Commercial Investment Real Estate March/April 2019 | Page 43
{SOUTHWEST} { N ATION A L}
Houston Industrial Healthy Fastest-Growing U.S. Cities
Houston’s industrial market ended 2018 on a high note. The
city’s vacancy rate remains steady at 5.4 percent in 4Q2018,
despite an increase in development, according to NAI Partners. Oxford Economics’ November 2018 “Global Cities” report
identified U.S. cities forecasted to be the fastest growing between
2019 and 2035.
Market Conditions
Projected Average GDP Growth (2019–2035)
San Jose, Calif.
YTD 4Q2018
Vacancy 5.4%
Availability 8.9%
Net absorption 8.6 million sf
Leasing activity 22.8 million sf
Industrial space deliveries 10.8 million sf
Industrial space under construction 11.7 million sf
Source: NAI Partners
{EAST}
Capital Gains:
More D.C. Construction
Portland, Ore. 2.6%
Austin, Texas 2.6%
Seattle 2.4%
Charlotte, N.C. 2.4%
Nashville, Tenn. 2.4%
San Francisco 2.4%
Orlando, Fla. 2.3%
Dallas 2.3%
Salt Lake City 2.3%
Source: Oxford Economics, MarketWatch
{SOUTHWEST}
Denver: High
Interest for Tech
Denver’s low unemployment rates and relatively affordable
housing have put it in fast competition with Silicon Valley
for tech companies. At least 22 tech companies opened an
office or relocated their headquarters to the Denver metro
area between October 2017 and October 2018. Tech firms’
annual absorption of office space in Colorado was 849,000
sf between 3Q2017 and 2Q2018 — with downtown Denver
leading the way with 472,282 sf, followed by Boulder with
377,000 sf, Bisnow reports. Employers also are getting
a boost from the “Pivot to Colorado” campaign, a self-
proclaimed poaching strategy designed to recruit tech talent
backed by several state agencies and nine tech companies.
The Washington, D.C., area reported strong job growth at the
end of 2018 as well as 2.4 million sf of net absorption, its high-
est figure since 2010. However, Cushman & Wakefield reports
that some of the region’s submarkets could be in transition.
Office markets in the central business district and East End
face competition from lower-cost emerging markets in NoMa
(north of Massachusetts Avenue), the Capitol Riverfront, and
the Wharf. In the last two years, several federal agencies,
not-for-profits, and legal-sector groups have relocated from the
two core markets. On the other hand, demand from large law
firms for new construction has driven unprecedented develop-
ment in the District itself.
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