Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.
Issue link: http://cire.epubxp.com/i/128835
REGIONAL OUTLOOK South Florida's Big Deals E A S T Ä SOUTH Capital Tremors M I D W E S T Á A New Kind of Big Box Demand for warehouse and distribution centers larger than 250,000 sf is driving the industrial market, and Chicago tops the list of top "big box" markets, with more than 200 million sf of product larger than 500,000 sf, according to Jones Lang LaSalle's U.S. Big Box Outlook. Emerging Midwest big box markets include Indianapolis, Memphis, Tenn., and Kansas City, Mo., due to location and a large stock of facilities 250,000 sf and larger. Phoenix and Houston also make the list as emerging big box markets. E-tailers such as Amazon are pushing the size of big boxes, with clear heights now reaching 36 feet for greater functionality. In addition, as labor-intensive operations, e-tailers require more parking spaces and other infrastructure upgrades. Unlike the speculative development in the 1990s and 2000s, developers today employ a more-cautious build-to-suit strategy to meet the specifc requirements of users. Ä Although at 10.6 percent, Washington, D.C.'s 4Q12 downtown ofce vacancy rate is almost two percentage points below the national CBD average of 12.4 percent, the nation's capital is now a tenant's market, with class A space leasing for close to class B rates, according to CBRE. Gross asking rental rates decreased 2.9 percent YOY. Conditions may favor tenants for a while: D.C.'s CBD has more than 5 msf available in 22 blocks larger than 100,000 sf, with another 3.5 msf breaking ground and under construction in the next two years. Suburban D.C. has more than 16 msf in 87 large blocks of space, with more than 3 msf under construction. Image Source Photography/Veer E A S T Industrial Asking Rents Largest year-over-year change in rents, 1Q13 42 Institutional buyers are dipping into smaller markets for strong retail assets: Iowa-based Principal Global Investors, along with Woolbright Development in Boca Raton, Fla., purchased the Pompano Marketplace in Pompano Beach, Fla., for around $30 million. The 239,200-sf, 90 percent leased grocery-anchored center sold for about $125 psf, making it the second largest retail sale of 2013. The largest deal was Heitman Capital Management's purchase of Miracle Marketplace in Coral Gables, Fla., for $92 million or $370 psf. Rent psf $6 5 4 3 2 1 0 YOY Change 6% 4 2 Baltimore Central New Jersey 0 Boston-Cambridge, Mass. Source: Cassidy Turley May | June | 2013 Commercial Investment Real Estate