2012 Global Market report - NAI Global

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Charlotte, North Carolina Greensboro/High Point/Winston-Salem, North Carolina Contact NAI Southern Real Estate +1 704 375 1000 Metropolitan Area Economic Overview 2011 Population 2016 Estimated Population Employment Population Household Average Income Median Household Income 1,973,615 2,200,775 1,067,573 $67,663 $51,844 The Charlotte area continues to attract newcomers to the market every year. One of the driving factors is the airport, which accommodates 700 flights daily. Other factors include the proximity to the mountains and beaches, as well as the accessibility to major cities along the East Coast. Nine Fortune 500 companies call the region home. Many businesses are relocating or expanding in the area including Time Warner, Celgard and Fifth Third Bank. The overall vacancy in the office market increased from 17.1% to 17.9% over the past year. In Ballantyne Corporate Park, the Bissell Companies continue to defy odds and are under construction with three speculative buildings totaling 790,000 SF. The three premier submarkets in Charlotte; Downtown, Southpark and Ballantyne, continue to attract the majority of newer, high-end tenants. The industrial market has puttered along in recent years. Thankfully, supply has been extremely limited resulting in the vacancy rate hovering around 14% for the last 10 quarters. Most of the moves have been within the market versus companies moving to the region. Several build-to-suit prospects are considering sites in the region. However, there is not enough demand, nor is the financing attractive enough to get developers to consider building speculative buildings. After rising for three years, retail vacancies finally improved a modest 0.3%. Some of the larger shopping centers traded hands and the new owners were able to entice tenants by lowering lease rates. Generous concessions have been offered throughout the area. The market is waiting to see whether or not Childress Klein and General Growth Properties are able to pull off the development of the 1,300,000 SF Bridges of Mint Hill. The investment business continued to improve from an anemic 2008 and 2009. High profile properties in each asset class traded hands, with multifamily leading the way. Investor demand pushed multifamily cap rates to the 5.5% to 6.0% range. Class A office, industrial and retail properties traded between 7% and 8%. Contact NAI Piedmont Triad +1 336 373 0995 Metropolitan Area Economic Overview 2011 Population 2016 Estimated Population Employment Population Household Average Income Median Household Income 1,537,612 1,625,907 796,721 $57,680 $44,513 The Piedmont Triad market is slowly emerging from the economic downturn. The biggest news in the region is the announcement of a $426 million Caterpillar manufacturing facility in eastern Forsyth County, employing 510 people in an 850,000 SF facility in 2012. In addition, TIMCO Aerosystems opened an aircraft seat manufacturing plant employing 500 in northern Davidson County in November, 2011. The Piedmont Triad industrial market saw an improvement in 2011, however industrial vacancies remain high with distribution center space over 200,000 SF exceeding 6,000,000 SF. Flex space is also very soft with vacancies exceeding 20% and rental rates falling. Increased demand for warehouse space between 20,000 and 40,000 SF is the lone bright spot in the $3.00 to $3.50 range. The retail sector has shown marginal improvement in 2011. Rents continue to decline, but there are active prospects looking in the market. Restaurant and convenience store activity has been brisk. Big box and grocery anchored shopping center developments are non-existent. The office market followed other market segments, with no net absorption in 2011. Activity is emerging, with 30,000 to100,000 SF deals touring the market with 2012 space requirements. Vacancy is over 20% in all suburban markets. Downtown areas have vacancy rates approaching 7% for Class A space, but rental rates and lending requirements make new construction difficult. Infrastructure improvements bode well for the future of the region. Expansion of a third runway and major road improvements have resulted in a $300 million FedEx Mid-Atlantic hub opening at the airport and a 400,000 SF FedEx Ground sorting facility in Kernersville. Honda Jet has opened a headquarters and R&D facility at the Airport. Honda recently announced 417 new jobs in an $80 million maintenance facility to be located adjacent to its headquarters. Public sector investment is strong, with UNC-G and NC A&T universities completing a $60 million center for Nanotechnology in east Greensboro. Growth continues in Winston-Salem, with significant expansions at Wake Forest Baptist and the center for regenerative medicine. Total Population Median Age 36 Total Population Median Age 39 Charlotte 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 23.00 16.00 24.00 20.00 15.00 $ $ $ $ $ N/A 34.00 24.00 28.00 28.00 21.00 N/A $ 27.00 $ 21.00 $ 27.00 $ 22.70 $ 19.00 N/A 10.20% 20.00% 22.00% 16.80% 18.50% Bulk Warehouse Manufacturing High Tech/R&D retaIl $ $ $ 2.50 2.75 6.00 $ $ $ 3.50 3.90 10.00 $ $ $ 2.80 3.15 7.00 14.30% 8.50% 9.50% Downtown Neighborhood Service Centers Community Power Center Regional Malls $ $ $ $ 18.00 14.00 13.00 16.00 $ $ $ $ 35.00 26.00 23.00 25.00 $ 25.00 $ 17.50 $ 17.44 $ 19.08 22.80% 9.50% 8.50% 5.30% deVeloPment land Low/Acre High/Acre Office in CBD $ 1,000,000.00 $ 2,100,000.00 Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park $ $ $ 100,000.00 40,000.00 75,000.00 $ $ $ 250,000.00 125,000.00 200,000.00 Retail/Commercial Land $ 100,000.00 $ 1,500,000.00 Residential $ 10,000.00 $ 60,000.00 Greensboro, High Point, Winston-Salem 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 $ $ $ $ $ $ 22.00 18.50 11.00 21.00 18.50 11.00 $ $ $ $ $ $ 28.00 21.00 15.00 26.00 22.00 16.00 $ 25.00 $ 19.50 $ 13.50 $ 23.00 $ 19.00 $ 13.00 N/A N/A 25.00% N/A 15.00% 20.00% Bulk Warehouse Manufacturing High Tech/R&D retaIl $ $ 2.00 3.50 N/A $ $ 3.50 4.75 N/A $ $ 3.25 4.00 N/A 15.00% 10.00% N/A Downtown Neighborhood Service Centers Community Power Center Regional Malls $ $ $ $ 8.00 12.00 16.00 22.00 $ $ $ $ 23.00 20.00 24.00 40.00 $ 16.00 $ 18.00 $ 20.00 $ 28.00 15.00% 20.00% 12.00% 12.00% deVeloPment land Low/Acre High/Acre Office in CBD $ 700,000.00 $ 2,000,000.00 Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential $ $ $ $ $ 100,000.00 75,000.00 50,000.00 125,000.00 20,000.00 $ $ $ $ $ 300,000.00 150,000.00 100,000.00 250,000.00 75,000.00 2012 Global Market Report n www.naiglobal.com 121
Raleigh/Durham, North Carolina Fargo, North Dakota Contact NAI Carolantic Realty +1 919 832 0594 Metropolitan Area Economic Overview 2011 Population 2016 Estimated Population Employment Population Household Average Income Median Household Income Total Population Median Age 1,928,033 2,155,657 1,019,281 $61,323 $46,941 36 Based on several metrics, Raleigh was ranked number one in Businessweek.com’s first Best Cities ranking. It is no surprise considering the region is home to three major universities; North Carolina State University, Duke University and the University of North Carolina at Chapel Hill. Also helping the area get high marks is The Research Triangle Park, one of the most successful R&D centers in the world featuring microelectronics, environmental sciences, pharmaceuticals and biotechnology companies. The local office market experienced a slight decrease in office vacancy at the end of the Q3 2011 with 15% for suburban Class A, down from 17%; and 24% for suburban Class B, down from 25%. Net absorption totaled 100,000+ SF over the past 12 months and rental rates remained flat. Approximately 133,000 SF of office space was under construction at the end of the Q3 2011. The largest office sales transaction was Fidelity Investments’ purchase of four office buildings in The Research Triangle Park. Fidelity paid $34.3 million for the buildings in late September. LED lighting company Cree bought another office building near its Durham headquarters, a 59,902 SF building for $3.65 million. In the industrial market, vacancy dropped slightly from the previous quarter to a rate of 21%. Net absorption was down in the warehouse category, but the flex market had 175,000 SF absorbed over a twelve month period. Rental rates remained in the $4 to $10 range depending on product type. No new construction is underway at the end of Q3 2011. In the flex market, 11 buildings in Keystone Technology Park were sold to The Lionstone Group for $88.8 million. In September, Duke Realty paid just under $31 million for four industrial warehouses and two flex office buildings totaling 371,600 SF, and 66 acres of land. The retail market had a slight increase in vacancy to 9% with positive absorption over 12 months of 60,000 SF. Despite two store closings (a Kmart and a Kroger store), several new tenants expanded at The Streets at Southpoint Mall in Durham. In addition, a 360,000+ SF shopping center was opened this fall in Cary anchored by a Target and buybuyBaby. Rental rates in the market dropped slightly. Contact NAI North Central +1 701 364 0244 Metropolitan Area Economic Overview 2011 Population 2016 Estimated Population Employment Population Household Average Income Median Household Income Total Population Median Age 216,073 245,226 129,087 $64,707 $48,706 31 Fargo-Moorhead remains a vibrant population center as well as a key transportation hub in the upper Midwest. Fargo- Moorhead’s economic outlook is promising. Both the labor and education are here to sustain future business growth as the population approaches, and soon exceeds, 200,000. This includes more than 26,000 college students enrolled in three major colleges. The Fargo-Moorhead population epitomizes the Midwestern values of hard work, honesty, integrity and something we call “Minnesota-North Dakota Nice.” Fargo-Moorhead’s business climate enjoys consistent growth through world class education, research, unique advanced facilities, strong industry-university partnerships, sophisticated business infrastructure and skilled and productive employees. Our companies are competing globally and profiting in a community that is fully engaged in deliberate, cooperative and business focused planning and execution. The regional agricultural and agribusiness base is solid. Producers-growers throughout the Red River Valley have realized near record yields and revenues for the last several years. Companies such as Amity Technology, Bobcat and Case IH continue to make in-roads into export markets. Labor negotiations have made recent news between American Crystal Sugar and its labor union(s). Fargo-Moorhead is a major transportation center for regional, national and international shipping. Major trucking concerns, such as Magnum and Valley Express, maintain operations here. Cross-dock facilities are also available. Agricultural commodities and manufactured goods are distributed worldwide by rail, truck and air. Hector International Airport allows for air freight to overseas markets and BNSF Railway maintains an intermodal center in Dilworth, MN. Health care continues to expand with Sanford Health. It is expected Sanford Health will soon break ground at a new campus after consolidating its merger with Meritcare. This new project will enhance real estate values in south Fargo while adding jobs to the health care industry. Special mention is given this year to the energy boom taking place in the Bakken Oil Field of western North Dakota. The tremendous growth taking place in this region will have a direct impact on businesses of all types serving the energy sector. Fargo-Moorhead will realize benefits as the drive to develop this resource progresses in the years ahead. Raleigh/Durham 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 $ $ $ $ $ $ 25.00 19.00 15.00 22.00 18.00 12.00 $ 28.95 $ 25.00 $ 18.00 $ 30.00 $ 24.00 $ 16.50 $ 26.98 $ 22.00 $ 16.50 $ 26.00 $ 21.00 $ 14.25 N/A 6.00% 16.00% N/A 15.00% 25.00% Bulk Warehouse Manufacturing $ $ 2.50 3.00 $ $ 5.00 5.00 $ $ 3.75 4.00 21.00% 21.00% High Tech/R&D retaIl $ 6.50 $ 10.00 $ 7.50 17.00% Downtown Neighborhood Service Centers Community Power Center Regional Malls $ $ $ $ 8.00 8.50 14.00 21.00 $ 21.00 $ 14.00 $ 22.00 $ 45.00 $ 14.50 $ 11.25 $ 18.00 $ 33.00 9.00% 9.00% 9.00% 9.00% deVeloPment land Low/Acre High/Acre Office in CBD $ 2,178,000.00 $ 3,920,400.00 Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential $ $ $ $ $ 135,000.00 75,000.00 60,000.00 152,460.00 12,500.00 $ $ $ $ $ 200,000.00 150,000.00 200,000.00 750,000.00 75,000.00 Fargo At A Glance (Rent/SF/YR) low High effective avg. Vacancy doWntoWn offIce New Construction (AAA) $ 14.00 $ 20.00 $ 18.00 14.00% Class A (Prime) $ 9.50 $ 16.00 $ 14.50 8.50% Class B (Secondary) suburban offIce $ 7.50 $ 10.00 $ 9.00 8.00% New Construction (AAA) Class A (Prime) Class B (Secondary) IndustrIal $ 14.00 $ 12.00 $ 10.00 $ 16.00 $ 16.00 $ 12.00 $ 16.00 $ 14.00 $ 10.00 10.00% 7.00% 8.00% Bulk Warehouse Manufacturing $ $ 4.40 4.75 $ $ 6.25 7.00 $ $ 5.40 6.50 8.50% 7.00% High Tech/R&D retaIl Downtown $ $ 9.50 9.00 $ 16.00 $ 16.00 $ 14.50 $ 14.50 N/A 11.50% Neighborhood Service Centers $ 10.50 $ 12.50 $ 11.00 12.00% Sub Regional Centers $ 8.00 $ 10.00 $ 8.00 11.00% Regional Malls $ 15.00 $ 20.00 $ 18.00 2.00% deVeloPment land Low/Acre High/Acre Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential $ $ $ $ $ $ 370,260.00 78,408.00 65,340.00 76,230.00 156,816.00 20,910.00 $ $ $ $ $ $ 662,112.00 152,460.00 98,010.00 126,324.00 235,224.00 55,539.00 2012 Global Market Report n www.naiglobal.com 122
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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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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
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Latin America sectIon contents Buen
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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 and 118: Ocean/Monmouth Counties (“Shore M
Page 119 and 120: Las Cruces, New Mexico Albany, New
Page 121: Westchester, New York Asheville, No
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
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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
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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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