2012 Global Market report - NAI Global

Westchester, New York
Asheville, North Carolina
Contact
NAI Friedland
+1 914 968 8500
Metropolitan Area
Economic Overview
2011
Population
2016 Estimated
Population
Employment
Population
Household
Average Income
Median
Household Income
Total Population
Median Age
944,818
944,424
486,422
$133,215
$80,322
39
Westchester County remains the county with the highest
property taxes in the nation, not a particularly positive
statistic. Businesses continue to leave here for better
economic opportunities in the south, and if they need to be
close to New York City, New Jersey continues to be a very
good alternative. Economic incentives from both New Jersey
and Connecticut have been effective in causing businesses
to relocate out of the state.
Large deals which have taken years to close (zoning/
planning and building permit delays) are finally closing, so
there has been some absorption, but there remains a
significant amount of space in the major Westchester
markets. Many national retailers left the market a few years
back and 99-cent stores took spaces previously occupied
by high-end retailers. With Borders, Blockbuster, Pathmark
and A&P recently vacating large spaces, we do not see
change coming in the near future. We are, however, seeing
more short-term/seasonal businesses popping up all over
town.
The office market has seen price reduction as owners try
to fill up empty space, but there continues to be almost 6
million SF vacant along the I-287 corridor where a majority
of the Class A office space in the county is located. Prices
today are similar to those of 10 to 15 years ago. Owners
have been unable to upgrade aging facilities, primarily
because rents necessary to pay for renovations would
be far higher than what would be obtainable. Owners are
looking to the county and state for tax incentives so that
upgrades can occur, but in these economic times, the types
of benefits necessary are not available. As a result, most of
the office deals being done are renewals.
The industrial market in Westchester continues to be flat.
Prices have dropped to early 2000 rates, but the amount of
vacant space continues to rise. There are virtually no sales
comps; prices remain high. Businesses are staying where
they are, occasionally looking around, but ultimately making
a deal with their current landlord in order to avoid the cost
of moving or closing shop.
Contact
NAI Beverly-Hanks
+1 828 210 3940
Metropolitan Area
Economic Overview
2011
Population
2016 Estimated
Population
Employment
Population
Household
Average Income
Median
Household Income
Total Population
Median Age
469,411
515,060
230,852
$56,736
$42,628
43
During 2011, our market witnessed increases in listing
activity and overall transaction volume. We’ve seen a
narrowing of the “expectation gap” (bid/ask) between buyers
and sellers, and tenants and landlords. Medical office space
(a key CRE class in our market) remains stable with respect
to occupancy levels, lease rates and sales prices. Very little
new product is being delivered or planned in our market with
the exception of several public sector projects (hospital,
university expansions, etc).
The strong presence of the medical community in
Buncombe County and the surrounding areas has long been
a supporting force behind our commercial office markets.
That trend has continued through the recent recessionary
period, lending critical support to many segments of an
otherwise soft office market. As economic conditions slowly
improved during Q1 to Q3 2011, we’ve seen incremental
increases in absorption of professional and medical office
space. Increased supply and softer demand during the
recession has placed greater importance than ever on
location, quality, amenities and pricing.
Asheville’s local restaurant and retail landscape has been
one of survival of the fittest. Yet strong restaurants and
retailers in solid locations and with well-positioned price
points have remained profitable. Overbuilding in some
submarkets during the “go-go” days from 2002 to 2007 led
to pressure on lease rates and other deal points during the
downward cycle. Excess retail space is being absorbed and
rental rates have stabilized, however tenant expectations
are forcing landlords to be very competitive with regard to
incentives.
The Asheville MSA has experienced its share of industrial
closures, relocations and consolidations in recent years. Q2
and Q3 of 2011 however, have brought news of existing
companies expanding, as well as announcements of new
corporations bringing critical base jobs to our area (Linimar
Corp. in late June 2011).
Local multifamily assets remain stable. The multifamily
sector has sustained strong occupancy levels and cap rates.
During 2011, several significant properties changed hands
and in Q2 2011, ground was broken on a 350 unit new
apartment facility in the south submarket, with deliveries of
units occurring currently in Q4.
Westchester At A Glance
(Rent/SF/YR) low High effective avg. Vacancy
mIdtoWn offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
doWntoWn offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
IndustrIal
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl (midtown)
Central Business District
Neighborhood Service Centers
Community Power Center
$
$
$
$
$
$
$
$
$
$
N/A
25.00
20.00
N/A
18.00
12.00
8.00
8.00
12.00
20.00
25.00
25.00
$
$
$
$
$
$
$
$
$
$
N/A
39.00
24.00
N/A
25.00
20.00
12.00
12.00
15.00
70.00
50.00
50.00
N/A
$ 26.00
$ 22.00
N/A
$ 21.00
$ 16.00
$ 10.00
$ 10.00
$ 13.50
$ 45.00
$ 37.50
$ 37.50
N/A
19.00%
19.00%
N/A
21.00%
21.00%
12.50%
12.50%
15.00%
15.00%
15.00%
15.00%
Regional Malls
$ 75.00 $ 100.00 $ 82.50 15.00%
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
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Asheville 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
$
$
$
$
$
$
20.00
16.00
12.00
20.00
18.00
12.00
$ 24.00
$ 22.00
$ 20.00
$ 30.00
$ 26.00
$ 20.00
$ 21.00
$ 20.00
$ 16.00
$ 24.00
$ 22.00
$ 18.00
12.60%
12.90%
14.40%
18.00%
16.50%
15.00%
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
$
$
$
1.75
3.00
5.00
$
$
$
3.50
6.00
9.00
$
$
$
3.15
4.25
6.00
14.00%
14.00%
12.00%
Downtown
Neighborhood Service Centers
Community Power Center
Regional Malls
$
$
$
$
10.00
12.50
10.00
12.00
$ 18.00
$ 24.00
$ 26.00
$ 44.00
$ 14.00
$ 16.00
$ 16.00
$ 22.00
14.00%
11.00%
9.00%
14.00%
deVeloPment land Low/Acre High/Acre
Office in CBD
$ 450,000.00 $ 1,200,000.00
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
$
$
$
225,000.00
95,000.00
50,000.00
$
$
$
450,000.00
190,000.00
125,000.00
Retail/Commercial Land
$ 450,000.00 $ 1,200,000.00
Residential
$ 35,000.00 $ 200,000.00
2012 Global Market Report n www.naiglobal.com 120