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. 3.0% CIREMAGAZINE.COM March | April 2019 41