Commercial Real Estate News Brief: November 2015

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In 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 tech industry expansion, workplace wellness trends, and also zooms in on Cincinnati’s rebounding office market.

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Midwest Markets Ready for Tech Growth

CRE Industry UpdateThink of the most robust tech markets in the country: Silicon Valley, New York and San Francisco likely come to mind. These cities are hot spots for some of the biggest names in the industry like Apple, eBay, Facebook and Google, just to name a few.

And now, the tech industry needs more room to grow.

“Expansion for the technology industry in 2015 is no longer just about the convenience of cheaper rents or accessing new talent pools. It’s a strategic necessity.”       –JLL’s 2015 U.S. Technology Office Outlook

More than ever, tech companies are finding great success in establishing offices in secondary markets. Despite smaller cities and populations, these offices often manage larger staffs and “hold just as much strategic importance to their business plans,” according to an article from the World Property Journal.

Two of the top tech-friendly markets ranked by JLL include Detroit and Pittsburgh. For more information about the tech market conditions in your city, download the full report.

Reinventing Workplace Wellness: Tips & Tactics (Video)

Companies are shifting their focus from workplace wellness to employee wellbeing.

In today’s fast-paced, tech-driven workforce, businesses are challenged to enhance employee work experiences to attract and retain the best talent. According to JLL Research, 82% of commercial real estate teams have launched new programs to “improve the quality of the workplace.”

Related read: Is Your Workplace Culture Friendly?

The idea is that wellbeing reaches past physical health and incorporates the needs of employee mental health, productivity and positivity at work. See how companies are improving workplace strategies to impact corporate sustainability, productivity and employee wellbeing conditions in the video below:

Cincinnati’s Local Office Market Is Hot

According to Cincinnati.com, the Queen City’s economy has “grown at a faster rate than the national average in three of the last five years.”

As a result, office vacancy is the lowest it’s been in years (21%). Not to mention job growth across local businesses has been strong; the region’s unemployment rate is down to 3.9%. Amidst a rebounding economy, three key factors drive Cincinnati’s current thriving office market demand:

  1. New construction projects. Six new buildings have added more than one million square feet of office space to the region this year, while another million square feet are under construction now.
  2. Investors are buying. According to Cincinnati.com, “more than $502 million was spent to acquire office properties in Greater Cincinnati last year.” This was the highest in more than a decade. Investors are recognizing the value of enjoying larger returns on investments in Cincinnati, as opposed to larger markets like San Francisco or New York.
  3. Re-imagined office space. Developers across the city are designing trendier, more modern spaces, with appealing features including fitness studios, rooftop attractions, retail and restaurant offerings, and lots of natural light.

CRE News Wrap-Up in Our Region  

Cincinnati

  • The Kemper Pointe office building sold for $8.9 million to CVG Partners III LCC. The 96,500-square-foot multitenant office property, located at 7870 E. Kemper Road, is currently 85% leased.
  • The Port of Greater Cincinnati Development Authority has developed a plan to bring in 12,000 manufacturing jobs on 500 acres in the region. The project aims to repurpose manufacturing sites, in appeal to outside investors. 

Columbus

  • The latest Metro Mix analysis by the Federal Reserve Bank of Cleveland revealed that the Columbus region continues to hold the strongest economy in Ohio. The capital city’s housing prices have improved, business activity is up and unemployment reached pre-recession levels this year.
  • Southgate Corporation and the Heath-Newark-Licking County Port Authority won bets on two speculative buildings last month. The two buildings are located at the Central Ohio Aerospace and Technology Center campus. 

Cleveland

  • Developers released new designs for a speculative retail project, the Van Aken Development, in Shaker Heights. The new 18-acre development would replace an “outdated strip shopping center,” featuring urban design, transit connections and public amenities.
  • According to Paul Boulier, vice president of business attraction for Team NEO, the polymer industry is growing. Akron and the Northeast Ohio region will likely benefit from relevant industries, like automotive to medical devices, which need improved polymer and plastic products.

Detroit

  • Government units used to be some of the biggest investors in downtown Detroit corporate real estate. Research shows Detroit’s metro area has seen continuously greater demand from private partnerships, including Dan Gilbert, since the city’s bankruptcy.
  • Local developers are “betting big on large swaths of vacant property” to accommodate for the region’s lack of distribution space. The region’s emphasis on marketing land for warehouse use suggests an optimistic future of Detroit’s industrial market. 

Pittsburgh

  • As reported in the Carbon Disclosure Project’s annual climate change survey, PNC Financial Services Group was recognized as a leader in “climate change-related disclosures.” As compared to your average office building, the Tower at PNC Plaza consumes 50% less energy.
  • Uber Technologies Inc. will open an Advanced Technologies Center in the Strip next year, including a staff of 400 new employees. The company plans to conduct research at the plant in an effort to develop driverless vehicles. 

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

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