2010 Global Market Report - NAI Commercial Real Estate

Washington County, UtahBurlington, VermontContactNAI Utah SouthernRegion+1 435 628 1609Metropolitan AreaEconomic Overview2009Population2014 EstimatedPopulationEmploymentPopulation148,274184,26037,729Southern Utah has seen its housing market begin therecovery process and prices are expected to increase slightlyin 2010. Historically, housing has been a very importantsector in the local economy. The increasing stability in thehousing market, along with the local economic developmentoffice's efforts to diversify the economy, is a sign that ouraggressive historical growth trends are not far behind.The economy has had the greatest impact on the industrialmarket. While net absorption has been negative for twoconsecutive years, we have seen an increase in the numberof transactions relative to Q1 and Q2 of 2009. The vastmajority of new leases are for small space with short-termleases and low rates. Although new business leasing wasnot sufficient enough to outpace business contraction in2009, we expect to see positive absorption in 2010.Leasing activity and demand in the office market is alsoimproving. Although it was just a slight increase, we did seepositive absorption in the office market in Q3 2009. Thisimprovement was driven by softening lease rates andbusiness growth. We expect office leasing to remain softinto 2010 with tenants asking for aggressive rates andadditional concessions. Most of the leasing activity willcontinue to come from business relocations, although wedo expect an increase in the number of new businessesentering the market.Locally, retail continues to be Southern Utah’s most activemarket, although retailers are still struggling and vacancyrates are still rising. Most of the interest in the retail marketis in high exposure locations. While actual retail rents havedecreased, it has not been to the degree seen in the officeand industrial markets.NAI Utah Southern Region is the largest commercial realestate brokerage in Southern Utah as measured by agents,leasing volume and sales volume. We also offer propertymanagement services.ContactNAI J.L. Davis Realty+1 802 878 9000Metropolitan AreaEconomic Overview2009Population2014 EstimatedPopulationEmploymentPopulation208,401210,825121,812The Greater Burlington commercial real estate market sawlimited growth in 2009. 2010 looks to be a similar year withbelow average growth anticipated in the retail, office andindustrial sectors. Each of these market segments shouldsee lease rates weaken. The number of lease transactionshas also declined over the past five years.Retail growth in 2010 is expected to be around 3.6%.Vacancy in the suburban markets has risen slightly, whilevacancy in the CBD remains stable. In the CBD, lease ratesare $18-$30/SF, with the highest rates seen in the ChurchStreet Marketplace and Burlington Town Center. Averagesuburban retail lease rates are between $8 and $13/SF. Newoffice development in 2010 is anticipated to be about 1.4%.There has been a weakening in the suburban office marketwhile the CBD remains stable. Vacancy rates for office spacein Chittenden County are 12.4%. Suburban vacancy ratesare closer to 14.7%. The CBD has the lowest vacancycoming in at 4%. Lease rates for Class A office space in theCBD range from $13-$17/SF and are stable. Class B spacein this district rents for $8-$13/SF and is also stable.Industrial growth in 2010 is projected at 2.2%. Vacancyrates have risen to 9% in 2009. Rents are expected toweaken for all classes of industrial space. Above averageproperty is leasing for $6-$8/SF, average industrial propertyrents for $4.50-$6/SF, and below average property leasesat $3-$4.50/SF. In general, large industrial propertiesare leasing for $3.50-$5.00/SF depending on conditionand location.Overall, 2010 should produce many opportunities for businessesof all sizes. As the economy tries to stabilize,development moves forward with new leasing opportunitiesfor the office, retail, and industrial markets.HouseholdAverage Income$59,135HouseholdAverage Income$71,349MedianHousehold Income$47,782MedianHousehold Income$57,648Total PopulationMedian Age30.2Total PopulationMedian Age38Washington County At A Glance(Rent/SF/YR) Low High Effective Avg. VacancyDOWNTOWN OFFICEPremium (AAA)Class A (Prime)Class B (Secondary)SUBURBAN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)INDUSTRIALBulk WarehouseManufacturingHigh Tech/R&DRETAILDowntownNeighborhood Service CentersSub Regional CentersRegional Malls$$$$$N/A0.900.70N/A0.900.700.35N/AN/AN/AN/AN/AN/A$$$$$N/A1.251.15N/A1.251.150.55N/AN/AN/AN/AN/AN/A$$$$$$1.151.131.00N/A1.131.000.46N/AN/AN/AN/AN/AN/A35.0%8.6%14.9%35.0%8.6%14.9%23.3%N/AN/AN/AN/AN/AN/ADEVELOPMENT LAND Low/Acre High/AcreOffice in CBDLand in Office ParksLand in Industrial ParksOffice/Industrial Land - Non-parkRetail/Commercial LandResidential$$$$$350,000.00300,000.00125,000.00N/A450,000.0030,000.00$$$$$600,000.00500,000.00175,000.00N/A700,000.0060,000.00Burlington At A Glance(Rent/SF/YR) Low High Effective Avg. VacancyDOWNTOWN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)SUBURBAN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)INDUSTRIALBulk WarehouseManufacturingHigh Tech/R&DRETAILDowntownNeighborhood Service CentersCommunity Power CenterRegional Malls$$$$$$$$$$$$N/A15.0010.0015.0014.0010.003.504.006.5018.0010.0018.0020.00$$$$$$$$$$$$N/A22.0015.0022.0022.0014.006.506.008.0030.0016.0022.0035.00$$$$$$$$$$$$N/A18.5012.5018.5017.0012.005.005.007.2524.0013.0020.0027.50N/A4.0%5.0%14.0%14.2%15.5%7.5%8.5%9.6%7.4%7.8%7.0%7.0%DEVELOPMENT LAND Low/Acre High/AcreOffice in CBD$ 15.00 $ 28.00Land in Office ParksLand in Industrial ParksOffice/Industrial Land - Non-parkRetail/Commercial LandResidential$$$$$90,000.0060,000.0050,000.00200,000.0060,000.00$$$$$125,000.00120,000.0080,000.00500,000.00120,000.002010 Global Market Report ■ www.naiglobal.com 132