Southwest Dallas National - LoopNet · 2019-12-13 · Sales Past 12 Months Southwest Dallas Office...
Transcript of Southwest Dallas National - LoopNet · 2019-12-13 · Sales Past 12 Months Southwest Dallas Office...
PREPARED BY
Richard Lowrance
Owner
Thornton Office Report
Southwest Dallas & NationalDallas-Fort Worth - TX
OverviewThornton Office Report
326 K (12.1 K) 11.3% 2.1%12 Mo Deliveries in SF 12 Mo Net Absorption in SF Vacancy Rate 12 Mo Rent Growth
Southwest Dallas includes some gentrifying areas nearthe Dallas CBD as well as many southern Dallas suburbsthat are collectively referred to as Best Southwest in aneffort to improve cooperation between the cities. Thearea represents 200,000 citizens, with the lion's share ofthe population found in Cedar Hill (48,000), DeSoto(51,900), Duncanville (39,700), and Lancaster (38,400).The area is home to several institutions of highereducation. Including Cedar Valley College, the Universityof North Texas at Dallas, Mountain View CommunityCollege, and Texas State Technical College. While officedevelopment has never taken off here, even in areasadjacent to the CBD. The area is poised for growth in thelong term. An abundance of affordable land and theanchors of high learning will serve the region well.
Local developers such as Matthews Southwest, Hoque
Global, and Buzzworks Properties continue to invest inthe Cedars, and West Dallas steadily evolves into alive/play environment. Furthermore, if the Dallas-to-Houston high-speed rail project ever comes to fruition,the area surrounding the station (expected to be in theCedars) would be ripe for office development. Also, inthe southern part of the submarket, part of the RedbirdMall will be converted into office space, which could becompleted by 2020.
Vacancies in Southwest Dallas are near all-time lows,tracking well below the Dallas market average. Despite arecent slowdown, rent growth has generally outperformedthe metro average over the past few years. Despitepromising future trends, the submarket’s upside is limitedby its lack of desirability and 4 & 5 Star inventory, atleast in the near term.
KEY INDICATORS
Market RentVacancy RateRBACurrent Quarter Availability RateNet Absorption
SFDeliveries SF
UnderConstruction
$29.1638.4%774,3804 & 5 Star 38.4% (7,712) 0 0
$22.8010.5%3,188,2373 Star 10.7% (19,223) 0 0
$20.164.7%2,778,7381 & 2 Star 5.7% (11,137) 0 0
$22.4411.3%6,741,355Submarket 11.8% (38,072) 0 0
ForecastAverage
HistoricalAverage
12 MonthAnnual Trends Peak When Trough When
9.3%12.7%4.7%Vacancy Change (YOY) 19.6% 1985 Q3 6.0% 2018 Q3
58,55183,180(12.1 K)Net Absorption SF 467,448 2008 Q1 (84,090) 2011 Q4
111,30993,740326 KDeliveries SF 441,131 1984 Q4 0 2013 Q3
1.8%1.7%2.1%Rent Growth 17.8% 1996 Q4 -19.2% 1988 Q2
N/A$6.6M$7.5 MSales Volume $46.8M 2015 Q4 $0 1995 Q3
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LeasingThornton Office Report
The fundamentals of Southwest Dallas are stable. Afteryears of positive net absorption, coupled with minimalnew supply, vacancies are near historic lows, hovering atabout 7%. Southwest Dallas’ vacancy rate comparesfavorably to submarkets with a similar heavyconcentration of 1 & 2 Star and 3 Star inventory, such asGrand Prairie and Garland. There is a notable lack oflarge contiguous blocks of space in SouthwestDallas—as of 19Q3, only a handful of assets had morethan 25,000 SF of contiguous space available, and adozen properties had more than 10,000 SF available.
South Dallas is known more for its warehouse/distributionsector than its office employment base. The SouthwestDallas Submarket holds more than 93 million SF ofindustrial inventory, compared to only 6 million SF ofoffice stock. The local industrial market is booming, anddue to structural factors like rail and highwayinfrastructure and a mostly blue-collar labor force,industrial projects should remain the focus here. Whilethere is potential for office development in up-and-
coming neighborhoods near Downtown Dallas, such asthe Cedars, Trinity Groves, and Oak Cliff, large-scaledevelopment is likely years if not decades away.
The largest single tenant in the submarket is AT&T,which operates a 206,000-SF call center PinnacleBusiness Park. A significant portion of tenants with largefootprints are related to the government or public sectorlike the Dallas Housing Authority, the Office of theAttorney General, and the Social Security Administration.Leasing activity slowed in 19Q3 to 32,700 SF, down froma record 19Q2 of 84,000 SF. The Dallas CountyWorkforce Development Board accounted for 30,000 SFwhen it signed onto its new space at 3560 W CampWisdom Road. There is also a heavier than averageconcentration of transportation and logistics that operateoffices submarket. Tenant movement is rare, andtypically only a handful of new leases for more than5,000 SF are signed per year on non-owner/userproperties.
NET ABSORPTION, NET DELIVERIES & VACANCY
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Top Net Absorption
1.1M 1.1M
1.3M 1.3M 1.3M 1.4M 1.4M
1.7M 1.7M
2.3M 2.4M
2.5M 2.6M
2.7M 3.2M 3.2M 3.2M
4.1M 5.2M 5.2M
0M 1M 2M 3M 4M 5M 6M
Salt Lake CityChicago
Los AngelesEast Bay
ProvoRichmondStamford
RaleighNashville
AtlantaDenverAustin
San FranciscoPhoenix
San JoseWashington
CharlotteSeattle
New YorkDallas-Fort Worth
Net Absorption (Last 4 Quarters)
Top Net Deliveries
1.0M 1.0M
1.3M 1.3M 1.3M
1.7M 1.7M 1.8M 1.8M 1.9M
2.3M 2.4M
2.6M 2.8M 2.8M
3.0M 3.4M
3.8M 5.4M
6.0M
0M 1M 2M 3M 4M 5M 6M 7M
BostonMinneapolis
ProvoRichmond
San AntonioNashville
PhiladelphiaRaleigh
ChicagoDenverAtlantaSeattle
PhoenixHouston
San FranciscoCharlotte
WashingtonAustin
Dallas-Fort WorthNew York
Net Deliveries (Last 4 Quarters)
Most Space Under Construction
2.3M 2.5M 2.6M 2.6M 3.0M 3.3M 3.7M
4.4M 6.0M 6.3M 6.6M
7.1M 7.2M 7.5M 7.7M
8.4M 9.1M
10.5M 12.2M
26.9M
0M 5M 10M 15M 20M 25M 30M
MinneapolisPortlandPhoenix
MiamiDenver
Salt Lake CityHouston
CharlotteSan Francisco
San JoseSeattle
Los AngelesNashville
AtlantaAustin
ChicagoDallas-Fort Worth
BostonWashington
New York
Under Construction
Starts and Under Construction
0M
20M
40M
60M
80M
100M
120M
140M
160M
180M
0M
5M
10M
15M
20M
25M
30M
35M
40M
45M
07 08 09 10 11 12 13 14 15 16 17 18 19
Under
Constr
uction S
F
Constr
uction S
tart
s in S
F
Starts Under Construction
LeasingThornton Office Report
VACANCY RATE
AVAILABILITY RATE
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RentThornton Office Report
2018, it has remained positive into 2019, rising slowly at2%. With vacancies near historical lows, landlords are inas strong a position as ever to continue to push rents.However, the lack of demand for office space in thesubmarket could keep rent growth relatively mutedcompared to more dynamic submarkets throughout themetroplex.
At about $21/SF gross, asking rents in Southwest Dallas are among the lowest in Dallas-Fort Worth. Rents in the submarket align with other tertiary office nodes in inner-ring suburbs like East Northeast Fort Worth, Garland, and Southeast Dallas. Rent growth has performed well this cycle, though, with rent growth outpacing the metro average from 2015–17. While rent growth slowed in
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MARKET RENT PER SQUARE FOOT
ConstructionThornton Office Report
The potential for major office development in SouthwestDallas is mostly tied to the emergence of close-inneighborhoods such as the Cedars, Trinity Groves, andOak Cliff. In particular, the northern part of the Cedarscould someday be the home of Dallas’ high-speed railstation, making office development feasible there.Projects like Hoque Global's SoGood @ Cedars mixed-use development could potentially bring officedevelopment to the neighborhood.
In the near to mid-term, however, the focus in terms of
new supply is on the site of the old Redbird Mall. Localinvestor Peter Brodsky is working on redeveloping thesite, including converting part of the mall into officespace. In June 2018, the Dallas City Council approved$22 million in funding—and $15.6 million in taxincentives—for the redevelopment. The redevelopmentbegan in 2019 and could be delivered before the end of2020. Rents on the property are advertised at $14/SFtriple net, which is some of the lowest asking rents fornew office space in the metro. Other components includea new hotel, restaurants, and multifamily for the site.
DELIVERIES & DEMOLITIONS
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Sales Past 12 MonthsSouthwest Dallas Office
44 7.0% $86 23.2%Sale Comparables Avg. Cap Rate Avg. Price/SF Avg. Vacancy At Sale
SALE COMPARABLE LOCATIONS
SALE COMPARABLES SUMMARY STATISTICS
Sales Attributes Low Average Median High
Sale Price $70,000 $1,077,940 $875,000 $2,133,000
Price Per SF $50 $86 $66 $356
Cap Rate 6.1% 7.0% 6.3% 9.4%
Time Since Sale in Months 0.9 6.2 5.9 11.9
Property Attributes Low Average Median High
Building SF 669 9,266 3,887 73,496
Stories 1 1 1 2
Typical Floor SF 669 5,717 3,234 36,748
Vacancy Rate At Sale 0% 23.2% 0% 100%
Year Built 1925 1977 1977 2016
Star Rating 2.3
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Sales Past 12 MonthsThornton Office Report
Property Name - Address Rating Yr Built Bldg SF Vacancy Price Price/SF
Property
Sale Date
Sale
Cap Rate
RECENT SIGNIFICANT SALES
-1 916 E Highway 672014 6,000 0% $2,133,000 $3569/5/2019 7.0%
-2 Offices at Hillside Village…2007 29,997 53.6% $1,988,434 $66
305 W FM 13829/27/2019 6.3%
-3 Offices at Hillside Village…2007 28,122 53.6% $1,864,144 $66
305 W FM 13829/27/2019 6.3%
-4 211 W Pleasant Run Rd1984 12,869 25.8% $875,000 $688/9/2019 9.4%
-5 722 E Wheatland Rd1970 5,970 0% $390,000 $6510/4/2019 -
-6 880 W Kiest Blvd1977 3,138 100% $225,000 $728/2/2019 -
-7 431-433 W Wheatland Rd1977 1,399 0% $70,000 $504/11/2019 -
-8 1011 S Main St1950 669 0% - -3/15/2019 -
-9 Stoneridge One1987 73,496 43.8% - -
2550 Beckleymeade Ave3/8/2019 -
-10 JP Morgan Chase Bldg1985 28,030 32.3% - -
1881 Sylvan Ave3/7/2019 -
-11 415 E Pleasant Run Rd1957 1,120 0% - -2/13/2019 -
-12 400 N Zang Blvd1963 3,600 0% - -2/12/2019 -
-13 202 W 10th St1925 2,037 0% - -2/7/2019 -
-13 202 W 10th St1925 2,037 0% - -2/7/2019 -
-14 428 W Pleasant Run Rd1971 2,380 0% - -1/31/2019 -
-15 1105 S Main St1938 1,474 0% - -1/21/2019 -
-16 1122 N Bishop Ave1961 5,000 0% - -12/23/2018 -
-17 Bldg 11962 3,773 0% - -
321 Cooper St12/20/2018 -
-17 Bldg 11962 3,773 0% - -
321 Cooper St12/20/2018 -
-18 202 Santa Fe Trl2001 2,583 0% - -12/19/2018 -
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Supply & Demand TrendsThornton Office Report
OVERALL SUPPLY & DEMAND
Net AbsorptionInventory
% of Inv Construction RatioSF SF Growth % Growth SFYear
2023 89,446 1.3% 0.7%50,145 1.86,971,214
2022 89,353 1.3% 0.2%16,081 5.66,881,768
2021 59,185 0.9% 0.5%35,982 1.66,792,415
2020 (8,125) -0.1% 0.7%46,366 -6,733,230
2019 322,300 5.0% 2.0%135,508 2.46,741,355
YTD 322,300 5.0% 0%(855) -6,741,355
2018 41,239 0.6% 1.4%92,104 0.46,419,055
2017 73,732 1.2% 1.4%89,472 0.86,377,816
2016 45,480 0.7% 2.3%145,477 0.36,304,084
2015 31,972 0.5% -0.1%(3,942) -6,258,604
2014 20,789 0.3% 1.2%72,782 0.36,226,632
2013 1,321 0% 0%(1,214) -6,205,843
2012 (9,827) -0.2% 1.5%95,437 -6,204,522
2011 20,871 0.3% -1.4%(84,090) -6,214,349
2010 3,976 0.1% 2.2%133,595 06,193,478
2009 114,716 1.9% -0.4%(23,339) -6,189,502
2008 37,817 0.6% 0.9%52,421 0.76,074,786
2007 351,542 6.2% 7.4%444,597 0.86,036,969
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3 STAR SUPPLY & DEMAND
Net AbsorptionInventory
% of Inv Construction RatioSF SF Growth % Growth SFYear
2023 0 0% -0.6%(19,216) -3,188,237
2022 0 0% -0.6%(18,825) -3,188,237
2021 0 0% -0.5%(15,137) -3,188,237
2020 0 0% -0.3%(9,549) -3,188,237
2019 7,300 0.2% -1.9%(60,021) -3,188,237
YTD 7,300 0.2% -2.8%(88,484) -3,188,237
2018 41,239 1.3% 1.2%38,723 1.13,180,937
2017 62,988 2.0% 1.5%48,339 1.33,139,698
2016 51,355 1.7% 3.6%110,946 0.53,076,710
2015 31,972 1.1% 0%(1,451) -3,025,355
2014 26,189 0.9% 2.2%66,882 0.42,993,383
2013 6,339 0.2% -0.5%(14,836) -2,967,194
2012 5,800 0.2% 2.3%68,572 0.12,960,855
2011 38,183 1.3% -0.2%(6,256) -2,955,055
2010 4,851 0.2% 2.4%70,756 0.12,916,872
2009 35,259 1.2% -1.5%(43,354) -2,912,021
2008 37,817 1.3% 1.8%53,042 0.72,876,762
2007 317,328 12.6% 14.7%416,186 0.82,838,945
Rent & VacancyThornton Office Report
OVERALL RENT & VACANCY
Market Rent
Per SF Index % Growth Vs Hist PeakYear
Vacancy
SF Percent Ppts Chg
2023 129 1.7% 9.6%$24.12 709,028 10.2% 0.5%
2022 127 1.7% 7.8%$23.73 668,897 9.7% 1.0%
2021 125 1.9% 5.9%$23.32 594,827 8.8% 0.3%
2020 123 1.9% 4.0%$22.89 570,787 8.5% -0.8%
2019 120 2.1% 2.1%$22.48 624,498 9.3% 2.4%
YTD 120 1.9% 1.9%$22.44 760,870 11.3% 4.5%
2018 118 1.3% 0%$22.01 437,715 6.8% -0.8%
2017 116 3.0% -1.3%$21.73 488,580 7.7% -0.3%
2016 113 2.3% -4.2%$21.10 504,320 8.0% -1.7%
2015 111 10.9% -6.3%$20.62 604,317 9.7% 0.5%
2014 100 2.8% -15.5%$18.60 568,403 9.1% -0.9%
2013 97 2.4% -17.8%$18.09 620,396 10.0% 0%
2012 95 0.5% -19.8%$17.67 617,861 10.0% -1.7%
2011 94 -0.8% -20.2%$17.58 723,125 11.6% 1.7%
2010 95 -2.3% -19.5%$17.72 618,164 10.0% -2.1%
2009 97 -2.8% -17.6%$18.14 747,783 12.1% 2.0%
2008 100 -1.1% -15.2%$18.66 609,728 10.0% -0.3%
2007 101 4.3% -14.3%$18.88 624,332 10.3% -2.3%
4 & 5 STAR RENT & VACANCY
Market Rent
Per SF Index % Growth Vs Hist PeakYear
Vacancy
SF Percent Ppts Chg
2023 140 1.2% 12.8%$31.25 129,330 12.3% -1.2%
2022 139 1.2% 11.4%$30.88 128,599 13.5% 2.5%
2021 137 1.9% 10.1%$30.50 93,582 11.0% -2.4%
2020 134 2.4% 8.1%$29.94 103,994 13.4% -11.6%
2019 131 5.6% 5.6%$29.25 193,326 25.0% 17.5%
YTD 131 5.2% 5.2%$29.16 297,226 38.4% 30.9%
2018 124 3.0% 0%$27.71 34,431 7.5% -1.6%
2017 121 3.6% -2.9%$26.89 41,785 9.1% 5.6%
2016 117 3.7% -6.3%$25.96 15,500 3.5% 0%
2015 112 4.4% -9.7%$25.03 15,500 3.5% -0.7%
2014 108 8.3% -13.5%$23.97 18,625 4.2% 0.5%
2013 99 3.1% -20.1%$22.13 16,556 3.7% -2.2%
2012 96 5.4% -22.5%$21.47 26,442 5.9% -0.6%
2011 91 0.8% -26.5%$20.37 29,345 6.5% -4.3%
2010 91 -2.3% -27.1%$20.20 48,613 10.8% 0.2%
2009 93 -7.2% -25.4%$20.68 47,822 10.7% 10.7%
2008 100 2.3% -19.6%$22.28 0 0% 0%
2007 98 8.4% -21.4%$21.79 0 0% 0%
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Rent & VacancyThornton Office Report
3 STAR RENT & VACANCY
Market Rent
Per SF Index % Growth Vs Hist PeakYear
Vacancy
SF Percent Ppts Chg
2023 122 1.7% 10.4%$24.67 368,556 11.6% 0.6%
2022 120 1.8% 8.6%$24.27 349,340 11.0% 0.6%
2021 118 2.0% 6.7%$23.83 330,515 10.4% 0.5%
2020 116 2.3% 4.6%$23.37 315,378 9.9% 0.3%
2019 113 2.3% 2.3%$22.85 305,829 9.6% 2.1%
YTD 113 2.1% 2.1%$22.80 334,296 10.5% 3.0%
2018 111 1.1% 0%$22.34 238,512 7.5% 0%
2017 109 0.6% -1.1%$22.09 235,996 7.5% 0.3%
2016 109 0% -1.8%$21.95 221,347 7.2% -2.1%
2015 109 17.7% -1.8%$21.94 280,938 9.3% 1.0%
2014 92 -1.1% -16.6%$18.64 247,515 8.3% -1.4%
2013 93 1.2% -15.7%$18.83 288,208 9.7% 0.7%
2012 92 1.8% -16.7%$18.61 267,033 9.0% -2.1%
2011 90 1.9% -18.2%$18.27 329,805 11.2% 1.4%
2010 89 -3.1% -19.8%$17.93 285,366 9.8% -2.3%
2009 92 -8.4% -17.2%$18.51 351,271 12.1% 2.6%
2008 100 0.3% -9.6%$20.20 272,658 9.5% -0.7%
2007 100 6.5% -9.9%$20.13 287,883 10.1% -5.2%
1 & 2 STAR RENT & VACANCY
Market Rent
Per SF Index % Growth Vs Hist PeakYear
Vacancy
SF Percent Ppts Chg
2023 135 1.8% 7.2%$21.50 211,142 7.7% 0.8%
2022 133 1.8% 5.3%$21.11 190,958 7.0% 0.8%
2021 130 1.7% 3.4%$20.73 170,730 6.2% 0.7%
2020 128 1.1% 1.7%$20.39 151,415 5.5% 1.0%
2019 127 0.6% 0.6%$20.16 125,343 4.5% -1.4%
YTD 127 0.5% 0.5%$20.16 129,348 4.7% -1.3%
2018 126 0.9% 0%$20.05 164,772 5.9% -1.7%
2017 125 5.9% -0.9%$19.87 210,799 7.6% -2.0%
2016 118 4.9% -6.4%$18.77 267,473 9.6% -1.4%
2015 113 4.8% -10.8%$17.89 307,879 11.1% 0.2%
2014 107 6.0% -14.9%$17.06 302,263 10.9% -0.5%
2013 101 3.7% -19.7%$16.10 315,632 11.3% -0.3%
2012 98 -3.0% -22.6%$15.53 324,386 11.6% -1.3%
2011 101 -4.7% -20.2%$16.00 363,975 12.9% 2.9%
2010 106 -1.3% -16.2%$16.80 284,185 10.0% -2.3%
2009 107 7.1% -15.2%$17.01 348,690 12.3% 0.4%
2008 100 -4.4% -20.8%$15.89 337,070 11.9% 0%
2007 105 0.1% -17.1%$16.63 336,449 11.9% 0.1%
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Sale TrendsThornton Office Report
OVERALL SALES
Completed Transactions (1)
Turnover Avg Price/SFDeals VolumeYear
Market Pricing Trends (2)
Avg Price Price IndexAvg Cap Rate Price/SF Cap Rate
2023 -- - -- 191- $178.78 7.2%
2022 -- - -- 188- $176.49 7.2%
2021 -- - -- 188- $176.06 7.0%
2020 -- - -- 183- $171.53 7.0%
2019 -- - -- 175- $163.64 7.1%
YTD $7.5 M35 5.4% $86.24$1,077,940 1747.2% $163.08 7.1%
2018 $0.8 M39 3.9% $42.50$265,000 1696.1% $158.08 7.1%
2017 $6.4 M40 4.5% $80.46$482,385 1658.8% $154.98 7.0%
2016 $1.8 M42 4.4% $174.79$356,600 1657.3% $154.34 6.9%
2015 $46.8 M43 9.3% $150.15$6,686,318 1557.7% $144.90 7.0%
2014 $12.6 M39 8.4% $95.10$1,570,006 1479.2% $137.74 7.1%
2013 $2.4 M34 4.2% $63.75$588,856 1346.5% $125.24 7.4%
2012 $9.2 M30 4.9% $261.51$4,607,070 1257.6% $116.74 7.8%
2011 $18.1 M32 5.4% $108.10$1,511,808 1158.3% $107.35 8.1%
2010 $31.2 M16 5.3% $118.34$10,316,667 1029.4% $95.69 8.8%
2009 $6.6 M25 2.4% $69.12$471,571 8811.0% $82.29 9.8%
2008 $22.4 M18 5.7% $153.68$2,035,089 1008.8% $93.70 9.3%
(1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period.
(2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.
4 & 5 STAR SALES
Completed Transactions (1)
Turnover Avg Price/SFDeals VolumeYear
Market Pricing Trends (2)
Avg Price Price IndexAvg Cap Rate Price/SF Cap Rate
2023 -- - -- 168- $230.75 7.2%
2022 -- - -- 167- $229.01 7.2%
2021 -- - -- 167- $229.08 7.0%
2020 -- - -- 163- $223.55 7.0%
2019 -- - -- 155- $212.74 7.1%
YTD -- - -- 154- $211.82 7.1%
2018 -- - -- 149- $204.11 7.1%
2017 -- - -- 145- $198.79 7.0%
2016 -- - -- 149- $203.77 6.8%
2015 $33.5 M1 45.9% $162.59$33,500,000 1438.0% $196.59 6.9%
2014 $0 M1 16.6% -- 142- $194.21 7.0%
2013 -- - -- 131- $180.19 7.2%
2012 -- - -- 124- $170.74 7.5%
2011 $6.4 M1 16.6% $85.85$6,400,500 118- $162.49 7.7%
2010 $29.4 M1 45.9% $142.69$29,400,000 1059.8% $144.14 8.4%
2009 -- - -- 89- $121.67 9.5%
2008 -- - -- 100- $137.21 9.0%
(1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period.
(2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.
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Sale TrendsThornton Office Report
3 STAR SALES
Completed Transactions (1)
Turnover Avg Price/SFDeals VolumeYear
Market Pricing Trends (2)
Avg Price Price IndexAvg Cap Rate Price/SF Cap Rate
2023 -- - -- 201- $204.20 6.9%
2022 -- - -- 198- $201.58 6.9%
2021 -- - -- 198- $201.22 6.7%
2020 -- - -- 192- $195.79 6.7%
2019 -- - -- 183- $185.96 6.8%
YTD $6.4 M14 8.4% $90.96$1,593,894 1826.5% $185.24 6.8%
2018 $0 M13 3.9% -- 1766.1% $179.24 6.8%
2017 $4.0 M17 3.1% $80.67$648,583 1739.9% $175.75 6.7%
2016 $0.4 M7 2.0% $104.52$375,000 173- $175.63 6.6%
2015 $13.0 M10 4.7% $135.76$3,243,806 1596.5% $161.76 6.7%
2014 $11.9 M15 10.4% $96.18$2,389,582 1519.2% $153.68 6.8%
2013 $0 M4 2.5% -- 136- $138.77 7.2%
2012 $8.4 M7 5.7% $276.18$8,350,000 1277.6% $129.07 7.5%
2011 $8.9 M10 3.8% $292.70$2,970,000 1148.4% $115.58 7.9%
2010 $1.3 M5 2.7% $28.89$1,300,000 1019.0% $102.91 8.6%
2009 $3.0 M2 0.9% $529.15$2,950,000 87- $88.67 9.6%
2008 $19.2 M6 6.9% $211.16$6,385,327 100- $101.74 9.0%
(1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period.
(2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.
1 & 2 STAR SALES
Completed Transactions (1)
Turnover Avg Price/SFDeals VolumeYear
Market Pricing Trends (2)
Avg Price Price IndexAvg Cap Rate Price/SF Cap Rate
2023 -- - -- 187- $135.13 7.6%
2022 -- - -- 184- $133.08 7.5%
2021 -- - -- 183- $132.44 7.4%
2020 -- - -- 179- $129.21 7.3%
2019 -- - -- 172- $124.35 7.4%
YTD $1.2 M21 3.5% $67.22$390,000 1729.4% $124.09 7.5%
2018 $0.8 M26 4.7% $42.50$265,000 167- $120.96 7.4%
2017 $2.4 M23 6.8% $80.11$339,929 1647.8% $118.93 7.3%
2016 $1.4 M35 7.7% $212.91$352,000 1617.3% $116.14 7.3%
2015 $0.3 M32 8.4% $32.57$164,500 1548.5% $111.14 7.4%
2014 $0.6 M23 5.0% $77.99$204,046 143- $103.72 7.5%
2013 $2.4 M30 6.8% $63.75$588,856 1316.5% $94.41 7.8%
2012 $0.9 M23 4.9% $172.83$864,140 121- $87.56 8.2%
2011 $2.8 M21 5.2% $45.06$353,900 1148.0% $82.54 8.5%
2010 $0.5 M10 1.6% $37.50$250,000 102- $73.89 9.1%
2009 $3.7 M23 4.3% $40.60$280,923 8811.0% $64.00 10.2%
2008 $3.2 M12 5.3% $58.78$403,750 1008.8% $72.34 9.7%
(1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period.
(2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.
12/4/2019Copyrighted report licensed to Property Cashin - 1096082.
Page 19
Top and Bottom Rent Growth Markets
-0.3%-0.0%
0.2%0.2%0.4%0.7%1.0%1.1%1.1%1.5%1.6%1.8%2.0%2.0%
2.4%2.6%2.6%2.8%
3.4%3.5%
-2% 0% 2% 4% 6% 8%
BaltimoreNorthern New Jersey
Kansas CityCleveland
DetroitNew York
WashingtonHouston
BostonOrange County
CincinnatiPittsburgh
Saint LouisMiami
ChicagoDallas-Fort Worth
PortlandColumbus
Los AngelesIndianapolis
Rent Growth, YOY
Note: Includes markets with 100M+ SF inventory.
2.4%2.6%2.6%2.8%
3.4%3.5%3.5%3.6%3.7%3.7%
4.1%4.2%
4.9%5.0%5.2%5.5%5.6%
6.3%6.6%6.8%
-2% 0% 2% 4% 6% 8%
ChicagoDallas-Fort Worth
PortlandColumbus
Los AngelesIndianapolisMinneapolis
San DiegoPhiladelphia
PhoenixAtlantaDenver
SacramentoSan Jose
TampaEast Bay
San FranciscoSeattle
CharlotteAustin
Rent Growth, YOY
Note: Includes markets with 100M+ SF inventory.
Office Rent Growth: Base Case Forecast
Forecast
(12%)
(8%)
(4%)
0%
4%
8%
12%
$24
$26
$28
$30
$32
$34
$36
07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Annual R
ent G
row
th
Rent P
er
SF
Market Rent Year-Over-Year Rent Change
Base Case Rent Growth Forecast, by Market
|||
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||
||||
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1.2%1.2%1.3%1.4%1.5%1.5%1.6%1.6%1.6%1.7%1.8%1.8%1.9%2.0%2.1%2.1%2.4%2.5%2.6%2.8%
-2% 0% 2% 4% 6% 8%
San FranciscoColumbus
PortlandPhiladelphia
AustinMiami
DenverEast Bay
AtlantaLos AngelesMinneapolis
Dallas-Fort WorthIndianapolis
PhoenixSan Diego
SacramentoSeattle
CharlotteSan Jose
Tampa
Four-Year Average Forecast Rent Growth, YOYNote: Includes markets with 100M+ SF inventory.
||
||
||
||
||
||
||
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||
|
-0.0%0.2%0.4%0.4%0.5%0.5%0.6%0.7%0.7%0.8%1.0%1.0%1.0%1.2%1.2%1.2%1.3%1.4%1.5%1.5%
-2% 0% 2% 4% 6% 8%
BostonBaltimore
Kansas CityDetroit
CincinnatiNorthern New Jersey
ClevelandPittsburghNew York
Orange CountyWashington
ChicagoSaint Louis
HoustonSan Francisco
ColumbusPortland
PhiladelphiaAustinMiami
Four-Year Average Forecast Rent Growth, YOYNote: Includes markets with 100M+ SF inventory.
4&5 Star Office Rent Growth: Base Case Forecast
Forecast
(12%)
(9%)
(6%)
(3%)
0%
3%
6%
9%
12%
15%
$30
$32
$34
$36
$38
$40
$42
$44
$46
$48
07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Annual R
ent G
row
th
Rent P
er
SF
Market Rent Year-Over-Year Rent Change
Office Average Transaction Price
$100
$150
$200
$250
$300
07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Price p
er
SF
Transaction Price/SF
Office Market Price: Base Case
(20%)
(10%)
0%
10%
20%
$100
$150
$200
$250
$300
07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Annual P
rice G
row
th
Price p
er
SF
Year-Over-Year Change Transaction Price/SF Avg Price/SF
Office Cap Rates
National Office Cap Rate Forecast
Forecast
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22
Average Cap Rate BBB Yield