London Office Market Update A Guide To Rents Rent Free Periods Market Trends Q3 2016
Market Report 2015 Office Q3
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Transcript of Market Report 2015 Office Q3
100 Grandville Ave SW Suite 100Grand Rapids, MI 49503616. 776. 0100 www.naiwwm.com
Wisinski ofWest Michigan
Office • Industrial • Retail • Multi-Family
Office Market ReportWest Michigan Q3 2015
*Also serving the Kalamazoo & Southwest Michigan areas from our new Kalamazoo office*
Downtown growth is more than meets the eyeOne sign of growth in a downtown market is the number of cranes that are visible in the skyline. If you have driven through downtown Grand Rapids recently, you have probably noticed these signs of growth. But there are more signs that point to growth in our market; such as positive net absorp-tion, increased rental rates, and vacancy rates that are lower compared to other Midwestern markets.
Another sign of growth is the redevelopment of existing properties. We have seen many key downtown office properties change hands over the past several years, and subsequently receive millions of dollars in invest-ment for exterior and interior improvements. One recent example of this in downtown Grand Rapids, on a smaller scale, is 25 Jefferson Place. The building has great character and amazing views of downtown from the penthouse unit. The owners were looking for a way to update the proper-ty and make it more appealing to buyers or tenants. It was recommended to the owner that they completely demo the penthouse unit and remodel the lobby.
The demo to the top floor unit included tearing out the ceiling tiles to ex-pose the 15’ ceilings, ripping out the drywall to the highlight the character of the original bricks walls, and removing the carpet to expose the mod-ern concrete floors. Not only did this help promote the beautiful views of downtown, but it also allowed natural light to flow through the space. The owner also remodeled the building’s lobby with new wood grain tile flooring, fresh paint for the walls, LED lighting, and mural of the building address on the lobby wall.
The owners spent approximately $50,000 for the improvements to the building, and that investment was quickly recovered as the property was sold just months later. This is a classic example of a property that pos-sessed unique features that were simply hidden due to the age of the property. By taking the time and investing a little capital, the building was transformed into one where buyers can easily visualize their business. Downtown growth isn’t just reserved for new office towers that add to the skyline. More often, old buildings, such as 25 Jefferson Place, are being redeveloped and repurposed to meet a growing need of downtown office users and downtown residences.
* The information contained herein has been given to us by sources we deem reliable. We have no reason to doubt its accuracy, however, we do not make any guarantees. All information should be verified before relying thereon.
* Source: NAIWisinskiofWestMI, CoStar Property®, & U.S. Bureau of Labor Statistics
“A broker open house was held after construction was complete, brought in 2 great offers within 2 weeks! The entire building, along with the 4 condo units, was sold in September 2015 to a local developer who plans to convert the property to residential.”
GRAND RAPIDS, MI
The Market
- Hillary Taatjas Woznick
Office & Retail Advisor
Total Employment GrowthHighlight Total Number of Jobs Added per Year
Office Square Footage per Employee By Industry- Based Upon All Tenants
Net absorption for the overall Grand Rapids office market was positive 224,768 square feet in thethird quarter 2015
Vacancy rate went from 9.6 in the previous quarter to 10.4 this quarter
Recent Lease Transactions, July - September 2015Address Size (SF) Tenant Lease Type 1591 Galbraith Ave. SE 27,600 First American Title Renewal 6290 Jupiter Ave. NE 4,201 GRP Engineering New330 Ionia Ave. NW 67,309 General Services Administration Renewal678 Front Ave., Suite 300 5,271 Varsity News Network New401 Hall St. SW, Ste. 484 3,392 J&R Schugel Logistics New
Recent Sales Transactions, July - September 2015Address Size (SF) Final Sale Price Price PSF Sale Date2311 E. Beltline Ave. SE 25,575 $1,950,000 $76.25 8/31/20153001 Orchard Vista Dr. SE 49,437 $2,725,000 $55.12 9/1/20152301 East Paris Ave. SE 13,125 $975,000 $74.29 8/5/201525 Jefferson Ave. SE 18,314 $600,000 $49.14 9/18/20154436 Broadmoor Ave. SE 12,768 $633,950 $49.65 8/21/2015
Economic Trends Rental rates increased from previous quarter
0 50 100 150 200 250 300 350 400
Law Firms
Agri-Mining/Utl
Retailers/Wholes
Services
Transportation
Communications
Business-Service
Engineers/Archit
Government
Accountants
Manufacturing
Finance/Insure
Medical
4.7
3.4
4.1
3.6
3.4
5.2
6.7
4.9
5.9
5.2
4.9
6.3
0.02 .0 4.06 .0 8.0
Newaygo Co.
Kent Co.
Ionia Co.
Barry Co.
Grand Rapidsarea
United States
Aug-14 Aug-15
Source:U .S. BLS, Local Area Unemployment
12-month percent changes in Unemployment
West MichiganOffice Submarket StatisticsMethodology: The office market report includes office buildings within each of the defined submarkets. Excluded are government buildings and institutional properties.
Office Space Statistical Changes Year-over-Year and Quarter-over-Quarter
CONSTRUCTION
CONSTRUCTION
ASKING RATES
ASKING RATES
VACANCY RATE
VACANCY RATE
NET ABSORPTION
NET ABSORPTION
2Q15 vs. 3Q15
3Q14 vs. 3Q15
Q3 Snapshot Submarket Total RBA Total
Available SFVacancy
RateTotal AverageRate ($/SF/Yr)
Total Net Absorption (SF)
Total Under Construction SF
DowntownClass A 1,366,022 87,184 6.3% $19.91 2,769 188,562Class B & C 7,914,748 621,317 7.8% $14.36 25,299 262,800Total 9,280,770 708,501 7.6% $17.13 28,068 451,362NortheastClass A 294,197 15,943 5.4% $13.88 12,198 -Class B & C 3,109,499 215,275 6.9% $13.92 20,748 -Total 3,403,696 231,218 6.7% $13.90 32,946 -NorthwestClass B & C 2,172,055 145,533 6.7% $10.90 43,759 -SoutheastClass A 1,065,736 80,021 7.5% $19.49 - -Class B & C 9,763,085 1,094,254 11.2% $10.89 137,570 -Total 10,828,821 1,174,275 10.8% $15.19 137,570 -SouthwestClass B & C 2,908,862 321,689 11.0% $10.92 -17,515 -
Overall Total 25,685,342 2,581,216 10.4% $13.60 224,768 902,724
Kent County StatisticsTotal Market Report
C
-200,00 0
0
200,00 0
2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3
Absorp on & Deliv ery
Total Net Absorp on Class A Total Net Absorp on Class B&C RBA Delivered Class A RBA Delivered Class B&C
0.00%
10.00%
20.00%
2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3
Vacancy Rate s
Vacancy Rates Class A Vacancy Rates Class B&C
$1.00
$25.00
2013Q3 2013Q4 2014Q12 014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3
Total Rental RatesRental Rates Class A Rental Rates Class B&C
0
200000
400000
2013Q32 013Q4 2014Q12 014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3
Absorption and Delivery
Vacancy Rate
Total Rental Rate
Under Construction
Methodology | Definitions | Submarket Map
SF/PSFSquare foot/per square foot, used as a unit of measurement.
Under ConstructionBuildings in a state of construction, up until they receive their certificate of occupancy. In order for CoStar to consider a building under construction, the site must have a concrete foundation in place.
DeliveriesBuildings that have their certificate of occupancy and are allowed to be moved into by the tenant/purchaser.
Vacancy RateAll physically unoccupied lease space, either direct or sublease.
Absorption (Net)The change in occupied space in a given time period.
Available Square FootageNet rentable area considered available for lease; excludes sublease space.
Average Asking Rental RateRental rate as quoted from each building’s owner/management company. For office space, a full service rate was requested; for retail, a triple net rate requested; for industrial, a NN basis.
Building ClassClass A Product is office space of steel and concrete construction, built after 1980, quality tenants, excellent amenities & premium rates. Class B product is office space built after 1980, fair to good finishes & wide range of tenants.
RBARentable Building Area - Mainly used for office and industrial.
NortheastNorthwest
SoutheastSouthwest
Downtown
In the spring of 2011, two successful and reputable companies, The Wisinski Group and NAI West Michigan merged. The merger represents collaboration, rich traditions, innovative technologies, unique cultures and diversity of skills and specialties which ultimately benefit our clients. We’re going back to our fundamentals, strengthening our core and becoming stronger in the services we provide our clients. Our focus is simple, building client relationships for life by offering market appropriate advice and then executing. Our success is a direct result of its unwavering commitment to providing the best possible service to each and every client. Our Brokers, with their 562 plus years of combined experience (20.1 years average), possess the knowledge and expertise to manage the most complex transactions in industrial, office, retail, and Multi-Family specialities throughout West Michigan.
Achieve More.
Doug TaatjesCCIM, SIOR616 292 [email protected]
Marc TourangeauMBA269 207 [email protected]
Jeremy Veenstra616 242 [email protected]
Kara Schroer269 459 [email protected]
Mary Anne Wisinski-RoselyCCIM, SIOR616 575 [email protected]
Stanley J. Wisinski, IIICCIM, SIOR616 575 [email protected]
Russ Bono616 242 [email protected]
Dick Jasinski616 575 [email protected]
Meet Our Team
Office SpecialistsRod Alderink616 242 [email protected]
Jason Makowski616 575 [email protected]
Hillary Taatjes Woznick616 242 [email protected]
Local Knowledge. Global Reach.
Through our affiliation with NAI Global, we can also assist you with your commercial real estate needs throughout the US & globally right here from West Michigan.
Doug TaatjesCCIM, SIOR616 292 [email protected]
Marc TourangeauMBA269 207 [email protected]
Jeremy Veenstra616 242 [email protected]
Kara Schroer269 459 [email protected]
Mary Anne Wisinski-RoselyCCIM, SIOR616 575 [email protected]
Stanley J. Wisinski, IIICCIM, SIOR616 575 [email protected]
Russ Bono616 242 [email protected]
Dick Jasinski616 575 [email protected]
Office SpecialistsRod Alderink616 242 [email protected]
Jason Makowski616 575 [email protected]
Hillary Taatjes Woznick616 242 [email protected]
100 Grandville Ave SW Suite 100Grand Rapids, MI 49503616. 776. 0100 www.naiwwm.com
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nai-wisinski-of-west-michigan
Wisinski ofWest Michigan
Office • Industrial • Retail • Multi-Family