2010 Global Market Report - NAI Commercial Real Estate

Fargo, North DakotaAkron, OhioContactNAI North Central+1 701 364 0244Metropolitan AreaEconomic Overview2009Population2014 EstimatedPopulationEmploymentPopulationHouseholdAverage IncomeMedianHousehold IncomeTotal PopulationMedian Age202,025225,041142,133$57,820$50,12732The 2009 Fargo market can best be described as sporadicand uneven. Demand for office and retail space is contractingwhile demand for industrial space is fairly stable. The multifamilysector remains active but with off-market properties.Current inventory of multi-family properties is very low.Excessive surplus office and retail inventories exist.Industrial inventory has a slight surplus. Key Fargo industrydrivers include health care, education, banking, insurance,agribusiness, shipping - transportation, and manufacturing.The office rental market is soft. An overabundance of leasespace with landlord concessions and competitive rentalrates prevails. Currently, there are approximately 219 leaselistings on the market. Rental rates vary from $7.00/SF to$8.00/SF for Class B space and up to $9.50/SF to$11.25/SF for Class A space located in start-up businessparks or along key corridor sites. The surplus of office spaceis expected to carry through 2010. Closed office salesare off from last year's pace and are expected to finishbehind 2008.The industrial rental market is near equilibrium with anominal inventory surplus. Rental rates for Class B heatedspace range from $4.50/SF to $6.00/SF. Year to date closedindustrial sales are slightly behind 2008. The retail rentalmarket is saturated with 142 lease listings on the market.New retail projects including Amber Valley, Cityscapes Plaza,Eagle Run, Osgood, and Shoppes at Urban Plains, haveadded to the surplus. The surplus will carry through 2010.Rental rates for Class A space are $14.00/SF to $16.00/SF.Class B space runs $9.00/SF to $10.75/SF. However, closedretail sales should finish comparable to 2008. MajorI-94 interchange projects are in progress in south Moorheadand south West Fargo creating renewed interest in anddevelopment at those sites. North Dakota State Universityopened a satellite business college & architecture departmentin the CBD.Special mention is made of the historic 2009 Red RiverFlood. Local and regional businesses lost at least one fullmonth of sales and production as a direct result of the flood.Economic impact was felt across all sectors as employerscontributed valuable labor and inventory to this effort.ContactNAI CumminsReal Estate+1 330 535 2661Metropolitan AreaEconomic Overview2009Population2014 EstimatedPopulationEmploymentPopulationHouseholdAverage IncomeMedianHousehold IncomeTotal PopulationMedian Age694,360680,988393,378$64,509$54,65839Situated near Lake Erie and several major interstates in theheart of the Midwest, Akron continues to attract entrepreneurs,investors and new businesses through its reputationfor innovation, low cost of living and strong institutionalinvestment in the community. Akron’s greatest growthin 2009 was in health care, education, technology and serviceindustries. Manufacturing and distribution continue tocontract from last year and retail has slowed with consumerspending.Greater Akron saw an increase in institutional developmentprojects throughout 2009. The construction of the $61.6million Infocision stadium at the University of Akron wascompleted this year and welcomed a capacity crowd onopening day. The requirement for educational office spacehas increased as the unemployed seek job and careertraining from ITT Technical Institute, Brown Mackie College,Strayer University and the like. These companies seek ClassA and B office space in markets across the country and haveopened multiple locations throughout Northeast Ohio toaccommodate growth in enrollment.The requirement for medical office space continues toexpand as groundbreaking takes place on hospital andmedical center projects throughout Summit County. SummaHospitals began construction on the Crystal Clinic andacquiring Robinson Memorial Hospital in Ravenna. AkronGeneral expanded the reach of its emergency medicalservices and wellness centers with new facilities and a 30+bed hospital planned for a suburban community.Investors have seen rising capitalization rates for cash-readybuyers and sale/leaseback opportunities abound. Sellerfinancing is now a viable option for many buyers and sellerswho are highly motivated to close transactions. Manufacturinghas taken a hit with the drastic reduction in automotiveassembly. With an ample supply of light industrial spaceavailable, tenant lease terms are shorter. Sale pricesand attractive lease rates offer great opportunities for buyersand tenants.Retail development expanded to suburban communities.These growing areas have lured regional and nationaltenants, speaking to the demand for mid to upscale services.Declining malls, strip centers and plazas are beingreinvented to include mixed use, light industrial, recordsstorage, trade schools and call center space.Fargo At A Glance(Rent/SF/YR) Low High Effective Avg. VacancyDOWNTOWN OFFICENew Construction (AAA)Class A (Prime)$$12.509.50$$16.5011.25$ 15.50$ 10.5012.5%10.5%Class B (Secondary)SUBURBAN OFFICE$ 7.00 $ 8.00 $ 7.50 11.3%New Construction (AAA)Class A (Prime)Class B (Secondary)INDUSTRIAL$$$12.0010.758.00$$$15.0012.5011.00$ 14.00$ 12.00$ 10.009.8%10.50%11.0%Bulk WarehouseManufacturingHigh Tech/R&DRETAIL$$4.505.75N/A$$6.006.90N/A$$5.506.50N/A9.9%9.9%N/ADowntownNeighborhood Service Centers$$14.0010.00$$16.0012.50$ 15.00$ 11.5014.3%8.5%Sub Regional Centers$ 8.00 $ 9.50 $ 9.00 8.5%Regional Malls$ 18.00 $ 20.00 $ 19.50 3.0%DEVELOPMENT LAND Low/Acre High/AcreOffice in CBD$ 9.20 $ 15.30Land in Office ParksLand in Industrial ParksOffice/Industrial Land - Non-parkRetail/Commercial LandResidential$$$$$87,120.0076,230.0084,942.00174,240.0021,780.00$$$$$174,240.00108,900.00130,680.00261,360.0054,450.00Akron At A Glance(Rent/SF/YR) Low High Effective Avg. VacancyDOWNTOWN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)SUBURBAN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)INDUSTRIALBulk WarehouseManufacturingHigh Tech/R&DRETAIL$$$$$$$$$19.0014.009.5017.5014.508.502.252.757.00$$$$$$$$$23.0019.0019.0021.0020.0014.004.003.758.00$$$$$$$$$16.5016.0014.0718.5018.5012.003.253.257.50N/A13.0%10.0%N/A13.0%12.0%14.0%12.0%7.0%DowntownNeighborhood Service CentersCommunity Power CenterRegional Malls$7.00$6.00$10.00$20.00$$$$17.0030.0017.0030.00$$$$12.0013.5014.0025.008.0%14.0%14.0%4.0%DEVELOPMENT LAND Low/Acre High/AcreOffice in CBDLand in Office ParksLand in Industrial ParksOffice/Industrial Land - Non-parkRetail/Commercial LandResidential$$$$$$350,000.00140,000.0060,000.0055,000.00100,000.0015,000.00$$$$$$525,000.00250,000.00100,000.0090,000.00300,000.0020,000.002010 Global Market Report ■ www.naiglobal.com 113