Commercial Real Estate News Brief: April 2016

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CRE Industry UpdateIn the latest edition of our monthly news brief, JLL’s regional team curates the top industry articles to keep you in-the-know. In this month’s edition, JLL spotlights how U.S. office development is meeting demand, the benefits of engaged employees, and what it takes to be recognized as one of the healthiest employers in central Ohio—plus additional headlines across the region.

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U.S. Office Development: Is Demand Being Met?

Office space in the U.S. is in high demand, and developers are doing all they can to create space. On top of the 140 million square feet delivered since 2010, an additional 88 million is currently being built.

Despite this growth, current development is lower than the previous cycle—by 49%. Why the big change? JLL’s recent report dives into the current cycle recovery, plus a shift in workplace preferences.

  • Slower market recovery: Overall, the market is taking longer to recover and expand from the last recession. As a result, lending standards are tighter and developers aren’t willing to finance as many projects.
  • Changes in the way we work: The environments and spaces we work in have shifted over the last few years. Previously, office spaces were better utilized instead of expanded. Now, those tenants who created higher density workspaces need a new workplace design.
  • Closer to home: And taking a closer look at inventory and preleasing rates in Columbus, Cleveland, Cincinnati, Detroit and Pittsburgh, current and future supply are positioned to meet demand—creating a prime spot for business owners. But, keep an eye on JLL’s office property clock. You’ll see that the region is slowly moving into landlord-favorable conditions. Now is the time for tenants to make a move.

The Benefits of More Engaged Employees

The way we work is changing. Now more than ever, company culture, workplace expressions and employee engagement are top business priorities.

According to JLL’s Fully Engaged report, the positive and negative effects of employee engagement are obvious. We studied 207 organizations over 11 years to find the financial and performance benefits of a strong, engaged company culture. The highlights include:

  • 66% of organizations agree that employee engagement has become a top business priority.
  • Active disengagement costs the U.S. $450 billion to $550 billion per year.
  • Companies who actively developed their culture returned 516% higher revenue and 755% higher income.
  • 75% of employees are not as engaged as they could potentially be.
  • Organizations with an average of 9.3 engaged employees in every actively disengaged employee experienced 147% higher earnings per share.

For full details on the costs and benefits of employee engagements, download our full report.

Engaged Employees

JLL Makes List of Healthiest Employers in Central Ohio

It’s important to support employees who want to live a healthy lifestyle. That’s why we make it a priority at JLL to give our employees the tools and flexibility they need to live healthy lives.

We’re proud to be recognized by Columbus Business First as one of Central Ohio’s Healthiest Employers in 2016. JLL’s Cincinnati office was also listed among the finalists for the Courier’s 2016 Healthiest Employers award, and Pittsburgh’s JLL office is also in the running.

Among other wellness initiatives, JLL encourages employees to do the Tour de Cure hosted by the American Diabetes Association (ADA). JLL is even sponsoring the Tour De Cure this year!

Regional CRE News Wrap-Up  

Cincinnati

  • Planners revealed new details about a $200 million project at Medpace’s Madisonville campus which includes 250 multifamily housing units, 250,000 square feet of office space, 100,000 square feet of retail and commercial space, and green space open to the community. Officials expect the project to create as many as 700 permanent jobs when completed.
  • The office space at Kenwood Collection Tower—one of Cincinnati’s most high-profile developments—is about 91% committed. The only available office space remaining is on the first floor.

Columbus

  • Dublin shared a proposed final draft of plans for a $44 million Riverside Park. Intended to draw people to the area, plans include outdoor ice skating, rock climbing, kayak access points, lawn space for leisure and events, and natural paths following the river.
  • The Columbus metro area population reached a milestone in 2015 when it grew to more than two million. Growth is the result of increases in the number of people moving to the area and births. Columbus prepared for the boost with available housing and a transportation network able to handle additional commuters.

Cleveland

  • Dan Gilbert, founder of Quicken Loans and majority owner of the Cleveland Cavaliers, purchased the mall at Tower City and the parking underneath it for $56.5 million. Plans for the space will be announced in the coming months.
  • Plans are in the making for new luxury apartments in Beachwood. Covington Vanguard Realty LLC purchased the site, the former Bally Total Fitness, for $3 million on March 29. 

Detroit

  • To expand its reach into medical real estate, Core Partners Associates LLC purchased real estate companies McNabnay & Associates LLC and McNabnay Property Management LLC. McNabnay’s real estate profile purchased by Core includes four medical office buildings totaling about 100,000 square feet and 20 condominium communities with more than 1,000 units.
  • A proposed $100 million mixed-use development project for Royal Oak City Center includes plans for retail and office space, a new park, new police headquarters, and a new city hall. Construction is slated to begin in the fall and be completed by early 2018. 

Pittsburgh

Keep up with trends and relevant commercial real estate news throughout the Great Lakes on Twitter at @JLL_Spaces!

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