MARKE T
TREND S
Retail Vacancy 3Q12
Select secondary markets
Market Vacancy (%)
Rent Growth (%)
Columbus, Ohio
8.9
Denver
7.0
0.5
0.6
Raleigh-Durham, N.C.
9.7
0.3
Philadelphia
9.7
0.7
Orange County, Calif. 5.6
6
—1Q12 PwC Real Estate Investor Survey
0.4
0
"The offering of free rent
is common in the national
secondary office market
with just over 90 percent
of surveyed investors using
free rent in their cash flow
forecasts. Free rent ranges
from one to 12 months on a
10-year lease and averages
7.9 months."
2
4
8
10
Source: Cassidy Turley
Briefly
Noted
Hospitality — Slower economic growth, weaker 3Q12 fundamentals, and
Superstorm Sandy led PwC to lower its revenue per available room expectations for
the 2012 and 2013 lodging sector. Prior to October 2012, RevPAR was growing at 7.5
percent; PwC now expects an increase of 6.6 percent in 2012 and 5.4 percent in 2013.
Industrial — "The industrial sector is where the apartment sector was two years ago," for
international gateway cities and distribution hubs, says a contributor to the Emerging Trends
in Real Estate 2013 Survey. Large-scale users in those markets are vying for specialized and
build-to-suit space.
Multifamily — The Freddie Mac Multifamily Research Group predicts 1.7 million new multifamily renters between 2012 and 2015 if today's slow recovery continues, and 1.6 million if
there is no recovery. In an accelerated recovery, a rebounding housing market will siphon off
some renters but still add 1.0 million additional renters in the market.
ment growth outpaced overall employment growth during the past year, attracting a return of
capital and a subsequent rise in pricing," reports CoStar's Commercial Repeat-Sale Indices.
Investors looking for alternatives to high-priced multifamily properties are also pushing up
office pricing.
Retail — "The stage is set for a much stronger rebound in the retail sector," says Cassidy
Turley economist Kevin Thorpe, who notes that consumers' debt service ratio looks as healthy
as it did in 1993. Net demand for community and neighborhood center retail space ended
2012 at 15 msf, easily the strongest year in the recovery, Thorpe notes.
8
January | February | 2013
Commercial Investment Real Estate
Jeff Gardner/Getty Images
Office — "The Office Index was up by 6.5 percent over year-ago levels as office-using employ-