Commercial Real Estate News Brief: September 2016

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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 the top domestic distribution markets, the comeback of re-urbanization, and the increasing demand for work-life balance.

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Southern Ohio, Northern Kentucky Rank Among Top Distribution Markets

JLL CRE News Brief

Newspaper image via NS Newsflash.

Cincinnati, Columbus and Louisville are taking the lead as three of the 18 top distribution markets in the U.S., according to JLL’s annual study. The top nine cities are ranked based on proximity to domestic population centers and corporate occupiers, while the bottom nine ranking is based on industry specialization and supply chain strengths.

Two of Ohio’s largest cities—Cincinnati and Columbus—made the “front nine” alongside Indianapolis. Why? With access to a number of interstate routes and cargo airports, drivers can reach much of the country in a day’s commute. The overall cost of living, labor rates and reasonably lower rental rates also set these cities apart from the rest.

As Louisville’s UPS all-points international air cargo hub kicks off construction on a $300 million expansion, the possibilities for distribution are endless. The short commute between Louisville and Cincinnati enables them to tap into each other’s cargo capabilities and warehouse real estate.

Brands, Professionals Shift Preference to Urban Cores  

Many brands are choosing to leave suburban office parks to make the move back to downtown areas. But why downtown? As it turns out, young professionals are equally as concerned with what’s inside the office as the opportunity outside of it.

A 2015 study from Urban Land Institute found 63% of millennials want to live in a place where they don’t need to use a car often. Nearly 50% of people said walkability is a top or high priority when considering where they’d like to live. Cities also present opportunities for nightlife, unique dining options and more, all of which add to the enriched quality of life millennials hope to achieve.

The study also found that 42% of millennials currently live downtown, which presents an opportunity for companies to tap into—and retain—top talent.

Cities along the Great Lakes have all experienced surges of millennials moving into downtown, as well as inner ring suburbs within close proximity to downtown centers. Cleveland recently ranked eighth in the country’s top 10 cities for growth in college-educated millennial residents. Similarly, Columbus was also ranked in the country’s top five places for millennials, citing job growth and rental rates among some of the top factors young professionals consider when moving.

Productivity Survey Reveals Desire for More Work-Life Balance

In the Annual Super Survey, FlexJobs polled nearly 3,000 participants regarding flexible work options. Not surprisingly, 80% of those surveyed ranked work flexibility as a top factor when evaluating a new job.

The survey also revealed that 79% of workers are demanding increased flexibility to achieve a healthier work-life balance. Participants identified a number of popular solutions, like partial telecommuting, part-time work, alternative schedules and freelancing options. The most popular alternatives, however, include a full-time telecommuting position and a workplace that allows flexible scheduling.

Further research suggests that as freelancing becomes more popular among young professionals, entrepreneurs and startups, many companies are also tapping into the co-working trend. Co-working allows companies, startups and freelancing professionals to take advantage of the convenience of a flexible lease. Plus, workers get the added benefits of an open, collaborative workspace, amenities and more.

CRE News Wrap-Up in Our Region

Cincinnati

  • Neyer Properties recently announced its new ownership of Cincinnati’s 200,000-square-foot URS Tower. The 12-story office tower will undergo both interior and exterior upgrades, which include a conference center and outdoor terrace.
  • Business-consulting firm Tier1 Performance Solutions signed a lease at the Offices in Liberty Center for 3,000 square feet. The company plans to build out its office to include more collaborative space for employees.

Columbus

  • Target announced plans to open its first “flexible-format” store near The Ohio State University campus in Columbus. The retail chain store is expected to open in July 2018 and will be significantly smaller (at 28,000 square feet) than its typical stores.
  • The future of startup real estate in Columbus is bright, with more new businesses growing to 50 or more employees in the first 10 years than any other metro area in the country.

Cleveland

  • Law firm Kelley & Ferraro announced its move to the Ernst & Young Tower in the Flats. The new office space includes 27,000 square feet where the firm hopes to add a number of modern office features.
  • Downtown Akron’s AES building solidified leases with two new tenants, Quanex Building Products and Gabriel Performance Products. Quanex will occupy 39,420 square feet of space with plans to include a product showroom. Gabriel will occupy 6,055 square feet of space and plans to implement its own style and brand into the office.

Detroit

  • Michigan State Fairground development plans were recently announced, including a mix of retail, residential and entertainment space. The developments will cost an estimated $300 million.
  • Detroit’s Soave Enterprises released plans to construct two Corktown projects. Between them, nearly 220 residential units would be constructed in addition to 35,000 square feet of retail space.

Louisville

  • UPS began construction on a $300 million ground hub expansion next to its Worldport. The addition is expected to create nearly 300 jobs in the area while also expanding the city’s distribution services.
  • A number of Louisville projects are expected to bring $1.2 million in development to the area, including the Omni Louisville Hotel and renovations to the Kentucky International Convention Center.

Pittsburgh

  • The Strip District has seen a spike in demand for retail and office space, driving conversation of a new office building at Riverfront Landing and residential space at the Penn Rose Building.
  • McGuireWoods announced plans to move into JLL Center at Tower Two-Sixty. The firm signed a lease for 36,000 square feet on the building’s 17th and 18th floors.

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