Top 10 Large Metros
Robert Bach
Senior Vice President, Chief Economist
Grubb & Ellis
Thursday, December 22, 2011
Weekly Market Insight Update
Labor Market Recovery Rates
Top 10 Large Metros
Grubb & Ellis examined metropolitan areas with populations of 1 million or more to determine their labor market recovery rates – the percentage of jobs lost to the recession in each market that has been recovered through Nov. 2011. Six of the top 10 markets are in three adjacent states – the four big Texas metros (#2 Houston, #5 Austin, #6 San Antonio and #10 Dallas-Fort Worth) plus #3 New Orleans and #4 Oklahoma City. Energy is a big driver in this region as well as technology in Austin and ongoing reconstruction projects in New Orleans. The other four top markets are in the Northeast: #1 Pittsburgh and, in the 7th through 9th positions, Boston, Rochester, N.Y. and Washington, D.C. Education and healthcare are big drivers of growth in these metros plus energy in Pittsburgh and the public sector and related non-profits and consultants in Washington, D.C. At the other extreme, Birmingham, Ala. has not recovered any jobs while the recovery rates in Cleveland and Atlanta are just 2 and 4 percent, respectively. The recovery rate in the U.S. overall is 28 percent. Look for continued, modest expansion in the labor market next year at roughly the same pace as 2011 – 125,000 net new payroll jobs per month. Metros with above average shares of energy, commodity, health care, education and technology businesses should grow more rapidly than average.
Top 10 Large Metros
Thursday, December 8, 2011
Monday, November 7, 2011
NEW LISTING
Office Building For Sale - 717 S. Alvernon Way
Two story office building with an elevator. Great central Tucson location. Located across from Reid Park.
View Sale Info | View & Print Brochure
NEW LISTING
Office Building For Sale
5704 E. Grant Road
A two story office building formerly a B & B converted to office in 2005.
Tuesday, November 1, 2011
Monday, October 17, 2011
Weekly Market Insight Update
Commercial Real Estate Vacancy Rates
October 17, 2011
October 17, 2011
All sectors of the property leasing market are recovering, some more quickly than others. Third quarter vacancy rates fell by 30 basis points for the office and apartment sectors and by 10 bps for the industrial and retail sectors. The apartment market has been recovering rapidly since mid-2010 thanks to the unresolved foreclosure crisis, tight mortgage lending standards and the tarnished reputation of homeownership. The office vacancy decline is a surprise considering that job creation remains sluggish and shadow space is still a problem. Industrial demand has been strong enough to trigger new construction starts, and the market continues to plough ahead despite manufacturing conditions that have softened since the spring. Retail has been the most sluggish of the major property types due to the well-documented headwinds facing consumers, but certain sub-types are outperforming, notably anchored centers and fortress malls in mature, high-income trade areas. Although vacancy rates are declining, landlords still do not have much pricing power since the market recovery remains in the early innings with the exception of apartments. Expect the recovery to continue at an uneven pace as the economy struggles to stay out of recession.
Robert Bach
Senior Vice President, Chief Economist
Grubb & Ellis
Friday, October 7, 2011
Good News Friday
Whole Lotta Good News
There’s a lot to cover today, so let’s get started.
First, the September jobs report released this morning by the Bureau of Labor Statistics came in better than expected with payrolls expanding by 103,000 last month while July and August totals were revised higher by a combined 99,000. Government shed 34,000 jobs last month, and private sector employers added 137,000 led by professional and business services (+48,000), education and health services (+45,000) and information (+34,000), although the latter sector was inflated by the return of 45,000 striking Verizon workers to the labor force. Also worth noting: retailers added 13,600 jobs, suggesting they have an optimistic outlook for consumer spending. Other details: the unemployment rate was unchanged at 9.1 percent, average weekly hours rose 0.1 percent and average hourly earnings were up 4 cents. While the September report is good news compared with last month’s preliminary report that zero jobs were created in August, the labor market is still not growing fast enough to begin absorbing the nation’s long-term unemployed.
Secondly, the numbers for commercial real estate have been looking better than warranted by recent economic data. In our second quarter “Office Market Trends” report, we asked: “Was the surprising second quarter absorption a delayed response to the stronger economy earlier in the year, or could it be that businesses, especially large and profitable ones, are more willing to take on multi-year space commitments than the recent economic data would suggest?” Our preliminary third-quarter office data supports this thesis. Absorption last quarter totaled 13.6 million square feet, better than Q2 and in line with a normal office market recovery, and the vacancy rate fell by a healthy 40 basis points to 16.9 percent. (Our final numbers will be out next week.) We are seeing a similar trend in the industrial market (click here), and B of A Merrill Lynch analysts noted that same-store sales in their universe of retail REITs are stronger than the economic news would suggest (click here). Last month’s growth in jobs, hours worked and earnings should provide some support for consumer spending going into the holiday season.
Lastly, take a look at “Happy Talk,” economist Jeff Thredgold’s semi-annual report on the positive trends in the economy and society. You will come away with a renewed sense of why some recent polls have it wrong: your kids will be better off than you. (Thanks to Bill Jenkins at Thermo Fisher Scientific for passing this along.) Jeff also wrote “On the One Hand…”, the indispensable joke book for economists, containing gems such as: “An economist is someone who didn’t have enough personality to become an accountant.” Sad, but true.
Have a great weekend.
Best regards,
Bob
Robert Bach
SVP, Chief Economist
Grubb & Ellis
Tuesday, October 4, 2011
Zimmerman's October Listings:
Click on link below to download Ron's October listings of available industrial and land properties available for sale or lease:
Monday, September 26, 2011
Weekly Market Insight Update
Consumer Confidence
September 26, 2011
Under normal circumstances, consumer confidence surveys are not very informative. They do not correlate well with consumer spending because consumers respond to what is going on rather than driving it. But in the “new normal,” consumer and business confidence appears to be playing an unusually large role in the recent bout of economic and financial market weakness. The S&P 500 plunged sharply during the first several trading days in August when the debt ceiling standoff was coming to a head, and it has been extremely volatile since then. Likewise, consumer confidence plunged in July and August according to the Thomson Reuters/University of Michigan consumer sentiment survey, reaching a level just above the bottom registered in November 2008 when the financial crisis was in full bloom. Although the survey’s September reading rebounded slightly, the three-month moving average continues to point downward. Recessions can be triggered by rising inflation and interest rates, by a bursting market bubble, or by an exogenous event such as the Gulf War in 1990-91. Typically, falling consumer and business confidence is an effect of a recession, not a cause. But in the current environment, falling confidence – particularly in the ability of policymakers here and in Europe to deal with sovereign debt issues – appears to be causing the weakness. Most surveys of retail spending indicate that consumers have not yet given up and retreated into their bunkers despite falling confidence, which raises hope that the economy can skirt a recession. Commercial real estate, though a lagging indicator, is affected by the loss of confidence; tenants need to feel confident in the economic outlook in order to pull the trigger on a multi-year lease, and the same holds true for investors contemplating an acquisition with a multi-year holding period.Robert Bach
Senior Vice President, Chief Economist
Grubb & Ellis
Robert Bach, Senior Vice President, Chief Economist, has 30 years of professional experience in real estate market research, consulting and city planning. His commentary on the real estate markets is provided here on a weekly basis.
NEW LISTING
335 E. Fort Lowell Road, Tucson, AZ
REO office building for sale. Two story multi-tenant office building with excellent street visibility. Owner-user or investor opportunity!
View Listing Info | View & Print Brochure
Friday, September 23, 2011
GOOD NEWS FRIDAY!
The I’s Have It
The news has been so bad lately that my brother-in-arms, The Good News Economist, abandoned his post in February and hasn’t been heard from since. And the phone number for Boston’s “Good Newstand” has been disconnected, although I hope it’s still there. If things get any worse, I may disconnect my phone.
For this week’s good news, we escape the confines of the faltering U.S. economy and cast our gaze to Iceland, an early casualty of the 2008 financial crisis. Before the crisis, Iceland’s banks had grown to 10 times the size of the tiny country’s GDP by marketing aggressive interest rates to European savers. Unable to roll over short-term debt in the fall of 2008 and facing mammoth losses, the country’s three biggest banks collapsed and were nationalized by the government, which said it didn’t have enough to pay back the banks’ foreign depositors. But earlier this month, Iceland agreed to pay $11.4 billion from the estate of failed Landsbanki to cover all foreign depositor losses. After two tough years of contraction, Iceland’s economy is projected to grow 2.5 percent this year according to the IMF, outstripping the 1.6 percent forecast for the euro area.
While we’re on the letter “I,” there’s some good news in Ireland, too, where the yield on Irish 10-year government bonds fell sharply from above 14 percent in July to below 9 percent over the past month. The government’s measures to cut spending and increase revenues are restoring investor confidence in the country’s financial stability.
The experience of Iceland and Ireland suggests that countries dealing with banking and sovereign debt crises can put their houses back in order and regain the confidence of investors.
Have a great weekend.
Best regards,
Bob
Robert Bach
SVP, Chief Economist
Grubb & Ellis
312.698.6754
NEW LISTING
6,352 SF single tenant industrial space now available for lease.
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View Listing | View & Print Brochure
Thursday, September 15, 2011
NEW LISTING!
Space available for lease at 1601-1607 S. Pantano Road in the Eastpoint Business Plaza!
View Listing Info View & Print Brochure
View Listing Info View & Print Brochure
Tuesday, September 13, 2011
NEW LISTING!
5842 & 5850 S. Palo Verde
View Listing | View & Print Brochure
View Listing | View & Print Brochure
Formerly C & J Tire & Wheel. The property has three (3) main buildings consisting of one (1) modular office building, one (1) mixed construction office building with a masonry porch used as a show room and (1) masonry, metal warehouse with two grade level doors. The entire property is situated on an approximately 1.31 acres (57,049 square feet). Two tax parcels, one (1) consisting of 1.04 acres (45,199 square feet and one (1) .27 acre parcel consisting of 11,850 square feet.
Friday, September 9, 2011
NEW LISTING!
For Sale or Lease:
1940 & 1945 E. 1st Street, Tucson , Arizona
- 7,200 SF available
- Central Speedway/Campbell location
- Adjacent to the Four Points Sheraton and next to the University of Arizona
- Most recently used as a conference center
Thursday, September 8, 2011
Tuesday, September 6, 2011
SELLER'S MOTIVATED TO SELL IN 2011!
Beautiful office condo for sale in Oro Valley. Seller's are motivated to sell in 2011! The sale price has been reduced to $377,355. Currently occupied by a day spa.
View Listing | View & Print Brochure
Beautiful office condo for sale in Oro Valley. Seller's are motivated to sell in 2011! The sale price has been reduced to $377,355. Currently occupied by a day spa.
View Listing | View & Print Brochure
Wednesday, August 31, 2011
Wednesday, August 24, 2011
Monday, August 22, 2011
INDUSTRIAL INSIGHT
National Logistics Market
The national logistics market totals about 3 billion square feet and represents 25 percent of total industrial space tracked by Grubb & Ellis. Over the past 10 years, logistics has emerged as the institutional industrial space with the lowest cap rates, highest new deliveries and greatest net absorption among all industrial subtypes. Since 2005, this sector accounted for nearly 60 percent of all completions and 55 percent of total demand. Since the recession, logistics’ market share improved. While the national industrial market still has 44 million square feet to absorb before the prior peak of total occupied square feet is reached, logistics is already 52 million square feet in the black. Total market share for new completions also rose, totaling 74 percent over the past four quarters. Second Quarter Highlights
• Vacancy declined 60 basis points to 11.8 percent
• Demand totaled 18 million square feet, 59 percent of total
• New supply totaled 2.3 million square feet, 68 percent of total
• Rents were up 0.7 percent year-to-date and down just 0.6 percent year-over-year, the lowest annual decline since the beginning of the recession
Source: Grubb & Ellis Research
NEW LISTING
For Sale - 6 Bay Self Serve Car Wash
8033 E. Escalante
Other Car Wash Properties Available:
Wednesday, August 17, 2011
Industrial Trends Report - Mid Year 2011
Market Stabilizes As The Return of Demand Still In Question
Read more in the Mid Year Industrial Trends Report:
Southern Arizona’s Sci-Tech Engine Gets Boost from UARC
Bob Davis • published in the July 2011 issue
Southern Arizona, with Tucson as its core, is an emerging dynamo of science discovery and technology-focused, especially bio- and solar-based, enterprise. But whether the region begins to takeoff as an entrepreneurial generator or to once again fizzle from overheated good intention is still to be decided. And so, the region is on the precipice of serious stagnation or exciting expansion.What could make the difference between regional success and failure are the current activities and outcome for the initiative with the current name University of Arizona Research Corporation (UARC). It’s important to note that UARC is not just another attempt to fix the evidence of UA’s technology transfer to entrepreneurial based, as opposed to institutionally based, projects. Entrepreneurial projects and small businesses are like having the proverbial One Thousand Flowers Bloom—more companies with more jobs and a better economy for the entire region.
Entrepreneurial business for this science-technology-innovation sector depends for its advance not just on new knowledge for its contribution to the emerging economies of the region. Such business is also dependent on companies servicing these enterprises—banking and lending, personal and casualty insurance, commercial and business real estate, intellectual property and general business legal, but also personal services that make our region a vibrant and enjoyable place to live.
Significantly, new supply chain services will undoubtedly emerge, such as those seen with the arrival in the region of the internationally positioned, bio-based and solar-industry companies. All of these will be influenced by the outcome of the UARC initiative.
The prospect of streamlining commercialization of science applications and technologies, especially in bio-based enterprise and those developed at and with the University of Arizona, has those focused on economic development and global innovation in the region very excited and hopeful. These outcomes of the UARC initiative are likely to accelerate knowledge-based enterprise with consequence for all in the region.
UARC has broad and deep support, with recommendations from a range of specialty experts and consultants. The regional community should soon have the information to judge about the UARC initiative’s potential to be presented by a broadly-based committee comprised of a team of UA, technology, and business leaders led by the UA’s Dr. Leslie Tolbert. The recommendations of that team are in final preparation to UA leadership for presentation to the Arizona Board of Regents for its approval.
Also in preparation is a survey of regional investment, finance, insurance, real estate, and legal service businesses and activity, which is likely to reveal telling indicators. Questions posed by this private sector-sponsored survey include: looks at angel, venture, and grant investment activity level s, currently and compared with other time periods; and the levels of activity in the preparation of patents, copyrights and other intellectual property. In commercial real estate we have seen new, incoming projects of significance as well as expansion- relocations of current users, with the attendant increase of business for funders and other service providers, such as building services.
http://trendreportaz.com/
Office Trends Report - Mid Year 2011
Is Recovery Around the Corner?
Read the Mid Year Office Trends Report:
Tuesday, August 16, 2011
Weekly Market Insight Update
C&I Loans For Large & Medium Borrowers
Bank credit conditions loosened moderately between April and July according to the Federal Reserve’s quarterly Senior Loan Officer Opinion Survey on Bank Lending Practices. Of the domestic banks responding to the survey, 21.8 percent loosened standards for commercial and industrial loans to large and medium firms during the survey period, i.e. general business loans to firms with annual sales of $50 million and up. Twenty percent of banks reported stronger demand from large creditworthy borrowers. Smaller borrowers did not fare quite as well in the survey with 7.8 percent of domestic banks loosening standards and just 5.8 percent of banks reporting an increase in loan demand from smaller firms. These results are in line with other surveys showing that small businesses have had a more difficult time rebounding from the recession. A separate question in the survey asked about supply and demand conditions for commercial real estate loans, and the results were moderately encouraging with 5.5 percent of domestic banks loosening standards and 21.8 percent reporting stronger demand from creditworthy borrowers. Overall, debt capital is available from banks at favorable terms for both general business and commercial real estate loans. Banks are competing for good credits, which explains why terms have become more favorable for borrowers who qualify.
Robert Bach
Senior Vice President, Chief Economist
Grubb & Ellis
Robert Bach
Senior Vice President, Chief Economist
Grubb & Ellis
Monday, August 15, 2011
New Listing
For Sale or Lease
Check out Tari's new listing at 6501 E. Grant Road available for sale or lease.
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