Commercial Investment Real Estate

MAR-APR 2015

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.

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42 March | April | 2015 Commercial Investment Real Estate S O U T H W E S T Houston Industrial, YOY METRIC YE2014 YE2013 Net absorption 10.2 msf 7.4 msf Vacancy 4.8% 5.3% Rent $6.20 $5.96 New supply 8.7msf 8.0 msf Under construction 8.0 msf 4.4 msf Source: Colliers International REGIO NAL OUTLO O K W E S T Tech Drives LA Offi ce Demand Tech is the sector that won't stop. Af er claiming the northern California mar- kets, it is driving new of ce demand in Los Angeles, where companies that wouldn't have considered that location f ve years ago are moving in, accord- ing to Cushman & Wakef eld. Market fundamentals have surpassed pre- recession levels, with overall vacancy dropping to 16.1 percent in 4Q14, the lowest level since 2008. Leasing activity increased 5.5 percent YOY to 13.6 msf, the highest total since 2007. "Overall absorption of 3.8 msf exceeded gains from the past 14 years and of set the losses from both 2010 and 2011," reports C&W.; Á N O R T H Off-Target in Canada Target Corp.'s decision to close its 133 Canadian stores will return about 20 msf of retail space to the market along with about 4.8 msf of distribution space, according to the Toronto Star. Part of Target's problem? Bad locations. The company bought a number of leaseholds in older malls in second- ary and tertiary locations. Most of those malls will probably be forced to close, market watchers say, as other tenants suffer from the loss of Target's foot traffi c. Á Washington, D.C.'s Big Deal Washington, D.C.'s offi ce market got a fourth-quarter shot in the arm with the $392 million sale leaseback of PNC Place to TIAA-CREF and Norges Bank Investment Management from PNC Financial Services Group. The property sold for $1,075 psf, a record for the D.C. offi ce market, which totaled $1.6 billion in offi ce transactions for 4Q14, according to JLL, ending 2014 on a high note. The high-water mark was short-lived as Jamestown Properties purchased another D.C. offi ce trophy, America's Square, for $500 million or $1,083 psf in February. EAST Ä

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