2012 Global Market report - NAI Global

Southern New Jersey
Albuquerque, New Mexico
Contact
NAI Mertz
+1 856 234 9600
Metropolitan Area
Economic Overview
2011
Population
2016 Estimated
Population
Employment
Population
Household
Average Income
Median
Household Income
Total Population
Median Age
1,316,676
1,322,041
704,130
$85,577
$70,267
38
Southern New Jersey’s education and healthcare sectors
continue to grow as they expand their presence in the area,
providing a positive impact on the market. This growth is
predicted to continue for the next several years. As mortgage
companies improve due to historically low interest rates,
financial firms are experiencing modest growth. Landlords
continue to rely heavily on free rent concessions to close
deals in office, retail and industrial sectors.
The Southern New Jersey office market leasing activity
steadily improved, reducing the overall vacancy rate. Rental
rates are stabilizing and the differential between Class A and
Class B is broadening again. Debt on the largest office building
of 222,329 SF was purchased and foreclosed upon this year
in a JV between Fortress and Madison Capital. With their
low basis, the new owners offering generous tenant
improvement packages and attractive rates.
Virtua Health in Voorhees opened its new 680,000 SF
regional medical center. An adjacent 300,000 SF ambulatory
care center that is 92% pre-leased is scheduled to open
Spring, 2012. Capital is starting to flow into the market
again.
The retail sector of Southern New Jersey showed some
signs of promise early in 2011. However, due to unemployment
and cautious consumer spending, several national chain
stores closed stores where the market is weak. More activity
from start up companies needing retail space resulted in
landlords dropping rental rates to accommodate them,
decreasing vacancy rates slightly in these areas. Mixed uses
in centers are becoming common place with pizzerias and
medical facilities side by side. Power Centers of 740,000
SF and 868,000 SF are taking shape in Woolwich Twp,
southern Gloucester County.
The Southern New Jersey industrial vacancy rate in 2011
remained fairly stable at approximately 13.5% between
Gloucester, Burlington and Camden counties. Camden
County saw the most vacancy at 16.4% attributed to lower
ceiling heights and older buildings. The largest industrial to
close in 2011 was Performance Food Group, which signed
a lease for 150,000 SF in Swedesboro. The largest user sale
was Mapei Corporation which purchased 231,800 SF in
Bridgeport from Liberty property Trust.
Contact
NAI Maestas & Ward
+1 505 878 0001
Metropolitan Area
Economic Overview
2011
Population
2016 Estimated
Population
Employment
Population
Household
Average Income
Median
Household Income
Total Population
Median Age
912,450
1,013,837
463,107
$65,031
$49,947
35
Ranked the 57th largest metropolitan area according to the
US Census, the Albuquerque Metropolitan Statistical Area
remains one of the fastest growing cities nationally with
approximately half of the New Mexico population residing in
the Albuquerque area. Markets continue to recover with
medical and apartment sectors remaining the performance
leaders. The retail market continues recovery with reasonable
absorption and lower vacancy. Some absorption is occurring
in the industrial and office sectors, however they continue to
experience stagnation.
Presbyterian Healthcare purchased a 133,000 SF office
building with 15 acres of land from CitiCorp for $9.95 million.
Albuquerque Health Partners purchased the 81,700 SF
building they had been leasing in northeast Albuquerque for
$8.7 million. REO activity in the market is moderately active.
Morgan Stanley executed a lease for 18,000 SF for $1.7
million in the northeast quadrant of the city. Chickasaw
Nation Industries completed a 28,700 SF lease. Radiology
Associates expanded their current location to 36,000 SF.
Under construction projects include the $165 million
Presbyterian Hospital in Rio Rancho; the estimated $25
million, 103,000 SF build-to-suit lease for the US Forest
Service Building; and the new corporate headquarters for
the REDW accounting firm which will be 45,000 SF with
estimated value of $9 million. These projects are all in the
northeast and northwest quadrants.
The north I-25 and Journal Center trade area continues to
be an active submarket with more medium to larger scale
single user office developments expected. K-Tech sold their
company to Raytheon in a deal that included the sale of
K-Techs real estate to an investor group with a 10 year lease
back to Raytheon. Industrial vacancy rates increased from
9.1% to 9.4% in Q2 but industrial leasing for space greater
than 10,000 SF was the strongest in two years. Albuquerque
was rated by Moody’s as one of the healthiest industrial
markets in the US.
Apartments continue to outperform other sectors with 97%
occupancy rates. With no new projects being developed and
continued metropolitan growth, rental rates will continue
to rise at 5% per year. Retail activity, especially in the
far northeast and southwest quadrants, continues to be
surprisingly strong.
Southern 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
$
$
$
N/A
N/A
N/A
21.00
20.00
10.00
N/A
N/A
N/A
$ 25.00
$ 24.00
$ 17.00
N/A
N/A
N/A
$ 23.00
$ 22.50
$ 13.50
N/A
N/A
N/A
N/A
12.00%
13.70%
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
$
$
$
3.00
2.50
5.25
$
$
$
4.50
4.45
9.25
$
$
$
3.75
3.48
7.25
9.00%
9.40%
9.80%
Downtown
Neighborhood Service Centers
Community Power Center
Regional Malls
$
$
$
9.00
10.00
16.00
N/A
$ 33.00
$ 20.00
$ 40.00
N/A
$ 21.00
$ 15.00
$ 28.00
N/A
8.00%
9.00%
7.00%
N/A
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
N/A
$ 123,000.00 $ 213,000.00
$ 7,000.00 $ 69,000.00
$ 6,000.00 $ 358,000.00
$ 75,000.00 $ 300,000.00
N/A
N/A
Albuquerque 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
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
Downtown
Neighborhood Service Centers
Community Power Center
Regional Malls
$
$
$
$
$
$
$
$
$
$
$
$
N/A
18.50
12.50
23.00
18.50
14.50
2.25
5.00
5.50
8.00
10.06
18.50
20.00
$
$
$
$
$
$
$
$
$
$
$
$
N/A
21.50
16.50
25.00
21.00
16.00
5.50
8.25
11.25
24.00
17.58
27.00
40.00
N/A
$ 20.27
$ 16.93
N/A
N/A
N/A
N/A
N/A
N/A
N/A
$ 14.67
$ 19.45
$ 30.00
N/A
15.40%
18.10%
30.00%
18.00%
18.00%
11.00%
11.00%
11.00%
18.90%
14.70%
1.30%
12.60%
deVeloPment land Low/Acre High/Acre
Office in CBD
$ 1,089,000.00 $ 2,178,000.00
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
$
$
$
$
$
175,000.00
175,000.00
85,000.00
220,000.00
25,000.00
$
$
$
$
$
435,600.00
350,000.00
200,000.00
500,000.00
600,000.00
2012 Global Market Report n www.naiglobal.com 117