Category: News & Market Reports

U.S. Industrial Vacancy Falls Again, Records Lowest Rate in Nearly 25 Years

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HOUSTON, Feb. 02, 2022 (GLOBE NEWSWIRE) — The national industrial market continues to shatter records across key metrics, according to Transwestern’s fourth quarter U.S. Industrial Market report. Vacancy dropped to 4.3% during the quarter, its lowest rate in almost 25 years – a result of unrelenting demand and delivery of less than 100 million square feet of space nationally. Net absorption registered 650 million square feet for 2021, obliterating the occupancy growth record set in 2018 (431 million square feet) and more than double 2020’s figure.

“The industrial sector continues its tear, evidenced by yet another remarkable quarter,” said Matthew Dolly, Research Director at Transwestern. “Rents grew in every market, even those that have historically commanded rates well above the national average. Economic conditions, consumer behavior and supply chain snarls all play a role: More investors are looking to real estate as a hedge against rising inflation, and logistics firms need the space.”

The U.S. average asking rent ended the year at $7.20 per square foot, increasing at the fastest pace for a calendar year since the start of the pandemic. Over 75% of tracked markets saw rents rise by more than 5% throughout 2021, with five markets – Inland Empire, Los Angeles, Baltimore, New Jersey and Philadelphia – exceeding 20%.

Many coastal markets continue to report the lowest availability as a percent of stock. Over the course of the year, markets experiencing the largest decreases in availability included Las Vegas, Cincinnati, and San Diego. Click to read more at www.globenewswire.com.

Finding the Balance: How the Pandemic Expedited Evolution in Property Management

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Property management has always been a feat of balancing the needs of the landlord with those of the tenants. Faced with the challenges of COVID-19, property management has evolved considerably in just two years.

“It’s been challenging. COVID has brought a whole new element to what we have seen in the property management world,” says Branon Pesnell, Senior Vice President and Managing Director of Property Services for NAI Partners in Houston. “We’ve really had to hold a lot of hands for landlords and walk them through this whole process because it’s something that none of us have seen before.”

From issues of building underutilization early in the pandemic to building cleanliness and social distancing as tenants started to return, Pesnell says properties have had to pivot and adjust like never before.

“We don’t have any kind of precedent to go off,” he explains. “It’s definitely been a learning process for everyone involved.” Click to read more at www.rednews.com.

Back in Business, Back in Buildings: How Property Managers are Bringing in Tenants

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When Laura Fishback joined Avison Young as Dallas Market Leader a month before the pandemic shutdowns in 2020, the newest member of the property management team thought she’d have plenty of time to get acclimated.

“It was just the opposite,” she says. “Property management was thrown into hyperdrive.”

At the time, Avison Young had only one building (a 156,000-square-foot Class A+ office building) under management. Flash forward to 2022 and the firm now manages seven office buildings totalling 418,000 square feet, four medical office buildings totaling 167,000 square feet and three industrial sites totaling more than one million square feet.

Fishback credits that growth to being persistent, engaged and truly caring
about the client’s needs. “This is a major differentiator with us: we listen to what our clients need and make it happen,” she says.

As an example, Fishback offers the story of Avison Young-Dallas’ second property management client: Metrocrest Hospital Authority. She cold-called a contact there and hit it off, discussing how they could address and improve the asset’s property management needs. Click to read more at www.rednews.com.

TuSimple, Property Developer Team up to Boost Autonomous Trucking in Texas

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The roads are mostly mapped for TuSimple to drive autonomously in Texas. Now it is up to commercial property developers to get ready for driverless trucks to come and go from warehouses.

Hillwood Investment Properties, one of the largest commercial real estate developers in the country, is taking suggestions from TuSimple Holdings (NASDAQ: TSP) on how to incorporate the needs of autonomous trucks into current and future facilities.

“If you develop a warehouse that has the right setup, like a separate entrance for autonomy, an area where you can put a launching pad and a landing pad for autonomous trucks, this is where the design of these warehouses are to be TuSimple Autonomous Freight Network-enabled,” TuSimple CEO Cheng Lu told FreightWaves. Click to read more at www.freightwaves.com.

Shearman & Sterling First To Sign Lease at The Link at Uptown

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Shearman & Sterling, a global law firm, became the first tenants of The Link at Uptown, a 291,968 square foot office development located at 2601 Olive St. in Uptown. Representing the tenant in the 22,838-square-foot lease were CBRE’s Chelby Sanders and Ryan Buchanan. JLL’s Blake Shipley, alongside Sarah Kennington and Bryce Jackson from Thirty-Four Commercial, represented the seller.

“We are thrilled to be moving to The Link at Uptown, which offers a flexible and engaging environment for our people including outstanding client, personnel hospitality, and wellness features,” said Bill Nelson, Head of Texas Offices at Shearman & Sterling in the release. “This move is essential as we continue to expand our offering in Dallas and throughout Texas. The continued growth of our Texas offering is part of the ongoing execution of our strategy globally to expand our core practices with the greatest potential for the Firm, aligning with market opportunities.”

The 25-story office tower serves as a connector between Uptown, Victory Park, and Downtown. The building offers tenants luxe amenities including two ground-floor restaurants, overnight executive suites, and a full amenity floor with an outdoor terrace with a view of the city. Click to read more at www.dmagazine.com.

Rising Interest Rates and What’s Next for Multifamily Lending

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Multifamily investors are bracing for an uptick in mortgage rates and other forms of real estate finance as the Federal Reserve bumps up interest rates in 2022. As an inflation-fighting move, the Fed plans three hikes of 25 basis points each. And in December, the Fed announced that it would wind down its bond-buying program by March.

But the consensus among mortgage bankers and economists is that increases in the cost of capital will be modest and will not dampen the availability of financing or the surge of investment. Multifamily lending volume will rise 3 percent to $421 billion this year as the economy continues to rebound, the Mortgage Bankers Association projects.

“The change in interest rates is not expected to reduce demand for multifamily housing this year. A lot of demand is driven by property values and fundamentals, both of which are extremely strong right now,” said Jamie Woodwell, MBA’s vice president of commercial real estate research. Strong property income and low vacancy are combining to push valuations upward, he added. Click to read more at www.multihousingnews.com.