Stability Attracts Philadelphia Office Investors
Seeking safe returns, investors have turned to the Philadelphia office market, helping it rapidly approach last year’s transaction volume of $1.6 billion. Philadelphia’s office fundamentals have not changed much in the past few years: asking rents have only increased by 0.1% from the end of ‘05 to $22.72/sf and the vacancy rate has remained steady at 10% since ‘01. The sales price has increased to $193/sf up from $144/sf in ‘05, according to Real Capital Analytics.

D.C. Area Flex Industrial Vacancy Increases
The vacancy rate for Washington, D.C. area flex industrial space increased 40 basis points to 11% in the second quarter. Net absorption for flex industrial has dropped to 26% of its pace late last year in the face of a surge in development. Flex accounted for 840,000 square feet of the 1.1 million sf of all industrial space that came online in the market during the first half of 2006.

Houston Apartment Market on the Rise
Demand for apartments in Houston is on the rise as a result of the dampening housing markets and rising interest rates. With the expected rise of interest rates, the demand for apartments is expected to be even higher in the coming months. Rental rates have risen 7.2% since this time last year, according to Rent.com, with the average reported monthly rent in Houston at $715 during the first quarter of 2006.

Kansas City Apartment Market Improves
The Kansas City metropolitan region experienced increases in both apartment rents and occupancy in the first half of 2006, according to a Colliers Turley Martin Tucker report. Apartment occupancy climbed by 1 percentage point during the period, rising to 93% from 92% at the end of 2005. Average rents added nearly 2 cents per square foot through the year’s first six months to 76 cents, the highest level in six years.

UConn Developing Mixed-Use “Campus Town”
The University of Connecticut is developing a $165 million mixed-use center on 15 acres in Mansfield, CT. The university is working with the Leyland Alliance developers and the local government in developing the facility that is slated to have a “college town” atmosphere. It will include 800 residential units, 200,000 sf of retail and restaurant space, 40,000-70,000 sf of offices and a civic center. Similar “college town” developments are also underway by the University of Pennsylvania and Ohio State.

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