
$<br />
$<br />
12.00<br />
10.00<br />
12.00<br />
8.00<br />
$<br />
$<br />
$<br />
$<br />
16.00<br />
16.00<br />
25.00<br />
22.00<br />
$ 14.00<br />
$ 12.00<br />
$ 16.00<br />
$ 15.00<br />
8.00%<br />
6.00%<br />
10.00%<br />
10.00%<br />
deVeloPment land Low/Acre High/Acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
125,000.00<br />
140,000.00<br />
45,000.00<br />
45,000.00<br />
150,000.00<br />
40,000.00<br />
$<br />
$<br />
$<br />
$<br />
$<br />
$<br />
200,000.00<br />
200,000.00<br />
125,000.00<br />
100,000.00<br />
900,000.00<br />
300,000.00<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 147
n Glossary<br />
n<br />
Acre<br />
Area of land equal to 43,560 SF (4,047 M 2 ).<br />
Bulk Warehouse (Warehouse)<br />
All modern distribution facilities 25,000 SF (2,500<br />
M 2 ) or greater. Quoted annual rate,<br />
net basis.<br />
CBD (City Center)<br />
The central business district is a market’s<br />
primary concentration of business activity,<br />
much like a traditional downtown.<br />
Class “A” Office (Prime)<br />
Excellent location (5,000 SF or 500 M 2 ), highquality<br />
tenants, high-quality finish, excellently<br />
maintained; usually new, or old buildings that are<br />
competitive with new construction.<br />
Class “B” Office (Secondary)<br />
Good location (5,000 SF or 500 M 2 ), fairly highquality<br />
construction and tenants. Buildings with<br />
only minimal deterioration or obsolescence.<br />
Community Power Centers (Big Box)<br />
Retail centers over 250,000 SF – 600,000 SF<br />
(25,000 M 2 - 56,000 M 2 ), which include one or<br />
more “category killers”, life-style centers and outlet<br />
centers.<br />
Development Land Prices in 2011<br />
Based on land sales recorded. The guide quotes<br />
the rate paid for land with available utilities and<br />
zoning in place for the use noted.<br />
Downtown Office (City Center)<br />
Sites in the market’s central business district.<br />
Downtown Retail (City Center)<br />
Any prime ground floor retail space in the market’s<br />
central business district, excluding space<br />
in enclosed malls. United Kingdom and Ireland<br />
presented on Zone A Basis.<br />
Effective Average Rent<br />
Net present value rate taking concessions, such<br />
as free rent and escalations into account.<br />
Full Service Basis<br />
Indicates that the landlord pays all expenses.<br />
High Tech/R&D (Flex)<br />
Modern buildings with space dedicated to<br />
research/product development, or buildings<br />
in industrial settings with high percentage of office/showroom<br />
style finish.<br />
GLA<br />
Gross leasable area.<br />
GSA<br />
General Services Administration, the US<br />
Government’s property procurement agency.<br />
Hectare<br />
Area of land equal to 2.47 acres.<br />
Highway/Commercial Land<br />
Refers to any commercially zoned land that has<br />
frontage along, and access to, a major state or<br />
interstate highway.<br />
Industrial Rents<br />
This <strong>report</strong> quotes the annual rate on a<br />
net basis.<br />
Manufacturing Space<br />
All facilities of 25,000 SF (2,500 M 2 ) or greater used<br />
in the production or development of goods.<br />
Neighborhood Service Centers<br />
(Retail Units on Parks)<br />
Retail centers ranging in size from 75,000 to<br />
250,000 SF (7,500 M 2 to 25,000 M 2 ), anchored<br />
by foot and/or drug stores providing general<br />
services to the local market—including pad<br />
sites. United Kingdom and Ireland presented on<br />
Zone A Basis.<br />
Net Basis<br />
Indicates the tenant pays for most of the<br />
operating costs such as utilities, maintenance,<br />
repairs and cleaning.<br />
Office Rents<br />
This <strong>report</strong> quotes the annual rate as<br />
full-service basis. Europe quoted as annual<br />
rates, net basis.<br />
Regional Mall<br />
(Regional Shopping Center)<br />
Suburban or downtown properties over<br />
600,000 SF (60,000 M 2 ) with at least two major<br />
department store anchor tenants.<br />
Retail Rents<br />
This <strong>report</strong> quotes the annual rate on a<br />
full-service basis. Europe quoted as annual<br />
rates, net basis.<br />
SF; s.f.<br />
Square foot or square feet, depending on the<br />
reference. 1 square foot = 0.093 M 2 .<br />
SM; sm; M 2<br />
Square meter. 1 S.M. = 10.764 square feet.<br />
Solus Food Stores<br />
Stand-alone large supermarkets or<br />
hypermarkets from 50,000 SF (5,000 M 2 )<br />
and up. Quoted as annual rates, net basis.<br />
Suburban Office<br />
Stand-alone buildings and business parks not<br />
within the metro city limits.<br />
Vacancy Rate<br />
The percentage of market space being<br />
directly offered by the landlord or properties for<br />
lease and the amount of sublease space being<br />
offered by tenants. In cases where the space is<br />
under lease but not occupied, count it as part<br />
of the vacancy.<br />
Zone A<br />
The area at the front of the shop at pedestrian<br />
level. It is usually 6.1 meters deep, this<br />
measurement equating 20 feet. In a very<br />
limited number of locations, Zone A can be<br />
30 feet deep (9.1 meters).<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 148
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