The Northwood Group

Building Partner Investors

Market Reports


Construction Cost Updates – Q1 2016

March 7, 2016

Commercial Real Estate Broker Utah

We are grateful for Bonneville Builders regularly supplying us with updates on construction costs in the commercial real estate Utah market.  As the commercial real estate investment market continues to heat-up prices tend to inflate as they relate to the underlying construction costs.  These estimates provide a good basis for comparison.  The link to the report is below.

Ball Park Estimates Q1 – 2016

A few items on the report that I found interesting and noteworthy:

  • The increasing cost of tenant improvements in the office world.  Oftentimes I see too low of assumptions on re-tenanting office buildings.
  • Small industrial buildings range from $65 to $67 per square foot.  Lease rates have not kept up with construction costs and it is very difficult to develop this type of product.  Good news for those already owning this product type.

Hopefully this information is helpful.  Please feel free to reach out to Bonneville Builders direction for questions on the data provided.  They can be reached at 801-263-1406 or JohnT@bonnevillebuilders.com (www.bonnevillebuilders.com)

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2015 Investment Market Re-Cap

March 1, 2016

Commercial Real Estate

At the end of every year as a commercial real estate investment broker you take some time to review the previous year and make certain observations.  You also look at previous years to see if there are any notable trends compared to other times.  All of us want a crystal ball and everybody has an opinion regarding what is happening in the market.  I will provide my own thoughts in the coming weeks but I recently received a video from Bryce Blanchard, one of my friends and colleagues in the commercial real estate world.  I found his presentation very insightful and entertaining.  I thought you might enjoy it.  The link to his video is below.

2015 YEAR END INVESTMENT REPORT – Bryce Blanchard – Newmark Grubb Acres

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Utah – Unique Residential Market Update

August 3, 2015

Salt Lake City Commercial Real Estate Parallels Residential

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In recent months I have included a couple of updates on the residential real estate market.  I do so because although the residential and commercial markets are different, they are correlated and driven by many of the same factors.

Matt Green, Regional Director of Keller Williams Utah produces some very propriety and interesting breakdowns of the Utah market.  I have included an attachment to his assessment of the SLC market.  Breakdowns of Park City and of the Davis, Weber & Utah County markets are available upon request.

2015 – Q2 Market Report Graphs – Salt Lake County

A couple of the highlights of the report include:

  • Average days on market are lower that at anytime during the past 15 years excepting 2005, 2006, & 2007.
  • Median sales price is higher than at anytime during the last 15 years excepting 2007.

Please let me know if you have additional questions.

Brandon

 

 

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2014 Utah Commercial Real Estate Update

January 27, 2015

Commercial Real Estate Utah

The Utah Chapter of NAIOP recently held its 2014 Year End Commercial Real Estate Symposium titled “Destination Utah”.  The event provided a fantastic overview of the Utah Commercial Real Estate Market.  Overall, the commercial real estate market in Utah is very strong boasting low vacancy rates, increasing lease rates and a robust commercial real estate investment market that is still providing opportunities for private and institutional investors alike.

There were several take-away’s for me that I found very interesting and telling:

    • Only 5% of the commercial real estate transactions nationwide in 2014 were distressed compared to 20% in 2010.  With that being said, there were almost no distressed deals in Utah in 2014.
    • Foreign investors were increasingly seen in the Utah Commercial Real Estate Investment market seeking the strong fundamentals that the market offers.
    • Nationally more money is flowing into secondary markets as commercial real estate investors seek yield not found in primary markets.
    • Although the Utah Commercial Real Estate Investment market boasts strong fundamentals, the increased presence of institutional and foreign investors makes Utah more sensitive to the global capital markets than it has been in the past.
    • Despite the severity of the economic recession, values for institutional grade properties in the US are 15% higher than the 2007 peak.
    • 2014 marked near record commercial real estate investment volume in Utah totalling $1.3 billion in sales (excluding multi-family).  This does not include owner-occupied sales.  The trough saw volume at only $194 million.
    • Average overall cap rates are at 7.25% which is the lowest in history (overall including all property types except multi-family)
    • Of the $1.3 billion in total transactoin volume, there were 112 deals under $20 million totalling $427 million and 11 deals over $20 million totalling $900 million.
    • The average cap rate for properties under $20 million was 8.03%.  (7.93% for industrial, 8.23% for office and 7.94% for retail) which shows that the 11 largest deals greatly pull down the average overall cap rate.
    • The Utah Commercial Real Estate Investor Composition was 46% from out of state investors and 54% for in state investors.  Of those investors 84% were private with 16% being institutional.  61% of commercial real estate investors in Utah were repeat buyers with 39% being new to the Utah market.
    • If you include multi-family properties the total transaction volume is $1.8 billion.

As you can see the market is very strong with a bright 2015 forecast limited primarly by supply of good commercial real estate investment product.

Following are a few other market statistics that are worth highlighting:

OFFICE MARKET

  • Overall vacancy is down to 10.02% in 2014 from 11.06% in 2013.
  • Overall lease rates were relatively flat slightly increasing from $20.08 to $20.10 per square foot.

INDUSTRIAL MARKET

  • Total industrial vacancy sits at only 5.5%.
  • Overall achieved lease rates increased from $0.31 to $0.38 per square foot.
  • There is a surge of speculative construction coming in the 100,000 SF + segment.

RETAIL MARKET

  • Overall vacancy dropped to 6.2% down from 6.9% in 2013.
  • Overall asking lease rates increase from $16.94 to $18.98 per square foot.

Although difficult to find there are still opportunities to invest in commercial real estate in Utah.  Those already invested here are positioned well and may have more value than they may have realized.

Please contact me at brandon@northwoodgrp.com for additional detailed market information or to discuss any commercial real estate needs that you may have.

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2013 Year End Market Report & Statistics

January 24, 2014

Investors In Utah

Download Report

Investors in Utah, we are pleased to present the 2013 Newmark Grubb Acres Year End Market Report. A few highlights from the investment market include:

  • Total transaction increased by nearly 50% over 2012 levels to almost $1.4 billion, which was comparable to pre-recession levels.
  • Multi-family was the largest segment of the market, followed by office.
  • Commercial real estate market is currently constrained by lack of supply of quality investment deals.
  • Cap rate changes by property type differed but were relatively flat overall.
  • Single-tenant NNN activity remains strong.
  • There are 1,031 active exchange buyers in the commercial real estate market.
  • We are starting to see more activity in the Class B & C commercial real estate investment market.

Please click the link above for the full report.

 

 

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Utah Investment Snapshot – Q3 2013

October 21, 2013

The 3rd quarter real estate investment saw a mixed bag of increases and decreases. Learn more about the status of the industry.

3rd Quarter Real Estate Investment

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2013 Newmark Grubb Acres Mid-Year Market Report and Statistics

August 6, 2013

We are pleased to present the 2013 Newmark Grubb Acres Mid-Year Real Estate Market Report. From the beginning, 2013 was off to a strong start, especially in the commercial real estate investments sector. For example:

  • Transaction volume increased 35% over the last half of 2012
  • The amount of square footage sold was at its highest level in at least 5-1/2 years
  • Overall price per square foot was at its highest level in 4-1/2 years

As always, I welcome your thoughts.

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Utah Investment Snapshot – Q1 2013

May 2, 2013

2012 NAI West Year End Market Report

January 28, 2013

We are pleased to present the 2012 NAI West Year End Market Report.  2012 was a progressive year for the Utah market and forecasts are strong for 2013.  As always, I welcome your feedback.  Please click the button below for a full copy of the report.

 

 

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Capital Market Review – 12-17-12

December 18, 2012

Following a link for the commercial real estate Capital Market Review for December 17, 2012:

Capital Market Review 12-17-12

In terms of interest since our last post there has been a slight decline in rates with office rates dropping below 5%.  December has been the busiest month for CMBS issuance in 5 years which is a good sign for the capital markets.

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