Category: News

Starved for Space: Demand for Industrial Still Far Outpacing Supply

Posted on by Sarah

Not even the disruptions of the COVID-19 pandemic, Russia’s attack on Ukraine and rising inflation have stalled the still red-hot industrial market, according to the first quarter national industrial report released recently by Newmark.

The United States saw 103.5 million square feet of industrial absorption during the first quarter of the year. According to Newmark, this marks the fourth consecutive quarter that the country’s industrial market has reached more than 100 million square feet of absorption.

That 103.5 million square feet was actually a decline of 33% from the all-time quarterly absorption amount registered in the third quarter of 2021. But Newmark says that this amount of absorption is still about double the pre-pandemic quarterly average of 2019.

At the same time, the U.S. industrial market’s vacancy rate fell to a record 4%, while asking rents jumped 12.8% on a year-over-year basis to $9.26 a square foot.

This isn’t surprising: As Newmark says in its report, the national industrial market is starved for space, with many major markets having little to no immediate occupancy opportunities for tenants. Competition for this space has driven industrial rents well past the nation’s high inflation rate.

Developers aren’t shy about building new industrial spaces, either. Newmark reported that the national industrial construction pipeline measured 546.1 million square feet as of the end of the first quarter. Developers also delivered 81.1 million square feet of industrial space during the quarter.

Newmark highlighted several big industrial transactions during the quarter, including two in the Midwest.

In Columbus, Ohio, Related Companies purchased the 2.07-million-square-foot Eddie Bauer/PacSun Distribution Center for $90.5 million, a price of $44 a square foot. And in Milwaukee, Phoenix Investors purchased the 1.5-million-square-foot Briggs & Stratton manufacturing facility for $24 million.

Newmark also pointed to several Midwest markets as having especially low industrial vacancy rates as of the end of the first quarter. This includes Chicago, with a vacancy rate of 4.4%; Cincinnati, 3.7%; Cleveland, 4.4%; Columbus, 2.4%; Detroit, 4.3%; Indianapolis, 3.6%; Milwaukee, 2.8%; Minneapolis, 3.6%; Nashville, 4.4%; and St. Louis, 3.5%.

Cushman & Wakefield Arranges Sale of Windwater at Windmill Lakes

Posted on by Sarah

Cushman & Wakefield has arranged the sale of Windwater at Windmill Lakes, a 150-unit multifamily community located in the Hobby submarket of Houston, Texas.

Cushman & Wakefield’s John Carr and Ben Fuller represented the seller, Southern Breeze LLC (an organization led by Ronald and Sylvia Reine), in the transaction. The Equity, Debt & Structured Finance team at Cushman & Wakefield also arranged financing on behalf of the buyer, The Bascom Group.

“As a well-maintained property with 100% classic units and an excellent performance trend, Windwater at Windmill Lakes provides the buyer with a strong value-add opportunity on a Houston asset,” said Carr, Senior Director at Cushman & Wakefield.

Windwater at Windmill Lakes was built in 1999 and offers community amenities such as a tropical pool with beachfront entry, pool waterfall, covered parking and garages, large private patios/balconies, and a fitness center.

1,080-Acre Community to be Developed at FM 1774, Hwy. 105 in Plantersville

Posted on by Sarah

A 1,080-acre residential community with commercial space is in the works for the intersection of Hwy. 105 and FM 1774 in Plantersville, according to a May 2 release from NewQuest Properties, a commercial real estate firm. NewQuest Properties brokered a partnership agreement between landowner Butler Holdings Ltd. and High Meadow Development Co., which has developed High Meadow Estates in Montgomery.

The new residential community has been dubbed “The Cedars,” according to the release—a nod to its historic roots. According to the release, the tract has historically been known as The Cedars locally and was settled in the 1830s by farmers and ranchers from Arkansas and Alabama.

“This transaction provides the depth to provide single-family homes in an area destined for growth and eventually higher-end commercial development in an emerging corridor,” NewQuest Properties Vice President Joe Burke said in the release. “This is a shared vision between the Butler family, who has owned the land for more than 50 years, and the developer. Click to read more at www.communityimpact.com.

CBRE Arranges $62.1 Million in Refinance Loans for Six Multifamily Properties Within the Sunbelt

Posted on by Sarah

The 1,632-unit portfolio consists of:

Deer Run at 8755 Jenny Lind St., Charleston
Middleton Cove at 2274 Ashley River Road, Charleston
Canyon Point at 16550 Henderson Pass, San Antonio
Oak Springs at 3919 Perrin Central Boulevard, San Antonio
Deer Oaks at 7230 Wurzbach Road, San Antonio
Churchill Crossing at 14100 Thermal Drive, Austin

“After owning these properties within their portfolio for over 25 years, Churchill Forge chose an early portfolio refinance of these assets to take advantage of the current low-interest-rate environment,” said Kristen Reilley, Director at CBRE in Charlotte. “These properties not only fit well within the mission-driven charter that Fannie Mae looks for in their loans, but also provides housing in these markets that are much needed.”

The Federal Housing Finance Agency (FHFA) established a 2022 multifamily volume cap of $78 billion, of which 50% must be mission-driven, focused on certain affordable and underserved market segments, and 25% affordable to residents earning 60% or less of area median income. Fannie Mae Multifamily provided liquidity for approximately 136,000 units of multifamily housing in Q1 of 2022; almost 95% of the units potentially eligible for housing goals credit were affordable to families earning at or below 120% of area median income, providing support for both workforce and affordable housing.

Constellation Real Estate Partners and a Real Estate Fund Advised by Crow Holdings Capital Acquire 52 Acres in El Paso

Posted on by Sarah

Constellation Real Estate Partners, an investor and developer of logistics properties, in partnership with a real estate fund advised by Crow Holdings Capital, has acquired 52.29 acres of land on Bill Burnett Drive in El Paso, Texas for the development of a three-building, 798,470-square-foot industrial project known as Constellation Trade Center. Construction will begin this summer with completion scheduled for Q2 of 2023.

This marks the second land acquisition/development project for Constellation in the past two months. In March, the company, in partnership with a real estate fund advised by Crow Holdings Capital, acquired 33 acres in Houston for Constellation Post Oak, a two-building, 426,200-square-foot industrial development. Construction on Constellation Post Oak is scheduled to start in June.

Designed by PSRBB Industrial Group, Inc. and Langan Engineering, the project will feature multiple points of ingress/egress with full circulation, significant auto/trailer parking, ESFR sprinkler systems, and LED lighting. Building 1 is 362,914 square feet and offers a cross-dock configuration with 36-foot clear height. Buildings 2 and 3 are each 217,778 square feet with both featuring a rear-load configuration and 32-foot clear height. The speculative project is designed to target distribution, fulfillment, e-commerce, and light industrial users from 40,833 square feet to 362,914 square feet.

Constellation Trade Center is located less than one mile from Interstate 10, the preferred east/west corridor connecting California to Florida. It is also located only five miles from the Zaragoza Bridge Port of Entry to Mexico, which is ranked No. 2 in the Top 10 U.S. Ports in the U.S. for total trade value between the US and Mexico.

Bill Caparis and Christian Perez Giese with CBRE’s El Paso office assisted Constellation Real Estate Partners in the acquisition and will oversee leasing of the new development.