Avison Young Canada US UK Commercial Real Estate Investment ...

FALL 2015

Avison Young Commercial Real Estate Investment Review Canada, U.S. and U.K. Partnership. Performance.

Contents Canada & U.S. Investment Market Overview

3

Canada & U.S. Investment Market Highlights

4

Canada

United States cont’d.

Calgary

10

Miami

33

Edmonton

11

Minneapolis

34

Montreal

12

New Jersey

35

Ottawa

13

New York

36

Toronto

14

Oakland

37

Vancouver

15

Orange County

38

Orlando

39

United States Atlanta

16

Philadelphia

40

Austin

17

Pittsburgh

41

Boston

18

Raleigh-Durham

42

Charleston

19

Sacramento

43

Charlotte

20

San Diego County

44

Chicago

21

San Francisco

45

Cleveland

22

San Mateo

46

Columbus, OH

23

Tampa

47

Dallas

24

Washington, DC

48

Denver

25

West Palm Beach

49

Detroit

26

Europe

Fairfield County

27

London, U.K.

50

Fort Lauderdale

28

Notes

51

Houston

29

About Avison Young

52

Las Vegas

30

Our Contacts

53

Long Island

31

Avison Young Research

54

Los Angeles

32

Canada & U.S. Commercial Real Estate Investment Market Overview Investor interest remains high despite lack of available product and global economic volatility Against a backdrop of global economic uncertainty and potential future interest-rate hikes in Canada and the U.S., investor interest is high as the flow of capital into the commercial real estate sector continues at a healthy pace – constrained mainly by the lack of available quality product. While Canadian investment has softened, U.S. sales volumes are strong and notably higher than one year ago.

Canada Overview

U.S. Overview

E

conomic headwinds, including volatile energy prices, are challenging commercial property market fundamentals across Canada. These fiscal events are having varying impacts especially in commodity-based and development-laden markets. Surplus capital, low-cost borrowing and limited available product continue to characterize the marketplace. Lack of product is constraining activity as investor interest remains high. Increased foreign (mainly Asian) capital has elevated pricing in Vancouver and Toronto. Moreover, Canada’s finite investable marketplace has led some investors to deploy capital abroad – especially in the U.S. The vendor/purchaser profile encompasses the spectrum from institutions and REITs to private and developer capital. Notable First-Half 2015 Canadian Investment Market Highlights: • Canada’s six major markets combined for $10.6 billion (CAD) in commercial real estate sales in the first half of 2015 – down $2.4 billion (-19%) compared with first-half 2014. The lower volume results from product scarcity more than any change in investor sentiment. • Toronto was again the top investment market ($4.7 billion / 44% share) – more than doubling the sales volume of second-place Vancouver. Toronto outpaced the other markets in every asset category, challenged only in ICI land by Vancouver and Edmonton. • Industrial ($2.5 billion) was the top investment sector and one of two showing year-over-year growth. Sales dipped in all three Western markets and in Montreal. Ottawa jumped 50%, while Toronto remained flat. • Multi-residential investment surged to $2.4 billion, recording the greatest annualized sales growth (+34%). Sales rose in four of six markets, notably in Calgary and Toronto – markets seeing increased purpose-built rental multi-residential construction. This sector dominated the top five sales rankings and was among the top three sectors by sales volume in every market. • Retail sales ($2.1 billion) contracted nationwide (-29%) as investors weighed the morphing retail landscape, including the failure of Target Canada, among others. • ICI land slipped 22% year-over-year to $2.1 billion, falling everywhere but Montreal. Despite the decline, the sector was high on investors’ lists in Vancouver, Calgary and Edmonton. • Office building trades slowed to $1.5 billion (-55%), with substantially lower sales volumes noted in Calgary, Edmonton, Toronto, Montreal and, to a lesser degree, Vancouver – due mainly to a lack of product and burgeoning development pipelines. • Capitalization (cap) rates across six markets and five asset categories were either flat or marginally lower than one year earlier. Multiresidential assets once again had the lowest yields, while Vancouver had the tightest cap rates. • Canadian investors deployed $6.6 billion in the U.S. in the first half of 2015, led largely by institutional capital, with Manhattan the top destination. Private capital saw the greatest year-over-year increase, up 50%.

T

he U.S. investment market strengthened between mid-year 2014 and mid-year 2015 as the availability of capital, improving economy, and historically low interest rates pushed sales volumes higher for all asset classes. Sales are on track to exceed 2014 levels. However, while all sectors have rebounded, only retail and multi-residential have achieved annual sales volumes that exceeded their 2007 peak levels. Investors, both foreign and domestic, have continued to look beyond the top investment destination cities. Atlanta has moved up in favor and on the strength of its office sales, where first-half 2015 volume was 77% of the full-year 2014 amount. The market had already recorded $6 billion (USD) in total investment volume by mid-year 2015. And in spite of lower energy prices, even Denver and Houston saw first-half 2015 sales markedly higher when compared with the same period in 2014. Notable First-Half 2015 U.S. Investment Market Highlights: • The pace of sales in the U.S. markets tracked by Avison Young continued to reach new heights in the first six months of 2015 with $131.8 billion of commercial transactions – a 40% increase year-overyear. At this rate, overall U.S. commercial sales are poised to eclipse 2014 annual investment volume of $225.8 billion. • Four markets exceeded $10 billion in commercial sales in the first half of 2015: Washington, DC ($10 billion / 8% share), Chicago ($10.2 billion / 8% share), Los Angeles ($11.4 billion / 9% share) and New York ($22.3 billion / 17% share). Together, these markets represented more than 40% of total commercial sales nationwide. • By mid-year 2015, the office, industrial and multi-residential asset classes had demonstrated exceptional growth year-over-year. However, sales of retail assets recorded the greatest gains when compared with the same period in 2014, jumping 64% in the first half of 2015. • New York led first-half 2015 sales volume in every asset class with the exception of industrial. For office properties alone, New York sales of $13.3 billion accounted for 27% of total U.S. office sales volume and a 41% increase locally, compared with the same period in 2014. • Several U.S. markets achieved industrial sales exceeding $1 billion in the first half of 2015. Southern California powerhouses Los Angeles and Orange County together recorded $3 billion of industrial sales ($1.7 billion and $1.3 billion, respectively). New Jersey ($2 billion), Chicago ($1.9 billion) and Dallas ($1.5 billion) rounded out the top five first-half 2015 U.S. industrial sales markets. • Many markets continued to register cap rate compression and some are approaching record-low territory. Overall, cap rates fell by 32 bps year-over-year in U.S. markets tracked by Avison Young, led by multi-residential (-45 bps) and office (-42 bps) assets. For industrial properties, overall cap rates averaged 7.1%, though cap rates can be as low as 4% to 5%. • Given the gap between lending rates and 10-year treasury bonds (and absent a meaningful interest rate hike by the U.S. Federal Reserve), the investment sales market will likely continue to be frothy with select assets trading at record prices.

Fall 2015 Canada, U.S. and U.K. Commercial Real Estate Investment Review

3


Canada Commercial Real Estate Investment Volume By Property Type (CAD) $30

$25

Billions

$20

$15

$10

$5

$0

2008

2009

2010

2011 Land

Office

2012

Multi-Residential

Retail

Industrial

Retail

2013

Industrial

2014

Mid-Year 2015

2014

Mid-Year 2015

Office

Multi-Residential

ICI Land

U.S. Commercial Real Estate Investment Volume By Property Type (USD) $250 $225 $200

Billions

$175 $150 $125 $100 $75 $50 $25 $0

2008

2009

2010

Multi-Residential

Office

4

2011

2012

Retail

Industrial

2013 Industrial

Retail


Multi-Residential

Office

Land

Commercial Real Estate Investment Volume By Market (CAD)


Canada Commercial Real Estate Investment Volume By Market (CAD) $6

Billions

$5

$4

$3

$2

U.S. Commercial Real Estate Investment Volume By Market (USD)

$1

$0

Edmonton Calgary

Montreal Edmonton

Ottawa Montreal

Mid-Year 2014 Mid-Year 2014

Ottawa

Toronto Toronto

Vancouver

Mid-Year 2015

Mid-Year 2015

U.S. Commercial Real Estate Investment Volume By Market (USD) $25

Billions

$20

$15

$10

$5

$0

Mid-YearMid-Year 20142014



5


Canada Commercial Real Estate Investment Volume By Property Type (CAD) $4

Billions

$3

$2


$1

$0

Edmonton Office

Industrial

Montreal

Ottawa Multi-Residential

Retail Mid-Year 2014

Toronto

ICI Land

Mid-Year 2015

Mid-Year 2014

Mid-Year 2015

U.S. Commercial Real Estate Investment Volume By Property Type (USD) $60

Billions

$50

$40

$30

$20

$10

$0

Office

Industrial Mid-Year 2014

Mid-Year 2014

6

Retail Mid-Year 2015


Mid-Year 2015

Multi-Residential

Canada & U.S. Investment Market Highlights Canada Average Capitalization Rates By Market Canada Types) (All Property

Average Capitalization Rates By Market (All Property Types)

8.5% 8.0% 8.5% 7.5% 8.0%

7.0%

7.5%

6.5%

7.0%

6.0%

6.5%

5.5%

6.0%

5.0%

5.5%

4.5%

5.0%

4.0% 4.5% 3.5% 4.0% 3.0% 3.5% 2.5% 3.0% 2.5% 2.0%


2.0% 1.5% 1.5% 1.0% 1.0%

0.5%

0.5%

0.0%

0.0%

Calgary Edmonton Calgary

Edmonton Edmonton

Montreal

Montreal

Montreal Mid-Year 2014

Mid-Year 2014

Mid-Year 2014

8.5% 8.5%

Ottawa

Ottawa Ottawa Mid-Year 2015

Toronto Toronto

Vancouver Toronto Vancouver

Mid-Year 2015

Mid-Year 2015

U.S. U.S. Average Capitalization CapitalizationRates RatesBy ByMarket Market Average (All Property Types) (All Property Types)

8.0% 8.0% 7.5% 7.5% 7.0% 7.0% 6.5% 6.5% 6.0% 6.0% 5.5%

5.5%

5.0%

5.0%

4.5%

4.5%

4.0%

4.0%

3.5%

3.5%

3.0%

3.0% 2.5% 2.5% 2.0% 2.0% 1.5% 1.5% 1.0% 0.5% 1.0% 0.0% 0.5%

0.0%

Mid-Year 2014

Mid-Year 2014

Mid-Year 2014

Mid-Year 2015

Mid-Year 2015

Mid-Year 2015


7

Canada & U.S. Investment Market Highlights Canada Average Capitalization Rates By Property Type Canada (All Markets)

Average Capitalization Rates By Property Type (All Markets)

Multi-Residential Multi-Residential

Tier I Regional Mall Tier I Regional Mall

Multi-Tenant Industrial Multi-Tenant Industrial


Single-Tenant Industrial Single-Tenant Industrial

Suburban Class A Office Suburban Class A Office

Downtown Class AA Office Downtown Class AA Office

0.0% Edmonton 0.0%

0.5%

0.5%

1.0%

1.0%

1.5%

1.5%

2.5% Montreal

2.0%

2.0%

2.5%

3.0%

3.5%

3.0%

3.5%

4.0%

4.0%

Mid-Year 2014

5.0% Ottawa

4.5%

4.5%

5.5%

5.0%

5.5%

6.0%

6.0%

6.5%

6.5%

7.5% Toronto

7.0%

8.0%

7.0%

7.5%

8.0%

7.0%

7.5%

8.0%

7.5%

8.0%

Mid-Year 2015


Mid-Year 2015

Mid-Year 2015

U.S. U.S. Average Capitalization Rates PropertyType Type Average Capitalization Rates ByBy Property (All Markets) (All Markets) Multi-Residential Multi-Residential

Retail

Retail

Industrial

Industrial

Office

Office 0.0%

0.5%

0.0%

1.0%

0.5%

1.5%

1.0%

2.0%

1.5%

2.0%

2.5%

3.0%

2.5% 3.0% Mid-Year 2014

3.5%

3.5%

Mid-Year 2014

Mid-Year 2014

8


4.0%

4.5%

4.0% 2015 4.5% Mid-Year Mid-Year 2015

5.0%

5.0%

Mid-Year 2015

5.5%

5.5%

6.0%

6.0%

6.5%

6.5%

7.0%

Canadian Commercial Real Estate Investment Capital Flow into U.S. First Half 2015

First Half 2015

$6.6 billion +22% YoY

Office $3.6B +1% YoY

MultiResidential $1.2B +43% YoY

Industrial $1.2B +170% YoY

Retail $565M +56% YoY

Land $27M -86% YoY

Top 10 U.S. Destination Markets for Canadian Capital First Half 2015 Rank

Destination

Volume $ million (CAD)

First Half 2014 Rank

$2,806

2

1.

Manhattan

2.

Atlanta

$369

5

3.

Los Angeles

$339

-

4.

Phoenix

$326

3

5.

Dallas

$221

-

6.

San Francisco

$219

-

7.

Memphis

$207

8.

Denver

9. 10.

Buyer Capital - First Half 2015 Type

Volume $ million (CAD)

YoY Change

-

Institutional

$4,582

+34%

$199

9

Private

$1,198

+50%

Houston

$157

4

Public

$614

-32%

Orlando

$156

10

Equity Fund

$191

+27%


9

Calgary The Laurier

I

Calgary Investment Volume Office

Industrial

Retail

Multi-Residential

ICI Land

Calgary Investment Volume

5

$ in billions (CAD)

4 3 2 1 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Calgary Investment Activity

Edmonton Investment Volume (By Property Type) Calgary Investment Activity

$ in billions (CAD)

4

Mid-Year Mid-Year 2015 2014

3 2 1

Mid-Year 2015

0 2008

2009

2010

25%

20%

ICI Land

22%

19%

Industrial

20%

4%

17%

13%

Multi-Residential Retail

201117%2012 43%2013 Office 2014

Mid-Year 2015

Edmonton Investment Activity Investment Select Average Capitalization Montreal Volume Rates

6

Mid-Year 2015

Mid-Year 2014

Downtown Class AA Office 5

5.5%

5.3%

Suburban Class A Office 4

5.9%

5.9%

Single-Tenant Industrial

5.8%

5.8%

Multi-Tenant Industrial

6.0%

6.0%

Tier I Regional Mall

4.8%

4.8%

1 Multi-Residential

4.8%

4.7%

$ in billions (CAD)

nvestment activity fell significantly in the first half of 2015 compared with the first half of 2014, declining to $954 million versus $1.4 billion one year prior. Of note, Calgary’s multiresidential market registered a substantial increase in dollar volume as investment more than tripled to $188 million from $62 million in the first six months of 2014. The most significant multi-residential property sale was the disposition of The Laurier, which accounted for 27% of multi-residential dollar volume. A noteworthy trend is the number of new purpose-built, multiresidential rental projects under construction, particularly in Calgary’s inner city, following a multi-decade gap in the development of new multi-residential rental projects and subsequent wave of condominium conversions. The relative scarcity of available investment-grade multi-residential rental product has prompted institutional players to develop apartment projects as a means of balancing their real estate exposure to the Calgary market. Bentall Kennedy – which was formally acquired by Sun Life Financial on September 1 – has been particularly active in this asset class. In the office sector, total dollar volume was down approximately 75% during the first six months of 2015 versus the first half of 2014, with transactions totalling $160 million compared with $595 million one year prior. The largest acquisition was Aspen Properties’ purchase of Encana Place for $116 million, a transaction that represented 72% of office dollar volume. Calgary’s industrial market experienced an anticipated decrease in investment dollar volume compared with the first half of 2014, given its ties to the energy sector. Ongoing industrial market diversification is helping to provide stability and insulating the sector from energy price volatility. The local retail market displayed surprising buoyancy against the backdrop of low oil prices and successive retail closures, including Target Canada, Mexx Canada, Future Shop and Black’s. With City of Calgary land-use regulations tending to limit retail developments, vacant space arising from closures is highly desirable. For example, all but two Target leases have been purchased, either by landlords or other major retailers such as Lowe’s.

3 2

0 2008 2009 2015 2010 TOP 5 INVESTMENT SALES BY PRICE - MID-YEAR

Property Name / Address

Property Type Total Price (CAD) Price per sf/unit/acre

2011

2012

2013

2014

Mid-Year 2015

Vendor

Purchaser

Remington Properties Inc.

Minto Group Inc.

Sun Life Assurance Company of Canada

Advent Commercial Real Estate Group

Montreal Investment Activity 1731325 Alberta Ltd. Investment VolumeAspen Properties Ottawa

1

Encana Place

Office

$116,000,000

2

The Laurier

Multi-Residential

$50,000,000

3

32nd Avenue Business Centre

Industrial

$26,100,000

$161 psf

4

202 4th Avenue SW

ICI Land

$23,500,000

$16,206,897 per acre

CN Investments Division

Cadillac Fairview Corp.

5

802-818 16th Avenue SW

Retail

$22,750,000

$563 psf

William-Arnold Holdings Ltd.

First Capital Realty

10

$260 psf


$ in billions (CAD)

$347,222 per unit 2

1

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Calgary Investment Volume

5

$ in billions (CAD)

4

Edmonton Grandin Tower Apartments

3 2 1 0

I

2008

2009

2010

2011

2012

2013

Edmonton Investment Volume

Office

Industrial

Retail

2014

Multi-Residential

Mid-Year 2015 ICI Land


4

$ in billions (CAD)

Calgary Investment Activity

3 2 1 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Edmonton Investment Activity

Montreal Investment Volume (By Property Type) Edmonton Investment Activity

6


$ in billions (CAD)

5 4 3 2 1

Mid-Year 2015

0 2008

2009

2010

45%

45%

23%

9%

18%

20%

Industrial

10%

15%

Retail

ICI Land Multi-Residential

2011 4%201211%2013 Office 2014

Mid-Year 2015

Montreal Investment Activity Select Average Capitalization Ottawa Investment Volume Rates

2

Mid-Year 2015

Mid-Year 2014

Downtown Class AA Office

6.1%

5.6%

Suburban Class A Office

6.7%

6.0%


5.9%

5.9%


6.0%

5.9%


5.0%

5.0%

Multi-Residential

5.0%

4.9%

$ in billions (CAD)

nvestment activity in Edmonton’s commercial real estate market declined 31% in the first half of 2015 with $1.2 billion in sales compared with $1.7 billion a year earlier. A substantial drop in commodity prices has impacted corporate revenues throughout Alberta. The impact was most notable in the industrial sector, which registered $210 million in sales in the first half of 2015 - a decrease of $140 million year-over-year. The three largest investment sales in the multi-residential sector in the first half of 2015 totalled just under $83 million. With 1,000 residential units scheduled to be built at Ice District in the heart of downtown, and a further 1,500-plus units planned for in and around the financial and government districts, growth in the multi-residential inventory is expected to continue. With a heavy dependence on the oil and gas industry, Alberta’s unemployment rate has increased 1.5% during the past 12 months to 6% as of August 2015. Though still below the national unemployment rate of 7%, the rising figure suggests a direct correlation to the volatility in energy prices. As industrial tenants cut costs and shelve new projects, there are fewer opportunities for part-time workers in the province. This is reflected in Alberta’s net migration figure of 7,723, which is down 60% from 19,326 in July 2014. There are positive signs the city will reverse its fortunes during the next 12 months. Although supply and demand pressures have yet to lead to a balanced office market, the new buildings continue to outperform the market as tenants choose to lease space for a range of reasons, including consolidation, corporate image, densification and employee recruitment. The investment market is expected to experience a nearterm softening period in the second half of 2015 due to a manageable amount of new supply being delivered in the face of dwindling demand and reduced absorption. This temporary slowdown will impact the revenue of property owners going forward; however, most landlords are well-positioned to weather the uncertainty.

1

0 2008 2009 2015 2010 TOP 5 INVESTMENT SALES BY PRICE - MID-YEAR



2011

2012

Vendor

9999 111 Street

Multi-Residential

$31,000,000

2

3707 & 3711 Whitelaw Lane

Multi-Residential

$28,500,000

$226,190 per unit 12 Harbour-RMS Windermere Ltd.

3

11405 27 Avenue

Multi-Residential

$23,275,000

$149,198 per unit 10

4

6108 50 Street

Retail

$12,650,000

$246 psf

5

9330 45 Avenue

Industrial

$9,200,000

$227 psf

$ in billions (CAD)

1

6

2014

Purchaser

Ottawa Investment Activity $248,000 per unit IMH Grandin Towers Ltd.Investment Volume Toronto

8

2013

Mid-Year 2015

CAP REIT

Centurion Apartment REIT

WB Blue Quill Pointe Inc.

BQP Management Ltd.

Leduc G.P. Ltd.

Crombie Property Holdings Ltd.

Rohit Commercial at Papaschase Industrial Ltd.

Feigel Investments Ltd.

4 2

Fall 2015 Canada, U.S. and U.K. Commercial Real Estate Investment Review 0

2008

2009

2010

2011

2012

2013

2014

11 Mid-Year 2015


4 Calgary Investment Activity

$ in billions (CAD)

3

Montreal

2 1

5501 Adalbert Avenue, Côte St-Luc

0

T

2008

2009

2010

2011

2012

2013

2014

Montreal Investment Volume

Office

Industrial

Retail

Multi-Residential



6

Edmonton Investment Activity

$ in billions (CAD)

5 4 3 2 1 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Montreal Activity OttawaInvestment Investment Volume (By Property Type) Montreal Investment Activity 2 $ in billions (CAD)


1

Mid-Year 2015

0 2008

2009

2010

28%

30%

Multi-Residential

25%

14%

Industrial

23%

22%

Retail

17%

12%

ICI Land

2011

2012

7%

2013

22%

2014

Office

Mid-Year 2015

Toronto Investment Volume Rates SelectActivity Average Capitalization Ottawa Investment

12

Mid-Year 2015

Mid-Year 2014

10 Downtown Class AA Office

5.7%

5.8%

Suburban Class A Office 8

6.5%

6.8%

Single-Tenant Industrial 6

6.6%

6.7%


6.9%

6.9%


5.1%

5.2%

Multi-Residential

5.2%

5.2%

$ in billions (CAD)

he Montreal investment market experienced a considerable decrease in investment activity during the first half of 2015 with dollar volume declining nearly $244 million since the first half of 2014. The drop was fuelled largely by the office market, which saw sales decline by $231 million year-over-year. Weakened retail and multi-residential investment also contributed to the decline in dollar volume in the first half of 2015, decreasing by 12% and 23%, respectively, compared with the first half of 2014. On the other hand, industrial investment increased by nearly $100 million, while ICI land sales also rose by almost $30 million between mid-year 2014 and mid-year 2015. The five largest transactions during the first half of 2015 included three industrial buildings, one retail property and a multi-residential building. The largest deal involved an industrial building located in Lachine Borough, sold for $34.5 million by IGRI Industrial Fund GP Ltd. to Fonds de Placement Immobilier Cominar. Also, in Côte St-Luc, the Sun Life Assurance Company of Canada sold a 280-unit multi-residential building to InterRent REIT for $32.4 million. Other significant transactions included the acquisition of a $29-million industrial building in Mount Royal by Carbonleo from Les Placements S.P. Canada. Carbonleo has recently announced a plan to convert the building into a retail development site for the future Quinze 40 power centre. If the proposed retail development proceeds, it will represent a $1.7-billion investment on 57 acres of former industrial land. A weakened Canadian dollar, currently favouring exports, is creating interesting investment opportunities in the industrial sector. On the other hand, elevated vacancy in the office market may reduce investment dollar volume, as assets appear less attractive to purchasers. However, with interest rates remaining fairly low and several projects underway, investment volume should remain stable and even increase through the remainder of 2015.

4 2 0

2008

2009

2010

TOP 5 INVESTMENT SALES BY PRICE - MID-YEAR 2015 Property Name / Address


5203 & 5205 Fairway Street

Industrial

$34,500,000

$116 psf

2

5501 Adalbert Avenue

Multi-Residential

$32,400,000

$115,714 per unit

3

11281-11299 Albert Hudon Boulevard

Industrial

$29,150,000

$62 psf

4

8600 Décarie Boulevard

Industrial

$29,000,000

$121 psf

5

6669-6799 Jean-Talon Boulevard

Retail

$28,090,000

$173 psf


2012

Vendor

2013

2014

Mid-Year 2015

Purchaser

Toronto Investment Activity Vancouver IGRI Industrial Fund GP Ltd.Investment VolumeCominar REIT

1

12

2011

5

$ in billions (CAD)

4 3

Sun Life Assurance Company of Canada

InterRent REIT

Sobeys Québec Inc.

11281 Albert-Hudon Investments Ltd.

Les Placements S.P. Canada Inc.

Carbonleo

RioCan REIT

Desjardins

2 1 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015


6 Edmonton Investment Activity

$ in billions (CAD)

5

Ottawa

4 3 2 1

320-330 Queen Street

0

O

2008

2009

2010

2011

2012

2013

2014

Ottawa Investment Volume

Office

Industrial

Retail

Multi-Residential



$ in billions (CAD)

2 Montreal Investment Activity

1

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Ottawa Investment Activity Toronto Investment Volume

(By Property Type) Ottawa Investment Activity 12


$ in billions (CAD)

10 8 6 4 2

Mid-Year 2015

0 2008

2009

2010

35%

30%

Multi-Residential

26%

28%

Office

20%

13%

Industrial

11%

15%

ICI Land

2011

2014 Mid-Year 8% 201214%2013Retail 2015

Vancouver Investment Volume Rates Select Activity Average Capitalization Toronto Investment

5

Mid-Year 2015

Mid-Year 2014

Downtown Class AA Office 4

5.5%

5.5%


6.4%

6.5%


6.0%

6.3%

Multi-Tenant Industrial 2

6.2%

6.4%


5.0%

5.0%

Multi-Residential

5.0%

4.8%

$ in billions (CAD)

ttawa’s commercial real estate market performed well during the first half of 2015, recording investment sales volume of $543 million - just shy of last year’s first-half tally of $545 million. A notable transaction in the first half of 2015 was InterRent REIT’s acquisition of the Forest Ridge apartment complex, which consists of highrise apartment buildings, townhomes and development land. InterRent’s activity in Ottawa did not end there. The group also acquired a lowrise multi-residential portfolio in the city’s west end. Overall, multi-residential investment remained strong year-over-year (up 18%), with the asset class registering three of the largest transactions of the first half of 2015. Investment in the industrial sector grew by nearly 50% yearover-year as demand remained strong for quality product. A tight overall industrial vacancy rate of 3.8% (with the Nepean submarket as low as 1.2%), combined with limited availability, will likely continue to drive pricing and activity in this sector for the balance of 2015. There was a significant change in ownership in Ottawa’s office market as Manulife acquired Standard Life in June 2015. This portfolio transaction represented more than 50% of the office sales during the first half of 2015, with 320 and 330 Queen Street (part of the portfolio, comprising 255,500 sf of downtown class B office space) being the largest single office asset traded in the period. Looming federal government lease expiries and Workplace 2.0 initiatives – designed to retain and attract public servants and help them work greener, smarter and healthier – will continue to present opportunities for new and existing office investors throughout Ottawa as assets are repositioned and investment objectives change. Given the continued demand for stable assets within the nation’s capital and the turmoil in global capital markets, investment across all real estate asset classes is expected to remain strong in the second half of 2015 as investors look for alternate opportunities to place capital.

3

1 0

2008 2009 2010 TOP 5 INVESTMENT SALES BY PRICE - MID-YEAR 2015



2011

Vendor

Vancouver Investment Activity Standard Life Assurance

2012

2013

2014

Mid-Year 2015

Purchaser

1

Standard Life - Manulife Portfolio

Office

$71,558,600

$143 psf

2

15-28 Rockway Crescent & 2380 Baseline Road

Multi-Residential

$58,500,000

$148,855 per unit

Andrews Brothers Construction (Ottawa) Ltd.

InterRent REIT

3

1240 & 1244 Donald Street

Multi-Residential

$52,177,800

$97,165 per unit

Greenwin Inc.

Q Residential

4

100-136 Colonnade Road

Industrial

$29,020,000

$191 psf

bcIMC Realty Corp.

The Regional Group of Companies Inc.

5

Sipolins - InterRent Portfolio

Multi-Residential

$27,750,000

$98,404 per unit

Sipolins Realty Ltd.

InterRent REIT

Company of Canada

Manufacturers Life Insurance Co.


13


2

$ in billions (CAD)

Montreal Investment Activity

Toronto Yonge Richmond Centre

1

0

D

2008

2009

2010

2011

2012

2013

2014

Toronto Investment Volume

Office

Industrial

Retail

Multi-Residential



$ in billions 12Ottawa Investment Activity (CAD) $ in billions (CAD)

10 8 6 4 2 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Toronto Investment Activity Vancouver Investment Volume

(By Property Type) 5Toronto Investment Activity


4 $ in billions (CAD)

espite economic headwinds, stable market fundamentals prevailed with $100-million-plus trades boosting first-half 2015 sales in the Greater Toronto Area (GTA) to $4.7 billion. Though down 16% from 2014’s first-half tally ($5.6 billion), GTA investment represented most of Canada’s first-half 2015 total dollar volume. Notwithstanding Target’s unexpected exit from Canada, retail was the top first-half investment asset with $1.1 billion in trades accounting for 25% of the region’s total. But the retail sector’s performance was 28% below its first-half 2014 level. The largest first-half transaction overall was the GTA portion of the $1.2-billion SmartCentres – SmartREIT portfolio sale. The vendor/purchaser profile was a mix of institutional, private and developer capital. Seen as offering the most upside, industrial sales ($1.1 billion / 24% share) increased slightly year-over-year, and also showed the greatest yield compression. The largest, and only, $100-million-plus industrial deal in first-half 2015 was the sale of the now-defunct Target Canada’s 1.3-msf Milton distribution centre to Lowe’s Canada for $106 million. Multi-residential sales topped $1 billion – the greatest year-over-year improvement (+106%) – thanks to immigration, urban intensification and a burgeoning millennial cohort. While private investors swapped urban assets, Canada Pension Plan Investment Board’s first direct domestic multiresidential deal – the $105-million acquisition of a 60% interest in High Park Village from Minto Group – captured headlines. Office sales posted the poorest annualized result (-50%) with only $788 million (17% share), due to product scarcity and overbuilding concerns in the market. GWL Realty Advisors, on behalf of its clients, participated (as purchaser and vendor) in the largest overall single asset and office portfolio trades as both deals exceeded $100 million. The sector will be hard-pressed to match the year-end 2014 total of $3 billion. ICI land was the least-traded asset type ($585 million / 12% share) – down 31% year-over-year. Investor demand for transit-served office sites was highlighted by Oxford Properties’ $12.7-million sale of its 0.88-acre site at 4800 Yonge St. to Menkes Developments. While yields remain low and capital and debt plentiful, overall transactions must accelerate in the second half of 2015 to match or surpass the 2014 yearly total of $10.3 billion.

3 2 1

Mid-Year 2015

0 2008

2009

2010

25%

29%

Retail

24%

19%

Industrial

22%

9%

17%

28%

Multi-Residential Office

2011 12% 2012 15% 2013 ICI Land 2014

Mid-Year 2015

Select Average Vancouver Investment Activity Capitalization Rates Mid-Year 2015

Mid-Year 2014


4.9%

5.1%


5.9%

6.2%


5.6%

6.0%


5.8%

6.2%


4.5%

4.6%

Multi-Residential

4.4%

4.6%



Vendor

Purchaser

1

SmartCentres - SmartREIT GTA Portfolio

Retail

$216,028,400

$156 psf

SmartCentres Inc.

SmartREIT

2

Yonge Richmond Centre

Office

$153,800,000

$518 psf

AIMCo / Brookfield / CPPIB

GWL Realty Advisors

3

bcIMC - Crown Realty Partners Portfolio

Office

$123,972,000

$266 psf

bcIMC Realty Corp.

Crown Realty Partners

4

8450 Boston Church Rd.

Industrial

$106,150,000

$80 psf

Ontario Superior Court of Justice (Target Canada)

Lowe's Companies of Canada

5

High Park Village Buildings 2,4 & 6 (60% interest)

Multi-Residential

$104,574,800

$232,388 per unit

Minto Group

Canada Pension Plan Investment Board (CPPIB)

14



12

Ottawa Investment Activity

$ in billions (CAD)

10

Vancouver Langara Gardens

8 6 4 2 0

D

2008

2009

2010

2011

2012

2013

Vancouver Investment Volume

Office

Industrial

Retail

2014

Multi-Residential


Vancouver Investment Volume

5Toronto Investment Activity 4 $ in billions (CAD)

emand for Metro Vancouver investment properties remained strong in the first half of 2015 even as overall sales activity slipped to $2 billion – a 13% decline when compared with the first half of 2014. The decrease is more attributable to a lack of available assets than any change in investor sentiment. Despite two transactions in excess of $100 million as well as five transactions greater than $20 million, the first six months of 2015 were ultimately characterized by a significant number of small transactions (less than $10 million). By asset class, office investment plunged 42% to $252 million during the first half of 2015 compared with $433 million during the same period in 2014. Retail investment also contracted by 37% to $314 million from $500 million in the first half of 2014. Multi-residential investment slipped 14% to $419 million from $489 million in the first half of 2014 as supply remained highly constrained. The value of ICI land acquisitions declined year-over-year, dropping 15% to $530 million in the first half of 2015 from $624 million one year earlier. These declines were mostly due to a lack of supply of available investment-grade assets and an almost total absence of institutional investors. Rising land values have continued to crush cap rates in almost all asset classes and permitted private investors to dominate both sides of a transaction. Industrial investment surged by 75% to $515 million in the first half of 2015 from $295 million in the same period in 2014, primarily due to three major transactions. The $102-million sale of a 50% interest in the redevelopment of Langara Gardens, a housing complex in the City of Vancouver, was the largest multi-residential and overall transaction recorded in Metro Vancouver in the first half of 2015. The disposition of 1550 Alberni Street, a class C office building, was based on the site’s redevelopment potential and therefore classified as an ICI land transaction. The largest deal completed in the province during the first half of 2015 - the approximately $123-million sale of a retail shopping centre - actually transacted in Victoria, BC and is not included in the Metro Vancouver figures.

3 2 1 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Vancouver Investment Activity (By Property Type) Vancouver Investment Activity Mid-Year Mid-Year 2015 2014

Mid-Year 2015

26%

27%

ICI Land

25%

13%

Industrial

21%

21%

Multi-Residential

16%

21%

Retail

12%

18%

Office

Select Average Capitalization Rates Mid-Year 2015

Mid-Year 2014


4.8%

4.9%


5.5%

5.9%


5.5%

5.7%


5.3%

5.7%


4.5%

4.7%

Multi-Residential

4.0%

4.1%



Vendor

Purchaser

1

Langara Gardens (50% interest)

Multi-Residential

$101,857,500

$328,043 per unit

Peterson Group

Concert Properties

2

7931 Alderbridge Way, Richmond

Industrial

$63,000,000

$373 psf

CIC Equities Corp.

1007500 BC Ltd.

3

5016 272nd Street, Langley

Industrial

$53,011,200

$134 psf

Beedie Group

Jim Pattison Group

4

1550 Alberni Street

ICI Land

$47,080,000

$470 psf*

Wicklow West

Westbank Projects Corp.

5

Knightsbridge Business Park, Richmond

Industrial

$40,250,000

$155 psf

GWL Realty Advisors

Crestpoint Real Estate Investments

*price psf based on size of existing office building located on site


15

Atlanta Concourse Corporate Center

A

Atlanta Investment Volume Office

Industrial

Retail

Multi-Residential

Atlanta Investment Volume

12

$ in billions (USD)

10 8 6 4 2 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Atlanta Investment Activity

Austin Investment Volume (By Property Type) Atlanta Investment Activity

6


$ in billions (USD)

5 4

Mid-Year 2015

3 2 1

42%

43%

Multi-Residential

32%

17%

Office

15%

22%

Retail

11%

17%

Industrial

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

SelectActivity Average Capitalization Rates Austin Investment Boston Investment Volume 10

Mid-Year 2015

Mid-Year 2014

Office

6.4%

7.1%

Industrial

6.7%

7.5%

Retail 6

7.1%

7.6%

Multi-Residential

6.6%

7.4%

8

$ in billions (USD)

tlanta’s investment sales market surged during the first half of 2015. Sales in the office, industrial, retail and multiresidential sectors jumped 30% year-over-year to nearly $6 billion. The momentum was driven largely by the office sector, where rising occupancy and rents, combined with historically low development activity, are boosting demand. Office sales rose 142% year-over-year to $1.9 billion. The largest firsthalf 2015 transaction was Building and Land Technology’s $469-million purchase of Concourse Corporate Center, a five-building, 2.1-msf office park in the Central Perimeter submarket. While multi-residential sales led the market in volume ($2.5 billion) through the first half of the year, the sector’s growth rate is beginning to decline following years of torrid activity. Multi-residential sales increased by 25% during the first half of 2015, compared with a 55% rise during the same period in 2014. While the apartment market is likely to continue to attract investment for the foreseeable future, the sector’s dominance should decline as demand increases for other product types. The largest multi-residential transaction was Strata Equity Group’s acquisition of a three-property portfolio (1,604 units) from Orion Residential and GE Capital Real Estate for $207 million. Industrial and retail sales both declined in the first half of 2015 following robust activity in 2014. Industrial sales totaled $687 million, down 15% year-over-year. Of particular note, USAA sold approximately 90% of its interest in the fully leased, 1.6-msf SouthPort Logistics Center to Abu Dhabi Financial Group for $114 million. First-half 2015 retail sales declined 14% year-over-year to $871 million. The largest first-half 2015 retail transaction was the sale of Ashley Park (554,000 sf ) to Apollo Group for $89.75 million. Atlanta has recovered all of the jobs lost during the Great Recession, and economists are predicting the region will add another 100,000 jobs in 2015. Improving leasing fundamentals and rising rental rates are expected to fuel increased sales volume during the next 12 months.

4 2 0

TOP 5 INVESTMENT SALES BY PRICE - MID-YEAR 2008 20092015 2010 Property Name / Address

Property Type Total Price (USD) Price per sf/unit/acre

2014

Purchaser

Boston Investment Activity Regent Partners

$221 psf

2013

Mid-Year 2015

Concourse Corporate Center

2

Orion/GE - Strata Equity Group Portfolio

Multi-Residential

$207,000,000

3

The Pinnacle, Two Live Oak

Office

$201,000,000

$285 psf

TIAA-CREF

Brookdale Group

4

One Buckhead Plaza

Office

$157,000,000

$340 psf

Metzler Realty Advisors

Parkway Properties

5

SouthPort Logistics Center (90% Interest)

Industrial

$114,239,000

$70 psf

USAA Real Estate

Abu Dhabi Financial Group

$129,052 per unit 1.0


$ in billions (USD)

$468,999,900

2012

1

16

Office

2011

Vendor

0.5

Building & Land Technology

Charleston Investment Volume

Orion Residential / GE Capital Real Estate

Strata Equity Group

0.0 2008

2009

2010

2011

2012

2013

2014

Mid-Year

Atlanta Investment Volume

12

$ in billions (USD)

10

Austin

8 6 4 2 0

Domain 7

2008

G

2009

2010

2011

2012

2013

Austin Investment Volume

Office

Industrial

Retail

2014

Mid-Year 2015

Multi-Residential


6Atlanta Investment Activity

$ in billions (USD)

5 4 3 2 1 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Austin Investment Activity

Boston Investment Volume (By Property Type) Austin Investment Activity

10


$ in billions (USD)

8 6 4 2

Mid-Year 2015

50%

51%

Multi-Residential

28%

20%

Office

13%

22%

Industrial

9%

7%

0 2008

2009

2010

2011

2012

Retail 2013

2014

Mid-Year 2015

SelectActivity Average Capitalization Rates Boston Investment Charleston Investment Volume Mid-Year 2015

Mid-Year 2014

Office

6.8%

7.3%

Industrial

7.6%

7.5%

Retail

6.2%

6.0%

0.5 Multi-Residential

5.1%

5.9%

1.0

$ in billions (USD)

reater Austin commercial real estate investment increased 77% to $3.5 billion in the first half of 2015 from $2 billion in the first half of 2014 as the region’s economy continued to attract large companies and investors. As the second quarter of 2015 came to a close, Austin’s unemployment rate stood at 3.3%, down from 4.4% in June 2014, according to the Bureau of Labor Statistics. Continuing from the first half of 2014, multi-residential investment volume widely outpaced other sectors during the first half of 2015, totaling more than $1.7 billion – an increase of nearly 73% from mid-year 2014. However, office investment accounted for the largest dollar volume increase in the first half of 2015, more than doubling to $981 million from $402 million in the first half of 2014. Retail investment also doubled year-over-year, climbing to $301 million at mid-year 2015 from $142 million at mid-year 2014. Industrial investment activity also increased (albeit less dramatically than other sectors) in the first half of 2015 to $474 million from $429 million one year earlier. Several high-profile transactions occurred during the first half of 2015 – and contributed significantly to total sales volume. Through June 2015, the largest confirmed transaction was Brandywine Realty Trust’s acquisition of IBM’s former Broadmoor Campus for $205 million, or $185 psf. The multi-building Domain, a highly popular mixed-use development in northwest Austin, accounted for two of the region’s top transactions. Dallas-based TIER REIT purchased Domain 7 and Domain 3 for $66.8 million and $53.8 million, respectively. Investment activity is expected to remain steady through the second half of 2015 and into 2016 as investors continue to display demand for a variety of assets. In other words, Austin’s commercial real estate investment market has a high level of stability, and the future looks very bright, as the area’s economic performance continues to attract more large investors and companies.

0.0

TOP 5 INVESTMENT SALES BY PRICE - MID-YEAR 20152010 2008 2009 Property Type Total Price (USD) Price per sf/unit/acre

1

IBM Broadmoor Campus

Office

$205,300,000

$185 psf

2

Domain 7

Office

$66,800,000

$301 psf

3

Perry Brooks Building

Office

$65,600,000

4

Elysian at Mueller

Multi-Residential

$63,300,000

5

Domain 3

Office

$53,800,000

5

$512 psf

$210,133 per unit 4 $301 psf

2011

2012

Vendor

2013

2014

Purchaser

Mid-Year 2015

IBM Activity Brandywine Realty Trust Charleston Investment Charlotte Investment Volume

$ in billions (USD)


3

Deutsche AWM - US

TIER REIT

Barton Creek Capital

Clarion Partners

CityStreet Residential Partners

Sun Holdings

Deutsche AWM - US

TIER REIT

2

Fall 2015 Canada,1U.S. and U.K. Commercial Real Estate Investment Review

17

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year


6 Atlanta Investment Activity

$ in billions (USD)

5

Boston

4 3 2 1 0

80 Fawcett Street

2008

G

2009

2010

2011

2012

2013

2014

Boston Investment Volume

Office

Industrial

Retail

Mid-Year 2015

Multi-Residential


$ in10billions Austin Investment Activity (USD)

$ in billions (USD)

8 6 4 2 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Boston Investment Activity

Charleston Investment Volume Boston Investment Activity (By Property Type)

1.0

$ in billions (USD)


0.5

Mid-Year 2015

55%

70%

Office

32%

14%

Multi-Residential

6%

13%

Retail

6%

3%

0.0 2008

2009

2010

2011

2012

Industrial 2013

2014

Mid-Year 2015

Select Average Capitalization Charlotte Volume Rates Charleston Investment Activity Investment 5

Mid-Year 2015

Mid-Year 2014

Office

5.9%

4.9%

Industrial

7.6%

6.7%

3 Retail

6.4%

6.6%

Multi-Residential

5.2%

5.0%

4

$ in billions (USD)

reater Boston investment activity is expected to show an increase through year-end 2015 after experiencing a lull in 2014. In the first half of 2015, $3.6 billion was invested compared with a total of $5.8 billion in all of 2014. This influx of capital can be attributed to the popularity of multiresidential assets among investors. With most of the multiresidential sales taking place in Downtown Boston, investors are confident this sector will continue to see strong demand despite a large construction pipeline. In the core area alone, more than 8,000 new units are expected to be completed in the next five years. An influx of office construction has coincided with this rise in residential construction as technology and biotech companies expand within and just outside the Boston city limits. Foreign investors have identified the region as an advantageous market and are investing heavily in the area, based on current landlord profitability. Capitalization rates compressed year-over-year in all asset classes with the exception of industrial properties, which rose 40 bps to 7.6%. Office properties had the greatest delta, declining 100 bps to 5.9%. Large transactions in Downtown Boston, such as the sale of 75 State Street, 745 Atlantic Avenue and a Fort Point portfolio, all resulted in cap rates of less than 5% while accounting for more than $720 million in investment volume. Pricing for older buildings with prime locations in the rapidly evolving city have soared – a trend which will likely continue for the foreseeable future. Newer suburban projects with large, reputable tenants were also popular investments. One example was the $133-million purchase by U.S. Realty Advisors of the new 280,000-sf building that serves as TripAdvisor’s headquarters in Needham. Vacancy rates continued to decline in the Boston market, and the majority of new construction is already preleased, while rental rates have increased across all product types. Rents should continue to rise for the remainder of the year, making speculative development a viable option for landlords and investors alike.

2 1 0

TOP 5 INVESTMENT SALES BY PRICE - MID-YEAR 2008 2009 2015 2010 Property Type Total Price (USD) Price per sf/unit/acre

1

80 Fawcett Street

Multi-Residential

$207,700,000

$352 psf

2

Fort Point Portfolio

Office

$183,500,000

$428 psf

3

400 First Avenue

Office

$133,200,000

$474 psf

4

315 A Street

Multi-Residential

$130,300,000

$507 psf

5

745 Atlantic Avenue

Office

$114,500,000

$658 psf

18


2011

2012

Vendor

2013

2014

Purchaser

Mid-Year 2015

O'Connor Capital Partners AEW Capital Management Charlotte Investment Activity Chicago Investment Volume 16 14

$ in billions (USD)


12 10

Crosspoint Associates

Invesco Advisers

Normandy Real Estate Partners

U.S. Realty Advisors

Gerding Edlen

Equity Residential

Beacon Capital Partners

Oxford Property Group

8 6 4 2 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year


10

Austin Investment Activity

$ in billions (USD)

8

Charleston

6 4 2 0

Edgewater Plantation

2008

C

2009

2010

2011

2012

2013

2014

Charleston Investment Volume Office

Mid-Year 2015

Industrial Retail Charleston Investment Volume Multi-Residential

$ in billions (USD)

$ in1.0 billionsInvestment Activity Boston (USD)

0.5

0.0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Charleston Investment Activity

Charlotte Investment Volume Charleston Investment Activity (By Property Type)

5


$ in billions (USD)

4 3 2 1

Mid-Year 2015

64%

40%

Multi-Residential

15%

13%

Office

12%

43%

Retail

9%

5%

0 2008

2009

2010

2011

2012

Industrial

2013

2014

Mid-Year 2015

Select Average Capitalization Chicago Investment Volume Rates Charlotte Investment Activity Mid-Year 2015

Mid-Year 2014

14 Office

7.7%

8.6%

12 Industrial

8.4%

8.3%

Retail

6.9%

7.3%

Multi-Residential

6.1%

7.1%

16

$ in billions (USD)

harleston’s economy continued to grow and diversify in the first half of 2015. With recent announcements that Boeing, Mercedes-Benz and Volvo are investing in the area, the advanced manufacturing sector and port continued to be major drivers of economic growth. The corresponding growth in population caused Charleston to be ranked the 12th-fastestgrowing metropolitan area in the U.S. The local industrial market experienced significant growth in the first half of 2015. Vacancy decreased to 7.5% at midyear 2015 from 7.9% at mid-year 2014. Most of the vacant space is in older, less functional buildings. Class A industrial vacancy is less than 2%. As a result, more than 1 msf is under construction, most on a speculative basis. Total investment volume for the first half of 2015 increased by more than 6% compared with the same period in 2014. Charleston’s office market has recorded slow growth during the last several years. There was essentially no new office development in 2014. With no new product, vacancy decreased from 10.9% at mid-year 2014 to 8.3% in the second quarter of 2015. Investment volume was $50.2 million in the first half of 2015, an increase of 9% compared with the same period in 2014. Charleston’s retail market continued to improve with new tenancy openings as well as existing tenant relocations within the market. Vacancy decreased to 5.1% at mid-year 2015 from 6.4% one year earlier, while annual asking rents increased to $18.55 psf from $15.32 psf. Charleston’s multi-residential market is experiencing the most development in 15 years. For the first time since 2008, the absorption rate of approximately 1,800 units was greater than the amount of new supply. Vacancy rates have risen slightly, but the lack of completed units in the first half of 2015 held the average vacancy rate between 5% and 6%. Cap rates compressed further as demand for class A developments continued. Two multi-residential complex sales transactions recently closed at sub-6% cap rates.

10

8 6 4 2 0

TOP 5 INVESTMENT SALES BY PRICE - MID-YEAR 20152010 2008 2009 Property Type Total Price (USD) Price per sf/unit/acre

1

Edgewater Plantation

Multi-Residential

$58,000,000

2

Woodfield Long Point

Multi-Residential

$55,325,000

3

Talison Row

Multi-Residential

$39,645,200

4 5

Ansley Commons 900 Channing Way

Multi-Residential Multi-Residential

$39,191,300 $35,304,500

2011

2012

Vendor

2013

2014

Purchaser

Mid-Year 2015

Praedium GroupActivity JV Carter $161,111 per unit Chicago InvestmentCleveland Investment Volume LivCor Haston 2 Woodfield Investments LLC / $214,438 per unit Sentinel Real Estate CNL Growth Properties $144,690 per unit

Trade Street Residential

Independence Realty Trust

$145,153 per unit

Mesa Capital Partners / Hathaway Development

Praedium Group

Trade Street Residential

Independence Realty Trust

$ in billions (USD)


$144,690 per unit

1


19

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year

Charleston Investment Volume

1.0

$ in billions (USD)

Boston Investment Activity

Charlotte

0.5

0.0

Charlotte Plaza

2008

B

2009

2010

2011

2012

2013

2014

Charlotte Investment Volume Office

Industrial

Retail

Mid-Year 2015

Multi-Residential

Charlotte Investment Volume

$ Charleston in5billions Investment Activity (USD)

$ in billions (USD)

4 3 2 1 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Charlotte Investment Activity

Chicago Investment Volume (By Property Type) Charlotte Investment Activity

16

$ in billions (USD)

14


12

44%

28%

Multi-Residential

29%

19%

Office

4

18%

24%

Industrial

2

10%

29%

Retail

10

Mid-Year 2015

8 6

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Select Average Capitalization Cleveland Volume Rates Chicago Investment Activity Investment 2

Mid-Year 2015

Mid-Year 2014

Office

6.7%

8.1%

Industrial

7.6%

7.8%

Retail

6.9%

7.6%

Multi-Residential

6.0%

6.8%

$ in billions (USD)

uoyed by a resurgent office market, Charlotte investment sales totaled $1.6 billion in the first half of 2015, an increase of 14% over the same period in 2014. Office sales increased by 74%, totaling $466 million at the mid-year 2015 mark. As the office market has shifted to favor landlords, asking rental rates have risen sharply, making the sector increasingly attractive to investors. The average class A asking rate ended the second quarter of 2015 at a record high of $25.69 psf, up by 11% yearover-year. Two CBD office towers topped the largest transactions list for the first half of the year: Charlotte Plaza (630,400 sf) sold for $160 million, and 101 Independence Center (526,000 sf) traded for $108 million. Multi-residential sales also grew significantly to $711 million – an increase of 76% year-over-year. This rise was mainly due to the majority of multi-residential sales activity in 2014 occurring in the back half of the year. The largest multi-residential transaction was Laramar Group’s purchase of the 694-unit Waterford Lakes apartments for $60.4 million. Following a record-breaking performance in 2014, industrial sales fell by 17% year-over-year in the first half of 2015, totaling $287 million. While industrial deal velocity slowed in the first half of 2015, two industrial sales numbered among the largest transactions to date: Hartz Mountain purchased RSI Distribution Center (1 msf) for $55.7 million, and a joint venture between LRC Opportunity Fund and New York Life bought Logistics Pointe (1.1 msf) for $52.1 million. Charlotte’s industrial market, the largest in North Carolina, ended the second quarter of 2015 with vacancy at 7.1%. Sales activity declined in the retail sector in the first half of 2015 following unusually high volume in 2014. Investors purchased $155 million in retail property during the first half of 2015, down by 62% year-over-year. The largest transaction was the sale of Myers Park Center (75,000 sf) to Edens Inc. for $22.5 million. Charlotte added more than 38,000 jobs between June 2014 and June 2015 - a growth rate of 3.4%. The region’s rebounding economy, robust population growth and strong leasing fundamentals across all sectors should continue to fuel increased investor demand heading into 2016.

1

0

TOP 5 INVESTMENT SALES BY PRICE - MID-YEAR 2008 20092015 2010 Property Name / Address


2011

2012

Vendor

2013

2014

Purchaser

Mid-Year 2015

1

Charlotte Plaza

Office

$160,000,000

$254 psf

Hines Activity JFR Global Investments Cleveland Investment Columbus, OH Investment Volume

2

101 Independence Center

Office

$107,766,700

$205 psf

2

3

Waterford Lakes

Multi-Residential

$60,400,100

4

RSI Distribution Center

Industrial

$55,700,000

5

Logistics Pointe

Industrial

$52,100,000

$48 psf

Cornerstone Real Estate Advisers / LRC Opportunity Fund

$87,032 per unit

Laramar Group

Cortland Partners

$56 psf

The Keith Corporation

Hartz Mountain

Westmount Realty Capital / Yucaipa Companies

LRC Opportunity Fund / New York Life


$ in billions (USD)

20

KBS REIT I / Gramercy Property Trust

1

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year

Charlotte Investment Volume

5 Charleston Investment Activity

$ in billions (USD)

4

Chicago

3 2 1 0

OneEleven

2008

C

2009

2010

2012

2013

Industrial

Retail

2014

Mid-Year 2015

Multi-Residential

Chicago Investment Volume

16 Charlotte Investment Activity

$ in billions (USD)

14 12 10 8 6 4 2 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Chicago Investment Activity

Cleveland Investment Volume (By Property Type) Chicago Investment Activity

2

$ in billions (USD)


1

Mid-Year 2015

0 2008

2009

2010

49%

34%

Office

18%

27%

Industrial

17%

19%

Multi-Residential

16%

20%

Retail

2011

2012

2013

2014

Mid-Year 2015

SelectColumbus, Average Rates Investment Volume Cleveland Investment Activity OHCapitalization 2

Mid-Year 2015

Mid-Year 2014

Office

7.1%

7.9%

Industrial

6.5%

7.1%

Retail

6.5%

6.5%

Multi-Residential

6.1%

5.6%

1

0

2008 20092015 2010 TOP 5 INVESTMENT SALES BY PRICE - MID-YEAR


2011


Office

$ in billions (USD)

hicago’s commercial real estate market continues to benefit from strong investor demand, registering investment sales increases across all asset sectors during the first half of 2015. Transaction volume totaled $10.2 billion – a 92% increase from mid-year 2014. Office investment continued to lead in sales volume with $5 billion in transactions – a 176% increase year-over-year. This boost was due to several high-profile properties trading throughout the CBD. As a result of strong demand, capitalization rates trended downward for the fourth straight quarter. The Blackstone Group acquired two notable CBD office properties with the iconic Willis Tower trading for $1.3 billion, or $336 psf – the highest first-half 2015 sales price. The second Blackstone property, River North Point, was purchased for $378 million, or $289 psf. As market fundamentals continue to improve, investor appetite for office product should remain strong in the CBD and in select suburban markets where value-add opportunities are more abundant. Investor demand for industrial assets remained strong during the first half of 2015. The purchase of class B product has gained momentum, especially if there is a value-add opportunity. However, a substantial gap remains in terms of purchase price as class A facilities are still favored by investors and attract the highest premiums. Cap rates have reached pre-Great Recession levels, averaging 6.5% at mid-year 2015. However, in select submarkets, buildings are trading at 5% or lower. These compressed cap rates indicate that industrial investment should continue through the remainder of the year. Fundamentals have improved tremendously in both the retail and multi-residential sectors. Retail investment remains centered on well-located shopping centers and grocery-anchored strip centers in key submarkets within the CBD and suburbs. Secondtier submarkets face higher vacancy due to lackluster leasing activity, which has been a major deterrent for investors. Multiresidential sales climbed 68% year-over-year due in large part to historically low vacancy rates, which have pushed rental rates up 6.5% from mid-2014. OneEleven, a 525-unit luxury apartment building located within the CBD, traded for a record-breaking $651,000 per unit.


Vendor

2011

2012

2013

2014

Purchaser

Mid-Year 2015

1

The Willis Tower

Office

$1,300,000,000

$336 psf Columbus, OH The Moinian Group Investment Activity

The Blackstone Group

2

River North Point

Office

$378,000,000

$289 psf

Shorenstein Properties


3

55 E Monroe Street

Office

$367,300,000

$296 psf

Glenstar Properties

Prudential Real Estate Investors

4

One South Wacker

Office

$344,000,000

$288 psf

The Harbor Goup

John Hancock Real Estate

5

OneEleven

Multi-Residential

$328,225,000

$651,240 per unit

Related Midwest

Heitman


21


16

Charlotte Investment Activity

$ in billions (USD)

14

Cleveland

12 10 8 6 4 2 0

Fifth Third Center

2008

C

2009

2010

2011

2012

2013

Cleveland Investment Volume Office

Industrial

Retail

2014

Mid-Year 2015

Multi-Residential

Cleveland Investment Volume

$ in billions (USD)

$ inChicago 2billions Investment Activity (USD)

1

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Cleveland Investment Activity

Columbus, OH Investment Volume Cleveland Investment Activity (By Property Type)

2


$ in billions (USD)

leveland’s commercial real estate market continued to make slow but steady progress on the road to recovery in the first half of 2015. According to the Bureau of Labor Statistics, the local metropolitan area’s unemployment rate increased 40 bps year-over-year to 6.4% at mid-year 2015. Cleveland’s highly advantageous location on the banks of Lake Erie suits its historical reputation as an industrial center. However, the world-renowned Cleveland Clinic continues to be the number one source of employment for local residents. The education and health services sectors accounted for approximately 19% of metro Cleveland jobs, compared with 11.6% nationally, according to commercial real estate research firm Reis. Downtown Cleveland is experiencing some big changes with a $32-million remodeling of Public Square, as well as the construction of the 54-story nuCLEus office tower and the $272-million Hilton Hotel. During the first six months of 2015, major office investment activity occurred with two notable office sales making headlines. The 508,000-sf Fifth Third Center (76% leased) was sold to Hertz Investment Group of California for $53.4 million, making it the largest sale in the first half of 2015. Florida-based Optima International cut its losses and sold the historic Huntington Building to Hudson Holdings, which is also based in Florida, for $17 psf in June 2015. The new ownership group is planning a conversion of the 1.3-msf office asset to residential use. The industrial and multi-residential sectors started off slowly in the first half of 2015. However, the multi-residential market is poised for a strong finish as older office buildings are repurposed for multi-residential use. Cleveland’s office market had a strong start in the first six months of 2015 with $188 million invested – a 258% increase compared with mid-year 2014. The average cap rate for office properties increased drastically when compared to mid-year 2014, rising to 9.1% from 8%. Capitalization rate volatility, stemming from the Great Recession, will likely prevail in all asset classes until a new equilibrium is reached. Overall investment activity for 2015 ($505 million at mid-year) is on pace to exceed the figure recorded in 2014 ($952 million).

1

Mid-Year 2015

37%

12%

Office

36%

44%

Retail

15%

25%

Multi-Residential

12%

19%

Industrial

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Select Average Columbus, OH Investment Activity Capitalization Rates Mid-Year 2015

Mid-Year 2014

Office

9.1%

8.0%

Industrial

8.8%

7.5%

Retail

6.8%

7.7%

Multi-Residential

7.5%

7.8%



Vendor

Purchaser

1

Fifth Third Center

Office

$53,400,000

$105 psf

TIER REIT

Hertz Investment Group

2

Creekside Commons

Retail

$28,300,000

$140 psf

First Interstate Properties

Inland Real Estate Corp / PGGM

3

3800 Embassy Parkway

Office

$24,800,000

$212 psf

John Dellagnese and Associates

Alexander Scharf

4

Cherry Tree Apartments

Multi-Residential

$22,400,000

$50,606 per unit

Gross Builder

Forest City

5

925 Building

Office

$22,200,000

$17 psf

Optima International

Hudson Holdings

22


Cleveland Investment Volume

2

$ in billions (USD)

Chicago Investment Activity

Columbus, OH

1

0

Polaris Fashion Place

2008

C

2009

2010

2011

2012

2013

2014

Columbus, OH Investment Volume

Mid-Year 2015

Office

Industrial Retail Columbus, OH Investment VolumeMulti-Residential

$ in 2billions Investment Activity Cleveland (USD)

$ in billions (USD)

olumbus commercial real estate investment is on pace for a record year after increasing by 101% in the first six months of 2015 to $1.4 billion. Investment dollar volume rose $679 million from mid-year 2014 as the local economy continued to outshine other Ohio metropolitan areas. Due to a rampant increase in population, along with attractive macroeconomic conditions and tax incentives for businesses, a drop in the Columbus Metropolitan Statistical Area unemployment rate was recorded in the first six months of 2015. The U.S. Bureau of Labor Statistics reported in June that the unemployment rate had reached its lowest point since 2002, falling 90 bps to 4.2% at mid-year 2015 from 5.1% a year earlier. Office investment activity decreased 10% year-over-year in the first half of 2015, recording slightly less than $70 million in transactions. However, the first half of 2015 saw significant increases in the industrial, multi-residential and retail investment sectors. What office investment lacked in the first half of 2015 was made up by a 316% increase in retail investment from mid-year 2014. The retail sector’s strong first-half 2015 was due in part to the sale of Polaris Fashion Place. New York-based O’Connor Capital Partners purchased the 420,000-sf mall from Columbus-based REIT WP Glimcher for approximately $248 million. Ohio-based Champion Real Estate Services acquired two major apartment complexes, adding to its portfolio of 12 multi-residential complexes. The Gardens at Easton and the Lake Club at Polaris were purchased for $56,391 and $69,444 per unit, respectively. Capitalization rates remained relatively stable in all asset classes, collectively declining by 15 bps on a year-over-year basis as of mid-year 2015. Going forward, an anticipated record year for investment bodes well for continued strong activity in 2016.

1

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Columbus, OH Investment Activity (By Property Type) Columbus, OH Investment Activity Mid-Year Mid-Year 2015 2014

Mid-Year 2015

48%

23%

Retail

27%

37%

Industrial

20%

28%

Multi-Residential

5%

12%

Office


Mid-Year 2014

Office

8.5%

8.2%

Industrial

6.4%

6.4%

Retail

7.4%

8.5%

Multi-Residential

7.1%

6.9%



Vendor

Purchaser

1

Polaris Fashion Place

Retail

$248,400,000

$588 psf

WP Glimcher

O'Connor Capital Partners

2

The Gardens at Easton

Multi-Residential

$60,000,000

$56,391 per unit

Multiple Investment Groups

Champion Real Estate Services

3

Rickenbacker Global Logistics

Industrial

$50,700,000

$42 psf

AFIAA

Ares Capital

4

Shops on Lane Avenue

Retail

$35,300,000

$200 psf

Heitman

Ramco-Gershenson

5

Lake Club at Polaris

Multi-Residential

$30,000,000

$69,444 per unit

Private individual

Champion Real Estate Services


23

Dallas Galleria North Tower II

D

Dallas Investment Volume Office

Industrial Dallas InvestmentRetail Volume

$ in billions (USD)

14 12 10 8 6 4 2 0 2008

2009

2010

2012

2013

2014

Mid-Year 2015

Dallas Investment Activity

10


$ in billions (USD)

8 6 4 2

Mid-Year 2015

40%

38%

Multi-Residential

21%

27%

Office

21%

19%

Industrial

18%

16%

Retail

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Denver Investment SelectActivity Average Capitalization Rates

Detroit Investment Volume

Mid-Year 2015

Mid-Year 2014

Office

7.2%

7.2%

Industrial

7.1%

8.1%

Retail 2

6.9%

7.1%

Multi-Residential

6.9%

7.4%

3

1

TOP 5 INVESTMENT SALES BY PRICE0 - MID-YEAR 2015 2009 Property Type Total Price (USD) Price per sf/unit/acre 2008 Vendor2010

1

The Residence at North Dallas

Multi-Residential

$81,500,000

$78,973 per unit

2

Galleria North Tower II

Office

$69,756,200

$215 psf

3

Nokia Siemens Networks US

Office

$64,051,000

$219 psf

4

Duke Bridges I & II

Office

$59,800,000

$210 psf

5

Park Place on Turtle Creek

Office

$46,600,000

$252 psf

Detroit Investment Activity

2011

2012

2013 2014 Purchaser

Mid-Year 2015

ARA Newmark

The Milestone Group

Metzler Real Estate

Grundbesitz Global

Dividend Capital Diversified Property Fund

Gramercy Property Trust

Signature REIT

GC Essential Asset REIT

Dividend Capital Diversified Property Fund

Piedmont REIT

Fairfield County Investment Volume

3

$ in billions (USD)


2011

Denver Investment Volume Dallas Investment Activity(By Property Type)


24

Multi-Residential

16

$ in billions (USD)

allas continues to strengthen as a corporate destination with 18 Fortune 500 companies currently headquartered in the metroplex. Additional large corporate users also remain focused on the Dallas-Fort Worth area for future relocations. An increased amount of capital flowed into the market in the past year. Investment sales climbed 27% to $7.3 billion in the first half of 2015 from $5.8 billion in the first half of 2014. High demand for product has caused the average capitalization rate to compress further, dropping to 7% at mid-year 2015 from 7.5% at mid-year 2014. Retail investment transactions recorded the largest percentage gains in the first half of 2015 as investment dollar volume increased 45% year-over-year. Village on the Parkway in Addison recently underwent a $40-million redevelopment that brought the shopping center up to 90% occupancy. UBS purchased the site from Retail Connection for an undisclosed sum. Multi-residential properties accrued the largest amount of capital, achieving more than $2.9 billion in sales volume in the first half of 2015. Dallas is a corporate destination with high-paying jobs, which should continue to benefit the luxury retail and multi-residential markets. Office investment sales volume totaled $1.5 billion in the first half of the year, remaining relatively flat compared with the first half of 2014. Investors continued to target highquality, well-located office properties in the Dallas market. German-based Grundbesitz Global purchased Galleria North Tower II for $70 million, or $215 psf. The average price for Dallas office product is $188 psf. The imminent end of construction on the LBJ Freeway is spurring increased investment activity in the Dallas Galleria area. The DallasFort Worth region continues to strengthen as a distribution hub, and industrial real estate investment totaled $1.5 billion in the first half of 2015, up from $1.1 billion in the first half of 2014. Increased investor interest is expected to continue through to year-end 2015 and into 2016.

2

1

16

$ in billions (USD)

14

Denver

12 10 8 6 4 2 0

1515 Wynkoop

2008

T

2009

2010

2011

2012

2013

2014

Denver Investment Volume Office

Industrial Denver InvestmentRetail Volume

Mid-Year 2015

Multi-Residential

$ in billions (USD)

$ in10billions (USD) Dallas Investment Activity 8

6 4 2 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Denver Investment Activity

Detroit Investment Volume (By Property Type) Denver Investment Activity

3

$ in billions (USD)


2

1

Mid-Year 2015

44%

24%

Multi-Residential

32%

41%

Office

12%

14%

Retail

11%

21%

Industrial

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

SelectActivity Average Capitalization Rates Detroit Investment Fairfield County Investment Volume Mid-Year 2015

Mid-Year 2014

Office

7.3%

7.3%

Industrial

7.2%

7.3%

Retail 2

6.9%

7.7%

Multi-Residential

6.1%

6.0%

3

$ in billions (USD)

remendous population and employment growth in the Denver market have attracted foreign and domestic investors in the past year. Investment volume is on track to surpass 2014 levels with more than $4.4 billion in commercial real estate sales volume recorded during the first half of 2015. The market appears on pace to meet or exceed the $8.2 billion in sales recorded in all of 2014. Average cap rates remained stable at 6.9% at mid-year 2015, down only 10 bps from 7% at the same point one year earlier. The continued in-migration of millennials benefited Denver’s multi-residential and retail investment markets in the past year. Multi-residential properties experienced the largest jump in activity in the first half of 2015, up 192% compared with the same period in 2014. Bell Flatirons, a 1,206-unit apartment complex located in Superior, sold for $252 million to North Carolina-based Bell Partners, making it the largest multi-residential sale in Colorado history. The property was 96% occupied at the time of sale. Retail investment volume increased 42% in the first half of 2015 compared with the first half of 2014. MetLife purchased a $137-million stake in the Denver Pavilions, which is 95% leased. Office properties recorded a 24% year-over-year increase in investment dollar volume with more than $1.4 billion transacted in the first half of 2015. Invesco Real Estate purchased 1515 Wynkoop Street for $172 million, or $562 psf, from American Realty Advisors. This was the highest price paid per square foot for office product in Denver to date in 2015. American Realty Advisors purchased the building in 2011 and was able to capitalize on the significant growth that has occurred around the Union Station redevelopment. Industrial investment activity softened slightly in the first half of 2015 from the same period in 2014, but remains healthy. Industrial sales totaled $493 million at mid-year 2015 compared with $583 million at mid-year 2014. Pending deals and a healthy economy will likely lead to increased investment sales through the rest of 2015.

1

TOP 5 INVESTMENT SALES BY PRICE - MID-YEAR 2015

0 Property Type Total Price (USD) Price per sf/unit/acre

2008

2009 Vendor2010

2011

Fairfield County Investment Activity $208,679 per unit Simpson Housing LLP

1

Bell Flatirons

Multi-Residential

$251,666,700

2

1515 Wynkoop

Office

$171,938,300

$562 psf

3

Denver Pavilions

Retail

$137,000,000

$395 psf

4

Greenwood Corporate Plaza

Office

$91,500,000

$149 psf

5

Village Center Station I

Office

$76,657,500

$328 psf

American Realty Advisors

2012

2013 2014 Purchaser

Bell Partners

Mid-Year 2015

Invesco RE

Fort Lauderdale Investment Volume

3

$ in billions (USD)


Clarion Partners

MetLife RE Investors

Equity West Investment Partners

ScanlanKemperBard

Shea Properties

KBS REIT

2

Fall 2015 Canada,1 U.S. and U.K. Commercial Real Estate Investment Review

25

10

$ in billions (USD)

8

Detroit

Dallas Investment Activity

6 4 2 0

One Detroit Center

2008

D

Property Name / Address 1

Somerset Park

Office

$216,000,000

2013

2014

Mid-Year 2015

Multi-Residential

$ in billions (USD)

2

1

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015


Fairfield County Investment Volume (By Property Type) Detroit Investment Activity

3

$ in billions (USD)


2

1

Mid-Year 2015

31%

19%

Multi-Residential

29%

36%

Office

23%

24%

Retail

17%

21%

Industrial

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Average Fairfield CountySelect Investment Activity Capitalization Rates Fort Lauderdale Investment Volume Mid-Year 2015

Mid-Year 2014

Office

7.5%

7.4%

Industrial

9.3%

8.0%

2 Retail

7.2%

8.1%

Multi-Residential

6.8%

8.2%

3

1

Fort Lauderdale Investment Activity $97,035 per unit Nykel Management Co.

2011

2012

2013 2014 Purchaser

Mid-Year 2015

Solomon Organization LLC

iStar Financial / Police and Fire Rock Ventures LLC Investment Volume Houston Retirement

One Detroit Center

Office

$100,000,000

$100 psf

3

Fountains of Franklin

Multi-Residential

$65,300,000

$191,416 per unit

4

Park at Trowbridge

Multi-Residential

$54,300,000

$181,072 per unit

5

Georgetown Park Apartments

Multi-Residential

$33,500,000

$69,792 per unit

14

$ in billions (USD)

12


2012

Detroit InvestmentRetail Volume Industrial

TOP 5 INVESTMENT SALES BY PRICE0 - MID-YEAR 2015 2009 Property Type Total Price (USD) Price per sf/unit/acre 2008 Vendor2010 Multi-Residential

2011

$ in3 billions Denver Investment Activity (USD)

2

26

2010

Detroit Investment Volume

$ in billions (USD)

etroit’s commercial real estate investment activity continues on an upward trajectory. The downtown market remains a focal point due to over-inflated cap rates in recent years. However, it appears that the knockout deals that made headlines at the beginning of the decade are now few and far between. As out-of-state investors kept an eye on Detroit’s downtown in the first half of 2015, the largest change in ownership occurred in the suburbs. New Jersey-based Solomon Organization LLC purchased the 2,226-unit Somerset Park apartment complex, located in Troy, for $216 million. The multi-residential sector saw a dramatic increase in total investment dollar volume, to $426 million in the first half of 2015 compared with $203 million at mid-year 2014. The industrial market recorded total investment volume of $231 million in the first half of 2015, similar to the $229 million reported a year earlier. Major construction activity underway includes Indianapolis-based Scannell Properties building a 350,000-sf distribution center in Oak Park for FedEx Corporation. Targeted completion date is August 2016. The historic Fisher and Albert Kahn office buildings sold for $12.2 million in June 2015. They were purchased in 2001 for approximately $31 million. Both buildings comprise a total of approximately 777,000 sf. New York-based HFZ Capital partnered with Detroit-based Redico to purchase the assets out of foreclosure. Total retail investment rose 19% to $312 million in the first half of 2015 compared with $262 million at the mid-way point of 2014. Major retail news included locally based Kroger Company acquiring seven of Hiller’s Markets’ Metro Detroit locations. In comparison with mid-year 2014, cap rates appeared to have stabilized at mid-year 2015, averaging 7.7% for all asset classes. Investors seem to be beginning to feel more comfortable with a market that has been unpredictable in recent years.

2009

10 8 6 4 2

Arcapita

Northstar Healthcare / The Freshwater Group

Chartwell Retirement Residences

Brookdale Senior Living / HCP Inc.

Associated Estates

Haley RE Group

3

Fairfield County

$ in billions (USD)

Denver Investment Activity

2

1

0

1 Elmcroft Road

2008

T

7 Backus Avenue

Retail

$68,100,000

$383 psf

2

1 North Frontage Road

Industrial

$57,500,000

$69 psf

3

1 Elmcroft Road

Office

$38,000,000

4

6 Armstrong Road

Office

$16,700,000

5

100 Mill Plain Road

Office

$12,400,000

2013

2014

Mid-Year 2015

$ in billions (USD)

2

1

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Fairfield County Investment Activity

Fort Lauderdale Investment Volume (By Property Type) Fairfield County Investment Activity

3


2

1

Mid-Year 2015

37%

31%

Retail

27%

23%

Multi-Residential

19%

2%

17%

44%

Industrial Office

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Average Fort LauderdaleSelect Investment Activity Capitalization Rates Houston Investment Volume Mid-Year 2015

Mid-Year 2014

Office

6.2%

7.6%

Industrial

7.2%

6.9%

Retail

6.2%

6.7%

Multi-Residential

5.2%

6.2%

14 12 10

8 6 4 2

TOP 5 INVESTMENT SALES BY PRICE 0- MID-YEAR 2015 2008 2009 Property Type Total Price (USD) Price per sf/unit/acre Vendor 2010

1

2012

Fairfield County Office IndustrialInvestment Retail Volume Multi-Residential

Houston Investment Activity Macerich

Investcorp

2011

2012

2013 2014 Mid-Year Purchaser 2015

Sears Holding Corporation STAG Industrial

Indianapolis Investment Volume

$90 psf

Pitney Bowes Inc. Building & Land Technology 0 Marcus Partners Windsor Management 0 0 EVO Real Estate Group / Rockledge $139 psf Lemle LLC 0 Investments 0 0 0 Fall 2015 Canada,0 U.S. and U.K. Commercial Real Estate Investment Review 27 0 0 $102 psf

$ in billions (USD)


2011

$ in3 billions Detroit Investment Activity (USD)

$ in billions (USD)

rs/Corey%20Deslandes/Dropbox%20(Avison%20Young)/New%20York%20... 9/11/2015

2010

Fairfield County Investment Volume

$ in billions (USD)

he current strength of Fairfield County’s investment sales market is the result of a renewed interest in the industrial market. During the first half of 2015, the county’s 19 industrial investment transactions accounted for $148 million in dollar volume, eclipsing both the mid-year 2014 mark of $29 million and the yearly total of $64 million. The largest industrial transactions during the first half of 2015 took place in neighboring New Haven County, including STAG Industrial’s purchase of North Haven Distribution Center at 1 North Frontage Road (832,400 sf ) in North Haven for $57.5 million ($69 psf ); and Lone Star Funds’ purchase of 50 Barnes Industrial Park N (154,000 sf ) in Wallingford, CT for $7.5 million or $49 psf. These sales demonstrated investors’ increased appetite for quality warehouse/distribution assets and reflected the continued improvement in the local economy. The retail market, which performed well during the first half of 2015 with 17 transactions totaling $294 million, did not match its mid-year 2014 investment level. The top transaction in the first half of 2015 was the sale of 7 Backus Avenue in Danbury, CT for $68.1 million. The property is home to a Sears department store. Office investment activity slowed year-over-year as 14 transactions valued at $133 million were recorded in the first half of 2015, down significantly from the 19 deals valued at $539 million in the first half of 2014. The largest first-half 2015 transaction was completed by Building & Land Technology, which acquired a 550,000-sf office complex located at 1 Elmcroft Road in Stamford, CT for $38 million ($90 psf ). The vacant complex, which the purchaser plans to redevelop, is the former home of Pitney Bowes. Aside from the industrial sector, the investment sales market in Fairfield County has been weak. Notably, the lack of investment in office product can be attributed to significant existing vacancy coupled with the potential for more space to become available.

2009

3

Fort Lauderdale

$ in billions (USD)


2

1

0

Casa Palma

2008

F

2010

2011

1

Casa Palma

$89,876,400

$ in billions (USD)

2

1

2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Fort Lauderdale Investment Activity

Houston Investment Volume Fort Lauderdale Investment Activity (By Property Type)

14 12


10 8 6 4

Mid-Year 2015

2

31%

19%

Multi-Residential

25%

13%

Industrial

24%

30%

Retail

20%

38%

Office

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Select Activity Average Capitalization Rates Houston Investment Indianapolis Investment Volume Mid-Year 2015

Mid-Year 2014

Office 0

8.4%

8.2%

0 Industrial

5.5%

6.0%

6.8%

6.4%

6.2%

6.4%

0

2011

Indianapolis Investment/ Activity $256,789 per unit ZOM Residential AEW Capital

Multi-Residential

$76,876,900

$256,256 per unit

3

Reflections at Welleby

Multi-Residential

$66,250,000

$151,256 per unit

4

Modera Pembroke Pines Phase II

Multi-Residential

$62,948,000

$226,432 per unit

5

Altis at Coconut Creek

Multi-Residential

$61,767,600

$228,769 per unit

$ in billions (USD)

Altis at Sheridan Village


Mid-Year 2015

0

2

28

2014

Fort Lauderdale Office IndustrialInvestment Retail Volume Multi-Residential

0 Retail 0 Multi-Residential 0 0 0 0 0 TOP 5 INVESTMENT SALES BY PRICE0 - MID-YEAR 2015 2009 Property Type Total Price (USD) Price per sf/unit/acre 2008 Vendor2010 Multi-Residential

2013

$ in3 billions Fairfield County Investment Activity (USD)

$ in billions (USD)


2012

Fort Lauderdale Investment Volume

$ in billions (USD)

ort Lauderdale’s commercial real estate investment market continues to gain momentum alongside the economy. The local population ranks as the second largest among South Florida’s three largest cities. As the population continues to grow, Fort Lauderdale’s economy continues to improve. Most recently, the unemployment rate for July 2015 was 5.2%, a substantial 110-bps improvement from July 2014, when unemployment was 6.3%. Fort Lauderdale’s total commercial real estate investment sales dollar volume for the office, retail, industrial and multiresidential sectors almost doubled to $2.2 billion in the first half of 2015, compared with $1.1 billion in the first half of 2014, as demand for industrial product surged. While demand increased for all product types, capitalization rates remained virtually unchanged year-over-year. The average cap rate nudged up to 7.1% at mid-year 2015 from 7% at mid-year 2014. Looking at each segment individually, the only cap rate compression occurred in multi-residential, where the rate dipped slightly to 6.2% at mid-2015 compared with 6.4% at mid-year 2014. As was the case with many North American cities, demand for multi-residential properties outpaced investor interest in all Fort Lauderdale asset classes. All of the city’s top five transactions in the first half of 2015 involved multiresidential properties. The most significant transaction was Casa Palma. The apartment complex, built in 2014, sold for $89.9 million, or $257,000 per unit. The 350-unit project is located in the Coconut Creek submarket of Fort Lauderdale. Going forward, Fort Lauderdale’s rapidly growing population and strong regional economy will likely spur more significant commercial real estate transactions through year-end 2015 and into 2016.

2009

4 3 2 1

2012

2013 2014 Purchaser

TIAA-CREF

Mid-Year 2015

Altman Companies / Sarofim Las Vegas Investment Volume AVR Realty Realty Advisors AEW Capital Partners

Lyon Capital Ventures

Mill Creek Residential

AVR Realty

Altman Companies

Clarion Partners

3

$ in billions (USD)

Fairfield County Investment Activity

Houston

2

1

0

1000 Main Street

2008

D


2010

1000 Main Street

Office

$435,500,000

$520 psf

2

Westgate 2 & 3

Office

$143,000,000

$325 psf

3

Westway II

Office

$82,500,000

4

Willowbrook Plaza

Retail

$74,000,000

5

Broadway Square

Multi-Residential

$69,000,000

2012

2013

2014

Investment Volume Office Houston Industrial Retail

Mid-Year 2015

Multi-Residential

$ in billions (USD)

$ in14billions Fort Lauderdale Investment Activity (USD) 12

10 8 6 4 2 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Houston Investment Activity

$ in billions (USD)

Indianapolis Investment Volume Houston Investment Activity (By Property Type)

0 0 0 0 0 0 0 0 0 0 0


Mid-Year 2015 2008

2009

2010

40%

45%

Multi-Residential

28%

31%

Office

17%

14%

Retail

15%

11%

Industrial

2011

2012

2013

2014

Mid-Year 2015

Select Average Indianapolis Investment Activity Capitalization Rates Las Vegas Investment Volume Mid-Year 2015

Mid-Year 2014

Office

6.9%

7.7%

Industrial 3

7.8%

7.9%

Retail

7.1%

7.5%

Multi-Residential 2

6.9%

7.1%

4

1


1

2011

Houston Investment Volume

$ in billions (USD)

espite a downturn in the energy industry, overall Houston commercial restate investment dollar volume increased by 33% in the first half of 2015 compared with the first half of 2014. All product types recorded investment increases in firsthalf 2015. Industrial properties reported the largest year-overyear percentage gains with investment dollar volume up 86%. Expansion in the petrochemical industry, which benefits from low oil prices, remains a bright spot in the region, spurring industrial transaction activity. Additional demand for industrial product is coming from companies outside the energy industry in fields such as technology, retail and healthcare. Industrial investment totaled $903 million in the first half of 2015, compared with $485 million during the same period in 2014. Office properties recorded a 21% year-over-year increase in investment volume. Many buyers cited resilience in the economy, a diversifying market and an understanding of Houston’s cyclical nature as reasons for investment. In the largest first-half 2015 transaction, German-based Union Investment RE purchased 1000 Main for $435 million, or $520 psf. The property comprises 837,100 sf and was 99% leased at the time of sale. Investment in suburban markets remained active as well, particularly in energy-centric West Houston. California-based Griffin Capital purchased Westgate 2 and 3 for $143 million. The buildings were completed in 2014 and currently serve as Wood Group Mustang’s headquarters. First-half 2015 retail and multi-residential investments were driven by a regional population boom. According to the Houston Partnership, the Houston metro area led the nation in population growth in 2014, adding nearly 157,000 residents. Accordingly, retail investment volume increased 60% in the first half of 2015 from the first half of 2014. Investors continue to target grocery-anchored assets, particularly those found in high-density areas. Investment in large, mixed-use centers has grown in popularity, and the retail market will likely continue to be driven by trends that support the live/work/play environment favored by millennials.

2009

Las Vegas Investment Invesco RealActivity Estate

2011

2012

2013 2014 Purchaser

Mid-Year 2015

Union Investment Real Estate

Transwestern


$340 psf

Signature REIT


$192 psf

Retail Connection

DDR

$27,947 per unit

Hudson Realty Capital

Private individual


29

$ in billions (USD)

Las Vegas 302 East Carson Avenue

0 0 0Houston Investment Activity 0 0 0 0 0 0 0 0 2008

L

2009

2010

2011

2012

2013

2014

Las Vegas Investment Volume

Mid-Year 2015

Office Las Vegas Industrial Retail Investment Volume Multi-Residential

$ in4billions Indianapolis Investment Activity (USD)

$ in billions (USD)

as Vegas’ commercial real estate market is poised for yet another significant year in 2015 on the heels of a strong 2014. Several economic indicators registered positive gains in the first half of 2015 with growing consumer confidence and interest from out-of-state investors. Monthly visitors, convention attendance, gaming revenue as well as residential and commercial permit applications are all on the rise. Multi-residential remains one of the top investment products in the local market. The majority of new college graduates and millennials are not yet able, or willing, to purchase new homes, resulting in increased demand for rental accommodation across the valley. There were approximately 1,430 units completed in seven buildings in 2014. At 2015’s midway point, 2,205 units in eight buildings were under construction with 1,135 units in another eight buildings already completed. Rental apartment demand has refused to subside and pushed asking rental rates upward - a trend expected to continue into the year ahead. As it is one of the most popular secondary markets in the U.S., investors from primary markets interested in multi-residential opportunities continue to look to Las Vegas to achieve higher yields and returns to balance their overall portfolios. After lagging other local sectors in recent years, the oncestruggling industrial real estate market is beginning to gain the attention of local and out-of-state investors. Only 72,000 sf of new industrial product was completed in 2014. However, as of mid-year 2015, approximately 1.5 msf of industrial space was under construction with 703,300 sf already completed. The majority of forthcoming industrial product is already preleased due to demand for available distribution spaces greater than 200,000 sf, which have been extremely difficult to find in recent years. Lease rates for industrial space have risen significantly in recent quarters, increasing the value of industrial product across the valley. While only a couple of recent sales were completed by investors, many are starting to see the positive growth in the industrial market as a sign of improvement and opportunity.

3 2 1 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Las Vegas Investment Activity (By Property Type) Las Vegas Investment Activity Mid-Year Mid-Year 2015 2014

Mid-Year 2015

36%

30%

Retail

28%

17%

Industrial

24%

38%

Multi-Residential

12%

15%

Office


Mid-Year 2014

Office

8.0%

8.0%

Industrial

7.0%

7.0%

Retail

6.5%

7.0%

Multi-Residential

5.8%

6.0%



Vendor

Purchaser

1

3769-3771 South Las Vegas Boulevard

Retail

$139,500,000

$1,457 psf

Walton Unilev Showcase LLC

Jordache Enterprises Inc.

2

3275 East Flamingo Road

Multi-Residential

$50,500,000

$96,347 per unit

Broadstone Vegas LLC

Pecos LL LLC

3

10721 West Charleston Boulevard

Retail

$49,425,900

$345 psf

Life Time Fitness

Gramercy Property Trust

4

6765 East Tulip Falls Drive

Multi-Residential

$40,000,000

$145,455 per unit

Thunder Road Development LLC

SP RGA Verona LP

5

302 East Carson Avenue

Office

$35,940,400

$224 psf

VF Carson LLC

HB 302 Carson Owner LLC

30


Long Island 1111 Marcus Avenue

T

Long Island Investment Volume OfficeLong Island Industrial Retail Investment Volume Multi-Residential

$ in billions (USD)

2

1

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Long Island Investment Activity

Los Angeles Investment Volume (By Property Type) Long Island Investment Activity

30


$ in billions (USD)

25 20 15 10

Mid-Year 2015

43%

14%

Office

39%

48%

Retail

9%

23%

Industrial

9%

14%

Multi-Residential

5 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Select Average Los Angeles Investment Activity Capitalization Rates Miami Investment Volume Mid-Year 2015 Mid-Year 2014 5

Office

7.5%

6.4%

Industrial 4

7.1%

6.4%

Retail

5.8%

6.5%

Multi-Residential

5.6%

5.7%

$ in billions (USD)

he Long Island investment sales market is highly differentiated, with the office market outpacing all other property types. Office sales dollar volume got off to a strong start in the first half of 2015 with $280 million in trades, surpassing not only the first-half 2014 level ($98 million), but also the overall 2014 total. Much of the first-half 2015 volume was recorded in the second quarter ($205 million). The largest transaction was the purchase of the 94-acre complex known as 1111 Marcus Avenue in New Hyde Park for $137 million, or $312 psf, by user Long Island Jewish Health System Inc. (LIJ). In a more traditional investor-driven transaction, Manhattanbased real estate investment company Philips International purchased 60 Cuttermill Road in Great Neck for $33.6 million ($314 psf ), clearly indicating that even cap-rate-based deals for well-located office properties can top the $300-psf threshold. Dropbox%20(Avison%20Young)/New%20York%20... 9/11/2015 Industrial building sales activity decreased dramatically in the first half of 2015 compared with the same period in 2014. In the first six months of 2015, industrial transactions totaled slightly more than $60 million compared with $161 million one year earlier. Even within the first six months of 2015, deal velocity decreased significantly from quarter to quarter as sales tumbled to $19 million, the lowest dollar volume since the first quarter of 2013. The retail sector also experienced a slowdown, but it was not nearly as precipitous as the one in the industrial sector – and overall volume is expected to rebound by year-end. As of mid-year 2015, retail sales volume was down 25% year-over-year, although the number of transactions increased to 28 from 24. Overall, the investment sales market is holding steady, but only due to the significant user-based transaction by LIJ. In general, the Long Island commercial real estate market is expected to remain strong through 2015 due to New York’s robust economy; however, an interest-rate increase by the Federal Reserve could have a negative impact.

3 2 1



1

1111 Marcus Avenue

Office

$137,000,000

$312 psf

2

60 Cuttermill Road

Office

$33,600,000

$314 psf

3

2 Corporate Center Drive

Office

$25,100,000

$86 psf

4

185 Great Neck Road

Office

$11,500,000

$286 psf

5

77 & 100 North Centre Avenue

Office

$8,100,000

$132 psf

Vendor2010 2008 2009 Miami Investment Activity Ares Management

2011

2012

Purchaser 2013 2014

Mid-Year 2015

Long Island Jewish Health System Inc.

Gould Investors

Philips International

Equity Commonwealth

Lone Star Funds

SMA Equities

185 GN LLC

SF&G Associates

CAF Rockville Centre LLC / 717 Conklin Street LLC / 148 Broadway LLC

Minneapolis Investment Volume

5 4 $ in billions (USD)


3 2


31

$ in billions (USD)

2

Los Angeles

1

0

801 S Hope Street

2008

T

2010

2011

2012

2013

2014

Los Angeles Investment Volume

Mid-Year 2015

Investment OfficeLos Angeles Industrial RetailVolume Multi-Residential

$ in billions (USD)

$ in30billions Long Island Investment Activity (USD) 25

20 15 10 5 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Los Angeles Investment Activity

Miami Investment Volume (By Property Type) Los Angeles Investment Activity

5


$ in billions (USD)

4

Mid-Year 2015

3 2 1

35%

29%

Multi-Residential

26%

16%

Retail

24%

42%

Office

15%

12%

Industrial

0 2008

5

2009

2010

2011

2012

2013

2014

Mid-Year 2015

SelectActivity Average Capitalization Rates Miami Investment Minneapolis Investment Mid-Year Volume 2015 Mid-Year 2014

Office

6.2%

6.3%

Industrial 4

6.1%

6.5%

Retail

5.7%

5.0%

Multi-Residential

5.0%

5.0%

$ in billions (USD)

he Los Angeles market remains a competitive investment environment after transaction volume amounted to $11.4 billion in the first half of 2015 compared with $11 billion in the first half of 2014. The multi-residential sector led the way with $4 billion in volume, followed by $2.9 billion of retail, $2.7 billion of office and $1.7 billion of industrial transactions. Several multi-market portfolio sales occurred in the first half of 2015, as institutional investors sought to deploy large amounts of capital in a single deal. Capitalization-rate compression continued as the average dropped 10 bps to 5.8% at mid-year 2015 from 5.9% at midyear 2014. Industrial, office and retail properties experienced cap-rate fluctuations between the first half of 2014 and the first half of 2015. Compression has eased in the multiresidential sector, where cap rates remained at 5% year-overyear. The acquisition of KTR Capital, a firm with a large concentration of industrial properties in the Los Angeles market, exemplified the region’s appeal to foreign investment capital. Prologis acquired KTR Capital with a joint venture partner from Norway, Norges Bank Investment Management. Foreign capital inflows to the Los Angeles market amounted to $2.4 billion in the first half of 2015. Institutional investors are seeking higher-return opportunities by starting to explore burgeoning submarkets. For example, Hudson Pacific Properties recently invested in a 150,000-sf creative office redevelopment in the Downtown Los Angeles Arts District, while SunCal Companies invested in a 15-acre site, also in the arts district. The vibrant investment sales environment has encouraged investors to seek offmarket deals as opposed to participating in intensive bidding competitions for properties. In the end, given the high demand and low supply of quality assets, further price appreciation in all property types is expected in the second half of 2015.

2009

3 2 1




2008

Vendor2010 2009

Minneapolis Investment Activity

1

2600-2800 Colorado Avenue, Santa Monica

Office

$284,000,000

$899 psf

2

801 S Hope Street

Multi-Residential

$200,000,000

$689,655 per unit

2011

Centurion Real Estate Partners

2012

Purchaser 2013 2014 Invesco

Mid-Year 2015

New Jersey Investment Volume Wood Partners Essex Property Trust

Midtown Crossing

Retail

$186,600,000

$592 psf

CIM Group

NewTower Trust Company

4

6300 Wilshire Boulevard

Office

$151,000,000

$364 psf

6

Legacy Partners

The Swig Company

5

6th Street & Alameda Street

Land

$130,000,000

$8,904,109 per acre5

Lowe Enterprises

SunCal Companies

32


$ in billions (USD)

3

7

4 3 2 1

30 25

$ in billions (USD)

Long Island Investment Activity

Miami

20 15 10 5 0

SunTrust Building

2008

M

2010

2011

2012

2013

2014

Miami Investment Volume Office

Miami InvestmentRetail Volume Industrial

Mid-Year 2015

Multi-Residential

$ in billions (USD)

$ in5 billions Los Angeles Investment Activity (USD) 4

3 2 1 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Miami Investment Activity

5

Minneapolis Investment Volume (By Property Type) Miami Investment Activity


4 $ in billions (USD)

iami ranks as the largest city in terms of population among South Florida’s three largest cities. Though Miami was hit hard by the Great Recession, the area is recovering as unemployment continues to decrease, falling 100 bps to 6.1% in July 2015 from 7.1% in July 2014. Coming out of the recession, multi-residential asset sales led the way due to lower inherent risk. During the first half of 2015, the other property types – though most notably the retail segment – whetted investor appetites. Through mid-year 2015, total retail investment sales volume exceeded $971 million, a 109% increase year-over-year from approximately $464 million at mid-year 2014. Stronger demand has led to cap-rate compression in Miami as the average across all segments dropped 70 bps to 5.4% at mid-year 2015 from 6.1% at mid-year 2014. Both the office and multi-residential sectors registered the strongest cap-rate compression, each dropping 140 bps. Office cap rates at mid-year 2015 averaged 5.1%, while mid-year 2014 cap rates were 6.5%. Multi-residential cap rates were 4.2% at mid-year 2015, down from 5.6% at midyear 2014. As the economy continues to strengthen, so has the demand for all asset classes of commercial real estate in Miami. The top five largest transactions by dollar volume were a mix of product types, including office, multi-residential and retail. Of the largest transactions recorded, four had price tags greater than $100 million, demonstrating the strength in the market. The largest transaction was the sale of the SunTrust Building in the Brickell submarket. The 286,000-sf office building sold for $140 million, or $490 psf.

2009

Mid-Year 2015

3 2 1

35%

24%

Retail

25%

50%

Office

21%

15%

Multi-Residential

19%

10%

Industrial

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Select Average Minneapolis Investment Activity Capitalization Rates New Jersey Investment Volume Mid-Year 2015

Mid-Year 2014

Office

5.1%

6.5%

Industrial

6.0%

5.8%

5 Retail

6.1%

6.4%

4 Multi-Residential

4.2%

5.6%

7

$ in billions (USD)

6

3 2 1


1

SunTrust Building

0 Property Type Total Price (USD) Price per sf/unit/acre Office

$140,000,000

2

800 Brickell

Office

$111,600,000

3

AMLI Dadeland

Multi-Residential

$104,500,000

4

Signature at Doral

Multi-Residential

$103,500,000

5

CocoWalk

Retail

$87,500,000

$490 psf

Vendor2010 2009

2011

2012

Purchaser 2013 2014 Grupo ARG

Mid-Year 2015

Guggenheim Partners / RREEF Property Trust New York Investment Volume Stiles Corp.

$537 psf $298,571 per unit 45 40 $294,034 per unit 35 $445 psf

2008

New JerseyCBRE Investment Activity Global Investors

$ in billions (USD)


30 25

Mill Creek Residential

AMLI Residential

Codina Partners / Ares Management

AMLI Residential

PMAT Real Estate Investments

Federal Realty / Grass River Property / Comras Company

20

Fall 2015 Canada,15U.S. and U.K. Commercial Real Estate Investment Review 10 5

33

5

$ in billions (USD)

4

Minneapolis

Los Angeles Investment Activity

3 2 1 0

Fifth Street Towers

2008

T

2010

2011

2012

2013

2014

Minneapolis Investment Volume

Mid-Year 2015

Investment OfficeMinneapolis Industrial RetailVolume Multi-Residential

$ in billions (USD)

$ in5 billions Miami Investment Activity (USD) 4

3 2 1 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015


New Jersey Investment Volume (By Property Type) Minneapolis Investment Activity

7 6


$ in billions (USD)

5 4 3 2

Mid-Year 2015

1

30%

45%

Office

27%

14%

Retail

23%

14%

Multi-Residential

21%

28%

Industrial

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Select Average New Jersey Investment Activity Capitalization Rates New York Investment Volume Mid-Year 2015

Mid-Year 2014

Office

7.8%

7.6%

Industrial 35

8.8%

7.5%

Retail 30

7.4%

7.5%

25 Multi-Residential

6.0%

6.6%

45 40

$ in billions (USD)

he Minneapolis-St. Paul Metropolitan Statistical Area (MSA) economy is surging. According to the U.S. Census Bureau, the Minneapolis MSA has the highest GDP per capita among Midwest cities. As millennials flood the Minneapolis workforce, the demand for affordable urban housing has skyrocketed. In addition, the city is home to 33 Fortune 1000 companies, making downtown Minneapolis a desirable place to live for an educated workforce. As of mid-year 2015, Minneapolis commercial real estate investment activity is flourishing. When compared with midyear 2014, the market saw an aggregate 57% increase in total investment dollars across all sectors. The retail sector reported the largest year-over-year increase at mid-year 2015 with $632 million in sales compared with $204 million in the first half of 2014. The industrial sector recorded $500 million in trades during the first half of 2015 compared with $424 million during the same period one year earlier. Office investment volume totaled $712 million at the halfway point of 2015 compared with $674 million at mid-year 2014. The largest sale in the first half of 2015 occurred in January when California-based PIMCO purchased the 1-msf Fifth Street Towers for $154 million from Georgia-based Invesco. Capitalization rates remained relatively stable in the retail and office sectors, finishing the first half of 2015 at 7.4% and 7.8%, respectively. The average cap rate for industrial properties increased 130 bps to 8.8%, while cap rate compression in the multi-residential sector resulted in a 60-bps drop to 6% on a year-over-year basis. Investment in the multi-residential sector totaled $538 million. This figure was a 155% increase compared with mid-year 2014 when investment totaled $211 million. As of April 2015, the multi-residential vacancy rate hit a low of 2.9%, according to commercial real estate research firm Reis. Low vacancy is a direct result of the region’s accelerated growth in population. However, the vacancy rate is anticipated to double once new supply is delivered to the market.

2009

20 15 10 5

Property Name / Address 1

Fifth Street Towers

TOP 5 INVESTMENT SALES BY PRICE0- MID-YEAR 2015

Property Type Total Price (USD) Price per sf/unit/acre Office

$154,000,000

2008

2009 Vendor 2010

2011

New York Investment Invesco / Zeller Activity Realty Corp.

$151 psf

2012

2013 2014 Purchaser

PIMCO

Mid-Year 2015

Ryan Companies / Excelsior Weidner Apartment Homes Oakland Group / Invesco RE Investment Volume

222 Hennepin

Multi-Residential

$109,000,000

$381,119 per unit

3

Shoppes at Knollwood

Retail

$106,700,000

$230,000 psf

Rouse Properties

Heitman

4

Plymouth Corporate Center

Office

$62,500,000

$99 psf

Carlson Real Estate Co.

Wildamere Properties LLC

5

Valley Creek

Multi-Residential

$54,300,000

$134,950 per unit

Trilogy Real Estate Group

Marquette Companies

34


$ in billions (USD)

2

2

1

5

$ in billions (USD)

4 Miami Investment Activity

New Jersey

3 2 1 0

Amazon Fulfillment Center

2008

N

2010

2011

2012

2013

2014

New Jersey Investment Volume

Mid-Year 2015

Investment Volume Multi-Residential Office New Jersey Industrial Retail

$ in billions (USD)

$ in7 billions Minneapolis Investment Activity 6(USD)

5 4 3 2 1 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

New Jersey Investment Activity

New York Investment Volume (By Property Type) New Jersey Investment Activity

45 40


$ in billions (USD)

35 30 25 20 15 10

Mid-Year 2015

5

34%

41%

Office

32%

25%

Industrial

23%

14%

Retail

10%

20%

Multi-Residential

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Select Average Capitalization Rates New York Investment Activity Oakland Investment Volume Mid-Year 2015

Mid-Year 2014

Office

6.7%

6.8%

Industrial

6.5%

7.3%

Retail

6.8%

7.2%

Multi-Residential

6.7%

7.0%

2

$ in billions (USD)

ew Jersey’s investment sales increased during the first half of 2015 in three of the four major asset classes – office, industrial and retail – compared with the same period in 2014. Overall sales volume nearly doubled to more than $6 billion at mid-year 2015. Multi-state portfolio sales were a major factor for New Jersey as institutional investors made purchases in search of yield, and owners realized gains on appreciated assets. Most notably, KTR Capital was acquired for $5.9 billion by a joint venture between Prologis and Norges Bank Investment Management, manager of the Norwegian government’s pension fund. Of the 231 industrial buildings acquired in the transaction, the 13 located in New Jersey (including the Amazon Fulfillment Center at 50 New Canton Way in Robbinsville) were valued at $727 million, representing 12% of the sale. Overall, industrial sales more than doubled year-over-year to $1.9 billion through the first half of 2015. A lack of available modern space has driven prices higher for limited class A inventory while lower-quality existing buildings are being targeted for their redevelopment potential. The largest individual deal completed in the first half of 2015 was the $952-million sale of Jersey Gardens mall in Elizabeth to Simon Property Group in January. Simon subsequently announced a 411,000-sf expansion to the 1.3-msf facility in May. Beyond retail, the largest deal during the first half of 2015 was the sale-leaseback of the Verizon operations center in Basking Ridge. Mesirow Financial purchased the building for $650 million from the telecommunications company, which in turn signed a 20-year lease. This transaction speaks to the trend of non-real estate companies spinning off real estate assets to realize their appreciation and raise cash. After two consecutive years of double-digit percentage growth, multi-residential sales volume is on pace to decline in 2015. At mid-year, sales were down 4% compared to the first half of 2014. The largest multi-residential sale occurred at 60 Fox Run Drive in Plainsboro, where Fieldstone Properties paid $117 million to acquire the 776-unit property from AvalonBay.

2009

1


1

The Mills at Jersey Gardens

0 Property Type Total Price (USD) Price per sf/unit/acre Retail

$951,600,000

$727 psf

2

KTR Capital - Prologis & NBIM Portfolio

Industrial

$727,408,500

$93 psf

3

295 North Maple Avenue

Office

$650,300,000

$482 psf

4

IndCor Properties - Global Logistic Properties & GIC Portfolio

Industrial

$331,480,500

$69 psf

Cole Corporate Income Trust - Select Income REIT Portfolio

Office

5

$135,085,700

$297 psf

2008

2009 Vendor2010

2011

Oakland Investment Activity Glimcher Realty Trust

2012

2013 2014 Purchaser

Mid-Year 2015

Simon Property Group

Prologis / Norges Bank Investment KTR Capital Management (NBIM) Orange County Investment Volume



Verizon

Mesirow Financial / Kawa Capital Management

IndCor Properties

Global Logistic Properties / GIC

Cole Corporate Income Trust

Select Income REIT

4 3

Fall 2015 Canada,2 U.S. and U.K. Commercial Real Estate Investment Review 1

35

7 6

$ in billions (USD)


New York

5 4 3 2 1 0

1095 Avenue of the Americas

2008

T

2010

2011

2012

2013

2014

New York Investment Volume

Mid-Year 2015

Investment Volume Multi-Residential Office New York Industrial Retail

$ in45billions New Jersey Investment Activity (USD) 40

$ in billions (USD)

35 30 25 20 15 10 5 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

New York Investment Activity

Oakland Investment Volume (By Property Type) New York Investment Activity

2

$ in billions (USD)


1

Mid-Year 2015

59%

69%

Office

22%

10%

Retail

19%

21%

Multi-Residential

N/A

N/A

Industrial

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Select Activity Average Capitalization Rates Oakland Investment Orange County Investment Volume Mid-Year 2015

Mid-Year 2014

Office

4.5%

4.7%

5 Industrial

N/A

N/A

Retail 4

4.2%

4.0%

Multi-Residential

3.6%

4.0%

6

$ in billions (USD)

he Manhattan investment sales market remained robust in the first half of 2015 with $22.4 billion in trades. Driven by record levels of foreign investment concentrated in the institutional market (defined as deals greater than $150 million), 2015 is poised to exceed 2014’s dollar volume total. Office investment sales totaled more than $13.2 billion during the first half of 2015, representing a 41% increase over the first half of 2014. Leading the way was the sale of 1095 Avenue of the Americas ($2.2 billion). The first half of the year saw seven sales transactions above the billiondollar mark, significantly outpacing the amount recorded in 2014. Barring radical change in the debt environment, the market is expected to continue to gain strength. The largest deals during the first half of 2015 involved overseas investors, as foreign economies remained unstable and global investors sought the safety of Manhattan real estate. At the year’s halfway point, 226 transactions had occurred, compared with 182 recorded through the first half of 2014. Although there was an increase in the number of transactions year-over-year, the second quarter of 2015 saw a significant decrease in the number of transactions (79), likely due to concerns about the Federal Reserve raising interest rates in 2015. This decrease in investor spending is not cause for alarm, as a consistent decrease in quarterly transactions has not been seen since the Great Recession. Although 2015 is on pace to set a new record for transaction velocity, growth should remain consistent and strong until there is a fundamental change in the market. Overall, the investment sales market remains healthy and is benefitting from an increasing proportion of foreign investors. Even without foreign investment, the market is strong, as evidenced by the velocity in the middle market. The slow increases in rates indicated by the Federal Reserve should allow the robust market to continue growing as investors account for the rate hike in investment decisions.

2009

3 2 1




1

1095 Avenue of the Americas (partial interest)

Office

$2,200,000,000

$1,887 psf

2

601 W 26th Street (50% interest)

Office

$1,741,000,000

3

11 Times Square (50% interest)

Office

4

230 Park Avenue

5

620 Avenue of the Americas

36

Vendor2010 2008 2009 2011 Orange County Investment Activity

2012

Purchaser 2013 2014

Mid-Year 2015

Blackstone

Ivanhoe Cambridge / Callahan Capital Partners

$754 psf

RXR Realty

Blackstone

$1,400,000,000

$1,273 psf

SJP Properties / Prudential RE Investors

Norges Bank Investment Management

Office

$1,200,000,000

$990 psf

Invesco / National Pension Service / Monday Properties

RXR Realty / Blackstone

Office

$668,500,000

$998 psf

RXR Realty

Blackstone



35 Jersey Investment Activity New

Oakland

30 25 20 15 10 5 0

Lake Merritt Tower

2008

T

2010

2011

2012

2013

2014

Oakland Investment Volume Investment Volume Office Oakland Industrial Retail

Mid-Year 2015

Multi-Residential

$ in billions (USD)

$ in2 billions New York Investment Activity (USD)

1

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Oakland Investment Activity

Orange County Investment Volume (By Property Type) Oakland Investment Activity

6



he Oakland market remains highly competitive as historically low vacancy rates across all property types attract well-capitalized buyers. The uptick of in-migration to this market across all property users is thriving while market fundamentals are strengthening. Conversely, developers have been slow to bring product to the market, pushing values for existing properties higher. Compared with the first half of 2014, overall investment volume was up 18% in the first half of 2015. Industrial volume grew 179% to $98 million. Retail property sales also increased 377% to $63 million, while multiresidential sales grew 292% to $155 million. Office was the only sector to fall, dropping 52% to $147 million - largely due to a lack of sale opportunities. The dearth of available office product has prompted potential buyers to place offers above the asking price, with current owners often receiving multiple bids. The limited number of class A listings should keep demand high for class B and C properties through the end of 2015. Industrial vacancy is historically low with high occupancy further increasing the attractiveness of industrial portfolios in this market. Retail properties in the Oakland market are in high demand. Investors from San Francisco and Silicon Valley will likely continue to move capital into Oakland in the second half of 2015 as retail listings remain limited throughout the region. Robust multi-residential rent growth has motivated developers to plan and build more apartment projects in Oakland. Recordlow interest rates and improved access to credit have allowed buyers to be more aggressive in the pursuit of multi-residential properties, setting the stage for escalated prices. Looking forward, sale volumes are expected to remain elevated across all property types. Strong activity should continue through the rest of 2015 as investors seek to place capital ahead of an expected interest-rate hike by the Federal Reserve. Compressed cap rates throughout the rest of the Bay Area will likely push buyers to higher-yielding assets in the Oakland market.

2009

4 3 2

Mid-Year 2015

1

34%

10%

Multi-Residential

32%

78%

Office

21%

9%

Industrial

14%

3%

Retail

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Select Average Orange County Investment Activity Capitalization Rates Mid-Year 2015

Mid-Year 2014

Office

6.4%

6.1%

Industrial

5.3%

7.0%

Retail

5.6%

6.4%

Multi-Residential

4.6%

4.8%



Vendor

Purchaser

1

45300 Fremont Boulevard

Land

$160,500,000

$1,468,872 per acre

Lennar Homes

Union Pacific Railroad Co.

2

Lake Merritt Tower

Office

$65,025,000

$318 psf

Brandywine Realty Trust

California Nurses Association

3

Eastmont Town Center

Retail

$54,500,000

$112 psf

The Praedium Group

Vertical Ventures Bentall Kennedy The Bascom Group

4

Goodman Logistics Center Oakland

Industrial

$52,500,000

$140 psf

Goodman Birtcher North America

5

Bridgecourt

Multi-Residential

$45,100,000

$205,000 per unit

Prologis


37

2

Orange County

$ in billions (USD)

New York Investment Activity

1

0

Koll Center Newport

2008

O

2009

2010

2011

2012

2013

2014

Orange County Investment Volume

Mid-Year 2015

Office Industrial Retail VolumeMulti-Residential Orange County Investment

6 billions $ in Oakland Investment Activity (USD) 5 $ in billions (USD)

range County continued to experience strong investor demand in the first half of 2015. Total sales volume approached $4.4 billion, an increase of 43% year-over-year. Quality assets in every sector are experiencing tightening availability while tenants are willing to pay an increasing premium for a presence in this vital region. Solid county employment rates continue to improve with professional and business services recording the greatest job growth. In the first half of 2015, the office sector led the way in investment volume with nearly $1.5 billion of property sold. This figure was up from the first half of 2014, when less than $1 billion traded. This property type has experienced a sharp drop in vacancy in the span of a year, causing rental rates to surge. The introduction of new construction is still modest, and sale pricing for existing inventory has made gains in the past year. In the first half of 2015, office product averaged $246 psf, up from $201 psf in the first half of 2014. The industrial sector followed closely behind office with almost $1.3 billion sold in the first half - a significant increase from $670 million one year earlier. Retail saw the largest proportional gains, jumping to $802 million at mid-year 2015 from $250 million at mid-year 2014. Multi-residential, which had the largest sale volume of all property types at mid-year 2014, contracted to $862 million in the first half of 2015. However, demand for this property type is expected to grow as home ownership in Orange County declines to record lows. Orange County’s overall investment market experienced a year-over-year drop of 50 bps in the average capitalization rate to 5.6% at mid-year 2015. The rates for each property type declined on a similar basis. Asking prices have soared since the Great Recession, while available sale properties are waning. However, pricing is expected to level out as more available properties are brought to the market.

4 3 2 1 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Orange County Investment Activity (By Property Type) Orange County Investment Activity Mid-Year Mid-Year 2015 2014

Mid-Year 2015

33%

32%

Office

29%

22%

Industrial

20%

38%

Multi-Residential

18%

8%

Retail


Mid-Year 2014

Office

6.0%

6.7%

Industrial

6.0%

6.5%

Retail

5.2%

5.8%

Multi-Residential

5.1%

5.5%



Vendor

Purchaser

1

Bella Terra, Huntington Beach

Retail

$288,750,000

$458 psf

DJM Acquisition Group LLC

Prudential Real Estate Investors

2

Pacifica San Juan, San Juan Capistrano

Land

$150,000,000

$585,938 per acre

Lehman Brothers Inc.

Oaktree Capital Management LP

3

Broadcom Campus Land, Irvine Spectrum

Land

$128,000,000

$1,630,573 per acre

Heritage Fields El Toro LLC

Broadcom Corporation

4

Madison Park, Anaheim

Multi-Residential

$122,000,000

$158,854 per unit

Pacific Urban Residential

Intercontinental Real Estate

5

Koll Center Newport, Newport Beach

Office

$120,000,000

$302 psf

Emmes Group of Companies

Hines REIT / Oaktree Capital Management LP

38


Orlando Gallery at Mills Park

A


Orlando Investment Volume Investment Volume Office Orlando Industrial Retail

$ in billions (USD)

2 1

2008

$ in billions (USD)

3 2 1

Mid-Year 2015 2008

Mid-Year 2015

61%

40%

Multi-Residential

13%

31%

Retail

13%

6%

13%

23%

Industrial Office

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Mid-Year 2015

Mid-Year 2014

Office

7.1%

10.7%

Industrial

8.5%

7.2%

Retail

7.4%

6.6%

Multi-Residential 1

7.6%

7.2%

2

2011

Investment Activity $214,516 per unit Pittsburgh DeBartolo Development

$66,500,000 $64,681,300

$180 psf

3

Citra At Windermere

Multi-Residential

$61,500,000

$170,833 per unit $138,889 per unit $97,826 per unit

$ in billions (USD)

2012

2013 2014 Purchaser

Heitman

Mid-Year 2015

Lexington Realty

Northridge Capital

RAM Realty

JRK Asset Management

Secret Lake Partners LLC / Village At Secret Lake LP

Bella Property Owner LLC

Praedium Group / Blue Rock Partners

White Eagle Property

Raleigh-Durham Investment Volume

5 4

$54,000,000

2014

Select Average Philadelphia Investment Activity Capitalization Rates Pittsburgh Investment Volume

Office

Multi-Residential

2013

0

Multi-Residential

$60,000,000

2012


4

TOP 5 INVESTMENT SALES BY PRICE0 - MID-YEAR 2015 2008 2009 Property Type Total Price (USD) Price per sf/unit/acre Vendor2010

Multi-Residential

2011

Philadelphia Investment Volume (By Property Type) Orlando Investment Activity

Gallery at Mills Park

The Park at Laurel Oaks

2010

5

Sea Harbor Office Center

5

2009

Orlando Investment Activity

2

Bella

3

0

1

4

Multi-Residential

$ in5billions (USD) 4

$ in billions (USD)

lmost $1.2 billion in total sales volume was registered in the first half of 2015 – a significant uptick from the $912 million in trades completed during the first half of 2014. The Orlando Metropolitan Statistical Area (MSA) consists of Orlando, Kissimmee and Sanford. Based on population, Orlando is Florida’s third-largest MSA. As is the case with other various U.S. cities, Orlando’s economy continued to improve in the first half of 2015, as witnessed by the continued decline of the unemployment rate. As of July 2015, Orlando’s unemployment rate stood at 5.2%, a 120-bps drop from 6.4% in July 2014. While both the office and multi-residential segments experienced stronger demand in the first half of 2015 compared with the same time period in 2014, investor interest was much higher in the multi-residential segment. Multi-residential sales dollar volume tripled in the first half of 2015 from the level recorded at mid-year 2014. Even as demand for office product has increased, the average capitalization rate recorded strong compression year-overyear. The average office cap rate fell to 7.1% at mid-year 2015 from 10.7% at mid-year 2014. Orlando’s overall average cap rate compressed by 20 bps to 7.7% by mid-2015 from 7.9% a year earlier. As demand for commercial real estate continues to increase, cap rates are expected to compress further while interest rates remain near historic lows and pricing continues to climb. Demand for multi-residential assets remained strong in the first half of 2015 as apartment trades represented four of the region’s five largest transactions by dollar volume. The other top-five deal was an office transaction. The largest of all the sales through mid-2015 was Gallery at Mills Park – a luxury class A, 310-unit apartment complex built in 2014. The property is located in Downtown Orlando and was acquired by an institutional investor for $66.5 million, or about $214,000 per unit.

3 2


39

5

$ in billions (USD)

4

Philadelphia

3 2 1 0

1818 Beneficial Bank Place

2008

P

Property Name / Address 1818 Beneficial Bank Place / 1818 Market Street

Office

$203,000,000

$206 psf

2

833 Chestnut Street

Office

$160,900,000

$228 psf

5

40

2012

2013

2014

Mid-Year 2015

Investment OfficePhiladelphia Industrial RetailVolumeMulti-Residential

$ in billions (USD)

3 2 1 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Philadelphia Investment Activity

Pittsburgh Investment Volume (By Property Type) Philadelphia Investment Activity

2

$ in billions (USD)


1

Mid-Year 2015

50%

71%

Office

26%

18%

Multi-Residential

14%

3%

Industrial

10%

8%

Retail

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Select Average Pittsburgh Investment Activity Capitalization Rates Raleigh-Durham Investment Volume Mid-Year 2015

Mid-Year 2014

Office

6.4%

8.0%

4 Industrial

8.5%

9.2%

Retail

6.5%

7.1%

Multi-Residential

6.2%

7.6%

5

3 2 1

2011

Raleigh-Durham Investment Activity

Sovereign Capital Management

0 Icon 1616 Multi-Residential $112,500,000 $546,108 per unit 0 0 51 Valley Stream Parkway Office $91,600,000 $100 psf 0 0 Valley Forge Office Center Office $89,500,000 $329 psf 0 0 Fall 2015 Canada, U.S. and U.K. Commercial Real Estate Investment Review 0 0 0 $ in billions (USD)

4

2011

$ in5millions Orlando Investment Activity (USD) 4


1

3

2010

Philadelphia Investment Volume

$ in billions (USD)

hiladelphia’s commercial real estate investment market recorded another strong start to the year in the first half of 2015. Sales volume exceeded $2 billion, representing an increase of more than $72 million, or 4%, compared with the same period in 2014. Year-over-year figures have been steadily increasing since hitting a low of $561 million in 2009. At this rate, year-end 2015 volume will likely exceed $4 billion for a second-straight year. The Philadelphia office market was responsible for 50% of the mid-year 2015 investment dollar total, primarily due to the sale of 1818 Beneficial Bank Place and 833 Chestnut Street. Both buildings were investment purchases as 1818 Beneficial Bank Place (983,200 sf ) was purchased by Shorenstein Properties LLC for $203 million and 833 Chestnut Street (705,000 sf ) was sold to HCP Inc. for nearly $160 million. With 22 properties changing hands, the multi-residential sector generated the second-highest investment dollar volume, $543 million, in the first half of 2015 - rising $181 million above the mid-year 2014 level. Notable first-half 2015 transactions included the $81-million Riverwalk at Millennium luxury apartment complex and the $59-million, 750-unit Alden Park complex. Contrary to 2014, the retail and industrial sectors both registered more investment activity during the first two quarters of 2015. Compared with mid-year 2014, retail sales increased by $44 million and industrial deals rose by $235 million. The largest retail investment was the sale of Juniper Court in Center City Philadelphia for $29 million. The sale of 9355 Blue Grass Road in northeast Philadelphia ($26 million) was the largest industrial investment sale. The first half of 2015 showed an improving economic climate in Philadelphia and its surrounding suburbs. The average cap rate was 6.9% with multi-residential on the low end (6.2%) and industrial on the high end (8.5%).

2009

2012

2013 2014 Purchaser

Mid-Year 2015

Shorenstein Properties

RenoInc. Investment Volume Digital Realty Trust

HCP Inc.

Federal Capital Partners / Cross Properties / Alterra Property Group

Castle Rock Equity Group

Siemens

Cerner Corp.

The Davis Companies / Hayden Real Estate Investments / Miller Investment Management

KBS REIT III Inc.

5

$ in billions (USD)

4

Pittsburgh

Orlando Investment Activity

3 2 1 0

Keystone Summit Corporate Park

2008

P


2010

2011

2012

2013

2014

Pittsburgh Investment Volume

Mid-Year 2015

Investment Volume Multi-Residential Office Pittsburgh Industrial Retail

$ in billions (USD)

$ in2millions (USD) Philadelphia Investment Activity

1

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Pittsburgh Investment Activity Raleigh-Durham Investment Volume

(By Property Type)

Pittsburgh Investment Activity 5



ittsburgh investment activity totaled slightly more than $446 million in the first half of 2015, up 6% year-over-year. Investment continues to flow from outside Pittsburgh, with new faces such as Faros Properties, King Penguin Fund and MaguireHayden Real Estate Company entering the market. Local investors continue to find opportunities. As an example, Kossman Development and a local investor group led by Michael McMullen purchased the former Medrad Heaquarters in Warrendale. With major CBD buildings One Oxford Center and 525 William Penn Place on the market, the Pittsburgh commercial real estate market is expected to finish 2015 on a high note. The largest transaction year-to-date was the sale of the Keystone Summit Corporate Park, which consists of five buildings totaling 544,500 sf in Warrendale, for $96.25 million. Also significant was Faros Properties’ continued investment in the region with the purchase of Allegheny Center, now renamed Nova Place, for $67.2 million. King Penguin entered the market quickly, purchasing both the Allegheny and the Lawyers Building, while Kossman Development acquired Southpointe Plaza I and Southpointe Center in February. A more recent sale was the purchase of PNC Center at 20 Stanwix, bought by M&J Wilkow in August for $38 million. Activity was limited in the industrial sector as there were only a few sales, but one stood out – 2250 Roswell Drive. The 500,000-sf-plus building was purchased by MaguireHayden, and the $29-million sale price was big news in the press. Activity in the retail sector decreased by more than 50% year-over-year, to $82 million. After declaring bankruptcy in 2014, the 260,000-sf Curry Hollow was purchased and is being repositioned. Topping the list of first-half retail sales was the 143,200-sf Holiday Center, which sold for $23.5 million. Overall, the investment market remains active, with interest from both local firms and outside investors. Brisk investment in and around Pittsburgh is expected to continue through the balance of 2015 and into 2016, as properties continue to trade below replacement cost, and at a relative discount to many similar markets across the country.

2009

3 2 1

Mid-Year 2015

59%

34%

Office

18%

40%

Retail

16%

22%

Multi-Residential

7%

4%

Industrial

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Select Average Capitalization Rates

Raleigh-Durham Investment Activity Reno Investment Volume

Mid-Year 2015

Mid-Year 2014

Office 0

7.6%

7.9%

0 Industrial

8.2%

8.3%

7.4%

7.1%

6.5%

6.8%

0

$ in billions (USD)

0 Retail 0 Multi-Residential 0 0 0 0 0 TOP 5 INVESTMENT SALES BY PRICE0 - MID-YEAR 2015 2008 2009 Property Type Total Price (USD) Price per sf/unit/acre Vendor2010

2011

RenoKeystone Investment Activity Property Group

1

Keystone Summit Corporate Park

Office

$96,250,000

$174 psf

2

Allegheny Center

Office

$67,200,000

$56 psf

3

2250 Roswell Drive

Industrial

$29,000,000

$49 psf

4

Holiday Center

Retail

$23,484,800

$164 psf

5

Duff Manor

Multi-Residential

$5,183,000

$51,830 per unit

2012

2013 2014 Purchaser

Mid-Year 2015

Northstar Healthcare Income Inc.

Allegheny Center Associates

Faros Properties

Rugby Realty Company Inc.

MaguireHayden Real Estate Company

The Blackstone Group LP

Kimco Realty Corp.

Crossgates Inc.

Tryko Partners

Sacramento Investment Volume

$ in billions (USD)

3

2

Fall 2015 Canada,1U.S. and U.K. Commercial Real Estate Investment Review

41

2

Raleigh-Durham

$ in billions (USD)

Philadelphia Investment Activity

1

0

Perimeter Three

2008

O

2009

2010

2011

2012

2013

2014

Raleigh-Durham Investment Volume

Mid-Year 2015

Office IndustrialInvestment Retail Volume Multi-Residential Raleigh-Durham

$ in billions (USD)

$ in5 billions Pittsburgh Investment Activity (USD) 4

3 2 1 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Raleigh-Durham Investment Activity

$ in billions (USD)

Reno Investment Volume (By Property Type) Raleigh-Durham Investment Activity

0 0 0 0 0 0 0 0 0 0 0


Mid-Year 2015 2008

2009

2010

48%

45%

Multi-Residential

45%

14%

Office

4%

25%

Retail

3%

15%

Industrial

2011

2012

2013

2014

Mid-Year 2015

SelectActivity Average Capitalization Rates Reno Investment Sacramento Investment Volume Mid-Year 2015

Mid-Year 2014

Office

7.5%

8.1%

Industrial

7.5%

8.5%

Retail 2

6.7%

8.2%

Multi-Residential

5.9%

6.2%

3

$ in billions (USD)

ffice, industrial, retail and multi-residential sales in RaleighDurham totaled $2 billion during the first half of 2015, up 58% over the first half of 2014. Office sales totaled $916 million, a 396% increase year-over-year. Of that $916 million figure, $476 million was generated from the sale of Duke Realty Corporation’s local office portfolio, which comprised 3 msf in 24 buildings. The properties were part of a $1.1-billion portfolio sale in Raleigh-Durham, Nashville, St. Louis and Florida. Also of note, the Lenovo Enterprises campus (485,000 sf ) was sold to a London-based investment group for $127 million by Rubenstein Partners and Grubb Properties. The property had been vacant for three years when the previous owner purchased it in 2013 for just $26 million. Lenovo leased the campus in early 2014, and the property was subsequently renovated and expanded. Office investment activity is expected to remain strong through 2016. Class A vacancy ended the second quarter of 2015 at just 9%, and rental rates are beginning to rise after several years of stagnation. Multi-residential sales once again led the pack in volume through the first half of 2015 with trades totaling $984 million, an increase of 66% year-over-year. Despite a wave of new construction, multi-residential assets continue to witness robust tenant demand which, thus far, has been strong enough to keep vacancy from rising to unhealthy levels. Rents have also continued to increase. Most notably, the recently completed 401 Oberlin was sold for $65 million, or $266,000 per unit – the second-highest unit price ever recorded in the region. Industrial and retail sales were tepid in the first half of 2015. Industrial sales totaled $72 million, down 63% year-over-year. Retail sales totaled $85 million, down 74% year-over-year. Nevertheless, Raleigh-Durham’s investment market is on track to surpass its record-setting 2014 performance. The market is awash in capital, and investors are increasingly looking to the region for opportunities. With demand and pricing strong, cap rates are unlikely to increase in 2015 even if interest rates rise.

1




2008

2009 Vendor2010

2011

Sacramento Investment Activity

2013 2014 Purchaser

Mid-Year 2015

Trinity Capital Advisors / Starwood Capital / Vanderbilt Partners

1

Duke Realty Office Portfolio

Office

$476,000,000

$152 psf

2

Lenovo Enterprise Campus

Office

$127,000,000

$262 psf

3

401 Oberlin

Multi-Residential

$64,884,600

$265,920 per unit 6

Taft Family Offices

4

Cumberland Cove

Multi-Residential

$57,000,000

$103,261 per unit 5

Realty Investment Corporation

Hercules Real Estate Services

5

Farrington Lake

Multi-Residential

$46,800,000

$113,869 per unit 4

Sterling American

Resource Real Estate Opportunity REIT II


7

$ in billions (USD)

42

Duke Realty Corporation

2012

3 2 1

Diego/ Grubb County Investment Volume RubensteinSan Partners 90 North Real Estate Partners / Properties Arazan Wealth

Tribridge Residential / Hartford Life Insurance

$ in billions (USD)

0 0 0 Raleigh-Durham Investment Activity 0 0 0 0 0 0 0 0

Sacramento 800 J Lofts

2008

T

2009

2010

2011

2012

2013

2014

Sacramento Investment Volume

Mid-Year 2015

Office Sacramento Industrial RetailVolume Multi-Residential Investment

$ in billions (USD)

$ in3millions Reno Investment Activity (USD)

2

1

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015


San Diego(By County Investment Property Type) Volume Sacramento Investment Activity

7


$ in billions (USD)

6 5 4 3 2

Mid-Year 2015

1

44%

36%

Multi-Residential

23%

36%

Retail

19%

8%

15%

19%

Industrial Office

0 2008

2009

2010

Select Average San Diego County Investment Activity

2011

2012

2013

Mid-Year 2015

Capitalization Rates

San Francisco Mid-Year Investment2015 Volume

8

2014

Mid-Year 2014

Office

6.3%

6.7%

Industrial

7.2%

7.5%

Retail

6.5%

6.9%

Multi-Residential

5.8%

6.0%

7

$ in billions (USD)

he Sacramento Valley commercial real estate market experienced nearly $1.4 billion in trades during the first half of 2015. This level was a 71% increase compared with the first half of 2014 when $795 million in trades occurred. All four asset classes (office, industrial, retail and multiresidential) registered investment increases in the first half of 2015 as compared with the first half of 2014. The multi-residential sector led first-half 2015 investment with nearly $593 million in trades. Sacramento offers a more affordable urban alternative to larger surrounding metros. Many Bay Area employees choose to reside in the Sacramento Valley and commute to work. Three of the top five investment transactions in the first two quarters of 2015 involved multi-residential buildings, including 800 J Lofts, which CIM Group sold to Wolff Company for $57 million, or $255,100 per unit. Sacramento office investors are looking to take advantage of continuing employment growth, climbing rents and decreasing vacancy. The first half of 2015 saw an increase in office investment with more than $200 million in trades compared with $151 million in the first half of 2014. Industrial investment activity has already surpassed 2014 totals and ended the first half of 2015 with $252 million in sales compared with $137 million at the end of 2014. Retail also saw an increase in sales in the first half of 2015 with $311 million in transactions and two deals grabbing spots in the top five. These retail deals included the second-largest overall sales transaction, Country Club Centre, which Buzz Oates Real Estate sold to Tourmaline Capital for $55.5 million ($111 psf ). With the NBA’s Sacramento Kings’ new arena expected to be completed by October 2016 and employment growth contributing to lowering vacancy and increasing rents coupled with a more affordable, urban lifestyle - investment in the Sacramento Valley is expected to remain stable throughout the second half of 2015.

6 5 4 3 2 1




2008

Vendor2010 2009

San Francisco Investment Activity $255,111 per unit CIM Group

2011

2012

Purchaser 2013 2014

1

800 J Lofts

Multi-Residential

$57,400,000

2

Country Club Centre

Retail

$55,500,000

$111 psf

3

Tanglewood Apartments

Multi-Residential

$54,000,000

$250,000 per unit

Sequoia Equities

Tomanek Group

4

Marketplace 99

Retail

$42,500,000

$264 psf

Donahue Schriber

NewMark Merrill Companies

5

The Winsted at Sunset West

Multi-Residential

$36,000,000

$173,077 per unit

Hill & Co.

Tomanek Group

Buzz Oates Real Estate

Wolff Company

Mid-Year 2015

Tourmaline Capital


43

3

San Diego County

$ in billions (USD)

Reno Investment Activity

2

1

0

The Aventine

2008

T

2009

2010

2011

2012

2013

2014

San Diego County Investment Volume

Mid-Year 2015

Office Retail Volume Multi-Residential San DiegoIndustrial County Investment

$ in billions (USD)

$ in7billions Sacramento Investment Activity (USD) 6

5 4 3 2 1 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

San Diego County Investment Activity San Francisco Investment Volume

(By Property Type) San Diego County Investment Activity

8 7

$ in billions (USD)

he San Diego County investment market surged forward with an increase in trading volume in the first half of 2015. Total volume exceeded $4 billion, up 36% year-over-year. It is expected that 2015 will close with a higher sales volume than 2014. The annual growth in sales volume that commenced in 2010 is on course to continue through 2016. At mid-year 2015, multi-residential investment led the way in sales volume by a narrow margin. More than $1.3 billion of multi-residential properties traded in first-half 2015, up from $1.1 billion at mid-2014. Investor appetite for multi-residential product has matched demand for office assets year-over-year since the Great Recession. With a rapidly increasing population in the fifth-most populous county in the U.S., San Diego is in need of more housing. Construction deliveries have not yet reached pre-recession levels. The office sector registered sales volume of nearly $1.3 billion as of mid-year 2015, up from $925 million at the mid-point of 2014. Retail investment gained ground with $558 million in properties sold by mid-year 2015, up from $308 million at mid-year 2014. Industrial investment also made considerable headway in the first half of 2015 as sales climbed to $863 million from $574 million a year earlier. The overall San Diego investment market registered a 20-bps decline in the average capitalization rate to 6.3% in the first half of 2015 from 6.5% a year earlier. Office and industrial cap rates experienced the greatest compression, while multiresidential cap rates remained stable and retail cap rates moved up considerably. There is still room for more cap-rate compression as the competition for fewer properties drives the asking price per square foot to pre-recession levels. However, price increases are expected to slow once construction deliveries gain momentum, particularly in the office and industrial markets. Multi-residential remains the exception as home ownership declines and investor competition is expected to escalate.


6 5 4 3 2

Mid-Year 2015

1

33%

39%

Multi-Residential

32%

31%

Office

22%

19%

Industrial

14%

10%

Retail

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Select Average San Francisco Investment Activity Capitalization Rates Mid-Year 2015

Mid-Year 2014

Office

5.8%

7.2%

Industrial

7.0%

7.6%

Retail

7.2%

6.0%

Multi-Residential

5.1%

5.2%



Vendor

Purchaser

1

The Aventine

Office

$150,000,000

$628 psf


Rockpoint Group LLC

2

CasaLago Eastlake

Multi-Residential

$142,500,000

$333,724 per unit

Resmark Companies

John Hancock Life Insurance Co.

3

Waterleaf Apartments

Multi-Residential

$86,200,000

$189,035 per unit

RedHill Realty Investors / AEW Capital Management

Investcorp / TruAmerica Multifamily

4

6420-6450 Sequence Drive

Office

$85,500,000

$275 psf

Motorola Mobility

Investco Advisors Inc. / CM Management Services Inc.

5

4535-4550 Towne Centre Court & 9775 Towne Centre Drive

Office

$83,885,000

$291 psf

Arden Realty Inc.

Biomed Realty Trust

44


7 6

$ in billions (USD)


San Francisco

5 4 3 2 1 0

50 Fremont Street

2008

S

2010

2011

2012

2013

2014

San Francisco Investment Volume

Mid-Year 2015

OfficeSan Francisco Industrial RetailVolumeMulti-Residential Investment

8 San Diego County Investment Activity

7

$ in billions (USD)

an Francisco’s investment market cooled in the first half of 2015 after coming off a very successful year in 2014. Slightly more than $1.8 billion in trades occurred in the first half of 2015, compared with more than $2.8 billion that traded in the first half of 2014. Investment activity remains steady throughout the city despite the decline in dollar volume. Office investment continues to be the driving force of San Francisco’s investment activity, accounting for more than $1 billion in trades, as well as three of the top five investment transactions in the first half of 2015. Most of the first-half activity was focused in the South Financial District and South of Market (SoMa) areas, where demand from tech firms continued to be a key driver along with financial services companies. The top investment transaction in the first half of 2015 belonged to Salesforce, which purchased 50 Fremont Street for $629 million ($770 psf ) from TIAA-CREF. Two other office transactions that made the top five were 160 Spear Street, which SteelWave and Brookfield Asset Management sold to Tishman Speyer for $197 million ($686 psf ); and 731 Market Street, which Jamestown purchased for $65 million ($700 psf ) from Harvest Properties. A slowdown in office investment in the first half of 2015 allowed retail and multi-residential buildings to claim spots in the top transactions: 2675 Geary Street (retail) was sold to Acadia Realty for $155 million ($799 psf ) by Lubert-Adler, and Gerding Edlen sold 1285 Sutter Street (multi-residential) for $106 million, or $990,654 per unit, to Stockbridge. With investors drawn to San Francisco’s wealth of expanding companies, the development of the new Transbay terminal and projected future rent growth, investment activity has remained strong throughout the market. Coupled with decreasing vacancy and a strong economy, investment activity is expected to stay strong throughout the rest of 2015.

2009

6 5 4 3 2 1 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

San Francisco Investment Activity (By Property Type) San Francisco Investment Activity Mid-Year Mid-Year 2015 2014

Mid-Year 2015

60%

75%

Office

18%

11%

Retail

16%

12%

Multi-Residential

6%

1%

Industrial


Mid-Year 2014

Office

4.8%

4.2%

Industrial

4.9%

5.0%

Retail

5.0%

6.0%

Multi-Residential

3.6%

4.4%

TOP 5 INVESTMENT SALES BY PRICE - MID-YEAR 2015 Property Name / Address 1

50 Fremont Street

2

160 Spear Street

3 4 5

Property Type Total Price (USD) Price per sf/unit/acre Office

$629,300,000

Vendor

Purchaser

$770 psf

TIAA-CREF

Salesforce

$686 psf

SteelWave / Brookfield Asset Management

Tishman Speyer

Office

$197,700,000

2675 Geary Boulevard

Retail

$155,000,000

$799 psf

Lubert-Adler

Acadia Realty

1285 Sutter Street

Multi-Residential

$106,000,000

$990,654 per unit

Gerding Edlen

Stockbridge

731 Market Street

Office

$65,160,000

$700 psf

Harvest Properties

Jamestown


45

San Mateo 950 Tower Lane

M


San Mateo Investment Volume Office San Mateo Industrial Retail Investment Volume Multi-Residential

$ in billions (USD)

4

2 1

2008

2009

2010

2011

Hudson Pacific Properties Portfolio

Office

$1,500,000,000

2

Menlo Science & Technology Park

Industrial

$220,000,000

2013

2014

Mid-Year 2015

Tampa Investment Volume (By Property Type) San Mateo Investment Activity

5


4 3 2 1

Mid-Year 2015

64%

73%

18%

6%

9%

15%

9%

6%

Office Industrial Multi-Residential Retail

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Select Average Capitalization Rates

Tampa Investment Activity Washington, DC Investment Volume

20

Mid-Year 2015

Mid-Year 2014

5.1%

5.8%

5.0%

4.5%

4.8%

5..8%

4.0%

4.7%

Office 18

Industrial 16 $ in billions (USD)

2011

$489 psf Washington,Blackstone/Equity Office DC Investment Activity $396 psf

Prologis

2012

2013 2014 Purchaser

Mid-Year 2015

Hudson Pacific Properties Facebook

West Palm Beach Investment Volume

Concar

Office

$131,000,000

$596 psf

4

2089 Pacific Blvd

Multi-Residential

$73,600,000

$663,063 per unit

5

Station Park Green

Retail

$67,000,000

$390 psf

$ in billions (USD)

3


2012

San Mateo Investment Activity

14 Retail 12 Multi-Residential 10 8 6 4 2 TOP 5 INVESTMENT SALES BY PRICE0- MID-YEAR 2015 2008 2009 Property Type Total Price (USD) Price per sf/unit/acre Vendor 2010

1

46

3

0

$ in billions (USD)

ore than $2.9 billion worth of commercial investment sales occurred throughout San Mateo County in the first half of 2015. This figure was more than double the deal volume recorded in the first half of 2014, when only $1.5 billion in trades took place. With an average cap rate of 4.7% during the first six months of 2015, down from 5.2% a year earlier, San Mateo recorded the second-lowest cap rates in the Bay Area, behind San Francisco. Office sales dominated investment activity in San Mateo County during the first half of 2015, accounting for 64% of total deal volume with $1.9 billion in transactions – a 65% increase compared with the first half of 2014. This increase was mainly due to Hudson Pacific Properties’ purchase of Equity Office’s $3.5-billion Bay Area portfolio, which included approximately 3.2 msf of office space in San Mateo County (including 950 Tower Lane). Social media giant Facebook stayed active on the investment market in first-half 2015, purchasing the 56-acre Menlo Science & Technology Park adjacent to its existing campus in Menlo Park, from Prologis. Facebook has not yet announced how it plans to use the site, but early signs indicate that the company will develop publicly accessible mixed-use housing and retail in order to integrate into the Menlo Park community. Industrial investors were also very active in San Mateo County during the first half of 2015, trading more than $534 million worth of product, compared with just $87 million in the first half of 2014. Retail and multi-residential assets also exceeded first-half 2014 sales volume as each accounted for more than $250 million worth of sales. As a result of the Hudson Pacific Properties portfolio purchase and ongoing strong investor interest, 2015 is on pace to be one of the most active investment years that San Mateo has ever experienced.

3

2

1

JP Morgan Asset Management

DivcoWest

Land & Houses PLC

Wood Partners

Essex Property Trust

Arjax Railroad Associates

$ in billions (USD)

4

Tampa

3 2 1 0

Rocky Point Centre

2008

T

2009

2010

2011

2012

2013

2014

Tampa Investment Volume Office

Industrial Tampa InvestmentRetail Volume

Mid-Year 2015

Multi-Residential

$ in billions (USD)

$ in5 billions San Mateo Investment Activity (USD) 4

3 2 1 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Tampa Investment Activity

$ in billions (USD)

Washington, DC Investment Volume (By Property Type) Tampa Investment Activity

20 18 16 14 12 10 8 6 4 2 0


Mid-Year 2015 2008

2009

2010

58%

45%

Multi-Residential

31%

38%

Retail

7%

10%

Office

5%

8%

2011

2012

Industrial

2013

2014

Mid-Year 2015

Average Washington, DC Select Investment ActivityCapitalization Rates West Palm Beach Investment Volume Mid-Year 2015

Mid-Year 2014

Office

6.9%

8.1%

Industrial

8.8%

7.9%

Retail 2

6.7%

6.7%

Multi-Residential

6.8%

7.1%

3

$ in billions (USD)

ampa Bay’s economy continues to show steady improvement as demonstrated by a sustained decline in the unemployment rate, which stood at 5.4% as of July 2015 - a 110-bps decrease from 6.5% in July 2014. In June 2015, the Tampa Bay area, which is the second largest metropolitan statistical area in the state, led all metro areas statewide in year-over-year employment gains in the education, health services and manufacturing sectors. Tampa Bay’s office and industrial leasing markets are improving with a tightening in vacancy, continued positive absorption, a constrained speculative development pipeline, and rental rates posting incremental gains across both sectors. Tenant confidence is increasing as companies are becoming more comfortable with longer-team leasing commitments. It is anticipated that vacancy will continue to trend downwards coupled with slight upward movement in rents through 2015. Tampa’s CBD and the Westshore submarket have been the strongest office leasing performers, and industrial activity has been strongest on the East Side. Multi-residential investment sales recorded a swift recovery in Tampa Bay in the past year due to the asset class’ lower inherent risk for investors. Multi-residential product remains in high demand as the sector outperformed all other asset classes in terms of total sales volume, increasing by 30% year-over-year as of June 30, 2015 in the Tampa Bay MSA. During the first half of 2015, Tampa Bay registered $1.1 billion in multi-residential sales - significantly higher than the $851 million invested in the first half of 2014. Office and industrial sales through mid-year 2015 have been modest although there were a few noteworthy transactions, and several key office towers in the Tampa CBD are expected to trade hands by the end of the year. It is anticipated that class A warehouse product and well-positioned suburban office buildings will continue to be targetted by institutional buyers.

1




2008

2009 Vendor2010

1

Bowery Bayside

Multi-Residential

$85,125,000

$102,314 per unit Camden Property Trust West Palm Beach Investment Activity

2

Lexington Park at Westchase

Multi-Residential

$64,500,000

$161,250 per unit

3

Azure

Multi-Residential

$55,587,500

4

Tampa Distribution Center

Industrial

$43,400,000

5

Rocky Point Centre

Office

$35,100,000

2011

2012

2013 2014 Purchaser

Cortland Partners

Mid-Year 2015

Crescent Heights Apartments

Pollack Shores RE Group / Heitman

$180,479 per unit

Hines

Passco Companies

$45 psf

MetLife

High Street Realty

$197 psf

Invesco

Parmenter Realty Partners


47

5

Washington, DC

$ in billions (USD)

San 4 Mateo Investment Activity

3 2 1 0

America’s Square

2008

T

2010

2011

2012

2013

2014

Washington, DC Metro Investment Volume

Mid-Year 2015

Washington, DC Investment Office Industrial Retail Volume Multi-Residential

$ in billions (USD)

$ in20billions Tampa Investment Activity 18 (USD) 16 14 12 10 8 6 4 2 0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

Washington, DC Investment Activity

West Palm Beach Investment Volume (By Property Type) Washington, DC Investment Activity

3


$ in billions (USD)

he Washington metropolitan area, home to six of the top 10 wealthiest counties in the United States (according to Forbes), parallels the rest of the country in commercial sales growth for the first half of 2015. Sales of downtown trophy office assets continued to make headlines, breaking the $1,000-psf threshold and demonstrating investors’ continued flight to quality. Yet, the year-over-year transaction volume improvement in the retail, multi-residential and industrial sectors was more impressive, with retail almost doubling its first-half 2014 performance. Downtown office market fundamentals have improved with higher asking rents, greater leasing activity and lower vacancy rates. Meanwhile, the suburban office market has pockets of positive absorption, particularly in submarkets close to employment drivers – mainly government agencies – that are presenting opportunities for value-add investors. Office investment volume increased 32% year-over-year, reaching $4.5 billion at mid-year 2015. Now, the office sector is on pace to achieve its highest transaction volume since soaring to $16.4 billion in 2007. Retail asset sales volume rose 95% year-over-year to $1.8 billion in the first half of 2015, almost surpassing the full-year 2014 total of $1.9 billion. Several sizeable transactions contributed to the impressive first-half 2015 total, and the momentum is expected to continue through year-end. Sales of industrial properties in 2015 ($669 million at mid-year) are also poised to eclipse the $1 billion in total volume recorded in 2014. Demand for data centers and industrial space for technology use is fueling the trades, with companies such as Google, Amazon and Microsoft building new facilities in suburban submarkets. Multi-residential supply is up, along with the number of trades. In the first half of 2015, more than $3 billion in multi-residential transactions were completed, suggesting that the full-year total will surpass 2014’s investment volume ($4.1 billion). Significant sales have occurred in the District of Columbia, as well as in nearby suburban submarkets that are Metrorail-accessible. With cap rates ticking lower across most asset classes, the region stands to benefit from continued job growth and economic recovery, while investors await the looming Federal Reserve rate hike.

2009

2

1

Mid-Year 2015

45%

51%

Office

30%

29%

Multi-Residential

18%

14%

Retail

7%

7%

Industrial

0 2008

2009

2010

Average West Palm BeachSelect Investment Activity

2011

2012

2013

2014

Mid-Year 2015

Capitalization Rates Mid-Year 2015

Mid-Year 2014

Office

6.5%

6.0%

Industrial

6.7%

7.1%

Retail

6.6%

6.5%

Multi-Residential

5.9%

5.9%



Vendor

Purchaser

1

America’s Square

Office

$500,000,000

$1,083 psf

Dweck Properties

Jamestown

2

1801 K Street NW

Office

$460,000,000

$816 psf

Somerset Partners

Mirae Asset Financial

3

25 Massachusetts Avenue NW

Office

$307,000,000

$796 psf

Republic Properties Corporation

TIAA-CREF / Norges Bank Investment Management

4

1200 K Street NW

Office

$260,000,000

$668 psf

Brookfield Property Partners

Principal Real Estate Investors

5

1101 K Street NW

Office

$244,250,000

$786 psf

Rockefeller Group / Mitsubishi Estate

UBS Realty Investors

48


$ in billions (USD)

West Palm Beach Phillips Point

20 18 Tampa Investment Activity 16 14 12 10 8 6 4 2 0 2008

W

2009

2010

2011

2012

2013

2014

West Palm Beach Investment Volume

Mid-Year 2015

Office Retail Volume Multi-Residential West PalmIndustrial Beach Investment

$ in3 billions (USD)

Washington, DC Investment Activity

$ in billions (USD)

est Palm Beach’s economy continued to strengthen in the first half of 2015. The improvement was demonstrated by the 90-bps decline in the unemployment rate to 5.6% in July 2015 from 6.5% a year earlier. As the economy gained momentum, so did commercial real estate investment. All four asset types – office, retail, industrial and multi-residential – registered a significant jump in sales volume during the first half of 2015 as compared with the same period in 2014. Retail investment recorded the largest dollar volume increase, rising to $559 million at mid-year 2015 from $150 million at mid-year 2014. The industrial market also experienced a significant investment increase as sales volume more than quadrupled year-over-year to $131 million from $30 million. Demand for most asset classes increased between mid-year 2014 and mid-year 2015, as demonstrated by the caprate compression recorded in the office, retail and multiresidential sectors. The average cap rate for multi-residential assets compressed by 200 bps to 4.2% at mid-year 2015 from 6.2% at mid-year 2014. The average retail cap rate fell 180 bps to 5% at mid2015 from 6.8% one year earlier. Overall, the average cap rate for assets in West Palm Beach compressed 150 bps yearover-year to 5.2% from 6.7%. Increased demand for all asset classes can be seen in the mix of properties constituting the top five transactions by dollar volume in first-half 2015. The most notable transaction was Palm Beach Outlets, a retail deal. The 460,000-sf shopping center sold for $278.4 million, or $605 psf.

2

1

0 2008

2009

2010

2011

2012

2013

2014

Mid-Year 2015

West Palm Beach Investment Activity West Palm Beach Investment Activity (By Property Type)


Mid-Year 2015

37%

51%

Multi-Residential

29%

23%

Retail

27%

21%

Office

7%

5%

Industrial


Mid-Year 2014

Office

6.4%

7.2%

Industrial

6.0%

6.5%

Retail

5.0%

6.8%

Multi-Residential

4.2%

6.2%



Vendor

Purchaser

1

Palm Beach Outlets

Retail

$278,437,600

$605 psf

Eastern Development / LubertAdler

Clarion Partners

2

Phillips Point

Office

$245,500,000

$580 psf

Prudential RE Investors

AEW Capital

3

Arium Palm Cove & Arium Laguna Lakes

Multi-Resdential

$112,000,000

$137,931 per unit

UBS Realty Advisors

Carroll Organization / BlueMountain Capital

4

Vintage at Abacoa

Multi-Resdential

$82,000,000

$210,256 per unit

TGM Associates

Heitman

5

TGM Floresta

Multi-Resdential

$76,000,000

$244,373 per unit

TGM Associates

Northland


49

London, U.K. The Walbrook Building

C

London, U.K. Investment Volume London Volume Retail Office Investment Industrial

40 35

£ in billions

entral London’s commercial real estate market registered increased investment demand in the first half of 2015. At the start of 2015, political uncertainty in the U.K. was the key concern among investors. However, after May’s election result, the U.K. regained its safe-haven status against a backdrop of Eurozone uncertainty and stock-market jitters in Asia. Central London saw a 26% increase in investment volume year-over-year, with nearly £16 billion in transactions during the first half of 2015. Despite the increase in sales volume, the London investment market is still characterised by an imbalance between supply and demand. It is estimated that the amount of money seeking Central London investment property was £40 billion at mid-year 2015 compared with £28 billion a year earlier. In effect, the £8.7 billion invested in London property in the second quarter of 2015 is covered more than four times by money parked on the sidelines due to a lack of available assets. This abundant capital also explains why yield compression has returned as a feature of the investment market. Central London office yields have fallen to a new low of 4.2%, with prime yields down to 3.1% in the West End. Further downward pressure on yields is expected due to the amount of money being pushed into the investment market, the market’s appeal to investors, and the opportunity for rental growth across most sectors. Some overseas investors have sold London assets. Asian investors have sold £2.9 billion of property in the last 12 months – almost three times the amount this investor group sold in the previous 12 months. Looking forward, 2015 is expected to be a record year for investment: Yields have further to fall (but not much), and investors may seek higher returns away from the core areas of London and into the surrounding regions.

30 25 20 15 10 5 0 2012

2013

2014

Mid-Year 2015

London, U.K. Investment Activity (By Property Type) London Investment Activity Mid-Year Mid-Year 2015 2014

Mid-Year 2015

70%

70%

Office

25%

29%

Retail

5%

1%

Industrial


Mid-Year 2014


4.0%

4.0%


5.2%

5.3%


4.5%

5.0%


5.5%

5.5%


5.4%

4.5%



Vendor

Purchaser

1

Project Laser

Office/Retail/ Multi-Residential

£1,000,000,000

£505 psf

Moorfield Real Estate

Lone Star Real Estate Fund III

2

Nido Portfolio

Multi-Residential

£600,000,000

£252,632 per unit

Nido London SARL

Greystar Real Estate

3

Walbrook Building

Office

£575,000,000

£1,369 psf

Minerva

Cathay Life

4

Pure Student Living Portfolio

Multi-Residential

£532,000,000

£245,161 per unit

The Carlyle Group

LetterOne Holdings

5

14-48 Oxford Street

Retail/Office

£435,000,000

£1,974 psf

Frogmore & Land Securities

Ponte Gadea

50


Notes


51

About Avison Young

A Growing, Multinational Presence Avison Young at a Glance 1978 2,000+ 70 800+ > 80 million sf

Founded: Total Real Estate Professionals: Offices: Brokerage Professionals: Property Under Management:

PITTSBURGH

EDMONTON REGINA

CALGARY

CLEVELAND WINNIPEG DETROIT COLUMBUS

VANCOUVER LETHBRIDGE SACRAMENTO RENO

TORONTO (2) TORONTO NORTH MISSISSAUGA GUELPH OTTAWA MONTREAL

MINNEAPOLIS CHICAGO (2) DENVER

LAS VEGAS DALLAS HOUSTON

NASHVILLE KNOXVILLE

AUSTIN

THAMES VALLEY

HAMBURG DUESSELDORF FRANKFURT MUNICH

RALEIGH-DURHAM (2) TAMPA

Transaction Services - Tenant representation, lease acquisition and disposition - Investment acquisition and disposition for owners and occupiers - Landlord representation— all property types—office, industrial, retail, build-to-suit, land and multi-family

LONDON QUEBEC CITY MONCTON HALIFAX BOSTON HARTFORD FAIRFIELD/WESTCHESTER LONG ISLAND NEW YORK CITY PHILADELPHIA NEW JERSEY SUBURBAN MARYLAND WASHINGTON, DC TYSONS CORNER

INDIANAPOLIS

SAN FRANCISCO LOS ANGELES (4) ORANGE COUNTY OAKLAND SAN DIEGO SAN MATEO

Avison Young is the world’s fastest-growing commercial real estate services firm. Headquartered in Toronto, Canada, Avison Young is a collaborative, global firm owned and operated by its principals. Founded in 1978, the company comprises 2,000 real estate professionals in 70 offices, providing value-added, client-centric investment sales, leasing, advisory, management, financing and mortgage placement services to owners and occupiers of office, retail, industrial and multi-family properties.

ORLANDO

CHARLOTTE

WEST PALM BEACH (2) FORT LAUDERDALE MIAMI

Consulting & Advisory Services - Portfolio review and analysis - Valuation and appraisal - Benchmarking - Transaction management - Asset rationalization - Mergers and acquisitions - Workplace solutions - Acquisitions and dispositions - Property tax services

GREENVILLE CHARLESTON ATLANTA

Management Services - Project management - Property and operations review - Property/facility management - Tenant relations - Financial reporting - Lease administration - Operations consulting - Asset management - Portfolio management

52Partnership. Fall 2015 Performance. Canada, U.S. and U.K. Commercial Real Estate Investment Review

Enterprise Solutions - Integrated services coordination - Transaction management - Optimization strategies - Portfolio lease administration - Project coordination and reporting Investment Management - Acquisitions - Asset management - Portfolio strategy - Capital repositioning

Our Contacts Canadian Research

Bill Argeropoulos, Principal Practice Leader, Research (Canada) 416.673.4029 [email protected]

U.S. Research

Margaret Donkerbrook Vice-President, U.S. Research 202.644.8677 [email protected]

Corporate Communications & Media

Sherry Quan, Principal Global Director of Communications & Media Relations 604.647.5098 [email protected]

Additional research reports are available at avisonyoung.com or by contacting the Avison Young offices below. Canadian Offices

Boston T 617.250.7600

Los Angeles (Santa Monica) T 310.899.1800

San Mateo T 650.425.6420

Charleston T 843.725.7200

Los Angeles (North) T 323.851.6666

Suburban Maryland T 301.948.9870

Charlotte T 704.531.5550

Los Angeles (West) T 424.265.9200

Tampa T 813.288.1800

Chicago (Downtown) T 312.957.7600

Miami T 305.446.0011

Tysons Corner T 703.288.2700

Chicago (Suburban) T 847.881.2045

Minneapolis T 612.913.5640

Washington, DC T 202.644.8700

Cleveland T 216.609.0303

Nashville, TN T 615.727.7400

West Palm Beach T 561.721.7000

Columbus, OH T 614.840.0700

New Jersey T 973.898.6360

Dallas T 214.559.3900

New York T 212.729.7140

West Palm Beach (Boca Raton) T 954.903.1800

Denver T 720.508.8100

Oakland T 510.254.4255

Detroit T 313.209.4120

Orange County (Irvine) T 949.757.1190

Greenville T 864.334.4145

Orlando T 407.219.3500

Fairfield/Westchester T 203.614.1260

Philadelphia T 610.276.1080

Duesseldorf T +49 (0)211 5405 7106

Fort Lauderdale T 954.903.1800

Pittsburgh T 412.944.2130

Frankfurt T +49 (0)69 7593 7233

Hartford T 860.327.8330

Raleigh-Durham T 919.785.3434

Hamburg T +49 (0)40 3111 2140

Toronto North T 905.474.1155

Houston T 713.993.7700

Munich T +49 (0)89 71042 2166

Vancouver T 604.687.7331

Indianapolis T 317.210.8801

Raleigh-Durham (Chapel Hill) T 919.968.4017

Winnipeg T 204.947.2242

Knoxville, TN T 865.450.8883

U.S. Offices

Las Vegas T 702.472.7979

Atlanta T 404.865.3663

Long Island T 516.962.5400

Austin T 512.474.2411

Los Angeles (Downtown) T 213.935.7430

Toronto (HQ) T 416.955.0000 Calgary T 403.262.3082 Edmonton T 780.428.7850 Guelph (SW Ontario) T 226.366.9090 Halifax T 902.454.6185 Lethbridge T 403.330.3338 Mississauga T 905.712.2100 Moncton T 506.388.1202 Montreal T 514.940.5330 Ottawa T 613.567.2680 Quebec City T 514.940.5330 Regina T 306.359.9799 Toronto (Property Management) T 416.343.0078

U.K. Offices London, U.K. T +44 (0)20 7101 0200 Thames Valley, U.K. T +44 (0)1494 540 000

Germany Offices

Reno T 775.332.2800 Sacramento T 916.563.7555 San Diego County T 858.201.7070 San Francisco T 415.322.5050


53

Avison Young Research Canada, U.S. and U.K. Publications Turning information into intelligence

A

vison Young’s multi-disciplinary group of dedicated research professionals works collectively to deliver market analysis and insights that drive value in real estate decisions. We translate data into market intelligence to help our clients strategically solve their real estate concerns and concentrate on what their businesses do best. Avison Young regularly produces an array of local, regional and global market research, including quarterly and topical reports, white papers and annual forecasts. Our research is quoted extensively in local, national, business and global media outlets. Through Avison Young’s professionals, our research team engages with a wide variety of corporate, investor and institutional clients to conduct customized research, due diligence and market assessments, as well as demographic and location analysis. Leveraging in-depth knowledge from our broad services platform with information from internal proprietary and independent third-party data-tracking systems, our clients’ real estate decisions are fully supported by best-in-class, interpreted data – true market intelligence.

London, U.K. Industrial Market

Washington, DC Office Market

London, U.K.

Washington, DC Office Absorption & Vacancy Rates

Vacancy Rate Vacancy Vacancy Rate Rate

Q2 2011 Q2 2011

Q2 2012 Q2 2012

Q2 2011

Q2 2013

Q2 2013

Q2 2015 8% Q2 2015

Q2 2014 Q2 2014

Downtown Additional Rent 6% Suburban Additional Rent Q2 2014

Deal Type New New New New

da

2%

2%

0%

Suburban Class A Average Asking Rent ($psf net)

* Rental rates are shown in CAN $

Q2 2011

Address / Complex 1

Tenant

West Memorial Place II

2

West Loop Plaza

4

Parc Plaza Business Park

5

Westway Plaza

$80 $70

Size (sf)

Downtown Asking Net Rent Suburban Asking Net Rent

$60

$60

$50

$50 $40 $30

$20

$20

$10

$10

$0

$0

Atlanta Austin Boston Charleston Charlotte Chicago Cleveland Columbus Dallas Denver Detroit Fairfield County Fort Lauderdale Houston Indianapolis Las Vegas Long Island Los Angeles Miami Minneapolis New Jersey New York Oakland Orange County Orlando Philadelphia Pittsburgh Raleigh-Durham Reno Sacramento San Diego County San Francisco San Mateo Tampa Washington, DC West Palm Beach AY U.S. Markets AY U.S. Markets

$40 $30

Downtown Class A Average Asking Rent ($psf net)


Downtown Class A Average Additional Rent ($psf) Downtown Class A Average Additional Rent ($psf)

* Rental rates are shown in U.S. $

Q2 2013

Q2 2014

Deal Type

Downtown Additional Rent Suburban Additional Rent

171,000

New

170,000

Expansion

113,800

Expansion

80,000

Expansion

64,000

New

Superior Energy Services

Q2 2015

Downtown Additional Rent Suburban Rent Q2 2015 Q2Additional 2014

IHI E&C

United Way of Greater Houston

Suburban Class A Average Asking Gross Rents

Mid-Year 2015 Canada, U.S. & U.K. Office Market Report

6 5 4 3 2 1

35

$16.00 $14.00 $12.00


12

Suburban Class A Average Additional Rent ($psf) Suburban Class A Average Additional Rent ($psf)

* Rental rates are shown in U.S. $

10% 5%

$8.00

0% 14%

$6.00 $4.00

12%

$2.00 $0.00

10% 8% 6% 4% 2% 0%

$8 $6 $4

2014 ANNUAL REVIEW

$0

Partnership. Performance.


4 Spring 2015 Canada, U.S. and U.K. Industrial Market Report Canada, U.S. and U.K. * Rental rates are shown in CAN $

Rental rates are shown in CAN $

Countering the perceived downtown migration of tenants, the U.S. - Overall Office Vacancy Rate Comparison suburbs reaffirmed their enduring appeal. The headquarters for Sobeys and TJX are nearing completion, while KPMG and Aviva have opted to remain in the suburbs, spurring new construction. Development will lift GTA vacancy above 10% in 2015, while tenants will have numerous affordable options.

Retail Malls across the region are expanding and renovating to 2013 2014 2015F attract and retain tenants and shoppers, motivated in part by competition with e-commerce and the Canadian expansion U.S. - Overall Industrial Vacancy Rate Comparison plans of U.S. retailers, including Nordstrom and Saks. Residential development is increasing downtown retail demand, encouraging retrofits of underutilized spaces and locations beyond the traditional street front, such as Loblaws’ planned 20,000-sf location on the second storey of a condo building. Target, traditionally in suburban locales, in 2014 announced a two-storey, 145,000-sf store to anchor a multi-tower, mixed-use development in downtown Toronto. 2013 2014 2015F

Industrial Demand for modern, higher-clear-height space continues to drive new speculative and design-build construction (5.7 msf underway). Toronto West remains the focus of most

54

Avison Young Industrial Market Report Canada, U.S. & U.K. (Spring 2015)


limited industrial Retailers are land. also increasingly expanding into office space above their existing stores to add space without drastically increasing

New multinationals (Costco, 1.1 msf ) are entering the Vaughan their rent.ofSalvatore Ferragamo (Bond Street)on and Nicole Farhi market north Toronto, putting upward pressure rental rates. (Conduitand Street), among taken SCI Logistics Princess Autoothers, rankedhave among thethis fewapproach. large deals of 2014. New completions in 2015 will likely cause a modest Industrial vacancy increase, while a number of larger transactions are Overall, industrial demand has been steady, and the level expected to be completed. of take-up for 2014 was similar to that of 2013. There will be Investment falling supply but, with relatively low levels of speculative development, are likelycapital to rise.chasing Developers are adapting The recurring themerents of abundant a limited supply

2014

of quality product will continue in 2015. Through the first three quarters of 2014, office and retail portfolio and single-asset sales greater than $100 million powered investment sales volume to more than $8 billion. Low cap rates for quality assets persist, and while private investors and pension funds have filled some of the void left by REITs, some buyers are undertaking development to augment their growth strategies. REITs, while culling some assets, were net buyers in 2014; however, pending interest-rate hikes may curtail their purchasing power. Blockbuster acquisitions including Bayview Village Shopping Centre ($505 million) by bcIMC, Hudson’s Bay office and retail sale/leaseback ($673 million) by Cadillac Fairview and 150 Bloor Street West ($255 million) by the Spanish billionaire owner of Zara underscored domestic and foreign interest in the GTA.

2015F

Avison Young 2015 Forecast

2013

2014

2015F

0

Avison Young 2015 Forecast Commercial Real Estate Canada, U.S. and U.K.

Office

Industrial


Office

Avison Young Office Market Report Canada, U.S. & U.K. (Mid-Year 2015)

London’s prominence as a major tourist destination and the expected increase in visitors from China and the Persian 0% Gulf, due 2013 to the relaxation of visa requirements, will support 2014 2015F consumer spendingOffice and maintain retailer demand for space. Industrial Central London continues to experience a chronic shortage of flagship stock on the prime pitches of Bond Street and Oxford Street.activity, Although prime rents are around £1,250 psf developer with someretail renovating or now replacing their per buildings annum, this is stillinfill lower than those in New York, Hong existing andlevel utilizing sites as the major industrial Kong and Paris. submarkets – Mississauga and Brampton – offer increasingly 4% 2%

U.S. - Area Canada - AreaUnder UnderConstruction Construction 18 7 16 6 14 5 12 4 10 3 8 2 6 1 4 0 2

$12

$2

Retail

8%

2013

Spring 2015 Canada, U.S. and U.K. Industrial Market Report

Canada - Industrial Average Net Asking Rental Rates Q1 2015


0% 15%

$10.00

$10

Avison Young Industrial Market Report

Mid-Year 2015 Canada, U.S. & U.K. Office Market Report

$12.00

$14

Avison Young Office Market Report Canada, U.S. & U.K. 6

$12.00

As the Atlanta market has shifted in favor of landlords, rental rates have begun to increase, returning to pre-recession levels, and landlords have begun reining in concessions in the region’s strongest submarkets. Atlanta is poised for another strong performance in 2015. The delivery of several large build-to-suit projects will fuel strong absorption. With speculative development still tracking in line with demand, construction activity should not significantly impact vacancy in the near term. The Port of Savannah expansion, which began in 2014, will attract more industrial users and investors to the region.

0

SPRING 2015

MID-YEAR 2015

7

Q2 2015

Atlanta Austin Boston Charleston Charlotte Chicago Cleveland Columbus Dallas Denver Detroit Fairfield County Fort Lauderdale Houston Indianapolis Las Vegas Long Island Los Angeles Miami Minneapolis New Jersey New York Oakland Orange County Orlando Philadelphia Pittsburgh Raleigh-Durham Reno Sacramento San Diego County San Francisco San Mateo Tampa Washington, DC West Palm Beach AY U.S. Markets AY U.S. Markets

Downtown Class A Average Asking Gross Rents

Q2 2012

Q2 2014

Downtown Additional Rent Suburban Additional Rent

Stage Stores

U.S. U.S. Place Swift Energy Class A Average Asking Gross Rents Downtown Class A Average Asking Gross 3Rents Five GreenspointSuburban U.S. U.S. $80

Q2 2013

Downtown Asking Net Rent

NOTABLE LEASE TRANSACTIONS BY$0SIZE - FIRST 2015 Suburban Asking Net HALF Rent Q2 2011

$70

Q2 2012

Q2 2013

14%

10% 25%

Area Under Construction (msf) Area Under Construction (msf)

Downtown Class A Average Additional Rent ($psf)

* Rental rates are shown in CAN $

Q2 2012


Area Under Construction (msf)

Q2 2011

$10 $0 Suburban Class A Average Additional Rent ($psf) $5

Average Net Asking Rental Rate ($psf)


14%

Thanks to anQ1 improving national and regional economy, Atlanta’s industrial 12% Q1 2014 2015 12% 12% $10.00 $10.00 market is back in a big way. Net absorption totaled 2.2 msf in the first quarter of Q1 2014 Q1 2015 10% 10% 10% 2015, marking the 15th consecutive quarter of positive gains. Vacancy ended $8.00 $8.00 8% 8% the quarter at 8.8%, down 160 bps year-over-year and 8% the lowest level recorded $6.00 $6.00 Canada - Industrial Area Under Construction 2015 6% since 2001. Atlanta led the nation Q1 in net absorption in 6% 2014 as tenants soaked 6% $4.00 $4.00 up a record-breaking 21.8 msf of industrial space. Major drivers of recent activity 4% 4% 4% include e-commerce, third-party logistics, the reshoring of manufacturing and $2.00 $2.00 2% 2% 2% a resurgence in construction activity. Renewed demand and dwindling big-box 0% 0% $0.00 0% $0.00 options are driving a rapid increase in construction activity. Approximately 17 Q1 msf Q1 2010 Q1 2011 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2010 Q1 2014 Q1 2011 Q1 2015 Q1 2012 Q1 2010 Q1 2013 Q1 2011 Q1 2014 Q1 2012 Q1 2015Q1 2013 of space – with more than half of it speculative – was underway Average in theNetfirst quarter Asking Rental Rate ($ psf ) Overall Industrial Vacancy Average Net AskingIndustrial Rental Rate ($ psf(%) ) Overall Industrial Vacancy (%) Average Triple Net Asking(%) Rental Rate ($ psf) Overall Vacancy of 2015. A 1-msf build-to-suit project was completed for Procter & Gamble in 2014, and additional projects were underway for Kroger (2 msf ), Walmart (1.2 msf ) and Surya Carpets (1 msf ). Key leases in the past year include Menlo Logistics (560,600 sf ), Home Depot (504,000 sf ), Amazon.com (301,200 sf ) and Maschio Pack North America (301,500 sf ).

15%

5% 20%

avisonyoung.com

A

RentalIndustrial Rates tlanta’s centralized location bisected by key transportation corridors, long- Vacancy & RentalAtlanta CalgaryitsIndustrial Rates Industrial Vacancy & Calgary Vacancy & Rental Rates $16.00 standing role as a center for logistics and its proximity to a major port and the 18% $16.00 18% 18% world’s busiest airport have made the city the hub of 16% industrial activity in the U.S. 16% $14.00 16% $14.00 2814% Spring 2015 Canada, U.S. and U.K. Industrial Market Report Southeast.

0%

New

Ca

na

Ca


Follow Avison Young on YouTube: www.youtube.com/user/AvisonYoungRE

Atlanta Industrial Market

4% Downtown Additional Rent Suburban Additional Rent

da

$5 $0

20%

Q2 2015

6%

Downtown Additional Rent 4% Suburban Rent Q2 2015 Q2Additional 2014

$ psf

Q2 2012

0% 25%

10% 6%

Uneven demand characterized the GTA office market for most of 2014. The flight to quality in both existing and new buildings is apparent, as is the ongoing space-rationalization trend. New developments continued to attract the interest of corporate users, as Sun Life Financial leased 300,000 sf at 1 York Street and LoyaltyOne inked a deal for 172,000 sf at the Globe & Mail U.S. - Overall Office Vacancy Rate Comparison Centre, both to be completed in 2016. The first two of seven new downtown towers (RBC WaterPark Place and Bremner Tower) opened in Downtown South. The banks have been busy and are expected to stay active with several large requirements in play, fuelling another development announcement in 2015.

U.S. Overview & Forecast

10% 5%

www.linkedin.com/company/avison-youngcommercial-real-estate

a

$15 $10

Q2 2012

Canada - Overall Industrial Vacancy Rate Comparison

ad

$25 $20

Q2 2013 Q2 2013


market. Construction is steady, and the City of Winnipeg has announced a capital expenditure of more than $100 million just on roads this year http://blog.avisonyoung.com – a significant 300% increase from the previous year. All of the road work complements numerous associated industries such as landscaping, construction vehicles, maintenance and more – creating additional demand for industrial space and outdoor compounds. Winnipeg’s market is Canada - Overall Industrial Rate steady andVacancy predictable, and Comparison not expected to feel significant effects from the volatility of oil prices and, hence, is perceived by investors as a safe Follow Avison Young on LinkedIn: place to be.

Office

12%

6% 4% 2% 0% 2013

2014

Office

2015F

Industrial

to the new market conditions. DP World Gateway is reworking its master plan for a 9.3-msf logistics park east of London. The plan is being revised to create a cluster of “small” (80,000-sf to 200,000-sf ) buildings that can be delivered quickly on a designbuild basis. Into 2015, the trend of preleasing distribution facilities will likely continue. In the smaller size ranges, tenant inducements will likely continue to shrink as rents increase and, significantly, lease terms move back in favour of landlords.

Investment Domestic and overseas investor demand remained high in 2014. Both groups have been attracted by the rental growth seen across all of London’s office submarkets. At the end of 2014, the preferred bidder for the Gherkin building (516,000 sf ) was a Brazilian investor group. The £710-million bid reflected an initial yield of 3.8% - a low yield for such a large lot size. Looking forward into 2015, investor demand is expected to remain strong, and continued headline-grabbing acquisitions of trophy assets are also expected. Away from the headlines, there will likely be steady growth in investor interest in the U.K.’s regional markets.

Ma rk et s

8%

T

he Greater Toronto Area (GTA) commercial real estate market, though fundamentally sound, will begin to face the impact of new development and backfill vacancy in 2015, especially on the office and industrial fronts. The retail landscape will continue its transformation, marrying bricks and clicks, while investors U.S. - Overall Office Vacancy Comparison strategically deployRate capital with the likelihood of higher interest rates in the near term.

18% 16% 14%

8%

With the absence of completed space, occupiers are signing preleasing agreements. It is estimated that half the space currently under construction hasRates been preleased. Looking Toronto Vacancy 24%further out to 2016 and using long-term average take-up as a 22%benchmark, only half the required supply of new space is likely 20% to be constructed. Rents rose by 7% in 2014. Continued, and 18% 16%even stronger, rental growth is expected throughout 2015. As 14%a result, many occupiers will have to review what jobs must be 12% London-based or could be moved to cheaper locations.

Sound fundamentals to be tested by new development

25%

London Vacancy Rates 24% 22%

U. S.

$0 $20 $10

$10 $0

Canada & U.S. Market PerhapsIndustrial it is Winnipeg’s buoyant constructionHighlights industry and the much-in-demand sub-trades that are pushing the construction-related nicheAvison Young Bloggers: Follow

10%

In 2014, London recorded its highest level of office leasing activity since 2007. The main submarkets all saw take-up levels in excess of long-term averages. Across the main user groups, demand is being driven by growth rather than consolidation, with technology, media and telecommunications the most active sectors.

Toronto Simpson’s Tower and Hudson’s Bay Store

20% 15%

20%

Office

AY

$10 $30 $20

£0.00

Ma rk et s

$20 $40 $30

£4.00 £2.00

Follow Us

Vacancy Rate (%)

$30 $50 $40

10%

The departures of Target Canada and two large construction-material distributors $8.00 $8.00 $8.00 8% 8% have pushed up single-tenant vacancy to 7.4% from 6.5%. While the vacancy that 8% Follow Avison Young on Twitter: $6.00 $6.00 $6.00 6% the departures of these tenants created is temporary, it6%does illustrate the way 6% $4.00 $4.00 $4.00 For industry news, press releases and market reports: that landlords’ cash flows can swing very quickly either4%way in this relatively small 4% 4% market. Many new developments are going up in Winnipeg’s East End and offer $2.00 $2.00 $2.00 www.twitter.com/avisonyoung 2% 2% 2% small bays of 2,000 sf to 5,000 sf for lease. These spaces are fetching close to $10 0% $0.00 0% $0.00 $0.00 For Avison Young listingsQ1and deals: psf net in some cases - rents previously unheard of in 0% the Winnipeg market. While Q1 2010 Q1 2014 Q1 2011 Q1 2015 Q1 2012 Q1 2010 Q1 2013 Q1 2011 Q1 2014 Q1 2012 Q1 2015Q1 2013 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 2015 it is still possible to secure small-bay space in Winnipeg in the $4Average to $6Netpsf range, Average Net Asking Rental Industrial Vacancy Asking Rental Rate ($ psf ) Overall Industrial Vacancy (%) Rate ($ psf ) AverageOverall Net Asking Rental Rate ($ (%) psf ) Overall Industrial Vacancy (%) www.twitter.com/AYListingsDeals these properties tend to be older and lack the amenities and efficiencies found in new construction.

Washington, DC Class A Average Asking Gross Rents

$40 $60 $50

10%

10%

Q2 2015

Suburban Completions (12 months)

Downtown Under Construction Suburban Under Construction 2,0000 Downtown Asking Net Rent average asking rates increased by 2.5% to $26.99 psf in the Q2 2011 Q2 2012 Q2NOTABLE 2013 Q2 2014 2015 LEASE Q2 TRANSACTIONS BY$0SIZE - FIRST 2015 Suburban Asking Net HALF Rent $45 Downtown Completions (12 months) Suburban Completions (12 months) 12 months ending at mid-year 2015. 0 Downtown Asking Net Rent Downtown Under Address / Construction Complex TenantQ2 2015 Size (sf) Q2 2011 Under Q2 2012 Q2 2013 SuburbanQ2 2014Construction $40 Suburban Asking Net Rent Vacancy increased to 12.1% at mid-year 2015 from 10.3% Downtown Completions (12 months) Suburban Completions (12 months) $35 Houston ANW Average Asking GrossUnder Rents 1 1150 15th Street, Fannie Mae 700,000 Downtown UnderClass Construction Suburban Construction one year earlier. Large occupancies from newly delivered $45 2 1215 South Clark Street U.S. Marshals Service 371,000 buildings and$30leases signed in 2014 will counteract the $40 Houston Class A Average Asking Gross Rents $25 vacated space, resulting in only a moderate increase in 3 $45 1301 Pennsylvania Avenue, NW Kirkland & Ellis 187,000 $35 $20 Houston Class A Average Asking Gross Rents vacancy by year-end 2015. However, the downturn in 4 $40 12000 Sunrise Valley Drive Fannie Mae 186,000 $30 $45 $15 the energy industry appears to have halted Houston’s $35 5 $40 2002 Edmund Halley Drive Noblis 160,000 $25 $10 construction boom. This situation will likely give demand $30 $20 $35 a chance to catch up with supply and pull the market back $5 $25 from the brink$0of an overbuild scenario. As of mid-year 2015, $15 $30 $20 56 $25 Mid-Year 2015 Canada, U.S. & U.K. Office Market Report a total of 10.8 msf of office space was under construction $10 $15 with 54% preleased. Office construction will still have an $5 $20 impact on the vacancy rate over the next seven quarters as $10 $0 $15 available is delivered toAsking theRent market. Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 Class A Average ($psf net) Suburban Class A Average Additional Rent ($psf) Downtown Class A Average Additional Rent ($psf) spaceSuburban $5 $50

Q2 2014

Suburban Completions (12 months) Suburban Under Construction Q2 2014 Q2 2015

a

$50 $60

L

£8.00 £6.00

ondon’s position as a “world city” has insulated it from the poor economic environment in continental Europe. London’s economy was expected to grow by 4.2% in 2014, slowing down to 3.4% in 2015. It is expected to expand by a further 15% over the next five years to 2019. The challenge for London, therefore, is how to manage this growth both now and in the future.

U. S.

Downtown Completions (12 months)

Can

$30

Q2 2013

Downtown Completions (12 months) Suburban Completions (12 months) Downtown Under Q2 2011 Under Construction Q2 2012 Q2 2013 SuburbanQ2 2014Construction Q2 2015

Vacancy Rate (%)

Q2 2012

Downtown Completions (12 months) Downtown Under Construction Q2 2011 Q2 2012 Q2 2013

Washington, DC Class A Average Asking Gross Rents

Vacancy Rate (%)

Q2 2011

Washington, Class A Average Asking Gross Rents Downtown UnderDC Construction Suburban Under Construction

ad

0

$60

£12.00 £10.00

Winnipeg Industrial Vacancy & Rental Rates innipeg’s industrial vacancy is a good indicator of the health ofCalgary the market planning to develop 930,000 sf in Industrial the next year. Despite the new Industrial Vacancy & Rental Rates approximately Calgary Vacancy & Rental Ratessupply, there will be continuing upward pressure on rents during the $16.00 18% next 12 months. and the city’s economics. In the past few years, there has been a rise in $16.00 $16.00 18% 18% vacancy. Despite the delivery of 300,000 sf of new construction at year-end 2014, 16% $14.00 16% 16% $14.00 $14.00 vacancy declined 60 bps year-over-year to close the first quarter of 2015 at 3.2%. 14% 14% 14% $12.00 $12.00 $12.00 The market is still very healthy, with rental rates continuing to increase each year 12% 12% $10.00 by at least 4% to 5% despite the vacancy rate edging 12% upward. $10.00 $10.00

Vacancy Rate (%)

Absorption (Thousands sf) (Thousands Absorption sf) Absorption (Thousands sf)

1,0000

Strong growth expected until 2019

£14.00

Outside London, the story is the same – falling vacancy rates and heathy rental growth in selected areas – with retailers leading the take-up statistics. Rents in the Midlands have hit £6 psf for the first time since 2007. Speculative development is underway in prime areas. Goodman/Anglesea Capital are

W

1,000 3,000 2,000 0 2,000 1,000

6%

Walkie Talkie, 20 Fenchurch Street

£16.00

Winnipeg Industrial Market

Washington, DC Office Space Under Construction & Completions

Washington, DC Office Space Under Construction & Completions

2,000 4,000 3,000

Q2 2011

$40 $35

6%

£4.00 Increasing rental values are also a sign of decreasing vacancy rates. The London £4.00 4% 4% 4% vacancy rate declined to 4.1% from 5% year-over-year. This reduction has £2.00 £2.00 2% 2% 2% triggered an increasing level of speculative development, particularly around 0% £0.00 0% three areas, speculative 0% £0.00 Thames Gateway, Park Royal and Heathrow. Outside those 2010 Q1Q1 2011 2012 Q1 2010 Q1 2011 Q1 2012 Q1Q1 2013 2014 Q1Q1 2015 Q1 2010 Q1 2013 Q1 2011 Q1 2014 Q1 2012 Q1 2015 Q1 2013 Q1 2014 Q1 2015 development is being handicapped by site assembly issues – the high site density Average Net Asking Rental(%) Rate (£ psf ) Vacancy Average Net Asking Rental Rate (£ psf ) Overall Industrial Vacancy Average NetOverall AskingIndustrial Rental Rate (£ psf(%) ) Overall Industrial Vacancy (%) of existing buildings and fragmented ownership result in large sites capable of supporting 100,000-sf to 200,000-sf schemes being difficult to assemble. For occupiers, being inside the M25 orbital motorway carries a premium with grade A property securing rents up to £13.75 psf (Park Royal) and Heathrow hitting £13 psf for the first time at the end of 2014. Rents will likely increase by a further £0.25 psf in the next 12 to 18 months.

Can

Suburban Completions (12 months)

SquareSquare Feet (Thousands) Square Feet (Thousands) Feet (Thousands)

Vacancy Rate Vacancy Vacancy Rate Rate

Downtown Completions (12 months)

5,000 6,000

Vacancy Rate (%) Vacancy Rate (%)

Downtown Class A Average Asking Gross Rents

$45

U.K. Industrial Vacancy Rental Rates Vacancy & Rental Rates he economic recovery caught up with the industrial market during the 12 London, U.K. Industrial Vacancy &London, Rental Rates London,&U.K. Industrial £16.00 18% £16.00 18% 18% months ending March 31, 2015, resulting in a transformation in supply and, consequently, rental rates. Average rents across London 16%increased to £8.90 psf from 16% 16% £14.00 £14.00 £8.30 psf year-over-year as occupiers scrambled for space. In the smaller size ranges, 14% 14% 14% £12.00 £12.00 trade-counter operators (B2B hardware stores) have sought to grow or reposition 12% 12% 12% their existing portfolios. At the higher size range (greater than 50,000 sf), the lack £10.00 £10.00 10% 10% 10% of grade A space means that many companies sign build-to-suit deals or prelease £8.00 £8.00 space under construction. Take-up is generally being led 8% 8% by e-commerce-related 8% £6.00 £6.00 businesses – principally, retailers or logistics companies. 6%

3,000 5,000 4,000

$ psf na $ psf

$50

SquareSquare Feet (Thousands) Square Feet (Thousands) Feet (Thousands)

Canada & U.S. Office Market Highlights

T

16.0% 20.0%

4,000 6,000 5,000

$ psf

Absorption (Thousands sf) (Thousands Absorption sf) Absorption (Thousands sf)

D

20.0% 18.0%



14.0% 18.0% 20.0% 12.0% 16.0% 18.0% 10.0% 14.0% 16.0% 8.0% 12.0% 14.0% 6.0% 10.0% 12.0% 4.0% 8.0% 10.0% 2.0% 6.0% 8.0% 0.0% 4.0% 6.0% Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 2.0% Downtown Absorption (12 months) Suburban Absorption (12 months) 4.0% Downtown Vacancy Suburban Vacancy 0.0% 2.0% Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 Suburban Absorption (12 months) 0.0% -2,000 Downtown Absorption (12 months) Downtown Suburban Vacancy Q2 2015 Q2 2011Vacancy Q2 2012 Q2 2013 Q2 2014 Washington, DC Office Space Under Construction & Completions Downtown Absorption (12 months) Suburban Absorption (12 months) Suburban Vacancy 6,000 Downtown Vacancy

$ psf

Houston Office Market

2,000 3,000 3,500 1,500 2,500 3,000 1,000 2,000 2,500 500 1,500 2,000 0 1,000 1,500 -500 500 1,000 -1,000 0 500 -1,500 -500 0 -2,000 -1,000 -500 -1,500 -1,000 -2,000 -1,500

$ psf

he Metropolitan Washington office market comprises nearly 377 msf in the District of Columbia, Northern Virginia and Suburban Maryland. As a whole, the market recorded a 14.8% vacancy rate and 347,000 sf of negative net absorption between mid-year 2014 and mid-year 2015. The strongest demand is in newer and class A properties, where the positive growth is occurring. Likewise, there has not been any softening in class A rental rates. Tenants continue to demonstrate a preference for mixed-use and amenity-rich projects near public transportation, often at the expense of traditional suburban office parks. This trend, coupled with a paradigm shift in how office space is utilized, has resulted in an overall decline in office occupancy in the region. As well, new office leases, by and large, reflect a shrinking tenant footprint. One bright spot for the aging vacant Office Absorption & Vacancy Rates inventory Houston is that adaptive reuse continues to rise. Recently, 16.0% 9,000 suburban office buildings have been converted to schools, 8,000 14.0% Office Absorption & Vacancy Rates residentialHouston and other uses. 16.0% 9,000 7,000 12.0% Houston Office Absorption & Vacancy Rates During the last 12-month period, less than 2 msf was delivered in 8,000 epressed oil prices in the first half of 2015 have resulted 14.0% 6,000 16.0% 9,000 10.0% the region, an amount notably below historical averages. In the 7,000 in mounting concern over their potential impact on 5,000 8,000 12.0% 14.0% 8.0% 3.6 msf. prior four reporting periods, the 12-month average was Houston’s office market. Tenants have shifted focus from 6,000 4,000 7,000 10.0% 12.0% Nevertheless, another 8 msf is underway, for delivery6.0% during securing real estate in prime locations to downsizing as a 5,000 3,000 6,000 8.0% 10.0% the next three years, with an overall prelease rate of 64%. cost-cutting measure, a drastic change in outlook from just 4.0% Federal 4,000 2,000 5,000 6.0% 8.0% government leasing activity has been moribund. The 2.0% largest non12 months earlier. Houston recorded negative net absorption 3,000 1,000 4,000 government office transaction in the first half of 2015 4.0% was of 187,700 sf in the first half of 2015, compared with positive 6.0% Fannie 2,000 0 0.0% 3,000 Mae’s prelease for its new headquarters, in which it is slated to absorption of 6.1 msf in the first half of 2014. Leasing velocity Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 2.0% 4.0% 1,000 2,000 Downtown Absorption (12 months) Suburban Absorption (12 months) occupy 700,000 sf. As with other major tenants, Fannie0.0% Mae will fell sharply in the first half of 2015 as companies continued Suburban Vacancy 0 Downtown Vacancy 2.0% 1,000 be reducing by roughlyQ230%, Q2 2011 its overall Q2 2012 occupancy, Q2 2013 Q2 2014 2015 when its new to implement a wait-and-see approach. Leasing activity is Suburban Absorption (12 months) 0.0% 0 Downtown Absorption (12 months) building is completed in 2018. not expected to pick up through the rest of 2015 given the Downtown Suburban Vacancy Q2 2015 Q2 2011Vacancy Q2 2012 Q2 2013 Q2 2014 Houston Office Space Under Construction Absorption & Completions Downtown Absorption (12 months) (12 months) current market conditions, but should increase in 2016 as Metrorail’s expansion continues toSuburban haveVacancy a meaningful impact on Suburban 14,000 Downtown Vacancy more tenants approach lease expirations. market conditions around the region. The Silver Line opening in 12,000 Houston Office Space Under Construction & Completions Houston entered 2015 from a position of strength, which Virginia and its future extension to Dulles International Airport 14,000 Space Construction & Completions 10,000 is helping to minimize the current downturn’s negative andHouston beyondOffice mean thatUnder certain tenants now consider beyond12,000 14,000 influence. Particular concerns are substantial amounts of the-Beltway submarkets viable after possibly eschewing them 8,000 10,000 12,000 available sublease space, recently delivered vacant space, previously. Likewise in Maryland, the proposed Purple Line 6,000 and rising shadow space (due to tenants moving to newly extension (approved but undergoing design and budget review) 8,000 10,000 4,000 delivered space) as a result of lower oil prices. Tenants who is expected to be a catalyst for business expansion in emerging 6,000 8,000 are able to make real estate decisions will find opportunities submarkets. With the exception of a few select submarkets 2,000 4,000 in the form of concessions, particularly for sublease space. 6,000 and prime properties, current market conditions should persist Canada Canada 0 Asking rates have held up in the past three major downturns through 2015. 2,000 Q2 year-end 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 Canada 4,000 Canada Asking Gross Rents Downtown Class A Average Suburban Class A Average Asking Gross Rents Class A Average Asking Gross Rents – a trend that continued in the Suburban first half of 2015. Overall

AY

3,500 3,000 2,500 3,500

T

Industrial


Avison Young 2015 Forecast Commercial Real Estate Canada, U.S. and U.K. (2014 Annual Review)

11

21


57

Follow Us Follow Avison Young on Twitter: For industry news, press releases and market reports:

www.twitter.com/avisonyoung For Avison Young listings and deals:

www.twitter.com/AYListingsDeals

Follow Avison Young Bloggers: http://blog.avisonyoung.com

Follow Avison Young on LinkedIn:

www.linkedin.com/company/avison-youngcommercial-real-estate Follow Avison Young on YouTube: www.youtube.com/user/AvisonYoungRE

avisonyoung.com


55

avisonyoung.com © 2015, Avison Young (Canada) Inc. The statistics contained in this report were obtained from sources deemed reliable, including Altus InSite, Avison Young, Collette, Plante & Associés, CoStar Group Inc., Desjarlais Prévost Inc., Gettel Network, Real Capital Analytics, Inc., RealNet Canada, RealTrack, Reis Services, LLC. However, Avison Young (Canada) Inc. does not guarantee the accuracy or completeness of the information presented, nor does it assume any responsibility or liability for any errors or omissions. All opinions expressed and data provided herein are subject to change without notice. This report cannot be reproduced in part or in full in any format without the prior written consent of Avison Young (Canada) Inc.

Avison Young Canada US UK Commercial Real Estate Investment ...

Avison Young Canada US UK Commercial Real Estate Investment ...

Suggest Documents

Avison Young Canada US UK Commercial Real Estate Investment ...

Avison Young Canada US UK Commercial Real Estate Investment ...

Avison Young Canada US Commercial Real Estate Investment Review

Avison Young Canada US Commercial Real Estate Investment Review

Avison Young Canada US Commercial Real Estate Investment Review

Avison Young Canada US Commercial Real Estate Investment Review

Avison Young Canada US Commercial Real Estate Investment Review

real estate quarterly - Avison Young

real estate quarterly - Avison Young

real estate quarterly - Avison Young

Avison Young acquires Morrison Commercial Real Estate, opens new ... [PDF]

Avison Young acquires Morrison Commercial Real Estate, opens new ...

Canadian commercial and residential real estate news ... - Avison Young

Commercial Mortgage Alert National Real Estate ... - Avison Young

Avison Young acquires Morrison Commercial Real Estate, opens new ...

Fast-growing commercial real estate services firm opens - Avison Young

Greater Toronto Area Commercial Real Estate ... - Avison Young

British Columbia Real Estate Investment Review - Avison Young

British Columbia Real Estate Investment Review - Avison Young

REAL ESTATE QUARTERLY: Submarket Still ... - Avison Young

Investment Review - Avison Young

Commercial Property Executive - Avison Young

Victoria's Bay Centre sold | Real Estate | Business in ... - Avison Young

Victoria's Bay Centre sold | Real Estate | Business in ... - Avison Young