INDUSTRIAL VACANCIES HIT RECORD HIGHS
There's more bad news for industrial investors and developers: vacancy rates in some markets are still growing. In Raleigh, N.C., for example, vacancy rates grew 130 basis points to 23.5% between the third quarter of 2002 and the third quarter of 2003.
| 3Q 2003 | 3Q 2002 | Basis Point Change | |
|---|---|---|---|
| Raleigh, N.C. | 23.5% | 22.2% | 130 |
| Austin, Texas | 19.7% | 19.1% | 60 |
| San Jose | 18.1% | 14.8% | 330 |
| Stamford, Conn. | 16.9% | 13.8% | 310 |
| Atlanta | 16.0% | 15.3% | 70 |
| Detroit | 15.6% | 12.3% | 330 |
| Charlotte, N.C. | 15.1% | 13.3% | 180 |
| Sacramento | 14.8% | 13.6% | 120 |
| Source: Torto Wheaton Research | |||
NET-LEASE LEADERS
As of the second quarter of 2003, the Northeast and Mid-Atlantic regions led the country in sales of single-tenant, net-lease office properties. The Southeast and the West experienced the highest volume of industrial net-lease transactions.
A WAREHOUSE OF REVENUE
The warehouse club/supercenter concept embraced by retailers such as Wal-Mart and Costco has become consumers' dominant source for general merchandise over the past decade, at the expense of conventional department stores, such as Macy's.
WHERE THE HOTEL DEALS ARE
Hotel buyers in search of bargains should look to North Central cities such as Chicago, Detroit and Minneapolis for attractive prices. The region averaged $42,545 per room, the lowest of any region, in the first half of 2003.
| First Half 2003 | |||
|---|---|---|---|
| Average | |||
| Number of | Number | Average Sale | |
| Transactions | of Rooms | Price Per Room | |
| New England and Middle Atlantic | 8 | 54 | $78,598 |
| Mountain and Pacific | 137 | 60 | $60,774 |
| South Central | 18 | 139 | $57,233 |
| South Atlantic | 58 | 77 | $56,220 |
| North Central | 27 | 117 | $42,545 |
| First Half 2002 | |||
| Average | |||
| Number of | Number | Average Sale | |
| Transactions | of Rooms | Price Per Room | |
| New England and Middle Atlantic | 46 | 137 | $128,637 |
| Mountain and Pacific | 150 | 85 | $57,628 |
| South Atlantic | 115 | 81 | $48,284 |
| North Central | 65 | 85 | $26,103 |
| South Central | 41 | 108 | $24,458 |
| Source: The Hospitality Research Group, CoStar, Hotel Brokers Association | |||
PACKED WITH APARTMENTS
Although the number of apartment units for rent in New York City actually declined by 21,000 over the last decade, the market's total apartment count still leads the nation by nearly 1 million units. The reduction in the number of units can be attributed in large part to relatively low population growth in older metropolitan areas.
| Rental Apartment Units | Difference | |||
|---|---|---|---|---|
| Metro Area | 1990 | 2000 | 1990-2000 | |
| 1.New York | 1.91 million | 1.89 million | -21,052 | |
| 2. Los Angeles | 896,542 | 931,222 | 34,680 | |
| 3. Chicago | 606,642 | 616,690 | 10,048 | |
| 4. Washington, D.C. | 424,676 | 445,660 | 20,984 | |
| 5. Houston | 397,062 | 416,690 | 19,628 | |
| 6. Dallas | 345,538 | 377,226 | 31,688 | |
| 7. Atlanta | 276,542 | 323,320 | 46,778 | |
| 8. San Diego | 275,618 | 286,050 | 10,432 | |
| 9. Detroit | 281,760 | 255,267 | -26,493 | |
| 10. Miami | 242,680 | 255,195 | 12,515 | |
| Source: Bob Sheehan, consulting economist to the National Apartment Association from U.S. Bureau of Census data. | ||||