2012 Global Market report - NAI Global

More documents

Recommendations

Info

Middlesex/Somerset Counties, New Jersey Northern New Jersey Contact NAI DiLeo-Bram & Co. +1 732 985 3000 Metropolitan Area Economic Overview 2011 Population 2016 Estimated Population Employment Population Household Average Income Median Household Income Total Population Median Age 1,146,121 1,200,105 609,909 $117,118 $89,718 38 The central New Jersey real estate market still remains challenged as 2011 comes to a close, however there are positive indications that the worst is behind. The most positive sign comes from the industrial sector as it continues to stabilize with positive net absorption throughout the region. The retail sector has shown signs of increased activity among national, regional and local tenants. The office market, the sector most directly affected by unemployment, remains stagnant. The industrial market is ending the year on the upswing. Vacancy rates continue to decline from 10.6% at the beginning of the year to 9.6%. While it is still a tenant’s market, the fundamentals indicate a more favorable vision of the future. The gap between what tenants are willing to pay and what landlords will accept is closing. The “panic” deals of the past 24 months are gone. Landlords are still giving concessions of free rent and Tenant Improvement Allowances, however the trend indicates that more tenants are willing to relocate for the right deal and commit to longer terms. In the retail sector, rents have stabilized at 30% less than the peaks of 2007 and vacancy rates are at 10%. There is still a healthy amount of national and regional chains seeking locations, especially in the food services industry. A majority of the leases are with tenants taking spaces of 20,000 SF or less, many of them independent or franchised chains. Any type of spec building in the retail sector is non-existent. The Route 18 retail corridor, considered one of the best retail markets in the region, is reporting vacancy rates of 18% which is above the general market vacancy rate. The office market remains the most problematic. In the last four quarters, vacancy rates have risen to 23%. It will take years, if ever, before this sector will see significant absorption of space. Large blocks of vacant corporate spaces still remain, creating challenges for owners to divide into smaller units. Steady job growth will be the ultimate key to any real positive turnaround or achieving any significant stabilization in this sector. Contact NAI James E. Hanson +1 201 488 5800 Metropolitan Area Economic Overview 2011 Population 2016 Estimated Population Employment Population Household Average Income Median Household Income Total Population Median Age 4,845,976 5,047,261 2,543,777 $98,350 $73,841 37 The Northern New Jersey marketplace continues to be extremely active. Our market is closely tied to the national economy. Northern New Jersey boasts one of the largest and most diverse commercial real estate markets in the country. Insurance, financial, pharmaceutical, telecom, manufacturing, retail and international companies are the backbone of our marketplace. The industrial sector remains active. Modern facilities are in demand with growth in the international import/export businesses. Less modern buildings aggressively compete for deals. Demand for flex/R&D is vibrant with older buildings being converted to data centers. The build-to-suit market has returned. Notable transactions include Kenco leasing 500,000 SF, Wakefern Foods and Goya Foods constructing over 1,050,000 SF and 600,000 SF respectively and I/O Communication leasing 830,000 SF as a data center. Overall vacancies stand at 9.0% to 9.5%. The office market is brisk. The Waterfront (Jersey City, Hoboken and Weehawken) has strong growth while suburban locations struggle. Overall vacancies have been falling and currently stand at 14.5%. Notable transactions include Novo Nordisk leasing 770,000 SF in Princeton, Atlantic Health 190,000 SF in Morristown, Fidelity and Merrill Lynch 180,000 SF and 250,000 SF respectively in Jersey City with a lease renewal of 1,000,000 SF plus by UBS in Weehawken. The NJ office market is great for companies seeking to upgrade space. Our retail sector has been slow to recover. Retailers are cautious to open new stores while others vacate. Vacancies have leveled to 6.5%. Malls continue to do well while downtown locations suffer. There is minimal new construction throughout our market. Investors have an insatiable appetite for core assets and are looking at all opportunities that fit their portfolios. Multifamily and industrial remain most active. Cap rates can break 5% for A+ multifamily properties and 6.5% to 7.5% for core institutional properties. With borrowing rates at historic lows, we see this continuing throughout the year. Overall, there is reason to be optimistic about the New Jersey real estate market as it remains a strategic location to do business. Economic growth locally and nationally will be crucial for any sustained recovery. Middlesex/Somerset Counties At A Glance (Rent/SF/YR) low High effective avg. Vacancy doWntoWn offIce New Construction (AAA) Class A (Prime) Class B (Secondary) suburban offIce New Construction (AAA) Class A (Prime) Class B (Secondary) IndustrIal $ $ $ N/A N/A N/A 22.00 17.00 12.00 N/A N/A N/A $ 28.00 $ 24.00 $ 16.00 N/A N/A N/A $ 23.00 $ 19.00 $ 14.00 N/A N/A N/A 20.00% 21.00% 30.00% Bulk Warehouse Manufacturing High Tech/R&D retaIl $ $ $ 2.50 2.50 5.00 $ $ $ 6.00 6.00 9.00 $ $ $ 4.00 4.00 7.00 9.60% 9.60% 9.60% Downtown Neighborhood Service Centers Community Power Center Regional Malls $ $ $ $ 16.00 12.00 17.00 40.00 $ 25.00 $ 22.00 $ 24.00 $ 80.00 $ 20.00 $ 17.00 $ 19.00 $ 50.00 10.00% 10.00% 13.00% 8.00% 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 200,000.00 200,000.00 100,000.00 250,000.00 50,000.00 $ $ $ $ $ N/A 400,000.00 300,000.00 300,000.00 900,000.00 150,000.00 Northern New Jersey At A Glance (Rent/SF/YR) low High effective avg. Vacancy doWntoWn offIce New Construction (AAA) Class A (Prime) Class B (Secondary) suburban offIce New Construction (AAA) Class A (Prime) Class B (Secondary) IndustrIal $ $ $ $ $ $ 33.00 22.00 14.00 28.00 21.00 14.00 $ 44.00 $ 35.00 $ 21.50 $ 36.00 $ 35.00 $ 22.00 $ 35.00 $ 27.50 $ 17.00 $ 30.00 $ 28.00 $ 19.00 5.00% 13.50% 16.50% 35.00% 12.50% 15.00% Bulk Warehouse Manufacturing $ $ 2.75 3.00 $ $ 6.00 5.50 $ $ 4.75 4.25 9.00% 8.00% High Tech/R&D retaIl $ 6.50 $ 13.00 $ 9.50 7.50% Downtown Neighborhood Service Centers Community Power Center Regional Malls $ $ $ $ 15.00 14.00 14.00 25.00 $ 40.00 $ 25.00 $ 25.00 $ 50.00 $ 25.00 $ 19.00 $ 20.00 $ 42.00 9.50% 13.00% 7.00% 2.00% deVeloPment land Low/Acre High/Acre Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park $ $ $ N/A 100,000.00 60,000.00 75,000.00 $ $ $ N/A 350,000.00 350,000.00 300,000.00 Retail/Commercial Land $ 150,000.00 $ 1,000,000.00 Residential $ 40,000.00 $ 400,000.00 2012 Global Market Report n www.naiglobal.com 115
Ocean/Monmouth Counties (“Shore Market”), New Jersey Princeton/Mercer County, New Jersey Contact NAI Atlantic Coast Realty +1 732 736 1300 Metropolitan Area Economic Overview 2011 Population 2016 Estimated Population Employment Population Household Average Income Median Household Income 1,206,559 1,206,324 603,753 $97,586 $73,872 The Shore markets were divided amongst distressed deals which sold quickly, and at-par deals which have traded thinly. The leasing market was significantly stronger, and the Shore business had another fantastic season with favorable weather. Despite a very decent tourist season, the market malaise has remained. The bright spot is our Governor, Chris Christie, who skyrocketed to national fame as he slashed government payrolls and commanded the public respect for staying home to finish the job rather than making a run for the White House. The residential market showed signs of life in the spring of 2011, and stalled shortly after Memorial Day. Local job creation was challenging, which continued to put pressure on the office market. Medical leasing was brisk, with NAI Atlantic Coast filling more than a few buildings in 2011. Retail trades were very thin as good cash flowing properties were held, and properties with weaker anchors looked to reposition. Value retailers dominated the year as Dollar General, Five Below and others took advantage of sub $14.00 rents in good locations. Industrial activity showed some early promise, but like the residential market, had all but stalled by Q3 2011. Industrial buys are still stalled at the bid-ask gate as sellers demand $65+ on Class B+ buildings where rents are available in the $4 range. The dominant purchasers are the owner users with longer holding period expectations. Multifamily dominated the regional landscape, but multifamily development in the Shore Region is either old obsolete product (40+ years), or is newer Class A product which is not trading absent huge premiums. The equity returns on multifamily are at all time lows, but low interest financing and the prospect of rent growth, are driving trailing cap rates sub 7% in most submarkets. NAI expects that landlords will feel better in 2012 as leasing velocity continues in all sectors. No major new construction is expected but solid buys in 2009 through 2012 will produce great returns over the next five to seven years as the economy stabilizes. Contact NAI Fennelly Associates. +1 609 520 0061 Metropolitan Area Economic Overview 2011 Population 2016 Estimated Population Employment Population Household Average Income Median Household Income 367,726 372,661 195,053 $104,908 $ 74,237 The Greater Princeton real estate market showed signs of recovery as two impact transactions were completed. Novo Nordisk and Church & Dwight leased 750,000 SF of new office headquarters space. Princeton has experienced a long history in the pharmaceutical and consumer products business. The speculative market also presented opportunities with Rubinstein Organization purchasing Princeton South for $145/SF. These two new buildings were 50% leased. Novo Nordisk (diabetic industry) has leased 550,000 SF of the former Merrill Lynch site in Plainsboro complete with a $220 million renovation. Church & Dwight (consumer products) signed a fifteen year lease at Princeton South to build a new 250,000 SF office headquarters. The vacancy rate for office is slowing lowering into a manageable rate of 19% to 20%. New construction has begun at 300 Carnegie Center for an 82,000 SF Class A office building in Carnegie Center with asking rents of $36/SF. The industrial markets after a long recovery are showing a slight improvement with over 2,000,000 SF leasing at the North East Business Park at Exit 7A. Recent deals include a build to suit to Ritchie & Page (150,000 SF refrigerated warehouse for $15,000,000) and Matrix buying 4 Applegate drive (265,000 SF) for $38.00/SF in the Exit 7A area of the turnpike. The investment market is still suffering from lowering rents and elevated cap rates. Forrestal Village sold for $130/SF (a multi- tenanted office retail park) or an 8% cap rate. Investment sales are occurring again as well as user purchases. There have been more than seven office buildings sold in the range of $24/SF and of $165/SF. The Greater Princeton real estate market has a well balanced diversified employment base with medical, government, educational, technology and industrial uses that have started to show upward positive results which will lead to stronger rents and values over the next twelve months. Total Population Median Age 41 Total Population Median Age 37 Ocean/Monmouth Counties (“Shore Market”) At A Glance (Rent/SF/YR) low High effective avg. Vacancy doWntoWn offIce New Construction (AAA) Class A (Prime) Class B (Secondary) suburban offIce New Construction (AAA) Class A (Prime) Class B (Secondary) IndustrIal $ $ $ $ $ $ 23.00 21.00 17.50 23.00 21.00 17.50 $ 33.00 $ 30.00 $ 24.00 $ 33.00 $ 30.00 $ 24.00 $ 24.00 $ 23.00 $ 20.00 $ 24.00 $ 23.00 $ 20.00 N/A 13.00% 15.00% 12.00% 13.80% 14.70% Bulk Warehouse Manufacturing $ $ 3.50 4.25 $ $ 6.00 7.50 $ $ 4.50 5.25 10.10% 8.20% High Tech/R&D retaIl Downtown Neighborhood Service Centers Community Power Center Regional Malls $ $ $ $ $ 6.00 19.00 10.00 9.00 30.00 $ 14.00 $ 30.00 $ 22.00 $ 25.00 $ 50.00 $ 10.50 $ 22.00 $ 14.00 $ 18.00 $ 40.00 11.00% 15.00% 11.00% 7.00% 3.00% 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 $ $ $ $ $ $ 200,000.00 100,000.00 100,000.00 200,000.00 150,000.00 50,000.00 $ $ $ $ $ $ 750,000.00 325,000.00 225,000.00 500,000.00 425,000.00 350,000.00 Princeton/Mercer County At A Glance (Rent/SF/YR) low High effective avg. Vacancy doWntoWn offIce New Construction (AAA) Class A (Prime) Class B (Secondary) suburban offIce New Construction (AAA) Class A (Prime) Class B (Secondary) IndustrIal $ 39.00 $ 36.00 $ 24.00 $ 34.00 $ 28.00 $ 20.00 $ 42.00 $ 40.00 $ 28.00 $ 36.00 $ 32.00 $ 26.00 $ 40.00 $ 38.00 $ 26.00 $ 35.00 $ 30.00 $ 23.00 14.00% 9.00% 10.00% 5.00% 18.00% 22.00% Bulk Warehouse Manufacturing High Tech/R&D retaIl $ $ $ 2.75 2.00 4.00 $ $ $ 4.25 3.95 5.50 $ $ $ 3.75 2.90 4.75 14.00% 16.00% 12.00% Downtown Neighborhood Service Centers Community Power Center Regional Malls $ 25.00 $ 18.00 $ 16.00 $ 22.00 $ 50.00 $ 26.00 $ 30.00 $ 50.00 $ 36.00 $ 22.00 $ 23.00 $ 36.00 10.00% 11.00% 15.00% 9.00% 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 $ $ $ $ $ $ 400,000.00 250,000.00 125,000.00 80,000.00 150,000.00 125,000.00 $ $ $ $ $ $ 1,000,000.00 400,000.00 250,000.00 150,000.00 400,000.00 400,000.00 2012 Global Market Report n www.naiglobal.com 116
Page 1 and 2:
2012 Global Market report Values, t
Page 3 and 4:
n n n table of contents General Inf
Page 5 and 6:
Global Outlook US Year in Review As
Page 7 and 8:
On the Road to Recovery % of Loss S
Page 9 and 10:
55% (1.1 million) owning and 45% (8
Page 11 and 12:
short-term leases, the multifamily
Page 13 and 14:
Alberta is home to Canada’s oil a
Page 15 and 16:
Office The sovereign debt crisis an
Page 17 and 18:
Area Type Q1 2010 Q2 2010 Q3 2010 Q
Page 19 and 20:
obust telecom infrastructure and av
Page 21 and 22:
egion’s cities. Nevertheless, lea
Page 23 and 24:
For 2012, absorption in the commerc
Page 25 and 26:
n us Highlights - northeast region
Page 27 and 28:
n us Highlights - midwest region n
Page 29 and 30:
n us Highlights - West region n Ari
Page 31 and 32:
Adelaide, Australia Brisbane, Austr
Page 33 and 34:
Sydney, Australia Beijing, China Co
Page 35 and 36:
Shanghai, China Shenzhen, China Con
Page 37 and 38:
Chennai, India Mumbai, India Contac
Page 39 and 40:
Jakarta, Indonesia Tokyo, Japan Con
Page 41 and 42:
Christchurch, New Zealand Wellingto
Page 43 and 44:
Taipei, Taiwan Ho Chi Minh City, Vi
Page 45 and 46:
Calgary, Alberta, Canada Edmonton,
Page 47 and 48:
Halifax, Nova Scotia, Canada Ottawa
Page 49 and 50:
Regina, Saskatchewan, Canada Contac
Page 51 and 52:
The Baltics (Latvia/Estonia/Lithuan
Page 53 and 54:
Helsinki, Finland Paris - lle de Fr
Page 55 and 56:
Tel Aviv, Israel Almaty, Kazakhstan
Page 57 and 58:
Amsterdam, The Netherlands Oslo, No
Page 59 and 60:
Moscow, Russia St. Petersburg, Russ
Page 61 and 62:
Madrid, Spain Stockholm, Sweden Con
Page 63 and 64:
Istanbul, Turkey Kiev, Ukraine Cont
Page 65 and 66: Leeds, England, United Kingdom Lond
Page 67 and 68: Latin America sectIon contents Buen
Page 69 and 70: Rio de Janeiro, Brazil Sao Paulo, B
Page 71 and 72: San Jose, Costa Rica Contact NAI Co
Page 73 and 74: Guadalajara, Jalisco, Mexico Guanaj
Page 75 and 76: Mexico City, Mexico Contact NAI Mex
Page 77 and 78: Saltillo, Coahuila, Mexico San Luis
Page 79 and 80: Lima, Peru Caracas, Venezuela Conta
Page 81 and 82: Birmingham, Alabama Huntsville/Deca
Page 83 and 84: Little Rock, Arkansas Bakersfield,
Page 85 and 86: Oakland, California Orange County,
Page 87 and 88: San Francisco, California Ventura C
Page 89 and 90: Hartford, Connecticut Wilmington, D
Page 91 and 92: Fort Lauderdale, Florida Ft. Myers/
Page 93 and 94: Miami, Florida Ocala/Gainesville, F
Page 95 and 96: Tampa Bay, Florida Atlanta, Georgia
Page 97 and 98: Boise, Idaho Southeast (Idaho Falls
Page 99 and 100: Fort Wayne, Indiana Indianapolis, I
Page 101 and 102: Des Moines, Iowa Sioux City, Iowa C
Page 103 and 104: Baton Rouge, Louisiana Lake Charles
Page 105 and 106: Greater Portland, Maine Baltimore,
Page 107 and 108: Greater Springfield, Massachusetts
Page 109 and 110: Minneapolis/St. Paul, Minnesota Jac
Page 111 and 112: Billings, Montana Bozeman, Montana
Page 113 and 114: Omaha, Nebraska Las Vegas, Nevada C
Page 115: Portsmouth, New Hampshire Atlantic
Page 119 and 120: Las Cruces, New Mexico Albany, New
Page 121 and 122: Westchester, New York Asheville, No
Page 123 and 124: Raleigh/Durham, North Carolina Farg
Page 125 and 126: Cincinnati, Ohio Cleveland, Ohio Co
Page 127 and 128: Oklahoma City, Oklahoma Tulsa, Okla
Page 129 and 130: Berks County, Pennsylvania Bucks Co
Page 131 and 132: Philadelphia, Pennsylvania Philadel
Page 133 and 134: Wilkes-Barre/Scranton/Hazleton, Pen
Page 135 and 136: Sioux Falls, South Dakota Chattanoo
Page 137 and 138: Memphis, Tennessee Nashville, Tenne
Page 139 and 140: Corpus Christi, Texas Dallas, Texas
Page 141 and 142: Houston, Texas Contact NAI Houston
Page 143 and 144: Salt Lake City, Utah Washington Cou
Page 145 and 146: Northern Virginia Seattle/Puget Sou
Page 147 and 148: Madison, Wisconsin Milwaukee, Wisco
Page 149 and 150: n Glossary n Acre Area of land equa
show all

2012 Global Market report - NAI Global

Create successful ePaper yourself

Delete template?

Save as template?