2012 Global Market report - NAI Global

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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
Las Cruces, New Mexico Albany, New York Contact NAI 1st Valley +1 575 521 1535 Metropolitan Area Economic Overview 2011 Population 2016 Estimated Population Employment Population Household Average Income Median Household Income 238,792 256,847 107,966 $44,736 $32,353 Following decades of sustained growth, growth which consistently defied business cycle downturns and recessions alike, current indicators confirm the Las Cruces economy remains influenced by the unprecedented confluence of external factors associated with the global financial crisis some two years after its official end. While relatively mild, in both depth and duration, such uncharacteristic weakness remains cause for caution in each and every local commercial, investment real estate sector. Mirroring national economic downturn and trends, the broad Las Cruces office market has seen deteriorating fundamentals. Layoffs in heavy office using employment sectors resulted in diminished demand yielding a 330 basis point increase in vacancies and 4% decline in market average rental rates on a year-over-year basis. Looking at longer trends, vacancy rates have risen 9.6% from their low in 2008 with lease rates falling 1% below their 2007 to 2011 period average. Amid news of declining net worth and consumer sentiment, it has been said "Flat is the new Up.” In this light, it can be said things are looking up for the Las Cruces retail market. With vacancy rates down and gross receipts from retail trade posting moderate increases, owners and their agents should enjoy certain latitude for lease rate increases to prerecession levels going forward. Numerous major retail players whose strategy has been to delay entry and/or expansion into the market have indicated they'll be moving dirt and opening doors here in 2011 and 2012. If we can rely upon the veracity and sophistication of their market analytics, this too provides further evidence that operating fundamentals in this consumer/consumption driven sector are headed in the right direction. Within a perfect storm of scant new supply and heightened demand from increasing household formation, the Las Cruces multifamily market continues to register positive operating results. A 3.1% year-over-year increase in rents coupled with a 97.2% market average occupancy rate, a 310 basis point improvement over the already admirable 2001 to 2011 period average of 94.1%, make this the best performing Las Cruces commercial real estate sector. Contact NAI Platform +1 518 465 1400 Metropolitan Area Economic Overview 2011 Population 2016 Estimated Population Employment Population Household Average Income Median Household Income 1,398,032 1,446,225 735,584 $71,328 $55,817 The Capital Region continues to be a smart bet for tech type research companies, due to the construction of the $2 billion chip fabrication plant being built in Malta, NY. Slated to employ 1,400 tech-related workers, the more attractive positive will be the 5,000+ support jobs coming into the area. Real estate in and around the park is beginning to benefit from the increased demand for close, convenient space to house these support services. The CBD office market continues to struggle with a glut of Class B or lower inventory approaching 30% in some recent polls. Functionally obsolete buildings with floor plates that require substantial capital to renovate, litter the downtown marketplace, leaving only the Class A spaces to vie for the few office tenants that need to be situated within a stone’s throw of the government process. Residential re-development is being called for to breathe new life into some of these buildings, but lack of ability to secure acquisition and construction cost loans have sidelined this initiative. Continuing the trend, the suburban office parks are performing well and continuing to experience lower vacancy rates between 10% to 12% overall. Large office tenants have made out well with several options available including attractive rates for build to suits. The industrial marketplace has been the leading segment in our marketplace, with brisk activity and stable rates. Vacancy rates are in the 8% to 12% range overall in spaces of 25,000 to 50,000 SF and slightly better numbers for new construction and flex spaces that offer a quality office component. Retail activity has picked up again. Shop Rite Grocery Store chain has decided to build three new stores within the region with facilities ranging from 40,000 to 55,000 SF. Investment and multifamily offerings have also picked up their volume as the uncertainty in the stock market has driven investors to seek more stable, predictable returns. Cap rates are down slightly to an average of 7% overall. As a strong tertiary marketplace, the Capital Region has remained a stable and safe environment to live, work and invest in. Total Population Median Age 34 Total Population Median Age 40 Las Cruces 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 N/A N/A N/A N/A N/A $ 3.00 N/A N/A $ 12.50 N/A N/A N/A N/A N/A N/A N/A N/A N/A $ 5.00 N/A N/A $ 16.00 N/A N/A N/A N/A N/A $ 14.23 N/A $ 24.02 $ 17.79 $ 4.00 N/A N/A $ 14.00 $ 15.76 N/A N/A N/A N/A 8.90% N/A 6.80% 18.10% 9.50% N/A N/A 9.50% 8.30% N/A 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 $ $ $ $ $ $ 217,800.00 196,020.00 25,000.00 25,000.00 392,040.00 10,000.00 $ $ $ $ $ $ 348,480.00 261,360.00 35,000.00 35,000.00 522,720.00 80,000.00 Albany 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 $ $ $ $ $ $ 18.00 16.00 6.00 18.00 14.00 6.00 $ $ $ $ $ $ 25.00 22.00 16.00 22.00 19.00 16.00 $ 21.00 $1 8.00 $ 13.00 $ 20.00 $ 17.00 $ 14.00 12.00% 15.00% 30.00% 12.00% 12.00% 20.00% Bulk Warehouse Manufacturing $ $ 2.00 3.00 $ $ 4.00 6.00 $ $ 3.50 5.00 15.00% 8.00% High Tech/R&D retaIl Downtown Neighborhood Service Centers Community Power Center Regional Malls $ $ $ $ 7.00 N/A 8.00 12.00 15.00 $ $ $ $ 15.00 N/A 25.00 25.00 35.00 $ 12.00 N/A $ 18.00 $ 15.00 $ 25.00 5.00% N/A 10.00% 13.00% 20.00% deVeloPment land Low/Acre High/Acre Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park $ $ $ $ 150,000.00 200,000.00 100,000.00 100,000.00 $ $ $ $ 275,000.00 350,000.00 250,000.00 300,000.00 Retail/Commercial Land Residential $ 300,000.00 N/A $ 1,000,000.00 N/A 2012 Global Market Report n www.naiglobal.com 118
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2012 Global Market report Values, t
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n n n table of contents General Inf
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Global Outlook US Year in Review As
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On the Road to Recovery % of Loss S
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55% (1.1 million) owning and 45% (8
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short-term leases, the multifamily
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Alberta is home to Canada’s oil a
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Office The sovereign debt crisis an
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Area Type Q1 2010 Q2 2010 Q3 2010 Q
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obust telecom infrastructure and av
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egion’s cities. Nevertheless, lea
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For 2012, absorption in the commerc
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n us Highlights - northeast region
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n us Highlights - midwest region n
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n us Highlights - West region n Ari
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Adelaide, Australia Brisbane, Austr
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Sydney, Australia Beijing, China Co
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Shanghai, China Shenzhen, China Con
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Chennai, India Mumbai, India Contac
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Jakarta, Indonesia Tokyo, Japan Con
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Christchurch, New Zealand Wellingto
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Taipei, Taiwan Ho Chi Minh City, Vi
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Calgary, Alberta, Canada Edmonton,
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Halifax, Nova Scotia, Canada Ottawa
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Regina, Saskatchewan, Canada Contac
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The Baltics (Latvia/Estonia/Lithuan
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Helsinki, Finland Paris - lle de Fr
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Tel Aviv, Israel Almaty, Kazakhstan
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Amsterdam, The Netherlands Oslo, No
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Moscow, Russia St. Petersburg, Russ
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Madrid, Spain Stockholm, Sweden Con
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Istanbul, Turkey Kiev, Ukraine Cont
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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 and 116: Portsmouth, New Hampshire Atlantic
Page 117: Ocean/Monmouth Counties (“Shore M
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
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