SLOW GROWTH
Not only has job growth cooled in recent months, it has been slow throughout this expansion cycle. The expansion is 57 months old, and payroll employment is up 3.5 percent. In the same time span after the end of the 1990-91 and 1981-82 recessions, employment had grown by 8.9 and 15.3 percent, respectively. Slower job growth, both in recent months and compared with historic cycles, has not adversely impacted the office market. Developers are adding new projects at a prudent pace, and the market continues to tighten.
LAND OF THE COSTS
The price of land varies widely by property type. Real Capital Analytics over the last 18 months tracked more than $20 billion worth of land acquisitions. The cost of land for mixed-use properties leads the pack, averaging $1.1 million per acre. Meanwhile, lifestyle centers are being built on the cheapest land, averaging $181,000 per acre. The type of buyers varies, but in-state private buyers lead the pack.
| $/acre (in thousands) | avg $ per buildable sf | avg % of project cost | |
|---|---|---|---|
| Big box retailers | 353 | 41 | 33 |
| Lifestyle centers | 181 | 24 | 10 |
| Power centers | 329 | 24 | 19 |
| Other strips | 767 | 67 | 27 |
| Total strips | 632 | 57 | 26 |
| Total mixed-use | 1136 | 38 | 10 |