Market Trends Online

Best Nests for Nurturing Small Businesses
Small businesses are economic engines, accountable for 60 percent to 80 percent of new job growth, according to the Small Business Administration. Bizjournals.com rated the 75 best locations for the creation of small businesses (companies employing less than 99 people), based on population growth, economic expansion, and the density of small businesses in the metropolitan area.

Midyear Market Glance
Office: 78 million sf of office space will come online by year-end and vacancy rates will range between 12.5 percent and 13.5 percent.

Industrial: Leasing and absorption is strongest in California and South Florida, although southwestern cities including Tucson, Ariz., Las Vegas, and Albuquerque, N.M., are seeing increased warehouse and distribution demand.

Retail: Institutional and foreign investors accounted for 60 percent of all retail transactions in the first four months of the year.

Multifamily: Reverse condominium conversions are occurring in many markets, but the vacancy rate should remain between 5.5 percent and 5.9 percent through year-end.

Source: Commercial Real Estate Outlook

Source: National Association of REALTORS®/TWR

Southern Office Markets Post Lowest 2Q07 Vacancies
For the second straight quarter, Charlotte, N.C., had the lowest U.S. downtown vacancy rate, followed by midtown Manhattan (4.8 percent), downtown Manhattan (7.0 percent), Boston (7.1 percent), and Las Vegas (8.5 percent), according to the CB Richard Ellis 2Q07 Office Vacancy Index Report. Overall the national downtown office vacancy rate was 10.6 percent, down slightly from 1Q07. The national suburban office vacancy rate was 13.7 percent, with Miami posting the lowest suburban market vacancy rate at 6.5 percent, followed by Fort Lauderdale, Fla. (7.0 percent), Orlando, Fla. (7.7 percent), San Jose, Calif. (8.4 percent), and Los Angeles (8.5 percent).

Oklahoma Is OK for Multifamily Investors
Oklahoma’s low rental rates are attracting out-of-state multifamily investors who see an opportunity to improve cash flow, according to Commercial Realty Resources Co. in Tulsa. Total multifamily sales volume in Oklahoma City is up 91 percent over midyear 2006, and average price per unit is up 51 percent over last year. Buyers from California, Missouri, Nebraska, Utah, and Arizona have been driving the market.

Hotel Investor 6-Month Outlook
Based on a survey of 6,000 U.S. select- and limited-service hotel owners and investors

Source: Jones Lang LaSalle Hotels

Indicative Construction Costs
Price psf range as of July 1, 2007; includes labor and materials, general contractor and subcontractor fees, and taxes

Charlotte, N.C., home to Wachovia and other financial services companies posted the lowest U.S. downtown office vacancy rate at 3.1 percent for 2Q07.

Hotel investors favor midmarket brands such as Holiday Inn Express, Comfort Inn, and Fairfield and Hampton Inns because they offer the best operating/profitability yields. Target markets include Atlanta, New York, Boston, Chicago, Dallas, Houston, and Orlando, Fla.