LAS VEGAS, Aug. 4, 2016 – The second quarter of 2016 has seen strong and steady leasing activity, according to the Palmeri – Wainwright tenant representative team of Cushman & Wakefield/Commerce’s Las Vegas office. Due to Southern Nevada’s large-scale scale commercial real estate with easy access to logistics, flexible and competitive utility rates, and low workers’ compensation rates in a right-to-work state, Las Vegas has become an increasingly desirable place for businesses to relocate.
SEATTLE, August 17, 2016 – Cushman & Wakefield/Commerce released its second quarter Marketbeat Snapshot report detailing the Seattle and Puget Sound Eastside areas’ office markets. According to the reports, the commercial real estate office market continues to be in high demand. The Seattle-Bellevue-Tacoma unemployment rates increased from 4.8 percent in Q1 of 2016 to 5.2 percent. Despite the continuously increasing unemployment rate, employment actually continued to grow as a result of the high return to the workforce, pushing the labor participation rate higher.
BOISE, IDAHO, Aug. 23, 2016 – According to Cushman & Wakefield/Commerce’s 2016 Mid-Year report, Treasure Valley’s office, retail and industrial markets were in extreme high demand. Each market saw a decrease in vacancy and demand was far out pacing supply for quality product. The Boise economy continued to perform well, reflecting a strong commercial real estate market.
The U.S. economy added 280,000 jobs in May, continuing the bounce back from the first quarter slowdown. Since the end of 2014, the economy has added 1.1 million jobs.
Importantly, there are signs of emerging shortages of workers which are starting to put upward pressure on wages. Faster wage growth is expected be an important contributor to economic growth in 2015.
U.S. retail sales for April, 2015 were estimated to have been unchanged from March and down 1.1% from the level reached in November, 2014. However, an important reason for this decline was the drop in gasoline prices. If we adjust for changes in gasoline and other prices, retail sales are actually up about 1.0%. consumer spending is not booming, but it’s also not as weak as the reported data suggest.
Cushman & Wakefield’s 2015-2017 US Overview & Forecast is now available. The U.S. office market ended 2014 on solid footing and is poised for even stronger growth through 2017. The economic environment over the next three years will be the best for the office real estate sector in more than a decade. The combination of rising employment and total income, strong consumer spending and business investment growth will likely lead to strong demand across all property types. Although the occupier trend toward efficiencies is expected to continue, with fewer square footage allocated per employee, job growth will be strong enough to drive down vacancies.
The consumer is the most important contributor to the U.S. economy, currently accounting for approximately 68% of GDP. In the first quarter of 2015 severe winter weather caused consumer spending to slow. However, high confidence, rising incomes and low oil prices are expected to lead to stronger consumer spending in the second quarter and beyond.
Although wage growth has lagged in the current economic expansion, there are reasons to expect that this will change in the near future. Companies are looking to hire more people than at any time in the past 14 years and the numbers of unemployed continue to drop. This should lead to faster wage growth in 2015 and driving increased demand for real estate.
Cushman & Wakefield’s International Investment Atlas 2015 report has been prepared to provide an overview of the world’s key commercial real estate investment markets in 2014 and an indication of performance in 2015.
-Global investment volumes fell 6.3% or $1.2 tn in 2014, the first fall in 5 years.
-The decline however was solely due to a fall in land sales in China and most markets saw strong demand.
-The US overtook China to be the largest city target for foreign investors, but Paris closed the gap with very strong growth in 2014.
-A focus on core markets remains but interest in tier 2 stock and locations has increased.
-Cross boarder investors raised their share of trading to 20%.
-North America is the largest global investor by some margin but 7 of the top 20 capital sources are now Asian.
KEY TAKE AWAY
An improving job market is one of the driving forces behind a rebound in American consumer confidence, but perhaps the biggest current factor in the consumer confidence boost is the declining price of gas. The pace of job growth accelerated notably in 2014 and the country capped its strongest year for job creation since 1999, while across the country retail prices for regular grade gasoline reached the lowest levels in four years. U.S. GDP growth is expected to accelerate to at least 3.3% in 2015, and possibly higher, as rising consumer and business confidence leads to faster employment and income growth and stronger increases in spending.
As the year comes to a close, it provides a chance to look back on what we learned last year and look ahead to what the events of 2014 might tell us about 2015. So this week we will do a modified top 10 list consisting of the top five surprises of 2014 and the top five expectations for 2015.
Anyone in the forecasting business knows that almost as soon as a projection has been made, something will happen to change the environment. Such was the case in 2014 when there were several unexpected events, and some expected events that did not take place.
How can companies win the war for millennial talent?
Millennials already make up almost 40% of the workforce and are on pace to hit 75% by 2025, leading business leaders across all industries to ask: “How do we win the war for millennial talent?”
Addressing these concerns, C&W Global Business consulting recently released a research report tackling what it takes to attract, engage, and retain millennials, including insights on how they approach the employee experience and view real estate and facilities. The best organizations will be proactive in addressing these changes, crafting workplace and location strategies designed for consumers of space, not users of space.
With the U.S. Thanksgiving holiday this week, it’s a great time to look back over the past year from an economic and real estate perspective to focus on five reasons to be thankful.
-The U.S. is the largest, strongest, most dynamic economy in the world
-The U.S. real estate market is in the sweet spot
-The Millennials’ dynamic impulse
-Energy and technology are driving employment, the economy and real estate markets
American consumers have not increased spending in the current expansion as rapidly as in previous economic upturns. But that appears likely to change in the coming year. A combination of tighter labor markets, which should lead to higher wages, rising employment, and increasing optimism are expected to lead to growth in consumer spending at the fastest pace of the recovery so far. The year 2015 should be the year of the consumer.
Cushman & Wakefield Research has released its 2015-2016 Global Office Forecast. The report tracks current and anticipated Class A office market trends in The Americas, Asia Pacific and Europe.
From a global perspective, 2014 was a stronger year for the office real estate sector, with many markets heading into 2015 on solid footing. Of course, some markets in or near areas of political instability and those with stalled economic growth continue to struggle; but overall, things are in better shape than they were 12 months ago.
The U.S. economy has shifted to a higher growth trajectory over the past year. Recently released economic reports suggest that this stronger growth will be sustained in 2015, which we expect to be the best year for the U.S. economy since 2004. Commercial real estate markets across the country are beginning to reflect this improving environment and we expect the coming year to see healthy performances across all property types. We are now in the sweet spot in the commercial real estate cycle.
There can be no doubt that sustainable real estate practices have become commonplace for any occupier that leases, owns, or operates corporate facilities. While the emphasis placed on sustainability varies by organization, and is often tied to larger enterprise goals and objectives, a discussion about corporate social responsibility (CSR) takes place with almost every occupancy decision made today. Businesses large and small realize the benefits of being “Green.” They know that reducing energy use can translate into real cost savings and projecting an environmentally responsible image enhances their brand. But, how are today’s corporations approaching sustainability from an organizational perspective? And, how is being “green” impacting their business and real estate policies?
The last time the Federal Reserve made any change to its interest rate policy was in late 2008 when the central bank dropped the federal funds rate to a record low. Now, six years later, the Fed has set the stage for higher interest rates. It is likely that the Fed will begin to raise interest rates during the first half of 2015. The timing and extent of the interest rate increases will depend on how the economy performs over the next several months.
Anxiety about consumer spending is misplaced. Revised retail sales data indicate that consumer spending in the U.S. is rising steadily. Although there are some concerns about the ability of consumers to increase spending because of slow wage growth, several indicators suggest wage growth is about to accelerate. As a result, we remain confident that consumers will continue to increase spending at a healthy clip, which will boost the need for both retail and industrial space in the coming year.
Several major indicators were released this week and they all indicate that the U.S. economy has shifted into high gear. That’s great news for the commercial real estate sector as more employment and stronger consumer demand will lead to greater demand for all forms of commercial real estate. Strong momentum going into the second half of the year is expected.
The shift to a stronger growth trajectory for the U.S. economy will be driven by rising business confidence. As U.S. businesses shift from defense to offense they are taking more risks and increasing hiring. This is expected to boost economic growth sharply in the second half of 2014 and in 2015.
After five years of tepid growth, the U.S. economy is finally busting out. The next year and a half or so should be the strongest of the expansion so far. The key is business confidence, which is setting post-recession highs. The result will be the best environment for commercial real estate leasing markets since 2006/2007.
New report available from CIS. Do the business opportunities in emerging markets outweigh the increasing risks?
As John Santora, President & CEO of CIS, points out that today’s emerging markets present enormous opportunities for both Occupiers and Investors, yet they also come with significant business, political, and security risks.
Ray Kelly, President of Risk Management Services, highlights the need for companies to have adequate security plans that address their physical assets and employees.
The U.S. economy added 288,000 jobs in June, making it the fifth consecutive month that employment growth has exceeded 200,000. This marks the first time since 1999-2000 that the U.S. economy has generated such sustained strong job growth. The economy has entered a new stronger growth phase that will likely last through 2014 and into 2015. For the first time in this recovery, the U.S. economy is running on all cylinders. This is great news for the commercial real estate sector.
WAITING ON SPENDING
One of the biggest disappointments thus far in the economic recovery has been the reluctance of consumers to open up their wallets. Consumer spending accounts for roughly two-thirds of the demand in the U.S. and it has increased at the slowest pace of any recovery. After nearly 5 years of expansion, consumer spending has increased only 2.2% per year, slightly more than half of the 3.9% average gain in the four previous economic recoveries. Three economic reports this week highlighted the impact of consumers, as well as the vulnerability of the current economic expansion and, at the same time, its potential.
Does the war for talent top your agenda?
There is a constant buzz around the war for talent. Today’s leading corporations compete fiercely for professionals who can produce new and innovative ideas and create a competitive edge. Now more than ever, real estate has a role in assisting the corporate enterprise with recruiting, retaining, and engaging talented labor. Whether through workplace designs that help foster collaboration, amenities that enhance work/life balance, or locations that draw the right professional demographics, real estate’s role in the talent war is increasingly important.
The effect the credit crisis and global recession has had on shopping center development has been apparent across the world. There can be absolutely no doubts now that the retail development landscape has changed to varying degrees depending on geography over the last few years. This is not likely to alter significantly in the near future as shopping center owners and developers grapple with the challenges of integrating an increasingly competitive virtual world, where technology is driving a structural change in the retail market and how shoppers want to shop.
As online retail sales in the U.S. have been on the rise for the past 15 years, online retailers have opened more and in many cases, larger distribution and fulfillment centers around the country. In terms of square feet occupied, E-commerce related tenants have seen their footprints grow at a brisk rate in recent years. In the top U.S. industrial markets, we’ve seen E-commerce firms account for approximately 24% of activity (leases 200,000 sf+) during the last three years.
There is a strong correlation between U.S. retail sales and U.S. industrial leasing activity. Retail sales continued to rise for the fourth straight year and the wider economy continues to improve. The consumer confidence index ended 2013 at 78.1 – the strongest year-end reading since 2007. As the retail sector, including ecommerce, expands, demand for distribution space and large fulfillment centers rises.
This edition of “3 Things to Know” touches on manufacturing location trends as moving production to countries with cheaper labor is no longer a given and “right shoring” involves the consideration of several variables.
Industrial Research MarketNote: The U.S. industrial real estate market marked its strongest performance since 2005
C&W Industrial Fact: Overall Net Absorption vs Warehousing/Storage Employment
Demand for suburban office space in Salt Lake City maintained momentum in third quarter 2013, as vacancy declined 90 basis points over the past year to 17.1 percent, and rental rates grew by 0.2 percent. CBD office rental rates increased 0.9 percent over the same period of time, although downtown vacancy increased by 1.2 percentage points on an annual basis to reach 18.0 percent. The Salt Lake City economy is growing at a robust rate, which suggests steady growth in the region’s Office and Industrial markets in the coming years.
One consequence of the government shutdown has been the delayed release of data. Most notably absent are the state and local employment numbers. At the state and local level, jobs gained (or lost) are the most common series used to represent the current state of the economy. Now that we lack that information, what other indicators can we turn to?
Below is a link to the Top 100 North America Infrastructure Project list, a report by CG/LA Infrastructure, a Washington-based consulting firm. The total estimated value of these projects, which are predominantly located in the U.S., is $435.7 billion and would add 1% to the national GDP each year from 2015 through 2020.
· The consultant ranked the projects by what they provide in terms of business opportunity, competitiveness, productivity, job creation and carbon efficiency.
· Several of the 100 projects that could enhance shippers’ ability to move freight through North America and connect to global markets are highlighted.
The U.S. economy continues to improve steadily. Although gross domestic product (GDP) growth has lagged, employment is increasing at a faster pace than a year ago and consumer demand is holding up surprisingly well. The key to stronger growth will be higher levels of confidence in the business sector. Once businesses are more confident, investment spending will accelerate, as will hiring, and the economy will accelerate from today’s 1.5% to 2.0% GDP growth rate to around 3.0% to 3.5%.
The key to improving that confidence is likely to be the resolution of the second part of the “fiscal cliff” in the October/November time frame. If Congress and the Administration can put the U.S. on a more sustainable deficit trajectory, or at the very least provide some clarity about tax and spending policy, it will go a long way toward improving confidence and spending by businesses.
CUSHMAN & WAKEFIELD IS PLEASED TO PRESENT 2nd QUARTER 2013 GLOBAL MARKETBEAT REPORTS
C&W’s Global MarketBeat interactive map, featuring local market data for the various commercial real estate sectors.
How are properties valued by the assessor?
Which properties are the best candidates for appeal?
What is the success rate for properties appealed?
What is the cost to appeal?
FIND OUT MORE:
CUSHMAN & WAKEFIELD IS PLEASED TO PRESENT 1st QUARTER 2013 GLOBAL MARKETBEAT REPORTS
The link below walks you through a brief flash introduction followed by a global map where you can download the latest MarketBeat reports from markets around the globe.
City Creek’s Clout: Clothing sales are leading the retail recovery. Overall retail sales are up about 7 percent, but clothing sales, which includes clothing, jewelery, luggage, leather and shoe stores, were up 20 percent statewide, 33 percent in Salt Lake County and 89 percent in Salt Lake City. Clothing sales in the third quarter in Salt Lake City were up more than $40 million. This remarkable gain is a combination of the strength of retail clothing and City Creek Center, which opened in March 2012. Clothing stores dominate City Creek Center and these stores have attracted shoppers from throughout the Wasatch Front.Read the Entire Report
SALT LAKE CITY OFFICE REPORT: The overall direct combined vacancy rate for all property types in the Salt Lake City Metro Office Market stands at 14.86%, an increase of more than one percentage point from year-end 2011.Read Q2 Salt Lake City Office Report
SALT LAKE CITY INDUSTRIAL REPORT: The overall vacancy rate has remained relatively flat, now sitting at 9.05%. We have about a two year supply of inventory in the 10 million square feet total of Salt Lake County industrial vacant space which is typical in this part of the market cycle. Read Q2 Salt Lake City Industrial Report
SALT LAKE CITY RETAIL REPORT: Discount retailers are hot, the expansion plans of retailers like Ross, Marshal’s, TJ Maxx, Jo-Ann Fabrics, Shoe Carnival and Rue 21 has been very aggressive over the past 6 months. Read Q2 Salt Lake City Retail Report
SALT LAKE CITY INVESTMENT REPORT: Year-over-year the investment market experienced an increase in sales activity/volume for all segments as follows: Apartments: 140%, Office: 80%, Industrial: 33%, Retail: 9%. Read Q2 Salt Lake City Investment Report
DAVIS COUNTY REPORT: Office vacancy rates are on the rise in Davis County, especially in North Davis County where the Falcon Hill development is taking shape. The industrial segment remains strong with an overall vacancy rate of 6.28%. Over the past year the retail vacancy rate has gone from 11.75% to 10.52%. Read Q2 Davis County Report
WEBER COUNTY REPORT: The overall office vacancy rate has declined significantly from the same period last year, with the largest absorption occurring in Class A type buildings. Although there has been a slight increase in industrial vacancy rates from the same period last year, the industrial market has been vibrant. Read Q2 Weber County Report
UTAH COUNTY REPORT: Industrial vacancy is at it’s lowest point in years and users are now more willing to buy land and start building their own projects. Retail market activity is slower than desired but new construction projects and vacancy rates show promise. Office landlords continue to offer low rates and concessions to curb vacancy, however there are signs of improvement. Read Q2 Utah County Report
WASHINGTON COUNTY REPORT: The office market showed signs of improvement in the first half of 2012. The industrial market has continued to see strong interest and absorption. Retail vacancy rates have fallen almost a full percentage point from 9.01% to 8.03%. Read Q2 Washington County Report
SUMMIT COUNTY REPORT: The market-wide office vacancy rate has decreased by 2.7% from the 2011 year-end report. Absorption in the first half of 2012 has reduced vacancy rates in office and industrial properties. The Main Street Historic District retail market remains strong, as indicated by low vacancy, estimated 5.0%. Read Q2 Summit County Report