Despite the emptying out of the tallest privately owned building in the state north of New York City, Western New Yorks office, industrial and retail markets are strong, according to new statistics released Thursday evening by the Buffalo office of real estate brokerage CBRE.

CBREs annual MarketView reports found the volume of open space in the region fell in two of the three categories, as strong demand for quality office and industrial space driven by an improved economy absorbed a lot of available space.

At the same time, the brokerage reported, a lack of new construction to replenish the inventory of manufacturing space means the industrial base isnt growing. And some vacant buildings were redeveloped for entirely new uses, taking them off the market.

Western New Yorks economic base and overall demographic trends continue to position it as a conservative region for real estate investment, development and lending, CBRE wrote.

Theres more empty office space in the region compared with a year ago, due to the downsizing of HSBC Bank USAs presence in downtown Buffalo and law firm Phillips Lytle LLPs move to One Canalside. Those two shifts resulted in more than 700,000 square feet of space being dumped on the market, as the former One HSBC Center now One Seneca Tower went from 95 percent full to 95 percent empty in a matter of weeks. As a result, the office vacancy rate jumped from 10.37 percent to 13.71 percent. The national vacancy rate was 15.1 percent.

That had been expected for more than a year and hasnt affected other market activity, said Shana B. Stegner, director of office sales and leasing for CBRE. Office leasing in other parts of the region tightened, taking up some of the new slack, while new construction boomed.

The activity is there. The momentum is there, Stegner said. When you look outside and see everything thats happening, its not stopping anybody from following through with their plans.

The vacancy rates for office, industrial and retail space in the region remained below national averages.

Despite this challenge, if the momentum continues through 2014, the Buffalo office market holds promise of recovery and continued future investment, CBRE said in the report.

Meanwhile, sales of existing apartment buildings rose by almost 40 percent compared with the previous three years average, while the total value of those sales rose by 27 percent. And more buildings are coming online, thanks to a mixture of new construction in the suburbs and adaptive reuse projects in the city.

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WNY real estate markets strong, CBRE says in annual MarketView reports

Developer Tony Giarratana has yet another Midtown site under contract, with plans for a $50 million apartment development that also will include retail space.

The apartments, called 1818 Church, could be the first project to take advantage of a zoning change that allows developers to build higher in parts of Midtown.

Giarratana Nashville LLC has a contract to buy the three-quarters of an acre or 34,000-square-foot tract from Nashville real estate investor Michael Shmerling. Giarratana expects to complete buying the two parcels, which include the Heritage Fuel gas station at 19th Avenue North and Church Street, within the next three months.

At 15 stories, 1818 Church will have 238 condo-quality apartments, including about 15 micro-unit apartments that will be just under 400 square feet, he said. There will be 4,000 square feet of retail space at the bottom level, Giarratana said, adding that Shmerlings XMi Commercial Real Estate would handle that leasing.

Separately, Giarratana and his equity partner LaSalle Investment Management have two other tracts in Midtown that also were acquired from Shmerling where apartments are either underway or planned. Midtown has a lot of potential that will finally be realized due to the new zoning code (there), Giarratana said.

As part of the change in Midtown to a new zoning district that went into effect last spring, Giarratana can build up to seven stories high along Church Street or 19th Avenue North and as high as 15 stories further into the property. Previously, the developer would have been limited to four stories along the street.

Giarratana said a construction timeline for 1818 Church isnt set, but he expects the units to be available in 2017. The gas station at the targeted site, which also includes a parking lot, will leave after its lease expires around mid-year, he said.

The site for 1818 Church is about the same size as the tract at the northwest corner of 22nd Avenue North and State Street where Giarratana and LaSalle plan this spring to start building a 146-unit apartment community that should be available next summer. Its slightly larger than the two parcels at Elliston Place and 21st Avenue where the partners have started construction of another 105-unit apartment in Midtown that should be available for occupancy this summer.

Its not yet clear whether LaSalle will be an equity partner with Giarratana for 1818 Church.

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Developer plans $50M Midtown apartment project

A year ago, Lane4 Property Group reported retail construction in the Kansas City area was up again after five slow years.

That observation played out in 2013, as grading started on several new projects, and retailers increasingly opened area stores or announced plans to open new locations.

Now Lane4, a Kansas City commercial real estate firm that specializes in retail developments, says 2014 is poised to be a solid year.

Urban and so-called infill areas are becoming increasingly popular as both developers and retailers take advantage of the dense populations, outdated shopping centers ready for renovation, and an increasing number of Kansas Citians choosing to live closer in.

Retailers are also discovering that many of these older areas have been starved of not only unique, but even basic restaurant, fashion, and other retail formats commonly found in the suburbs, the report said. Demand for Class A locations continues to outpace demand throughout the metro.

Among the retail highlights of 2014 Kansas City Retail Report:

Northwest Kansas City: Some Northland centers are boasting their strongest sales and occupancy levels to-date. Land north of Tiffany Springs MarketCenter should be developed in the new few years with a major anchor and smaller tenants.

Northeast Kansas City: The Village at Shoal Creek saw the opening of the Mosaic Life Care, a 47,000-square-foot urgent, primary care and surgery center, an example of the new breed of shopping center anchors, and Cheddars cafe is scheduled to open soon. Sams Club plans to open a new store this summer at 8130 N. Church Road.

Central Kansas City: Lane4 called this one of the most robust markets in the area and that has led to increased competition for desirable retail space. While Halls announcement that it is leaving the Country Club Plaza this year may have disappointed many of the department stores customers, it does open up a large space in the heart of the Plaza for a single tenant or it could possibly be subdivided for multiple tenants.

South Kansas City: The former Dillards spot is still available on the south end of Ward Parkway Center. Redevelopment efforts also are continuing at Truman Corners in Grandview and at the former Bannister Mall site in south Kansas City.

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Lane4 Property Group tells what’s in store for retail in 2014

Las Vegas battered commercial real estate market is showing signs of life but remains a long way from full recovery.

Last year, investors snapped up properties, landlords signed new tenants, industrial buildings sprouted and developers pushed ahead with big retail projects.

Much of the same is expected this year, although the valley still faces big obstacles. Lease rates are low, vacancy rates are far above the national average, and despite some notable projects, development is relatively limited. New businesses are moving to Las Vegas and taking over empty real estate, but most local companies arent expanding and dont need additional space.

And the valleys unemployment rate remains high. In November, it was 8.6 percent, well above the 6.6 percent national average.

What more is in store for 2014? Here is a look at how the office, retail, apartment and industrial sectors might fare:

Despite meager improvements last year, Las Vegas still has one of the worst office markets in the country.

The city had a 21 percent vacancy rate during the fourth quarter of 2013, down slightly from 22 percent a year earlier, according to brokerage firm Colliers International. Research firm Reis Inc. put the valleys fourth-quarter vacancy rate at 26 percent, the second-highest in the country.

In 2005, during the boom, the rate was 8 percent.

The average asking rent was $1.87 per square foot last quarter, unchanged from a year earlier, Colliers said.

The market is far from dead, though.

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2014 real estate predictions: What’s on tap for housing, retail, office and industrial space this year

Veggie Wagon owners April Sussman, left, and Max Sussman unload produce for their new walk-in cooler at the store in Carolina Beach, North Carolina Thursday, January 9, 2014.

Loyal customers of The Veggie Wagon likely won't notice anything different at the Carolina Beach store, but many changes have been made behind the walls of the store's retail space.

In December, owners Max and April Sussman started work to replace their shingles.

Three weeks and thousands of dollars later, the business's roof has been replaced and its kitchen space has doubled.

"This was not planned," said Max Sussman.

The business which sells fresh produce, bread, milk and wine among other things had seemingly outgrown its space when the owners decided to commit to expanding their operations space in the back. The South Lake Park Boulevard store's renovations included converting the existing freezer to more processing space and building a new walk-in freezer.

While the three weeks of construction were chaotic, according to Max and April, the end product is worth it for them and employees.

"This gives us a dedicated gluten-free space," said Max, adding that space also will be used for wrapping and packaging the foods they make in-house.

For Axton Sparks, who leads production for the business, it means he'll have a dedicated space for lots of cooking, including pulling fresh mozzarella cheese like he was doing Thursday.

"This is going to be great," Sparks said as he dumped hot water over crushed mozzarella curds. "We're going to be able to move."

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Carolina Beach's Veggie Wagon expands to meet demand

After a tough few years, business space has become a prized commodity in and around Bakersfield, with demand for some property exceeding pre-recession levels.

Led by warehouse work and other industrial activity, the area's commercial real estate market is posting across-the-board improvement in vacancy rates. Some developers have responded by building, or proposing to build, new industrial space, offices and retail space.

The local market is almost superlative by one measure: Bakersfield's 4.1 percent warehouse vacancy rate at the end of September was the nation's third-lowest, behind only Honolulu and Los Angeles, according to Colliers International.

"Bakersfield is proving to be the gem of the Central Valley," Bakersfield industrial real estate broker Wayne Kress noted in an email highlighting local strength in energy, logistics and agriculture.

The tightening market speaks well of Bakersfield's economic prospects. While not all the property uses are part of high-paying industries, they nevertheless contribute jobs that support local services and bolster the housing market, which, in turn, generates additional employment.

"In the short term, very low (industrial) vacancy rates like we are now experiencing are a harbinger of large-scale construction projects that will bring jobs, wages and (economic spillover) effects," Cal State Bakersfield economics professor Mark Evans noted.

"In the long run, these new properties provide the infrastructure that is essential to attracting new companies that further build our economic base in areas such as logistics and energy-related support services."

Even retail, the weakest category of Bakersfield's commercial real estate market, is posting substantial gains from the depths of 2010 and 2011. Properties left vacant by the recession are beginning to fill up, and chains such as Walmart are poised to expand locally.

This sort of staggered progress is to be expected, said Bakersfield commercial broker Anthony Olivieri. Jobs generated by industrial and office activity tend to feed the home market, which he said is what outside retailers study when making decisions about where to grow.

"The big picture is that retail does trail, generally, the job creation out of the industrial sector and the office sector," Olivieri said.

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Businesses snap up commercial space

Work continues on the Texas Roadhouse restaurant on Friday, December 6, 2013, at Tikahtnu Commons. The restaurant is slated to open in February of 2014.

ERIK HILL Anchorage Daily News Buy Photo

Anchorage logged $631 mil- lion in new building permits in 2013, a 40 percent increase over 2012 construction, according to data presented by architect Brian Meissner at the Building Owners and Managers Association's annual commercial real estate forecast luncheon Friday.

"2013 was as big as the years before the bust," Meissner said.

Major construction projects under way around the city include hotels, office buildings and retail space.

Commercial vacancy rates throughout the city generally went down in 2013, said Brandon Walker, an associate at Pacific Tower Properties in Anchorage. Retail vacancy rates are just more than 4 percent, lower than the national average of 7.7 percent, he said.

National retailers that set up outlets in Anchorage in 2013 included cosmetics giant Sephora and designer Michael Kors. Walker said a number of other national brands have plans to open in here in 2014: Cabela's, Bass Pro Shops, Hard Rock Cafe, Texas Roadhouse and Tilted Kilt Pub and Eatery.

Industrial vacancy rates fell below 2 percent in 2013, Walker said.

Speaking of the city's available commercial properties, Walker said, "Much of the inventory right now is plagued by obsolescence. This is limiting the already limited supply of properties."

Fortunately for the city's commercial tenants, Walker said, they haven't seen an upswing in rents as a result of the decrease in vacancies.

Original post:
Commercial property prices hold up despite new construction

A sprawling parking lot across the street from Staples Center in downtown Los Angeles has been sold to local investors who plan to build a large-scale residential and retail complex perhaps including a hotel.

It was the second sale of a parking lot in the area around Staples and the L.A. Live entertainment complex in recent weeks as real estate development in the neighborhood south of downtown's financial district picks up speed.

The latest sale was a 2.7-acre parcel at 12th and Figueroa streets that has city approval for construction of apartment or condominium towers above stores and restaurants, real estate broker Adam Tischer of Colliers International said.

Tischer is an advisor to the seller, L&R Group, which is the parent company of Joe's Auto Park. The broker declined to name the three buyers, but other downtown property experts not authorized to talk about the deal identified one of the new owners as David Y. Lee.

Lee's Los Angeles company, Jamison Services Inc., is one of the largest office landlords in Southern California.

L&R paid $31 million for the property in 2010 and hadn't planned to sell it, but a trio of local buyers offered to pay substantially more than twice that amount, Tischer said. He declined to reveal the exact price.

The parcel, which was once owned by condominium developer South Group, has preliminary approvals for two high-rise towers of about 35 and 27 stories housing 648 residential units. About 40,000 square feet of space for stores and restaurants would be available for rent at street level.

The new owners may seek a variance from the city that would allow them to use some of the approved 863,000 square feet of development space as a hotel and perhaps accommodate more retail space, Tischer said.

"They are eager to get started and hope to be under construction this year," he said.

The other Staples area parking lot to be sold recently was a 4.6-acre site just to the north at 11th and Figueroa streets. Chinese property developer Oceanwide Real Estate Group acquired the land now used as a parking lot from New York landlord Moinian Group.

Originally posted here:
Investors buy parking lot across from Staples Center

RANDOLPH TWP. Local officials are expecting a scurry of activity on some new and some long-pending development projects that they say will increase tax ratables thereby spreading the property tax burden over a larger base.

Following her election as deputy mayor at the annual reorganization meeting of the Township Council, held on Wednesday, Jan. 1, Joanne Veech outlined the progress of those projects and offered a recap of more than 3,500 acres that has been preserved as open space to date.

Theres an amazing balance between the two that we in Randolph enjoy - smart development and open space, said Veech.

Veech said several new or expanded commercially developed properties are expected to advance during the coming year.

The Grecco property, also referred to as the Shoppes at Randolph, on Route 10 with 80,000 square feet of retail space is still searching for the right anchor store tenant and will begin construction once a lease is signed, said Veech.

An application for a new Walgreens store adjacent to the Randolph Diner on Route 10 has begun the Planning Board review process.

At the same time, existing businesses along the Route 10 corridor are planning to expand their operations, such as the Performance Ford dealership.

The new commercial center, Randolph Commons, behind the Randolph Diner, was the first phase of redevelopment for this highly visible Route 10 corner, said Veech.

Phase 2, the reconstruction and expansion of the diner building, is scheduled to undergo construction in 2014.

The developers of Brightview, a125 independent and assisted living unit development planned on Quaker Church Road just behind Route 10, expect to break ground this winter with an estimated 15-month completion date.

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Open space, development on tap in Randolph

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