2012 Global Market report - NAI Global

Des Moines, Iowa
Sioux City, Iowa
Contact
NAI Ruhl & Ruhl
Commercial Company
+1 515 309 4002
Metropolitan Area
Economic Overview
2011
Population
2016 Estimated
Population
Employment
Population
Household
Average Income
581,477
628,841
330,190
$76,481
Des Moines’ growth for the past twenty years has been closely
tied to the insurance and finance industries. Therefore the
recent softness in those same industries has had a more
pronounced effect on our market. While our unemployment
rate remains well below the national average (6.0% vs. 9.1%),
the quality of the jobs that have been trimmed has had a larger
impact on our local consumer base than the loss of entry level
positions.
Conditions of the Des Moines office market remain favorable
for tenants as landlords continue to offer high level incentives,
such as free rent, moving allowances and T.I.’s. With so many
options, tenants have no sense of urgency believing they have
the upper hand; if one landlord won’t meet their deal, another
will. However, not every landlord has the ability to offer aggressive
lease terms. With lender involvement continuing to rise, some
find themselves constricted on the terms they can offer a
tenant. Market conditions in the CBD will continue to slowly
improve throughout 2011 and 2012 as additional competitive
space is removed from the current inventory and converted
into apartments.
Industrial occupancy remained stable with limited new
construction. The flex market remains soft; a majority of the
activity within this sector will continue to be driven by users in
the 3,000 to 10,000 SF range. Lease rates have declined
slightly and will remain flat for the next 18 months.
New retail projects are still few and far between in the Greater
Des Moines area. Most retailers remain cautious, delaying
expansion plans for an improved economic climate. But, retail
activity is picking up at the Prairie Trail development in Ankeny.
The 1,000+ acre master plan calls for two retail components
covering approximately a half million SF. Town Center at Prairie
Trail will feature fashion anchors, a wide variety of restaurants
and a mix of regional and national merchants. Plaza Shoppes
at Prairie Trail will be anchored by a Hy-Vee grocery store. The
community will also feature a vast network of trails, parks and
bike paths, approximately 2,500 homes, the city library, police
headquarters and three new schools.
Contact
NAI LeGrand & Company
+1 712 277 1070
Metropolitan Area
Economic Overview
2011
Population
2016 Estimated
Population
Employment
Population
Household
Average Income
145,000
182,562
95,998
$61,916
Site Selection magazine has ranked the Sioux City area #1
nationally in economic activity among metro areas under
200,000 people in 2007 and 2008, #2 in 2009 and #3 in
2010. Strong activity in the agricultural and food processing
sectors are responsible for the high ranking. The metropolitan
area includes Sioux City, Iowa; South Sioux City, Nebraska
and North Sioux City, South Dakota.
The industrial market totals 15.4 million SF with a 6%
vacancy rate. A 1.6 location quotient indicates demand for
industrial space is likely to continue. Work continues on a
$400 million expansion by Beef Products, Inc. in South Sioux
City, which is the largest single investment ever made in
Nebraska. The most significant industrial news is a proposed
$10 billion, 400,000 barrel oil refinery by Hyperion
Resources of Dallas that would be the second largest
construction project in the history of the United States. The
company has renewed options on 4,700 acres and received
an air quality permit from the State of South Dakota.
Construction must begin by mid 2013.
Sioux City is the dominant retail center in the region with 6.1
million SF of space. Retail sales steadily increased due to a
large amount of space coming online that effectively
increased the trade area, but it was only a matter of time
until overbuilding outpaced demand. Many properties have
experienced rising vacancy rates and falling rents, creating
a favorable leasing market.
The office market consists of 5.7 million SF, and has
maintained a split personality. The professional sector
remains weak due to the lack of white collar job growth,
while the medical market is more robust, accounting for half
of all office construction since 2000. The Dakota Dunes
submarket thrives with 2.8% vacancy rate, while the CBD
struggles due to corporate downsizing.
The Sioux City area will experience an unprecedented boom
if the Hyperion Energy Center goes forward. A research study
estimates the project would result in 14,000 new jobs and
add $14 billion in annual economic activity to the local
market.
Median
Household Income
$60,444
Median
Household Income
$48,862
Total Population
Median Age
35
Total Population
Median Age
39
Des Moines At A Glance
(Rent/SF/YR) low High effective avg. Vacancy
doWntoWn offIce
Premium (AAA)
Class A (Prime)
Class B (Secondary)
suburban offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
IndustrIal
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
Downtown
Neighborhood Service Centers
Community Power Center
Regional Malls
$
$
$
$
$
$
$
$
$
$
$
$
N/A
17.00
13.00
12.75
16.00
12.00
3.00
1.50
4.50
3.00
4.00
6.00
13.00
$
$
$
$
$
$
$
$
$
$
$
$
N/A
24.00
16.00
16.50
23.00
16.00
5.50
7.00
10.80
16.00
15.00
18.00
23.00
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
14.40%
23.70%
N/A
9.70%
16.90%
6.60%
8.20%
6.50%
12.70%
14.00%
16.00%
10.40%
deVeloPment land Low/Acre High/Acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
$
$
$
$
$
$
94,500.00
5,700.00
6,900.00
7,500.00
45,000.00
14,000.00
$
$
$
$
$
$
480,900.00
450,000.00
165,000.00
500,000.00
964,000.00
30,000.00
Sioux City At A Glance
(Rent/SF/YR) low High effective avg. Vacancy
doWntoWn offIce
New Construction (AAA)
Class A (Prime)
$
N/A
12.00 $
N/A
14.50
N/A
$ 13.00
N/A
20.00%
Class B (Secondary)
suburban offIce
$ 7.50 $ 10.00 $ 8.00 10.00%
New Construction (AAA)
Class A (Prime)
$
$
15.00
12.00
$
$
20.00
20.00
$ 15.50
$ 13.00
15.00%
5.00%
Class B (Secondary)
IndustrIal
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
$
$
$
7.50
1.50
1.50
N/A
$
$
$
11.00
5.25
3.50
N/A
$
$
$
9.00
3.75
3.00
N/A
6.50%
10.00%
4.00%
N/A
Downtown
Neighborhood Service Centers
Community Power Center
Regional Malls
$
$
$
$
5.00
8.00
10.00
20.00
$
$
$
$
12.00
18.50
22.00
40.00
$ 10.00
$ 13.00
$ 16.00
$ 30.00
30.00%
10.00%
11.00%
7.50%
deVeloPment land Low/Acre High/Acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
$
$
$
$
$
N/A
130,000.00
25,000.00
10,000.00
260,000.00
15,000.00
$
$
$
$
$
N/A
260,000.00
55,000.00
218,000.00
870,000.00
45,000.00
2012 Global Market Report n www.naiglobal.com 100