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.
| Top 5 cities | Change in small businesses, 2000-2005 |
Bottom 5 cities |
Change in small businesses, 2000-2005 |
| Orlando, FL | 25.1% | Springfield, MA | -8.4% |
| Sarasota-Bradenton, FL | 24.7% | El Paso, TX | 3.4% |
| Miami-Fort Lauderdale, FL | 14.0% | Dayton, OH | -2.0% |
| Las Vegasm NV | 29.0% | New Orleans, LA | -1.3% |
| Jacksonville, FL | 19.1% | Memphis, TN. | 0.0% |
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
1Q08 Forecast| Sector | Vacancy rate | Inventory | Rent growth |
| Office | 13.3% | 3.4 million sf | 0.7% |
| Industrial | 9.2% | 12.3 million sf | 0.8% |
| Retail | 8.6% | 1.6 million sf | 0.4% |
| Multifamily | 5.7% | 14 million units | 1.0% |
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.
| Market | Average price/unit | No. of units sold |
| Oklahoma City | $75,722 | 4,869 |
| Tulsa | $30,394 | 3,650 |
Hotel Investor 6-Month Outlook
Based on a survey of 6,000 U.S. select- and limited-service hotel
owners and investors
| Investment strategy | Property focus for acquisition and development |
Regional focus for acquisition and development |
| 39% - Hold 32% - Buy 21% - Build 8% - Sell |
43% - Midmarket 38% - Upper midmarket 12% - Extended stay 7% - Economy |
35% - Southeast 18% - Southwest 12% - Mid-Atlantic 12% - Midwest 10% - Northeast 4% - Northwest 9% - California |
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
| Metro area | Class A office | Strip center | Warehouse | Multifamily |
| Boston | $185-$265 | $90-$140 | $65-$90 | $125-$190 |
| Denver | $135-$220 | $65-$125 | $60-$90 | $70-$145 |
| Orlando, Fla. | $125-$225 | $65-$120 | $60-$95 | $70-$140 |
| Phoenix | $140-$220 | $85-$140 | $55-$80 | $80-$205 |
| Portland, Ore. | $155-$195 | $75-$120 | $45-$75 | $80-$160 |
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.
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