November 10, 2006 - November 16, 2006
Provided by Commercial Real Estate DirectOffice, Industrial Markets Strong into 2007
Rising rents and a steadily growing economy have commercial developers and investors looking optimistically into 2007. According to the 12th semi-annual Vital Signs survey by the National Association of Industrial and Office Properties, 71% of respondents reported increased rents in their local markets. The industrial market is seeing a similar boon, with 66% of respondents reporting rising rents. NAIOP is predicting continued upward momentum through 2007, with exceptional growth along the Pacific Coast due to strong Asian trade. Increasing rents have led survey respondents to look more favorably on development, specifically in the industrial, office and research and development sectors.

NYC Retail Rents Spiking, Supply Dropping
Retail property rents in Manhattan are increasing sharply and space availability is declining, says a report from the Real Estate Board of New York. The average asking rent for retail space in all of Manhattan increased 4% to $106/sf over the past year, according to the report, which also found declining availability in all sub-markets. For example, the amount available in Soho and Tribeca dropped 114,000 sf from year ago, and on Third and Madison avenues, between East 57th and East 72nd, it dropped 69,000 sf.

CBRE to Buy Trammell Crow in $2.2B Deal
CB Richard Ellis Group, Inc. has agreed to acquire Trammell Crow Co. in a deal valuing the Dallas firm at about $2.2 billion, including assumed debt. The acquisition would give CB some $4.4 billion of annualized revenue, which CB said would make it the first commercial real estate services company to qualify for the Fortune 500 list of the largest U.S. corporations. The acquisition is slated to be completed by the end of 2006, or early 2007. CB said it would retain the Trammell Crow Co. brand and that its development and investment operations would operate as independent units.

Los Angeles Hotel Market Remains Strong
Downtown Los Angeles hotels are seeing significant increases in occupancy because of renovated rooms and a renewed interest in staying downtown, according to report by PKF Consulting. The L.A. firm, which tracks the hospitality market, expects downtown’s average hotel occupancy rate to hit about 73%, compared to 51% in 2003. Hotel occupancy for the 10-county region is hovering just under 80%.

Office Boom Continues in Dallas
The Dallas office market is about to receive the most space it’s seen in 20 years. Nine buildings are in various stages of construction, which, when finished, will add 3 million sf to a market already experiencing some of the nation’s highest vacancy rates. Developers are convinced businesses will respond to the new space, favoring the new space to the old. Rents are projected for more than $30 per sf in the new towers while rents in the area are currently about $23 per sf.