Systematic Risk  

The commercial real estate market is subject to general economic trends that can adversely influence prices. National-level economic activity has a direct impact on the CRE market, from GDP growth to changes in inflation.  

For example, a recession that prompts the closure of businesses and higher unemployment rates can lead to delayed rent collections and higher vacancies due to lost tenants. A sudden surge in inflation may increase operational costs and diminish returns on previously signed leases, especially in the case of long-term contracts. Furthermore, borrowers holding mortgages with floating interest rates can face increasingly expensive payments and higher refinancing costs if interest rates rise. 

Location Risk  

Individual market shifts have a significant impact on local property value. On a broad level, declines in demographic growth and local GDP lead to the depreciation of assets in affected submarkets.  

Moreover, changes in local government and economic development plans directly affect public goods and services. For example, planned infrastructure projects such as train lines, motorways or retail centers have a positive impact on property prices within the project areas but negatively affect assets in less developed regions.  

However, new infrastructure can lower asset value in time through oversupply. Planned improvements may lead to an acceleration in the development of new stock and increased competition. Changes in the composition of the supply can also impact a property’s desirability — such is the case when a new high-rise is erected in front of a building that previously boasted spectacular views, lowering demand for the older property. Assets in highly coveted areas require greater consideration in terms of property-level risks such as building quality, construction and improvement costs.  

Asset Risk  

A significant portion of CRE risks is shared by every property in a particular asset class. These types of risks have become more apparent during the COVID-19 pandemic, when demand for office spaces dropped, vacancies surged and office listing rates stagnated or decreased on a national level. At the same time, the pandemic prompted a shift in office market fundamentals, as a portion of tenants have begun searching for flex space, more diverse amenity offerings or decentralized offices. Demand for retail space was also affected by pandemic restrictions, with tenants in the sector searching for shorter-term leases.  

Of course, evaluating risk by asset type was a fundamental step in investment strategy prior to the pandemic. A telling example would be the migration of the U.S. manufacturing sector to less expensive markets in foreign countries and the subsequent decline in demand for this type of industrial space.  

Diversified portfolios are significantly less prone to asset (and liquidity) risk than concentrated investment strategies but are also more likely to reflect, and be affected by, overall market conditions, as well as requiring enhanced oversight and more costly intelligence across multiple markets. Concentrated portfolios can have higher return rates with strategic investments and full operational focus on key high-quality assets.  

Property Risk 

While risks related to economic trends can only be managed through wider business strategies and due diligence, most property-level risks are under the direct control of the investor. Due diligence at the property level is a pivotal step in ensuring invested returns and cash flows match projections, especially in the case of large portfolio transactions that involve multiple assets.  

• Replacement and improvement risks relate to construction required to redevelop, upgrade or repair a specific property to ensure its condition is at market standards. These considerations are especially important in the assessment of older buildings in high-demand areas, where properties can become obsolete at a more rapid pace. Replacement risk must consider whether lease rates can justify future construction costs, to ensure properties maintain their condition relative to the market even if new buildings are delivered in the area. 
• Downtime risk refers to any factor that can hinder planned revenue collections. From expanding construction timelines to expiring long-term leases, a number of issues can lead to temporarily increased vacancies, which negatively impact projected returns.  
• Liquidity risk is also highly relevant in the CRE market, as real estate is a particularly illiquid asset that cannot be sold immediately at market value. Exit investment strategies should be considered at the same time as the building due diligence process, since the degree of illiquidity depends on a property’s location, quality, asset type and the length of deal cycles in the market and asset class.  
• At the property level, environmental risk refers to land use and environmental regulations for the location of an asset and issues such as the presence of asbestos, lead-based paints and groundwater or soil contamination. 

Tenant Risk  

To ensure projected returns for leased assets, properties should be leased to the tenants most likely to abide by lease agreements. In this respect, credit risks depend on the composition of a tenant base as well as individual tenants and their lease agreements.  

As a property’s value is directly related to length of leases and tenants’ ability to pay their rents, careful evaluation of in-place tenants’ finances becomes paramount in risk mitigation. Properties that are occupied by national firms with long-term leases pose the lowest risk in terms of tenant credit, while smaller businesses and short-term leases will most often impact market value negatively.  

The type of lease is also considered, as certain types of agreements transfer a higher share of property risks to tenants. Such is the case of assets occupied by tenants with triple net leases, which have become increasingly desirable due to their perceived safety. Triple net leases transfer property expenses such as insurance, taxes and maintenance to the tenant, in exchange for lowered rental rates.  

Furthermore, assessing credit risk requires an added layer of market research, which pertains to the business sectors of potential tenants. For example, product-oriented businesses operating within physical spaces pose a greater risk than service-based companies.  

Management Risk 

Management risks refer both to the management of deals and the management of assets acquired through these deals.  

High leverage risk 

Leverage, or gearing, involves the use of debt financing to structure large-scale deals, which would have otherwise been inaccessible. While leverage allows investors to acquire assets with a smaller initial commitment, excessive debt can adversely impact income if inflation drops and prices decrease. Still, this type of risk has been greatly reduced following the Great Recession and is particularly uncommon in commercial real estate, when regulated lenders tend to be more conservative with their underwriting.  

Deficient market analysis 

Valuation risk refers to the due diligence process that assesses a property’s value against the local market. Reducing this type of risk involves looking at granular data such as: 

• Localized supply and demand for space 
• Leasing rates and lease spreads   
• Vacancies  
• Construction pipelines  
• Highest and best use reviews  

One of the most important steps in the due diligence process is the evaluation of the capitalization rate (cap rate). Cap rates, which represent an asset’s unlevered return, reflect a property’s value through comparison to similar deals closed in the market. Acquiring properties at low cap rates most often happens when interest rates are low and capital is easily available. These conditions can lead investors to purchase high-quality assets at higher prices (and often with higher leverage) to strengthen their fundamentals — which essentially bets on a prolonged market expansion.  

Pressure to invest idle capital 

The need to invest unused capital is another type of CRE risk, which most often happens during times of economic growth. An abundance of cash can artificially create pressure to maximize returns through fast investments, particularly in the case of large funds that need to justify asset management fees. Deal cycles shortened under these conditions can be plagued by hasty due diligence regarding all risk categories.  

Regulatory risk  

Changes in legislation are the most difficult risk to mitigate as they fall outside the control of the property owner. Additionally, the many levels of regulation involved (local, state and country-level) can make it difficult to assess impact on an ongoing basis. Legislation involving zoning, building codes, taxes, access and environmental impact can change quickly and decisively, so owners need to stay ahead by developing their local network and attending local council meetings. Furthermore, the regulation of financial institutions that have high CRE concentrations can lead to increases in interest rates if financers are required to reduce their CRE loans.  

Inadequate property management  

Last but not least, poor management of an acquired asset represents a freestanding risk beyond the dealmaking process. Inadequate management can easily lead to lower valuations and high operational costs — whether due to improper income and operational oversight or higher vacancies resulting from strained tenant relationships. 

Overall, commercial real estate acquisitions require rigorous, granular risk assessments, which are achievable only through strategic due diligence processes and complex economic analyses — particularly during times of market volatility.  

The post Key Factors to Consider in Commercial Real Estate Risk Management Plans   appeared first on CommercialEdge.

From writing high-conversion copy to capturing the perfect visual elements and ranking higher in search engines, here’s the complete guide to creating commercial real estate (CRE) listings that convert. 

Provide Valuable Information  

Buyers, tenants and reps have clear outlines for their needs, so include detailed, accurate specifications in all your commercial listings. Unlike residential prospects, those seeking commercial spaces will first check property and space characteristics before reading through the rest of the page, starting with a brief assessment of whether the space fits their core needs.  

To ensure these key specifications are easy to parse, list them in the dedicated info boxes rather than the listing description. Of course, if the platform you’re using is missing data points you think are essential in the early stage of decision-making, use the blurb to fill in the gaps. 

Essential information 

Some marketing experts argue that you should keep a few details gated to acquire more leads, but the aspects above are vital to ensuring you connect with quality prospects who have a high chance of converting. 

Services, amenities and highlights  

In today’s competitive market, commercial listings should highlight every benefit a tenant might want or need. List all the amenities and services available, from basics such as internet connectivity and meeting rooms to more substantial benefits such as wellness rooms, day care centers or private outdoor spaces.   

Furthermore, consider adding a section dedicated to building highlights in your website listing format. Some marketplaces already offer this option (including those in the CommercialEdge Listing Network) because they’re a highly efficient means of showcasing the best features of a space memorably. People read and remember bullets faster and more easily than they do blocks of text, so use this is an opportunity to highlight features such as:   

Enhanced contact details  

Besides including your name, firm, phone number and any relevant email addresses, add a well-lit headshot to your profile whenever you’re given the option. Prospects are more likely to communicate openly and warmly if they can put a face to the person. Even if you don’t have a professional headshot, you can go a long way with just your phone and an internet search for amateur portrait photography.   

Showcase Properties With Enhanced Visuals   

Visuals that convert leads not only offer information but tell a story. A remarkable CRE listing requires high-quality, descriptive imagery that expertly communicates the unique value of a property. 

Upgrade your photography   

Investing in professional photography should be at the top of your priority list when it comes to expenses. However, if you’re short on time or budget, showcasing a space through outstanding visual elements is achievable if you keep in mind a few key details. 

Regardless of the situation, make sure you cover all the aspects of a space and upload high-resolution images. You’ll need several wide presentation shots of the outside of the building and its location, as well as diversely angled pictures of most of the indoor spaces.  

When it comes to the photos themselves, consider these universal rules to pinpoint the proper context and elements to include in your listing: 

• Pick the best light and time of day: Take the time to visit the building and space at different times during the day to see when the light highlights its best features. You might discover that a particular time of day is best for outdoor shots, and another is well-suited for indoor photos.   
• Stage both outdoor and indoor spaces: Staging is just as necessary in commercial real estate as in residential, so cleaning and decluttering are vital. For example, rearranging furniture or bringing in a few pieces can make a world of difference for office photography. At the same time, outdoor photos shouldn’t include cars, out-of-place items (such as food stands or maintenance equipment) or crowds in front of the building.  

Won’t be using a professional service? These easy tips and tricks will elevate your photography instantly: 

• Be mindful of green spaces and seasonality: Outdoor photos will look better on a bright day and if they include some vegetation. Furthermore, if you have to take photos during the winter months, replace them as soon as possible with ones taken during warmer seasons.   
• Let vertical lines guide you: Framing can be challenging when a property’s size and location make it difficult to find the perfect angle. A good rule of thumb is identifying the central vertical lines in the composition and ensuring they’re straight and parallel.   
• Use the rule of thirds: This age-old rule is a boon for amateur photographers, especially when it comes to indoor shots. First, divide the frame into nine equal zones using horizontal and vertical lines that will form your grid — most smartphones and all digital cameras provide this setting. Then, place your subject in the left or right third of an image, ideally opposite the light source.  

Invest in video and new technology  

While classical photography is the bread and butter of listing visuals, new tools and technology will give you a competitive edge in a rapidly digitalizing industry.   

Video walkthroughs bring in results for a reason. The medium is engaging, enabling you to showcase a space more realistically, dynamically and in the order you want. You can guide the prospects through the most impressive features of the property from a distance and craft a narrative you want prospects to remember. Remember to keep videos short and to the point.  

The same is true for 3D virtual tours, which allow prospects to see the space for themselves. Of course, you won’t have as much control over how they view it, but this powerful tool will enable people to explore spaces at their leisure and control what they focus on. Prospects will be more likely to book a tour if they’ve already seen a property’s best features through an immersive experience. 

Furthermore, drone technology will elevate your outdoor photography and videography alike. The benefits are clear: dynamic content, more details, a broader location context, a wealth of opportunities for flattering angles.  

Include floor plans and maps   

Last but not least, just as you include space specifications, ensure you also cover the essentials in terms of information:   

• Floor plans help prospects visualize the space differently from videos or photos. While this step may seem outdated, floor plans allow prospects to see how the space flows, how they can repurpose it to their own needs and how it can grow.   
• Interactive maps offer the same benefits on a neighborhood level. Most listing platforms have built-in, listing-level interactive maps that pinpoint surrounding businesses, amenities and neighborhood landmarks. If you don’t already have this feature on your website as well, consider implementing it to showcase the location.   

Write an Attention-Grabbing Description   

A high-performing listing needs a compelling description. If they’ve gotten to this stage, buyers and tenants have already determined that the property or space meets their core criteria, so this is your opportunity to turn them into leads.  

Find your unique value proposition  

Listing benefits is vital, but a memorable listing also needs a main selling point that ties everything together. The first step in writing a great description is finding an angle that generates interest and tells the story of the space. This unique value proposition should act as a building block for the rest of the description, so consider any outstanding features, including:  

• Does the building have a captivating history or unique architecture?   
• Are there any well-known tenants in the building?   
• Are there premium or uncommon amenities available?   
• Is there something special about the location or layout?   

Essentially, this is your chance to differentiate your listing and direct attention to its best features.   

Of course, for a unique selling proposition to work, you need to tailor it to your audience. You can create a lean buyer persona by identifying your ideal client segment and researching their traits and preferences. Consider the types of properties they choose and their needs and nice-to-haves.  

At the same time, learn from your competition. Find similar spaces listed by firms and brokers you know are successful and see how they position listings for your audience.   

Choose your words carefully  

Regardless of their background and profession, people prefer stories over information. Listing descriptions should help prospects connect with a space, so present it in a narrative rather than informative manner and use active language.  

To make a description attractive without overselling, leverage powerful adjectives and verbs while avoiding cliches. Achieving an impactful writing style without overwhelming prospects can take some work, but there are plenty of tools that can help. Thesaurus websites are your best friend when it comes to finding new ways to describe typical highlights. At the same time, text editing solutions (such as Grammarly) will notify you when you’re in danger of overusing phrases or words.

Mind the syntax and punctuation   

A noteworthy CRE listing should generate enthusiasm while being easy to read — and punctuation plays an integral part in both.   

First, make sure you use punctuation, especially to break up long paragraphs. At the same time, use short, snappy sentences are easier to read and have greater impact. Each sentence should make a clear point as succinctly as possible.   

On the other end of the spectrum, use exclamation marks sparingly. A few exclamation marks sprinkled through the description text instill a healthy sense of eagerness. However, going overboard with them will seem unprofessional and tire the reader. Balance out intensity throughout the text.  

Again, text editing apps can be invaluable in creating attractive descriptions. They’ll tell you when you need to break up a sentence, as well as when you’ve added too much or too little punctuation.  

Skip the basics   

All listing sites include one or several info boxes where you can reveal detailed property and space information, so use the description area to sell rather than provide facts and figures. The square footage, availability and contact information are all critical, but unless there’s something special about a particular bit of information, keep it out of the description. Instead, focus on differentiating factors.   

Leverage SEO and Diverse Distribution Channels   

Once you have gathered all the elements of an exceptional listing, it’s time to tie it all together and spread the message. Besides the paid advertisements managed by marketers, you can have a direct impact on lead generation through two simple strategies.  

Optimize your listing for search engines  

Search engine optimization (SEO) makes it easier for leads to find your spaces. Perform keyword research to identify important terms for the headline. Start by putting yourself in the prospect’s shoes. For example, if you were looking for creative office space in Phoenix, you would include the name of the city and the type of space.   

Then use a tool such as SEMRush or Ahrefs to search for related keywords. Don’t get discouraged by the technical aspects; these solutions come with easy-to-understand user guides.   

If you want to leave the search engine marketing to the experts, you can contract a third-party service specialized in commercial real estate, such as CommercialEdge Marketing. We offer a full-service marketing stack that includes bespoke property websites that are both SEO- and conversion-optimized.  

Centralize your listings and syndication  

Finally, list your spaces on the top marketplaces! Of course, it can be daunting to manage listings across scattered platforms, so consider opting for a specialized CRE solution that you can use to advertise across the web.   

With CommercialEdge, you can leverage an expansive distribution network and centralize your listings in one place. Our free-to-use marketing platform empowers you to:  

• List spaces individually and in bulk with just a few clicks.  
• Publish spaces automatically to the entire CommercialEdge Listing Network  
• List to CommercialSearch, CommercialCafe, PropertyShark, 42Floors and Point2 Commercial with the push of a button.   
• These five top marketplaces rank on the first page of Google and bring in more than 300K yearly verified leads, growing by 540% over the past year.  
• Syndicate to the largest commercial marketplaces and your own website with ease. There is no need to duplicate listings if you want to extend your presence to third-party listing sites — you can manage all your listings from a single platform.   

Conclusions 

To sum it up, remarkable commercial real estate listings rely on quality information, professional photography and enhanced copywriting. To convert more quality prospects: 

• Provide detailed specifications regarding the property, services and amenities so prospects can qualify the space easily. 
• Present spaces with comprehensive, high-quality photography and leverage new touring technology. 
• Write purposeful descriptions by identifying unique value propositions and creating cohesive narratives.  
• Leverage SEO and listing networks to enhance your exposure and boost your leads.  

The post The Complete Guide to Creating CRE Listings That Convert Leads   appeared first on CommercialEdge.

• U.S. office listing rates averaged $38.62 per square foot in February  
• The national vacancy rate rested at 15.7% across the top 50 markets  
• Office transactions amounted to $12 billion in the first two months of the year 
• The construction pipeline shrunk to 146.6 million square feet nationwide 

Companies are calling workers back to the office as pandemic mandates have expired around the U.S. However, return-to-office strategies evolved significantly in the past year, shaping a new future for the market. Specifically, the rise of hybrid work models has been contributing to increased demand for high-quality office assets, already widening the rate gap between classes in select markets.  

However, mid-tier office buildings are not devoid of growth opportunities in this new context. With some concessions and increased tenant improvement allowances, class B and C buildings can stay competitive — while conversions and redevelopments remain a lucrative option, especially for investors interested in tight markets.  

For more details on the rise of high-quality office space and other market trends, download the full March 2022 report below. 

Tampa Rates on the Rise as New Development Comes Online in the Market  

Across the top 50 U.S. markets, the average full-service equivalent listing rate for office space rested at $38.62 per square foot in February. Office rates remained stable through February, increasing by 1.2% compared to the previous year.  

Looking at individual markets, Los Angeles office space ($41.62/sq. ft.) came first in terms of year-over-year growth, marking an 8.1% increase compared to February 2021. The Bay Area ($55.79/sq. ft.) and Tampa ($29.70/sq. ft.) shared the second spot for office rent growth, as rates in both markets increased by 6.2% in the last year.  

Listing rates for Tampa office space illustrate how changes in the composition of stock can drive up rents and vacancies without reflecting underlying market conditions. An extensive new mixed-use development, Water Street Tampa, recently started coming online in the Florida market, delivering 150,000 square feet of high-quality stock: office space at Thousand & One is listed for $58.00 per square foot, significantly above the Tampa market average.  

The National Office Vacancy Rate Remained Stable Through February  

February office vacancies averaged 15.7% nationally, unchanged compared to the previous month and up 70 basis points (bps) over the last year.  

Boston remained the tightest office market in the U.S., recording an average vacancy rate of 10.5% in February. Office vacancies were also in the low double digits in Manhattan (13.1%), Miami (13.1%) and Los Angeles (13.3%). 

Meanwhile, Phoenix office space (15.5%) recorded the fastest drop in vacancies, 280 basis points compared to February 2021. Furthermore, the office vacancy rate in Miami decreased by 270 bps, the second largest year-over-year drop. Vacancies for office space in the Twin Cities came in third, falling by 200 bps to an average of 14.5%. 

Download the full March 2022 report below for updated lease and vacancy rate stats across all major U.S. markets. 

Office Transactions Amounted to $12 Billion in the First Two Months of the Year  

A total of $12 billion in office transactions were recorded through the end of February, while the average sale price per square foot rested at $284 nationally.  

Both Atlanta ($983 million) and the Bay Area ($918 million) are already nearing $1 billion in sales volume year-to-date. When it comes to office transactions in the California market, investor activity has primarily been driven by the life sciences sector. A significant $446 million in Bay Area office sales is owed to Alexandria Real Estate’s acquisition of the Stanford Research Park, which will be converted to laboratory space — according to SEC documents filed by the company.  

U.S. Office Construction Pipeline Slid to 146.6 Million Square Feet  

Nearly 147 million square feet of new office space were under construction by the end of February, as the development pipeline continued shrinking on a national level. New projects have been starting at a slower pace than office completions, leading to a decrease of 10 million square feet in the past six months. Projects with shovels in the ground accounted for 2.2% of the total stock nationwide in February, while the under-construction and planned project pipeline represented 5.9% of stock.  

In an individual market analysis, the Manhattan development pipeline was the largest in February. Close to 20 million square feet of new office space was under construction in the Northeast market, accounting for 4% of inventory. However, with only 2.1 million square feet of stock starting construction this year, the Manhattan pipeline will contract in the coming months. 

Meanwhile, Boston had the second largest development pipeline last month — close to 12 million square feet of office space — while Austin came in third, with over 10 million square feet of new inventory underway.  

Download the full March 2022 report on performance across U.S. office markets, as well as insights on industry and fundamentals of economic recovery.

You can also see our previous office reports.

Methodology

This report covers office buildings 25,000 square feet and above. CommercialEdge subscribers have access to more than 10,500,000 property records and 325,000 listings for a continually growing list of markets. 

CommercialEdge collects listing rate and occupancy data using proprietary methods. 

• Listing Rates — Listing Rates are full-service rates or “full-service equivalent” for spaces that were available as of the report period. CommercialEdge uses aggregated and anonymized expense data to create full-service equivalent rates from triple-net and modified gross listings. Expense data is available to CommercialEdge subscribers. National average listing rate is for the top 50 markets covered by CommercialEdge. 
• Vacancy — The total square feet vacant in a market, including subleases, divided by the total square feet of office space in that market. Owner-occupied buildings are not included in vacancy calculations. A and A+/Trophy buildings have been combined for reporting purposes. 
• Stages of the supply pipeline:
  • Planned — Buildings that are currently in the process of acquiring zoning approval and permits but have not yet begun construction. 
  • Under Construction — Buildings for which construction and excavation has begun. 
• Sales volume and price-per-square-foot calculations for portfolio transactions or those with unpublished dollar values are estimated using sales comps based on similar sales in the market and submarket, use type, location and asset ratings, sale date and property size.

The post Office Listing Rates Post 1.2% Y-o-Y Rise as Employers Resume Return-to-Office Plans appeared first on CommercialEdge.

• The national average rent for industrial space hit $6.46 per square foot in January 
• Vacancies dipped to an average of 5.5% across the top U.S. markets  
• Sales price continued upward trend, reaching $135 per square foot 
• Nearly 588 million square feet of industrial space under construction nationwide

Supply chains have been at the center of the industrial market in the past year, as the rise of e-commerce has fueled a surge in demand for industrial space in the nation’s port and port-adjacent markets. But while northeastern and southwestern ports have been in focus during this time, the trend extends beyond the largest U.S. markets. Specifically, the Southeast has seen an unprecedented industrial boom in the past year, also propelled by port activity.  

In particular, the Savannah-Hilton Head market had 23.5 million square feet (MSF) of new industrial space under construction in January, accounting for a significant 22.3% of its stock. At the same time, 9.7MSF of industrial space were in development in nearby Charleston, representing 14.7% of the stock in its market. Moreover, a spillover effect is already visible, with Greenville’s strategic location near the two ports — as well as its positioning between Atlanta and Charlotte — propelling its construction pipeline to 12.6MSF at the start of the year (6.7% of stock).  

Read to the end and download the full February 2022 report for updated lease rate and vacancy stats for all major U.S. markets.

Nashville Leads Rent Growth Nationwide, Overtakes Southern California Markets  

Across the top 30 U.S. markets, rents for industrial space averaged $6.46 per square foot in January, rising by 4% in the last year. Furthermore, the national vacancy rate decreased by 20 points compared to December, dipping to 5.5%.  

In an individual market analysis, Nashville industrial space posted the fastest rent growth among top markets, reaching an average of $5.20 per square foot after a 6.3% year-over-year rise. While Southern California markets such as the Inland Empire (up 6%) and Los Angeles (up 5.7%) usually lead rent growth nationwide, Nashville’s storage boom has pushed it ahead of the pack at the start of the year.  

Rent growth was weakest in Midwestern markets, where higher availability of developable land has allowed for construction to meet rising demand. Detroit recorded the slowest rent growth at the beginning of 2022, up only 0.9% compared to January 2021. Kansas City and St. Louis followed, as industrial rents in the two markets rose by 1.6% and 1.7%, respectively.  

In terms of tenant absorption, the Inland Empire continued leading the U.S. with an average vacancy rate of just 0.9% in January. Columbus recorded the second-tightest availability (1.3%) while Los Angeles and Indianapolis shared the third position with a 2.6% average vacancy rate. 

Industrial Sales Prices Show No Signs of Slowing at the Start of the Year  

The average sale price for industrial space was $135 at the beginning of the year, surging 13.5% compared to the fourth quarter of last year ($119). Sale prices for industrial transactions will likely continue to rise throughout the new year, based on the sustained upward trend of the past five quarters.  

The highest sale prices for January transactions were recorded in Seattle, where properties exchanged hands for an average of $382 per square foot. The Bay Area and New Jersey followed, with average sales prices of $311 and $237 per square foot, respectively.  

Furthermore, industrial sales amounted to $3.6 billion by the end of January, a strong start to the year considering the first quarter typically reports lower transaction volumes. Eight markets already surpassed $100 million in industrial transactions by the close of January. New Jersey industrial space stood out with a sales volume of $375 million in the first month of the year, as did Houston recording a notable $210 million in industrial transactions.  

Starting with this month, sales volume reporting has been adjusted. Sales estimates now also include unpublished and portfolio transactions (previously not covered in this report), with sales comps based on similar local transactions. As such, comparing sales figures in this and future reports to previously published values will deliver inaccurate results. The complete sales comps criteria are available in the full report.

Nearly 588MSF of New Industrial Stock Under Construction Nationwide  

The industrial supply pipeline remained robust through January, with a total of 587.8 million square feet of new stock under construction by the close of the month. Projects with shovels in the ground accounted for 3.5% of stock among top markets. Including planned projects, the pipeline represents 7% of the total industrial space across the top 30 markets, pointing to a continued supply boom in the coming months.  

At the individual market level, Dallas had the largest construction pipeline at the start of the year — 38.9 million square feet or 12.4% of the market’s total industrial stock. Furthermore, Phoenix had over 35 million square feet of industrial supply under construction, accounting for 12.5% of its stock. Logistics hub Indianapolis came in third with 29.1 million square feet of industrial space in development, and claimed the second-highest share of new industrial construction nationwide at 9.4%. 

Download the complete February 2022 report for a full picture of how U.S. industrial markets fared in 2021, including insights on industry and economic recovery fundamentals.

You can also see our previous industrial reports.

Methodology 

The monthly CommercialEdge national industrial real estate report considers data recorded throughout the course of 12 months and tracks top U.S. industrial markets with a focus on average rents; vacancies (including subleases but excluding owner-occupied properties); deals closed; pipeline yield; and forecasts, as well as the economic indicators most relevant to the performance of the industrial sector. For a detailed methodology, download the full report above. 

The post Industrial Market Starts Year Strong With 4% Rent Growth & 588MSF of Supply Under Construction appeared first on CommercialEdge.

• January office lease rates posted 1.2% year-over-year growth nationwide 
• Average office vacancy rate climbed to 15.7% across top 50 U.S. markets 
• Transactions amounted to $5.9 billion, sale price rested at $288 per square foot
• Office construction pipeline declined to 150 million square feet in January 

Medical office buildings (MOBs) have been a resilient subsector throughout the pandemic, gaining increased investor and developer interest since the emergence of COVID-19. Though rates for elective and non-essential procedures declined early in the pandemic, they rebounded by the end of 2020. 

According to our most recent data, more than 16 million square feet of properties that include some type of medical offices are currently under construction. Furthermore, as the U.S. population is aging, demand for MOBs is poised to grow in the coming years, especially in suburban centers, where residents will seek services closer to home. 

U.S. Office Space Listing Rates Inch Up 1.2% Year-Over-Year 

Across the top 50 U.S. markets, the average full-service equivalent listing rate for office space rested at $38.62 per square foot in January, up 1.2% year-over-year (Y-o-Y). 

Office listing rates ranged between $22.13 per square foot and $83.52 per square foot among the markets surveyed for this report. The highest year-over-year increase was recorded in Los Angeles, where office rates rose by 8.1%, reaching an average of $41.62 per square foot in January. The Bay Area ($55.79/sq. ft.) and Tampa ($29.70/sq. ft.) shared the second spot in office rent growth, posting a 6.2% rise compared to January 2021. Listing rates for Miami office space registered the third-fastest rise, averaging $43.43 per square foot after a 5.8% year-over-year increase. 

Office rates grew at a slower pace in Charlotte, where the average listing rate rested at $29.00 in January, up 0.5% Y-o-Y. Atlanta ($27.64/sq. ft.) was also among the cooler office markets at the start of the year, with office rates rising by 0.8% compared to January 2021. Meanwhile, office space in Portland hit the market for an average of $29.97 per square foot, up 1% over January 2021. 

Office Vacancies Pick Up Speed in January, Rise to 15.7% Average 

In terms of tenant absorption, January vacancies averaged 15.7% across the top 50 U.S. office markets, up 20 basis points (bps) compared to the previous month and 110 bps year-over-year. Since a significant percentage of the construction pipeline was started before the pandemic, and the Omicron variant further delayed returns to the office, higher vacancies are expected even in competitive office clusters. 

Looking at individual markets, Boston office space boasted the tightest vacancies in January, averaging 10.7% after a year-over-year decrease of 40 basis points. Next up, Miami has been a bright spot among the top office markets in the nation overall – besides posting the third-fastest rising listing rates, the Miami vacancy rate was 13.4%, down 190 basis points compared to January 2021. The average vacancy rate in Los Angeles closely followed, resting at 13.5% in the first month of the year. 

January Sales Volume Reveals Strong Start for Transactions

Nearly $5.9 billion in office transactions were completed through January, despite return-to-office delays. As such, the national average sale price for office space rested at $288 per square foot at the beginning of the year. 

The Bay Area saw the strongest start in 2022, with $715 million in office sales completed through January. The market also posted one of the highest sale prices in the nation, at an average of $611 per square foot of office space. Boston ($249/sq. ft.) recorded the second-highest office sales volume: $435 million as of January. Next up, office space in Washington D.C. exchanged hands for an average of $531 per square foot, with January sales amounting to $367 million. 

Starting with this month, sales volume reporting has been adjusted. Sales estimates now also include unpublished and portfolio transactions (previously not covered in this report) with sales comps based on similar local transactions. As such, comparing sales figures in this and future reports to previously published values will deliver inaccurate results. The complete sales comps criteria are available in this report’s methodology section.  

More Than 150MSF of Office Space Under Construction Nationwide 

Nationally, 150.5 million square feet (MSF) of new office stock were under construction by the end of January. Half of the new office space was located in urban submarkets (areas within the city center but outside its central business district), 31% was in suburban submarkets, while the remaining 19% was located in central business districts. 

In an individual market analysis, Austin had the most robust development pipeline at the beginning of the year, totaling over 9 million square feet of new office space or 10.3% of the stock in the market. Furthermore, 8% of the office space in both Miami and Nashville was under construction in January, amounting to 5.6 and 4.6 million square feet of new stock, respectively. A further 2.1 million square feet of new office space was under construction in Brooklyn, representing 5.2% of the stock in the market. 

Boston came in fourth by share of office space under construction, which amounted to 4.9% in January. And with more than 12.2 million square feet in development, the northeastern market has the second largest pipeline in the nation. Still, the Boston construction stock broadly represents pre-pandemic trends, as starts have slowed since the emergence of COVID-19. From January 2019 through March 2020, there were 8.2 million square feet of new office starts in the market, while the following 22 months saw only 4.9 million square feet begin construction.

Download the full February 2022 report on performance across U.S. office markets, as well as insights on industry and fundamentals of economic recovery.

You can also see our previous office reports.

Methodology

This report covers office buildings 25,000 square feet and above. CommercialEdge subscribers have access to more than 10,500,000 property records and 325,000 listings for a continually growing list of markets. 

CommercialEdge collects listing rate and occupancy data using proprietary methods. 

• Listing Rates — Listing Rates are full-service rates or “full-service equivalent” for spaces that were available as of the report period. CommercialEdge uses aggregated and anonymized expense data to create full-service equivalent rates from triple-net and modified gross listings. Expense data is available to CommercialEdge subscribers. National average listing rate is for the top 50 markets covered by CommercialEdge. 
• Vacancy — The total square feet vacant in a market, including subleases, divided by the total square feet of office space in that market. Owner-occupied buildings are not included in vacancy calculations. A and A+/Trophy buildings have been combined for reporting purposes. 
• Stages of the supply pipeline:
  • Planned — Buildings that are currently in the process of acquiring zoning approval and permits but have not yet begun construction. 
  • Under Construction — Buildings for which construction and excavation has begun. 
• Sales volume and price-per-square-foot calculations do not always include portfolio transactions or those with unpublished dollar values.

The post Demand for Medical Office Buildings on the Rise as Strong Office Sales Mark New Year  appeared first on CommercialEdge.

Streamline the Touring Process & Centralize Feedback 

Digital Tourbooks both streamline and centralize the back-and-forth of selecting spaces for lease. Specifically, they enable brokers to easily generate and share online interactive tour books, as well as collect tenant feedback through a single, powerful tool.  

In fact, Digital Tourbooks cover the entire touring process. First, brokers make an initial selection of listings that fit a tenant’s broader needs by selecting spaces for lease from the CommercialEdge Research platform. Next, they can instantly share a pre-review tourbook with clients through automated emails, which will direct the clients to select the spaces they’re interested in to receive additional details. Then, once a tenant submits their shortlist, the Digital Tourbooks tool automatically updates with their selections so their representative can generate and share the final tour book, which includes a map and additional property specs.  

What’s more, Digital Tourbooks enable a simplified, user-friendly feedback process: Directly within their dedicated touring web page, tenants can leave notes, which are automatically funnelled into the CommercialEdge Research platform for the representative to view. The tool also allows internal notetaking so brokers and their teams can work on touring materials in real-time. And, because CRE leasing often involves several back-and-forths, tour books are also easily and continuously editable, thereby allowing tenant reps to move forward with ease and agility. 

Finally, Digital Tourbooks are also managed from a centralized dashboard and can be sorted by tenant, listing activity, touring stage and tourbook activities. 

Improve Client Experience & Showcase Your Brand 

With Digital Tourbooks, brokers can virtually showcase spaces for lease through a professional medium. Bringing tour books online enables clients to browse selected listings through polished, mini websites to offer an interactive viewing experience. Furthermore, Digital Tourbooks display spaces for lease similar to a CRE marketplace: Tenants can browse the selection of listings on a map and click on individual listings to open dedicated pages with additional details. They can also provide feedback for each listing directly on the dedicated touring page to further digitize the leasing experience. 

The feature also offers a multi-step workflow that brokers can customize to specific client scenarios. For instance, tenants can either go through a two-step process in which they receive a simplified list of spaces for lease and then select a shortlist for the final tourbook, or they can receive the detailed, interactive page directly. 

Finally, Digital Tourbooks are easily customizable, which allows brokers to provide a professional experience, while also increasing brand awareness. Once a CRE professional uploads their contact details and a company logo, every tour book they create will be automatically branded through the platform. The same goes for the notification emails that the books are shared through, which are also customized with the tenant’s and broker’s names, as well as the company logo.

The post How Digital Tenant Tourbooks Enhance the CRE Leasing Process   appeared first on CommercialEdge.

A broker-first CRE solution, CommercialEdge is proud to partner with an organization that connects commercial clients and firms with industry-leading resources and global expertise. The NAI Global 2022 agenda will include three days of talks and events tailored for commercial real estate professionals, for a 360° educational and networking experience. Moreover, the conference will include several diversity-focused sessions hosted by the NAI Global Women’s Alliance.   

CRE professionals aligned with NAI Global will participate in a wide range of in-depth training sessions. Covered topics include marketing strategy, sales and personal branding workshops, as well as several talks on market-specific issues and property management — all led by industry experts. Furthermore, the convention provides a diverse set of networking events to empower professionals to connect, broaden their expertise and find deal-making opportunities. Register now to join the comprehensive CRE conference. 

NAI Global is the largest independent broker organization in the world, with over 300 offices strategically located across the globe. Bringing together both entrepreneurial brokers and firms, NAI Global has achieved an expansive footprint in both primary and secondary markets. From investment sales and acquisition advisory to leasing management and tenant representation, NAI Global provides comprehensive services and in-depth consultancy across commercial asset types.  

The post CommercialEdge Sponsors Leading CRE Convention NAI Global 2022  appeared first on CommercialEdge.

• Average rent for U.S. industrial space increased 5.1% year-over-year 
• Vacancies across top 30 markets averaged 5.7% in December 
• Nearly 573 million square feet of added to development pipeline nationwide 
• Close to $71 billion in industrial transactions recorded through 2021 

As e-commerce surged over the past two years, investor interest in industrial space has also expanded with the sector. Refrigerated warehouse space, in particular, has seen a wave of investment owning both to consumer lifestyle changes — demand for grocery deliveries and meal kits has skyrocketed — and pharmaceutical companies needing cold storage facilities for raw materials and finished products.  Industrial properties of this type, especially those close to dense urban areas, accounted for $2 billion in sales volume in 2021.  

With demand for refrigerated space on the rise, over 6.7 million square feet (sq. ft) of new cold storage space was under construction by the close of December 2021. But developers will need to overcome growing hurdles to add new supply, as labor and material shortages are still impacting construction.  

Read to the end and download the full January 2021 report for updated lease rate and vacancy stats for all major U.S. markets.

Inland Empire Leads Rent Growth in December, Posts Tightest Vacancies  

Across the top 30 markets surveyed for this report, national rents for industrial space increased by 5.1% year-over-year (Y-o-Y), averaging $6.40 per square foot in December. 

Southern California industrial space continued leading rent growth at the close of the year, with a record number of containers coming through the ports of Los Angeles and Long Beach. The Inland Empire ($6.54/sq. ft.) posted the fastest rise in industrial rents, which grew by 6.3% compared to December 2020. Industrial space in Los Angeles ($10.28/sq. ft.) closely followed with a 6.2% year-over-year increase, while Orange County ($11.63/sq. ft.) saw industrial rents grow by 5.1%. At the same time, nearby Central Valley posted the third fastest-rising rents, which averaged $5.29 per square foot after a 5.6% year-over-year rise.  

The Inland Empire also recorded the highest spread between the cost of new leases and the market average (38%), as well as the tightest vacancies among the markets we analyzed, coming in at 0.9%. Scarcity of space is also visible in other Southern California markets, with Los Angeles and Orange County recording average vacancy rates of 2.8% and 3.8%, respectively.  

Almost 322 Million Square Feet of Industrial Space Delivered in 2021  

By the close of 2021, a total of 321.8 million square feet of new industrial stock was delivered on a national level – a number that will likely increase as more supply data is collected for the year. At the same time, 572.9 million square feet of industrial space were under construction nationally by the end of December, accounting for 3.4% of the total stock.  

In an individual market analysis, Phoenix led in terms of new supply, increasing its stock 11% over the past three years. The Arizona market added 33.7 million square feet of new office space over the last three years, of which 10.3 million were delivered in 2021. Furthermore, an additional 32.6 million square feet of Phoenix industrial space was under construction at the end of December,  equalling 11.8% of the market’s total stock.  

The industrial development pipeline was also robust in Midwestern markets such as Indianapolis, where projects with shovels in the ground in December represented 7.7% of the total stock. At the same time, 14.2 million square feet of new industrial stock were under construction in Columbus (5.3% of the total industrial supply) and 11.8 million in Kansas City (4.8% of the total stock).  

U.S. Industrial Market Closes 2021 With Record Sales Volumes  

With $71 billion in industrial transactions completed through December, the 2021 industrial sales volume is currently 47% higher than in 2020 ($48.3 billion). This gap will further widen over the next few months as more end-of-the-year sales data comes in. More than two-thirds of the markets covered in this report follow this growth trend, with the largest increases in sales volume recorded in Los Angeles — $2.9 billion more in 2021 compared to 2020 —, the Inland Empire ($2 billion) and Chicago ($1.8 billion).  

Meanwhile, the national average sale price of industrial space climbed to $112 by the end of the year, an increase of 29% compared to 2020. Los Angeles recorded the highest price per square foot in December at $298, followed by Orange County industrial space with $290 per square foot. The Bay Area came in third for price growth, with its industrial properties changing hands for $243 per square foot, on average.  

Download the complete January 2021 report for a full picture of how U.S. industrial markets fared in the first 11 months of the year, including insights on industry and economic recovery fundamentals.

You can also see our previous industrial reports.

Methodology 

CommercialEdge added new markets to the National Industrial Report as Yardi Market Insight has increased its coverage to more than 50 markets in recent months. As such, the national numbers in this and future reports are not comparable to past issues. 

The monthly CommercialEdge national industrial real estate report considers data recorded throughout the course of 12 months and tracks top U.S. industrial markets with a focus on average rents; vacancies (including subleases but excluding owner-occupied properties); deals closed; pipeline yield; and forecasts, as well as the economic indicators most relevant to the performance of the industrial sector. For a detailed methodology, download the full report above. 

The post 2021 Breaks Sales Records as Investors Continue Fuelling Demand for Industrial Space appeared first on CommercialEdge.

• December asking rents across top markets averaged $38.44 per square foot. 
• U.S. vacancy rate held steady at 15.5% across top 50 office markets.  
• Sales price per square foot reached $293 average in December. 
• Over 156 MSF of new office space was under construction by end of 2021. 

While the summer of 2021 was marked by increased optimism regarding a fall return to the office, the emergence of the Delta and Omicron variants put plans on hold for the foreseeable future. Some large firms are already tightening safety measures (including Goldman Sachs), while others, such as Apple and Google parent company Alphabet, are holding off on announcing plans until the latest wave of infections settles.  

What is clear thus far is that a return to office will involve a new model for space utilization. CBRE’s Workforce Sentiment Survey revealed that 85% of workers would like to work remotely at least two to three days per week – and with 87% of firms stating they will adopt a hybrid work program of some kind, it seems that employers are willing to meet this increasingly prevalent demand.  

To learn more about the latest office market trends, download the full report below.  

Office Space Listing Rate Up 1.8% Y-o-Y in Major U.S. Markets 

Across the top 50 U.S. markets, full-service equivalent listing rates for office space averaged $38.44 per foot in December, up 1.8% year-over-year (Y-o-Y).  

At a market level, the average rent for office space in Phoenix ($30.01 per square foot) grew by 9.5% since December 2020, accelerating compared to the previous months. Atlanta office rents also picked up speed, reaching an average of $29.21 per foot after an 8.1% year-over-year increase. At the same time, the full-service equivalent listing rate in Tampa grew by 7.9%, up to $30.90 per square foot.   

Cooler markets include Chicago ($28.19/sq. ft.), where the average office rent inched upwards by 0.9% compared to December 2020, and Washington, D.C., ($41.78/sq. ft.), where leasing rates increased by 1.4%. 

U.S. Office Vacancy Rate Stagnates at 15.5%  

In December, U.S. office vacancy saw a year-over-year increase of 130 basis points (bps), averaging 15.5% across the top 50 markets. Overall, after a few spikes in the first half of 2021, vacancies plateaued in the last six months.  

At the local level, Boston was the tightest market in terms of leasing volumes in December, registering a 10.3% vacancy rate. At the same time, the vacancy rate for Miami office space was 12.5%. The Los Angeles vacancy rate was also lower than the national average in December, resting at 13.2%. 

Download the full January 2021 report below for updated lease and vacancy rate stats across all major U.S. markets.

Sales Prices Lag in Commercial Business Districts  

The average sale price for office properties across the top 50 U.S. markets climbed to $293 in December as the national sales volume topped $77 billion.  

While sales prices for office space in submarkets classified as Commercial Business District (CBD) and Urban (defined as within the city center but outside of the CBD) had similar trajectories following the Great Financial Crisis, the pandemic diverged this trend. As such, CBD prices have fallen since the start of the pandemic, dropping by 19% to an average of $323 per square foot. However, prices in Urban submarkets continued to grow at the same rate, increasing by 28% over the past two years.   

Over 156MSF of New Office Space Under Construction  

The under-construction pipeline is likely still representative of pre-pandemic trends, as 156.6 million square feet of office space was in development by the end of 2021. But while projects with shovels in the ground are still concentrated in the Urban and CBD submarkets (48.6% and 21.1%, respectively), the planned pipeline paints a different picture. Specifically, suburban markets saw a considerable rise in planned developments – from a share of 35% of the total planned pipeline at the start of 2020 to 48% in 2021.  

In an individual market analysis, Austin had the most robust development pipeline in December, 10.6% of its total inventory. Nashville office space follows, with 8% of the market’s office stock in construction by the close of the year. Brooklyn registered the third-highest share of office projects under construction, 5.2% of the total space in the market.  

Download the full January 2022 report on performance across U.S. office markets, as well as insights on industry and fundamentals of economic recovery. 

You can also see our previous office reports.

Methodology

This report covers office buildings 25,000 square feet and above. CommercialEdge subscribers have access to more than 10,500,000 property records and 325,000 listings for a continually growing list of markets. 

CommercialEdge collects listing rate and occupancy data using proprietary methods. 

• Listing Rates — Listing Rates are full-service rates or “full-service equivalent” for spaces that were available as of the report period. CommercialEdge uses aggregated and anonymized expense data to create full-service equivalent rates from triple-net and modified gross listings. Expense data is available to CommercialEdge subscribers. National average listing rate is for the top 50 markets covered by CommercialEdge. 
• Vacancy — The total square feet vacant in a market, including subleases, divided by the total square feet of office space in that market. Owner-occupied buildings are not included in vacancy calculations. A and A+/Trophy buildings have been combined for reporting purposes. 
• Stages of the supply pipeline:
  • Planned — Buildings that are currently in the process of acquiring zoning approval and permits but have not yet begun construction. 
  • Under Construction — Buildings for which construction and excavation has begun. 
• Sales volume and price-per-square-foot calculations do not always include portfolio transactions or those with unpublished dollar values.

The post Asking Rates Up 1.8% Y-o-Y as Omicron Further Delays Return to Office appeared first on CommercialEdge.

• November’s national average rent climbed to $6.37 per square foot  
• Nationwide vacancy rate averaged 5.7%, ranging from 1% to 11.6% among markets 
• Year-to-date sales totaled $62 billion; average price per square foot reached $111 
• Over 555 million square feet of new supply in development nationwide 

E-Commerce Numbers Slip in Third Quarter

After a massive spike during the second quarter of 2020, e-commerce sales have fallen three of the last five quarters. If e-commerce’s share of core retail sales stood at 19.4% during the surge’s peak, it declined to 16% in the third quarter of 2021. Furthermore, both Target’s and Walmart’s third-quarter earnings noted continued but slowing growth of online sales and rises in in-person or pick-up orders.  

But despite the dip, e-commerce sales are still ahead of where they would be on the pre-pandemic trend line, pointing to a structural shift in the market — and to the emergence of an omnichannel approach in the future of retail.  

Read to the end and download the full December 2021 report for updated lease rate and vacancy stats for all major U.S. markets.

Southern California Records Fastest Rent Growth Among Top U.S. Markets 

Across the top 30 U.S. markets, November rents for industrial space averaged $6.37 per square foot, up 3.8% year-over-year. Two Southern California markets and the Bay Area are among the top five markets by rent growth, as the shift from services to goods continues fuelling demand in port and port-adjacent areas.  

The Inland Empire ($6.49/sq. ft.) and Los Angeles ($10.23/sq. ft.) saw the fastest rent growth in the nation, with industrial space rates rising by 6.2% in both markets over the past 12 months. Furthermore, rents for industrial space in the Bay Area rose by 5.3%, averaging $10.93 in November. The ports of Los Angeles and Long Beach are still adjusting to increased demand, while tight vacancy rates, scarcity of developable land or a combination of both are pushing rents upwards — in California — as well as Nashville ($5/sq. ft., up 5.6%) and New Jersey ($7.98/sq. ft., up 5.4%), which round out the top five.  

Meanwhile, the national vacancy rate rested at 5.7% in November. Vacancies remain tightest for industrial space in the Inland Empire (1%), followed by Columbus (2.3%) and Nashville (3%).  

Year-to-Date Sales Volume Tops $61 Billion, Continues Record-Breaking Streak 

Transactions closed through the first 11 months of the year totaled $61.6 billion across the markets we analyzed, an all-time high for sales volume. In addition, sales prices averaged $111 per square foot in November, up 27.4% year-over-year.  

Despite being the 15th largest market in the country by total inventory, Phoenix had the third-highest sales volume, recording $3.6 billion in industrial space transactions through the end of November. Los Angeles and Chicago are the only industrial markets to surpass the booming industrial hub. Transactions for industrial space in Los Angeles amounted to $6 billion during the first 11 months of the year, while the Chicago sales volume exceeded the $4 billion threshold last month.  

Port markets in Southern California also lead the ranking in terms of sale prices — industrial space in Los Angeles changed hands for an average of $301 per square foot in November, while Orange County industrial space sold for $292 per square foot, on average. At the same time, the average sale price in the Bay Area rested at $229 per square foot.  

Close to 294 Million Square Feet of Industrial Space Delivered Through End of November  

By the end of November, 293.9MSF (million square feet) of industrial supply was delivered nationally. An additional 555.4MSF of industrial space is currently under construction, making up 3.4% of the total stock on a national level.  

The Phoenix pipeline remains the most robust out of the top U.S. markets, as projects under construction or in the planning stages account for a significant 29.1% of the existing industrial stock in the market. Indianapolis trails from behind, with 13% of the industrial space in the market being made up of under-construction and planned developments. Meanwhile, underway and planned industrial stock in Charlotte (10.9%) — which saw close to 10MSF in deliveries this year — comes in third. 

Download the complete December 2021 report for a full picture of how U.S. industrial markets fared in the first 11 months of the year, including insights on industry and economic recovery fundamentals.

You can also see our previous industrial reports.

Methodology 

CommercialEdge added new markets to the National Industrial Report as Yardi Market Insight has increased its coverage to more than 50 markets in recent months. As such, the national numbers in this and future reports are not comparable to past issues. 

The monthly CommercialEdge national industrial real estate report considers data recorded throughout the course of 12 months and tracks top U.S. industrial markets with a focus on average rents; vacancies (including subleases but excluding owner-occupied properties); deals closed; pipeline yield; and forecasts, as well as the economic indicators most relevant to the performance of the industrial sector. For a detailed methodology, download the full report above. 

The post E-commerce Dips but Continues Sustaining Demand as Industrial Rents Post 3.8% Y-o-Y Rise  appeared first on CommercialEdge.