2010 Global Market Report - NAI Commercial Real Estate

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■ US Highlights – West Region■ ArizonaCaliforniaColoradoHawaiiIdahoMontanaOfficeNevadaNew MexicoOregonUtahWashingtonWyomingThe entertainment industry, a primary component of the Los Angeles market, has weatheredthe economic crisis well, but demand is off in most other sectors. Tenants are giving back excessspace and renegotiating leases to reduce their operating costs. Higher vacancy rates, lowerlease rates and tight credit have almost eliminated new construction.The office vacancy rate in Phoenix is 25% overall, but vacancy at Class A+ product downtownand in suburban submarkets has reached a staggering 60%. Relief won’t come anytime soonwith over 2 million SF currently under construction.Portland office vacancy increased considerably during 2009, but Class A space in the CBDremained tight at around 6%. No new CBD projects will deliver until summer 2010.Positive net absorption of almost 300,000 SF of office space in San Diego in Q3 provided somewelcome positive news in an otherwise very difficult year. Investment activity is well off the 2007peak in velocity and volume. Excluding buildings under 15,000 SF, sale prices in 2009 averaged$140/SF, down from $230/SF in 2008.The San Francisco commercial market remained plagued by rising vacancy, declining rents andoccupancy loss with the September 2009 preliminary unemployment rate reaching 10.4%. Themarket-wide vacancy rate rose to 15.3% at the end of Q3 with nearly 1.7 million SF of negativeabsorption year to date. Rental rates dropped $3.75 to $33.01/SF full service.San Mateo office vacancy peaked above 18% in 2009, climbing 680 basis points from 2008.The average asking rate decreased a dramatic $10.32 in the past year to $31.92/SF full serviceper year. Since 2007, nearly 5.7 million SF of office space has been absorbed from SanMateo County's available marketplace.IndustrialDenver’s vacancy rate is nearing 9%. The good news is there are several large transactionsin the market, which should fill some voids that have been created due to the downturn inthe economy.Las Vegas industrial inventory grew to 103 million SF, pushing the vacancy rate beyond 12%.Current vacancies are significantly higher than the 10-year historical average of 8%. Speculativedevelopment in the sector remains limited while net absorption remained negative throughoutthe year.Offsetting Los Angeles’ gains in entertainment are losses in international trade. Total shipmentsthrough September at the Port of Long Beach decreased 24.6 % from the previous year, andcontributed to rising vacancy and weakening rents in the L.A. County industrial sector.Demand for industrial space in Reno was down for the third consecutive year and the vacancyrate reached an all-time high above 15%. Even with virtually no speculative developmentduring 2009, occupancy receded by more than 3% (almost 2 million SF) and effective rentsdropped 15% to 25%, with a concomitant decrease in property values.RetailIn December 2009, MGM Mirage’s $8.5 billion CityCenter mixed-use development debuts with18.5 million SF of resort and residential development along the famous Las Vegas Strip. Theproperty is expected to act as a catalyst for increased visitation, which should have ripplingeffects throughout the local economy.While economic conditions in Los Angeles County remain weak, one bright spot is discountretailers such as Big Lots, Dollar Tree, 99 Cents Only and Wal-Mart, continue to expand.Retail landlords in Phoenix have been aggressive with rental rates and concessions for bothnew and existing tenants. In spite of those efforts, overall vacancy has risen from 10.3% at thebeginning of 2009 to the current level of 11%. New construction has exacerbated the problemwith 2.8 million SF added over the past year and another 1 million SF is due to delivered bymid-2010.Leading Price Class A MarketsDowntown OfficeClass ASuburban OfficeClass ALeading Price Retail MarketsRetailDowntownRetailService CentersRetailPower CentersRetailRegional MallsMarket Effective Avg. High Rent VacancySanta Clara County (Silicon Valley), California $43.44 $85.20 24.1%San Francisco County, California $36.42 $70.00 14.4%Los Angeles County, California $34.19 $52.54 13.7%Sacramento, California $34.08 $39.60 9.6%Jackson Hole, Wyoming $32.50 $35.00 10.0%San Diego, California $31.50 $36.00 18.0%Market Effective Avg. High Rent VacancySanta Clara County (Silicon Valley), California $35.60 $78.96 23.9%San Mateo County, California $35.04 $162.00 18.7%Los Angeles County, California $32.67 $77.40 14.8%Marin County, California $30.96 $60.00 27.9%Ventura County, California $30.00 $35.00 19.6%Market Effective Avg. High Rent VacancySan Francisco County, California $76.33 $750.00 6.7%Santa Clara County (Silicon Valley), California $48.00 $72.00 7.6%Seattle, Washington $42.00 $65.00 8.1%San Diego, California $33.33 $60.00 6.6%Los Angeles County, California $32.61 $45.24 4.6%Market Effective Avg. High Rent VacancySan Francisco County, California $45.06 $65.00 3.6%Santa Clara County (Silicon Valley), California $36.00 $48.00 10.8%San Mateo County, California $33.66 $54.00 3.8%Ventura County, California $25.70 $39.00 9.1%Los Angeles County, California $25.31 $41.68 6.8%Market Effective Avg. High Rent VacancySanta Clara County (Silicon Valley), California $43.50 $60.00 8.0%Marin County, California $39.09 $45.00 2.7%San Diego, California $28.07 $28.00 5.8%San Mateo County, California $27.49 $45.00 5.1%Seattle, Washington $27.00 $38.00 5.0%Market Effective Avg. High Rent VacancySanta Clara County (Silicon Valley), California $85.00 $125.00 12.0%San Francisco County, California $71.37 $150.00 1.5%Phoenix, Arizona $50.00 $80.00 10.0%Albuquerque, New Mexico $42.00 $50.00 22.8%Seattle, Washington $39.00 $90.00 4.8%Leading Price Industrial MarketsIndustrialBulk WarehouseIndustrialManufacturingMarket Effective Avg. High Rent VacancyVentura County, California $15.00 $10.80 5.9%Marin County, California $13.80 $15.60 10.0%San Mateo County, California $9.48 $18.00 13.5%San Francisco County, California $9.12 $16.20 5.1%San Diego, California $8.34 $12.00 9.4%Market Effective Avg. High Rent VacancyMarin County, California $13.80 $15.60 10.0%Ventura County, California $12.60 $7.80 6.3%Santa Cruz County, California $10.08 $16.20 5.4%San Diego, California $9.24 $18.00 10.9%San Mateo County, California $9.24 $18.00 11.0%IndustrialHigh Tech/R&DMarket Effective Avg. High Rent VacancySan Mateo County, California $27.96 $45.00 16.1%Marin County, California $20.10 $20.10 10.0%Santa Clara County (Silicon Valley), California $12.96 $46.80 19.1%Santa Cruz County, California $12.24 $18.60 14.7%Las Vegas, Nevada $12.00 $18.00 18.0%2010 Global Market Report ■ www.naiglobal.com25
Asia PacificSECTION CONTENTSMelbourne, AustraliaBeijing, ChinaChengdu, ChinaHong Kong, ChinaShanghai, ChinaXiamen, ChinaGuamChennai, IndiaDelhi, Gurgaon, IndiaHyderabad, Pradesh, IndiaKolkata, IndiaPune, IndiaPunjab, IndiaTokyo, JapanKuala Lumpur, MalaysiaSeoul, South KoreaTaipei, TaiwanSingapore
Page 1 and 2: CommercialCommercial Real Estate Se
Page 3 and 4: ■ ■ ■ Table of ContentsGENERA
Page 5 and 6: Global OutlookCommercial real estat
Page 7 and 8: 38.3% in November 2009. At the same
Page 9 and 10: quality than the Census properties.
Page 11 and 12: SaskatchewanSaskatchewan is a small
Page 13 and 14: As 2009 draws to a close, there is
Page 15 and 16: Global investment interest largely
Page 18 and 19: ChinaChina continued to post large
Page 20 and 21: MalaysiaWith Malaysia’s dependenc
Page 22 and 23: ■ US Highlights - Northeast Regio
Page 24 and 25: ■ US Highlights - Midwest Region
Page 28 and 29: Melbourne, AustraliaBeijing, ChinaC
Page 30 and 31: Shanghai, ChinaXiamen, ChinaContact
Page 32 and 33: Delhi, Gurgaon, IndiaHyderabad, Pra
Page 34 and 35: Punjab, IndiaTokyo, JapanContactNAI
Page 36 and 37: Seoul, South KoreaTaipei, TaiwanCon
Page 38 and 39: Calgary, Alberta, CanadaEdmonton, A
Page 40 and 41: Halifax, Nova Scotia, CanadaOttawa,
Page 42 and 43: Regina, Saskatchewan, CanadaContact
Page 44 and 45: Vienna, AustriaThe Baltics (Latvia/
Page 46 and 47: Copenhagen, DenmarkFinlandContactNA
Page 48 and 49: Athens, GreeceReykjavik IcelandCont
Page 50 and 51: KuwaitOslo, NorwayContactNAI Kuwait
Page 52 and 53: Moscow, Russian FederationSt. Peter
Page 54 and 55: Madrid, SpainStockholm, SwedenConta
Page 56 and 57: Istanbul, TurkeyKiev, UkraineContac
Page 58 and 59: Latin AmericaSECTION CONTENTSBuenos
Page 60 and 61: Campinas, BrazilCuritiba, BrazilCon
Page 62 and 63: Sao Paulo, BrazilSantiago, ChileCon
Page 64 and 65: Ciudad Juarez, Chihuahua, MexicoGua
Page 66 and 67: Matamoros, Tamaulipas, MexicoMexica
Page 68 and 69: Reynosa, MexicoSaltillo, Coahuila,
Page 70 and 71: Torreon, Coahulia, MexicoCaracas, V
Page 72 and 73: Birmingham, AlabamaHuntsville, Deca
Page 74 and 75: Jonesboro, ArkansasLittle Rock, Ark
Page 76 and 77:
Marin County, CaliforniaMonterey, C
Page 78 and 79:
Sacramento, CaliforniaSan Diego, Ca
Page 80 and 81:
Santa Clara County (Silicon Valley)
Page 82 and 83:
Colorado Springs, ColoradoDenver, C
Page 84 and 85:
Fort Lauderdale, FloridaFt. Myers/N
Page 86 and 87:
Miami, FloridaOrlando, FloridaConta
Page 88 and 89:
Atlanta, GeorgiaHonolulu, HawaiiCon
Page 90 and 91:
Chicago, IllinoisSpringfield, Illin
Page 92 and 93:
Cedar Rapids, Iowa City, IowaDavenp
Page 94 and 95:
Wichita, KansasLexington, KentuckyC
Page 96 and 97:
Monroe, LouisianaNew Orleans, Louis
Page 98 and 99:
Suburban MarylandBoston, Massachuse
Page 100 and 101:
Grand Rapids, MichiganLansing, Mich
Page 102 and 103:
St. Louis, MissouriBozeman, Montana
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Omaha, NebraskaLas Vegas, NevadaCon
Page 106 and 107:
Portsmouth, New HampshireAtlantic C
Page 108 and 109:
Ocean/Monmouth Counties (“Shore M
Page 110 and 111:
Las Cruces, New MexicoAlbany, New Y
Page 112 and 113:
Asheville, North CarolinaCharlotte,
Page 114 and 115:
Fargo, North DakotaAkron, OhioConta
Page 116 and 117:
Cleveland, OhioColumbus, OhioContac
Page 118 and 119:
Tulsa, OklahomaPortland, OregonCont
Page 120 and 121:
Bucks County, PennsylvaniaHarrisbur
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Pittsburgh, PennsylvaniaSchuylkill
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Greenville/Spartanburg/Anderson Cou
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Knoxville, TennesseeMemphis, Tennes
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Beaumont, TexasCorpus Christi, Texa
Page 130 and 131:
Fort Worth, TexasHouston, TexasCont
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Texarkana (Bowie County, Texas/Mill
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Northern VirginiaSeattle/Puget Soun
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Madison, WisconsinMilwaukee, Wiscon
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Jackson Hole, WyomingContactNAI Jac
Page 140:
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