2012 Global Market report - NAI Global

Sacramento, California
San Diego, California
Contact
NAI Aguer Havelock
+1 916 563 7555
Metropolitan Area
Economic Overview
2011
Population
2016 Estimated
Population
Employment
Population
Household
Average Income
2,182,119
2,314,016
1,099,661
$86,934
The Sacramento market has been exhibiting mixed signals.
We continue to see signs of the economic recovery process
that commenced in 2010. The combination of low interest
rates, low inflation and the prospect of significant corporate
earnings recovery in 2011 should provide the catalyst for
increased jobs and additional tenant demand in 2012.
Unfortunately, low investor confidence and lack of significant
job creation in our region is a further negative on commercial
private sector activity.
The office market has been lead by continued demand and
net absorption from the State of California, although the
state is now showing signs of slowing as the Governor’s
Administration is desperately looking for ways to solve
the state’s structural deficit problem. The private sector
industries that have led our region’s recovery include legal,
education, health care and most significantly, engineering.
The stimulus package has propelled almost all sectors of
the engineering field to consider significant expansion.
The Office market ended the Q3 2011 with a 17.2%
vacancy rate, and net absorption totaling positive 359,206
SF. Rental rates ended Q3 at $1.70, a decrease over the
previous quarter. Just two buildings delivered to the market
during Q3 with a total 160,195 SF.
The industrial market experienced a slight decrease in
vacancy rate from the previous quarter, ending Q3 2011 at
13.4% compared to 13.6% from the Q2. Industrial rental
rates also decreased 1.4%, ending the quarter at $5.08/SF.
The most notable industrial transaction is the sale of 7501
Foothills Boulevard located in Roseville. The 465,000 SF
building sold for $53,000,000.
The retail market did not experience much change during
Q3 2011 with a vacancy rate of 10.3% and average quoted
rates at $16.92. A total of nine retail buildings were
delivered to the market totaling 236,841 SF of space.
Notable transactions in the retail market were Oak Shade
Town Center in Davis selling for $35,000,000 ($337.31/SF)
and the 76,248 SF lease of 1815 Douglas Boulevard signed
by Hobby Lobby.
Contact
NAI San Diego
+1 619 497 2255
Metropolitan Area
Economic Overview
2011
Population
2016 Estimated
Population
Employment
Population
Household
Average Income
3,319,907
3,542,129
1,620,037
$71,669
The San Diego housing market continues to experience a
decrease in housing prices, down 5.8% from 2010 with the
average single family home selling for $369,000. Many
houses selling near the median price are being acquired
without financing by investors and being rented with the
average rental rate increasing 9% from 2010.
Improved activity in the office market resulted in a decrease
in the countywide vacancy rate from 13.9% in the Q4 2010
to 13% in the Q3 2011 with positive net absorption of
671,997 SF. Average rents decreased from 2010 to
$25.32/SF per year. The largest office lease signing in 2011
was Novatel Wireless with 96,000 SF. The first six months
of 2011 registered 83 lease transactions totaling
$64,377,591, or $121.29/SF. Office cap rates ranged from
6% to 10%, up slightly from 2011. The largest sale was 110
Plaza downtown for $80,000,000, or $245.42/SF at an 8%
cap rate.
The industrial market decreased vacancy in 2011 to 8%
from 11.2% in 2010. Rental rates fell to $8.13/SF per year
with positive net absorption of 718,543 SF as of the end of
Q3 2011. The largest lease signing was Northwood, LLC for
33,424 SF. Midway through 2011, six industrial buildings
sold for a total volume of $163,666,000 averaging
$84.79/SF. The largest industrial sale was a portfolio
comprised of 25 industrial building totaling 1,095,525 SF
for $86,000,000 or $78.50/SF. at a 7.75% cap rate.
The San Diego retail market experienced little change in
2011. At the end of the Q3 2011, the vacancy rate was 5%;
average asking rents were $21.30/SF per year. The largest
lease signed in 2011 was Mr. O’s BBQ for 10,954 SF. During
the first six months of 2011, six retail sales occurred with
an aggregate volume of $9,716,835,000 and an average
price of $103/SF. Cap rates declined in 2011 to approximately
7.75% from 8.27% in 2010.
Median
Household Income
$67,938
Median
Household Income
$52,930
Total Population
Median Age
36
Total Population
Median Age
32
Sacramento 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
21.60
18.00
N/A
16.20
7.20
$
$
$
$
N/A
38.40
33.00
N/A
31.56
45.00
N/A
$ 31.03
$ 21.17
N/A
$ 22.33
$ 20.68
N/A
9.60%
13.70%
N/A
23.00%
18.50%
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
$ 2.88
N/A
N/A
$ 7.56
N/A
N/A
$ 5.10
N/A
N/A
13.60%
N/A
N/A
Downtown
Neighborhood Service Centers
Community Power Center
Regional Malls
$
$
$
$
9.12
8.28
9.00
22.80
$
$
$
$
38.40
39.00
33.00
24.00
$ 16.05
$ 16.93
$ 21.13
$ 26.16
4.10%
14.00%
8.50%
7.30%
deVeloPment land Low/Acre High/Acre
Office in CBD
Land in Office Parks
$
N/A
55,749.65
N/A
$ 1,045,440.00
Land in Industrial Parks
$ 376,510.00 $ 19,560,000.00
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
$
$
18,315.02
55,749.65
N/A
$ 6,837,606.84
$ 4,112,453.53
N/A
San Diego 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
27.24
15.00
42.00
14.40
8.40
$
$
$
$
$
N/A
29.88
36.00
48.36
48.36
52.08
N/A
$ 28.36
$ 24.00
$ 47.88
$ 31.80
$ 24.48
N/A
16.00%
18.00%
N/A
13.00%
N/A
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
$
$
$
4.20
3.48
3.48
$
$
$
30.00
19.20
48.84
$
$
$
8.04
8.16
8.16
10.00%
9.00%
8.00%
Downtown
Neighborhood Service Centers
Community Power Center
Regional Malls
$
$
$
$
12.00
9.60
11.88
21.96
$
$
$
$
53.76
60.00
48.00
36.00
$ 13.32
$ 20.88
$ 22.92
$ 26.64
5.00%
8.00%
5.00%
4.00%
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
2012 Global Market Report n www.naiglobal.com 85