Commercial real estate is a dynamic industry. Keep up with Spaces’ monthly recaps of the most valuable industry articles we’ve recently come across, focused on news in Ohio, Michigan and Pennsylvania.
Hospitable Hotel Industry Attractive to Investors
The hotel market is beginning to look like a good place to stay. The New York Times would agree:
“With business travelers taking to the road again, the hotel industry is emerging from a slump that began a year before the terrorist attacks of September 2001.”
JLL released the Hotel Investor Sentiment Survey in July, which also showed consistent growth in the hotel sector. JLL experts accredited the growth to improving economic conditions, as well as positive employment levels. The survey also found that more than half are chasing acquisitions.
Industrial Market Activity Sets the Stage for Speculative Construction
Industrial market activity is looking up. CoStar Group researchers reported a significant increase in warehouse rent growth during Q2–”year-over-year rent gains of 5% or more in the second quarter..”
This trend isn’t forecasted to last exponentially. Ongoing resistance to new industrial construction has caused the spike in rent growth. However, CoStar predicts that developers will begin to correct the imbalance between supply and demand in coming years.
The increase in activity has spilled over into the Midwest market. Columbus, a Midwest industrial hotspot, is even running low on available inventory, according to a recent article in Columbus Business First. This may prompt future construction. Also in July, the Dayton Business Journal named Ohio “no. 6 top manufacturing state.”
U.S. Energy Market Drives Interest in Local Markets (Including Pittsburgh)
The national energy industry is thriving; positioning the U.S. as an international leader in natural gas and shale oil production. JLL recently released a study spotlighting the Energy Outlook for 2013. It is evident that the industry is having a widespread impact on economic performance−driving growth in many areas, including job and income growth. In fact, according to CoStar Group:
“While energy production is the direct growth driver, much of the commercial real estate demand is coming from affiliated industries and thus driving growth in office, retail, industrial and multifamily demand.”
JLL pinpointed 5 of the hottest energy markets currently experiencing subsequent growth and demand. These include Houston, Dallas / Fort Worth, Denver, Pittsburgh and Philadelphia.
News Wrap Up In Our Region
- A full floor of the Kenwood Collection, owned by Phillips Edison & Co., has been leased to a local insurance agency, Neace Lukens. Six floors are still available.
- Harris Teeter Supermarkets Inc. sold to competitor Kroger Co. for $2.4 billion.
- LA -based Hackman Capital purchased a 16-building portfolio in July–approximately 1.6 million square feet. The buildings are located in Strongsville, Solon and Twinsburg.
- The remaining vacancies on East Fourth street’s ground-level have been taken. In its place will be a restaurant, brewery and a butcher shop.
- Nationwide Realty Investors will develop 28,000 square feet of space in Grandview Yard into 28 apartments, as well as Class A office space. The Grandview Heights Planning Commission officially approved plans last month.
- Worthington Industries Inc., a local steel processor, increased its stake (45% to 55%) in Tailor Welded Blanks Company LLC.
- The Detroit Police and Fire Retirement System sold the Grand Park Centre buildings to Princeton Enterprises LLC on West Adams Street. The estimated selling price is between $4 and $5.5 million.
- Severstal Dearborn LLC discontinued its partnership with U.S. Steel Corp–dubbed the Double Eagle Steel Coating Co.
- In July, the Pittsburgh Business Times announced that the 37-story, K&L Gates Center is partially owned by international investor Independencia Asset Management.
- Industrial Safety Technologies will purchase the “Oldham fixed-point gas detection business” from Industrial Scientific Corp.