In the latest edition of our monthly news brief, JLL’s regional team curates the top industry articles to keep you in-the-know on the latest in commercial real estate development. In this month’s edition, JLL spotlights the optimism from CRE executives about the industry’s future, strategic construction investments in the U.S., and JLL’s acquisition of Harry K. Moore in Louisville.
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Executives Feel Optimistic About the Future of CRE
The future of commercial real estate is bright. In a recent Forbes Insights Report, sponsored by CIT, more than 200 executives weighed in on the state of the domestic CRE market. Many acknowledged that some areas need improvement; however, with every challenge comes an opportunity. The majority of executives surveyed characterized their industry as optimistic, with many opportunities to grow.
Key findings from the survey include:
- 52% of those surveyed said they felt their segment of the market was either “strong or very strong.”
- More than 60% described their market as opportunistic, with a mix of challenges and opportunities for growth—especially with the development of new CRE technology.
- Respondents believe interest rates, consumer confidence, tax rates, unemployment and the global economy are the top five factors driving CRE investments.
Although the advancement of new CRE technology is revolutionizing the industry, many executives are struggling to adapt within their firms. In the study, only 11% of executives rated themselves as having a leading advantage in terms of implementation. Read the full article for more details.
Developers Pave the Way for More Strategic Construction
From coast to coast, big projects kicked off construction during the first quarter of 2016. But as building costs continue to rise, the need for strategic development and construction investments also comes into focus. This, paired with the conclusion of this year’s election approaching, will shed more light on how the economy will be affected overall.
Regardless, JLL predicts that construction will outpace the overall economy this year. Developers, though, should proceed with caution. Material prices will increase slightly and flatten over the next few years, while labor costs continue their upward trend.
Key construction markets include:
- Nashville: The city is experiencing significant construction growth driven by its low-cost, well-educated workforce.
- San Francisco: Though all coastal markets are experiencing growth, San Francisco could surpass New York City as the most expensive market with its high construction demands combined with high labor costs.
- Houston: For tenants looking to avoid a high-cost market, Houston may be an appealing option for its recent growth in subletting and low-cost labor.
For more information on the construction and development outlook, download the full JLL report.
JLL Expands with Acquisition of Louisville Office
In other news, JLL acquired Harry K. Moore, a commercial real estate firm based out of Louisville, KY. The acquisition will strengthen JLL’s industrial and office brokerage platforms in the region, and will also support an increased focus on e-commerce in fast-growing markets like Louisville, Cincinnati and Columbus.
With a strong track record and more 10 years in the industry, Harry K. Moore has carried out more than 2,000 transactions. Harry K. Moore’s Powell Spears is taking on the role as managing director in JLL’s new Louisville office, alongside 12 additional industry professionals.
The region’s Market Leader and Managing Director, JC Pelusi, said, “Adding Harry K. Moore’s local expertise to JLL will provide better, expanded and more comprehensive services to our clients in the fast-growing Louisville area.”
Read the full press release for more information.
CRE News Wrap-Up in Our Region
- Pictoria Tower was acquired by Fairbridge Properties, LLC for $25.7 million, which comes down to $101 per square foot in the 253,000-square-foot office building.
- The development of new retail and restaurant spaces will line the Streets of West Chester—including the anticipated Topgolf—to help carry out the vision of a family and lifestyle entertainment center.
- JLL’s Paul Heiserman spoke among top industry experts at this year’s annual Columbus Commercial Real Estate Summit, hosted by Midwest Real Estate News. Heiserman covered top trends in healthcare and CRE, including specific submarket projects and a positive outlook for job growth.
- The city of Columbus is requesting a $1 million roadwork grant for the realignment of 2,500 feet of Dublin-Granville Road to make room for the city-based retailer Big Lots, Inc.’s new headquarters.
- Street resurfacing, new sidewalks and new traffic lights are among the improvements underway on Lee Road, as part of a six-month project that began on May 9.
- The new Hilton Cleveland Downtown hotel stands finished along the city’s skyline, with windows that stretch from floor-to-ceiling, attractive gathering spaces and three different restaurants. Cleveland’s newest hotel features 600 rooms, including 37 suites, and employs 370 people.
- Michigan shopping centers are transforming to survive long-term by incorporating entertainment components and using leftover parking space for new builds.
- Detroit’s industrial market outlook is on the upswing, due to interest from firms and outside investors in the automotive industry.
- Liberty Center, a 27-story office building, is up for sale for the second time in three years. The 529,289-square-foot tower is expected to attract a lot of interest, especially from investors trying to break into the downtown CRE market.
- Nearly 4 million square feet in of office space will be arriving in the downtown area, thanks to a wave of new projects coming to the North Side and Strip District.
Newspaper image via NS Newsflash.