Office & Industrial Markets Look Strong for Q4
The National Association of Realtors’ Commercial Leading Indicator for Brokerage Activity was up 2.5% in Q2 compared to the same period in 2005. This indicates that net absorption and commercial construction activity will continue to grow over the next six months. The NAR projects that there will be $300 billion to $310 billion in office and industrial construction in Q4, up from the $296 billion reported in Q2. It further projects net absorption of 70 million to 90 million sf in office and industrial in the fourth quarter.

New Jersey Becoming Medical Office Hot Spot
New Jersey is shaping up as a strong market for medical offices. Rents for medical office properties are being reported in the mid-$20s/sf range, compared to $30/sf for office space in the market, and sales are reportedly going at as much as $250/sf. Onyx Equities paid $9.5 million for the 59,000 sf CentraState Medical Center in Freehold and $6.6 million for the 10,000 sf Glen Rock Plaza in Bergen County. Rents are expected to be $20 per/sf rent for the 24,000 sf Wall Medical Arts building in Wall Township.

New Orleans Office Market Starting Recovery
Hurricane Katrina reduced the size of the New Orleans office market by more than 7% to 8.8 million sf, resulting in higher lease rates and fewer vacancies. But as supply shrinks, demand for office space is heating up. About 128,000 sf of space was absorbed in Q2, according to Reis, Inc. The strong leasing activity has bumped New Orleans’ occupancy rate to about 90% from 86% before the storm. Rental rates in New Orleans have increased to $16.23/sf during Q2, from $15.46/sf pre-Katrina, according to Reis.

Cubs Plan Parking Garage, Retail Space
Rising costs have forced the Chicago Cubs to delay construction of a restaurant and parking garage next to Wrigley Field in Chicago. The team unveiled plans for the building in 2001, but expects to start construction this fall. Preliminary plans call for a fives-story mixed-use building with 400 parking spaces, a restaurant, museum, retail shops as well as underground workout facilities for Cub Players.

Western PA’s Emerging Warehouse Market
The pending designation of Route 60 as an Interstate Highway is spurring warehouse and distribution space development near the Pennsylvania Turnpike’s Route 60 interchange in Beaver County, about 40 miles northwest of Pittsburgh. The more than 1 million sf that are under development includes 714,000 sf being co-developed by Castlebrook Development Corp. and Neyer Properties. Beaver County has been largely undeveloped, whereas most Turnpike interchanges areas in central and eastern Pennsylvania are largely developed.

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