2012 Global Market report - NAI Global

Savannah, Georgia
Honolulu, Hawaii
Contact
NAI Savannah
+1 912 358 5600
Metropolitan Area
Economic Overview
2011
Population
2016 Estimated
Population
Employment
Population
Household
Average Income
Median
Household Income
Total Population
Median Age
356,143
389,596
173,004
$66,159
$51,030
34
The Savannah MSA has had six consecutive quarters of
recovery as of Q2 2011. Economic indicators show steady
recovery through 2011 with stronger improvements
beginning in early 2012. The economic drivers are logistics,
tourism, manufacturing (e.g., Gulfstream Aerospace,
Mitsubishi Power Systems) and a large military and
educational presence. The Port of Savannah was the second
busiest US container port for export by tonnage in FY2011.
Savannah had 11.4 million tourists spending $1.7 billion in
2010.
Demand in most sectors has seen some improvement over
2010. Very little new development has been permitted with
the exception of build-to-suit projects. The downtown CBD
saw its first modern day Class A office building break
ground. A 72,072 SF GSA build-to-suit will house the US
Attorney's office on four of its six floors. Modest activity in
all submarkets is reflected in the high teens to 20+ %
vacancies.
Industrial vacancy of around 7 million SF continues to
gradually improve with almost 2 million SF of absorption in
Q2 2011 and 900,000 SF in Q3. Large distribution space
abounds with over 3 million SF of first generation space
including five free standing Class A buildings over 400,000
SF. Most leasing activity was port related 3PLs. Walmart took
800,000 SF of space. Duke Realty, the largest industrial
owner in Savannah, purchased an income producing
330,000 SF building. Dollar Tree and Gulfstream Aerospace
both have sizable expansions in progress.
National retailers have resumed interest in Savannah.
Whole Foods, Anthropologie and others are pursuing sites.
Kohl’s is entering the market with an 80,000 SF space and
Office Depot is relocating to 20,000 SF vacated by Books-
A-Million. The overall vacancy is under 7% with highest
vacancies in strip centers. Prime locations in the historic
district and the Southside continue to garner significant
interest.
Multifamily has seen improvements with some land trades
but little new construction. A notable project, Sustainable
Fellwood, a public/private, LEED certified mixed income
development composed of 220 Units on 27 acres has Phase
I fully occupied.
Hotel occupancy continues to improve with downtown
occupancies over 85%. Sales revenue in the sector hit record
highs through the first half of 2011 and room rates rose 11%.
Contact
NAI ChaneyBrooks
+1 808 544 1600
Metropolitan Area
Economic Overview
2011
Population
2016 Estimated
Population
Employment
Population
Household
Average Income
Median
Household Income
Total Population
Median Age
975,811
1,067,904
467,817
$88,098
$71,068
36
During 2011, Hawaii’s economic indicators have been
mixed. Tourism statistics, civilian wages and state general
fund tax revenues have displayed positive growth over 2010,
however private building permits and government contracts
awarded have decreased. Hawaii’s unemployment rate
(6.4%) is below the national average (9.1%) and has
remained largely static from the previous year.
In aggregate, the local economy has displayed gradual net
gains that are expected to continue into 2012. However,
consumers fear economists’ predictions of a potential
“double-dip” recession which could be triggered by ongoing
domestic and international debt crises.
The tourism industry experienced the beginnings of a
recovery in 2011, buoyed by strong increases in visitors
from Canada, China and Australia. However, during this
period, visitors from Japan declined sharply, impacted by
the March 2011 earthquake and tsunami. Tourism forecasts
for 2012 include continued recovery, with total visitors,
visitor days, and visitor expenditures forecasted by DBEDT
to grow 2.9%, 2.7%, and 5.3%, respectively.
Down from its 2006 peak, commercial real estate leasing
exhibits improvement over 2010. The retail sector posted
modest gains in occupancy over the past four quarters with
statewide vacancy approximating 5%. Nevertheless, lease
rates softened as weak gross sales continue to mirror
prevailing economic conditions.
The office market is negatively impacted by vacancy rates
at a 10 year peak with corresponding decreasing rental
rates. The construction declines severely impacted the
industrial market yet statewide vacancy of -4.7% is well
below the national average of 13.9%.
Somewhat counter-intuitively, the investment market in
Hawaii has performed relatively well over the past eight
quarters. During this period, many of Hawaii’s asset classes
have seen numerous “trophy” properties trade at
compressed cap rates. Certain asset classes such as
development land and lodging have experienced less activity
as lenders continue to work out of their positions. Other
notable activity includes the opening of the Aulani Disney
resort in Ko Olina and the Asia Pacific Economic Cooperation
(APEC) conference.
Savannah At A Glance
(Rent/SF/YR) low High effective avg. Vacancy
doWntoWn offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
Class C
suburban offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
Class C
IndustrIal
$ 35.00
N/A
$ 18.00
$ 14.00
N/A
$ 18.00
$ 12.00
$ 10.00
$
$
$
$
$
$
35.00
N/A
22.00
18.00
N/A
22.00
16.00
16.00
$ 35.00
N/A
$ 20.00
$ 17.50
N/A
$ 18.50
$ 14.00
$ 12.00
25.00%
N/A
22.00%
18.00%
N/A
21.00%
15.00%
18.00%
Bulk Warehouse
Distribution
Flex/Service
retaIl
$
$
$
3.00
3.25
5.50
$
$
$
4.35
4.35
9.00
$
$
$
3.75
3.95
7.00
22.80%
15.50%
10.00%
Downtown
Neighborhood Service Centers
Community Power Center
Regional Malls
deVeloPment land
$ 18.00
$ 10.00
$ 10.25
$ 25.00
Low/Acre
$
$
$
$
40.00
24.00
31.00
50.00
$ 20.00
$ 18.00
$ 25.00
$ 35.00
High/Acre
7.00%
9.00%
1.10%
1.00%
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
$ 1,300,000.00 $ 2,800,000.00
$ 125,000.00 $ 450,000.00
$ 35,000.00 $ 150,000.00
$ 30,000.00 $ 125,000.00
$ 200,000.00 $ 650,000.00
$ 15,000.00 $ 60,000.00
Honolulu 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
$
$
$
$
$
$
$
$
$
$
N/A
31.20
25.80
N/A
17.40
13.20
10.80
11.88
10.80
21.60
24.00
41.40
$
$
$
$
$
$
$
$
$
$
N/A
34.80
30.00
N/A
27.00
21.00
15.60
12.60
15.60
36.00
42.00
55.80
N/A
$ 33.00
$ 27.90
N/A
$ 22.20
$ 17.10
$ 13.20
$ 12.04
$ 13.20
$ 28.80
$ 33.00
$ 48.60
N/A
13.20%
11.00%
N/A
9.50%
10.30%
4.80%
6.80%
4.80%
3.40%
3.00%
5.00%
Regional Malls
$ 33.60 $ 114.00 $ 73.80 1.00%
deVeloPment land Low/Acre High/Acre
Office in CBD
Land in Office Parks
N/A
$ 1,000,000.00
N/A
$ 1,530,000.00
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
$
$
$
$
950,000.00
780,000.00
850,000.00
30,000.00
$ 1,060,000.00
$ 1,020,000.00
$ 1,250,000.00
$ 3,700,000.00
2012 Global Market Report n www.naiglobal.com 95