2012 Global Market report - NAI Global

n us Highlights – southeast region
n Alabama
Florida
Georgia
Kentucky
Mississippi
office
North Carolina
South Carolina
Tennessee
The atlanta office market recorded positive absorption in 2011 with vacancy rates averaging
19% and rental rates continuing on a downward trend. Concessions reached a plateau, impacting
small-to-midsized firms seeking space. Larger tenants continue to secure favorable terms as
building owners are reluctant to subdivide bigger blocks of existing vacant space.
The overall vacancy in the charlotte 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 is building
three speculative buildings totaling 790,000 SF. The three premier submarkets in Charlotte -
Downtown, Southpark and Ballantyne - continue to attract the majority of newer, higher end
tenants.
The office sector In miami remains divergent with vacancy in CBD, Brickell and other submarkets
exceeding 20%. However, rental rates are stabilizing, though landlord concession package remain
generous. The only new construction, Coral Gables’ 396 Alhambra Circle, is nearing completion
with few leases signed.
Expansions and a lack of new construction has led to five straight quarters of positive absorption
in memphis’ office market. The direct vacancy rate is 19.7%, down from 20.4% at the same
time last year.
The orlando office market is improving with an overall vacancy rate of 13.7% and positive
absorption of 811,570 SF as of Q3 2011. Rental rates are virtually unchanged from last year.
Office cap rates have averaged 8.4%.
Industrial
atlanta’s industrial market, with over 10.7 million SF of leasing activity (as of Q3 2011) is on
track to finish the year with the largest occupancy gains in several years. The increases are due
to expansions, regional consolidations and some small new business growth. Vacancy rates
dropped slightly to 13.6% while rental rates are down slightly from 2010.
Jacksonville’s industrial warehouse leasing was notably stronger in 2011. Leasing and absorption
are up but rental rates are down. Research/high tech space has lagged, but not enough to put a
damper on the positive absorption over the past year.
The memphis industrial market, a pillar of the region, has had two consecutive quarters of positive
absorption putting direct vacancy at 14.3%. The market has been bolstered by large new leases
for Trane, CEVA Logistics, Nike, Newegg and Cummins as well as several build-to-suit projects
from Electrolux Home Products and Mitsubishi Electric Power Products.
Industrial markets in miami improved, led by export growth with Brazil, Miami’s largest trading
partner, with vacancies declining and rates increasing. The industrial market is also benefiting
from the Port of Miami’s expansion, which includes increased capacity to accommodate new
super container ships and a new cargo tunnel to improve vehicular access to the port.
The orlando industrial market vacancy rate stands at 12% with annual positive net absorption
totaling 1.2 million square feet as of Q3. Absorption has been strongest among warehouse and
distribution buildings. Asking rents remained flat at $5.36/SF.
retail
atlanta’s retail market has seen some positive momentum with shopping centers seeing a
majority of the activity as well as retailers backfilling some of the empty big-boxes. Vacancy
remains in the 10% range and no new construction projects are on the horizon. Modest activity
should continue to keep the market positive and slowly reduce the amount of vacant space
available throughout 2012.
After rising for three years, charlotte retail vacancies declined a modest 0.3%. Some of the larger
shopping centers traded hands, with the new owners able to entice tenants by lowering lease
rates and offering generous concessions.
Many new grocers entered the knoxville retail market including Whole Foods, Trader Joe’s, Publix
and Costco. Other noteworthy transactions include a new 100,000 SF Kroger’s, and Target’s
110,000 SF store at the new NorthShore Town Center.
Demand for retail in miami is balanced and vacancy rates remain low. Well-capitalized retailers
continue to expand and large national retailers are adding stores for the first time. Strong demand
should result in rental rates in preferred markets growing over 10% and vacancy rates declining
in 2012.
Improvements continue in the orlando retail market with an overall vacancy rate of 7.3% and
positive absorption of 807,900 SF. Asking rents trended lower over the year. New tenants are
gradually filling formerly vacant big box space as Borders closed its Orlando area stores.
leading Price class a markets
Downtown Office
Class A
Suburban Office
Class A
leading Price retail markets
Retail
Downtown
Retail
Service Centers
Retail
Power Centers
Retail
Regional Malls
Market Effective Avg. High Rent Vacancy
Miami, Florida $ 40.93 $ 46.50 27.89%
Palm Beach County, Florida $ 37.52 $ 50.00 19.40%
Charleston, South Carolina $ 30.00 $ 32.00 4.90%
Charlotte, North Carolina $ 27.00 $ 34.00 10.20%
Tampa Bay, Florida $ 25.00 $ 28.00 30.00%
Market Effective Avg. High Rent Vacancy
Palm Beach County, Florida $ 30.86 $ 35.00 18.20%
Miami, Florida $ 29.37 $ 42.66 22.30%
Memphis, Tennessee $ 22.34 $ 28.75 11.10%
Asheville, North Carolina $ 22.00 $ 26.00 16.50%
Tampa Bay, Florida $ 18.00 $ 21.00 30.00%
Market Effective Avg. High Rent Vacancy
Miami, Florida $ 34.90 $ 45.00 3.49%
Charleston, South Carolina $ 26.00 $ 34.00 8.10%
Charlotte, North Carolina $ 25.00 $ 35.00 22.80%
Palm Beach County, Florida $ 24.06 $ 40.00 4.97%
Orlando, Florida $ 23.25 $ 32.50 4.10%
Market Effective Avg. High Rent Vacancy
Miami, Florida $ 22.46 $ 45.00 5.90%
Palm Beach County, Florida $ 19.17 $ 36.31 3.80%
Chattanooga, Tennessee $ 18.00 $ 20.00 10.00%
Greensboro/High Point/Winston-Salem, North Carolina $ 18.00 $ 20.00 20.00%
Birmingham, Alabama $ 12.80 $ 17.35 13.50%
Market Effective Avg. High Rent Vacancy
Miami, Florida $ 39.71 $ 50.00 1.50%
Chattanooga, Tennessee $ 24.00 $ 30.00 10.00%
Charlotte, North Carolina $ 17.44 $ 23.00 8.50%
Orlando, Florida $ 16.30 $ 26.00 7.20%
Memphis, Tennesseee $ 11.80 $ 22.00 16.20%
Market Effective Avg. High Rent Vacancy
Chattanooga, Tennessee $ 37.00 $ 50.00 10.00%
Columbia, South Carolina $ 35.00 $ 45.00 16.40%
Savannah, Georgia $ 35.00 $ 50.00 1.00%
Greenville/Spartanburg, South Carolina $ 32.00 $ 38.00 2.00%
Charleston, South Carolina $ 30.00 $ 40.00 9.00%
leading Price Industrial markets
Industrial
Bulk Warehouse
Industrial
Manufacturing
Industrial
High Tech/R&D
Market Effective Avg. High Rent Vacancy
Palm Beach County, Florida $ 7.41 $ 9.50 9.20%
Miami, Florida $ 6.89 $ 18.85 8.20%
Orlando, Florida $ 4.76 $ 6.50 12.30%
Tampa Bay, Florida $ 4.00 $ 6.00 25.00%
Jacksonville, Florida $ 3.70 $ 7.29 10.40%
Market Effective Avg. High Rent Vacancy
Tampa Bay, Florida $ 5.00 $ 6.50 25.00%
Birmingham, Alabama $ 4.50 $ 6.50 13.00%
Asheville, North Carolina $ 4.25 $ 6.00 14.00%
Savannah, Georgia $ 3.95 $ 4.35 15.50%
Memphis, Tennessee $ 2.65 $ 5.00 10.00%
Market Effective Avg. High Rent Vacancy
Orlando, Florida $ 30.00 $ 30.00 5.20%
Knoxville, Tennessee $ 12.50 $ 20.00 6.00%
Miami, Florida $ 11.98 $ 23.00 10.80%
Birmingham, Alabama $ 10.20 $ 12.50 8.00%
Raliegh/Durham, North Carolina $ 7.50 $ 10.00 17.00%
2012 Global Market Report n www.naiglobal.com
25