New Report: Occupancy Growth Hits a Wall
Landlords are savoring some well-deserved
occupancy gains. They may need to enjoy them
while they last. An Oct. 27 research report from
Property & Portfolio Research (PPR) predicts that
vacancies in all classes of real estate (except office)
will register above current levels by 2011. This
shouldn’t be misread as dire news, however. Tight
occupancy will allow most landlords to hike rents,
and the tightest markets can absorb plenty of new
Boston-based PPR doubts that vacancy will
continue dropping at the pace that it has been
during the past few quarters. Between mid year and
the end of September, for example, office vacancy
dropped by 0.2% to 16% in the steepest decline of
any property type. But PPR expects office vacancies
to fall by just 0.1% between the end of September
2006 and the end of September 2007. That’s a
meager drop, too: The previous twelve-month period
saw office vacancies decline by 0.9%.
“The office market has done pretty well with
what most economists are calling mediocre job
growth in recent months,” says Bob Bach, director of
national research at Oak Brook, Ill.-based Grubb &
Ellis. Bach doesn’t expect office vacancy to drop
quite as dramatically next year as it has in 2006.
The apartment market will also be challenged to
bring vacancy down over the next 11 months.
Apartment vacancies are only expected to drop by
0.2% to 5.5% by the end of September 2007. Like
the office market, apartment vacancies fell sharply
between September 2005 and 2006 (try 0.7%).
“We’ve really seen a shift over the past 12
months as more people have gravitated towards
renting an apartment versus owning a home,” says
Mark Obrinsky, chief economist at Washington, D.C.-
based apartment trade association National Multi-
Housing Council. His bullish outlook hinges on solid
economic growth in 2007, plus declines in single-
family home values.
While apartment and office are following similar
paths over the next year, the office sector is poised
to thin vacancy further within the next five years.
PPR projects that the office market recovery will
resume after next year, pushing vacancies down by
1.3% between early 2007 and the 2011.
For the near term, PPR expects some markets to
outshine the herd. Sixteen markets should see a
vacancy decline of roughly one percentage point
between now and the end of September 2007. The
leaders, in order, will be New Orleans office, Raleigh
retail followed by San Jose office, in third place.
Some of these markets are in bad shape now,
however. The New Orleans’ office market was 26.5%
vacant at the end of September. San Jose, where
the technology bust is still being felt, is grappling
with 20% vacancy. And Raleigh’s retail market is
coping with the after-effects of a construction boom
that’s thankfully come to an end.
“While the occupancy recovery is largely over in
many markets, rent growth projections are still
healthy,” reads the report. “Upcoming rent growth in
the apartment and office markets will outpace that
of the past year. The picture is not so rosy for retail
and warehouse markets, where rent growth is
slowing, but still-decent growth is projected in the
Source: The National Real Estate Investor
How Do We Fare? - Utah Metro Commercial
Area - Q2 2006 Vacancy
- SLC CBD Class C - 25.99%
- SLCo Periphery Class C - 20.04%
- Weber County Class B - 19.91%
- Weber County Class C - 19.05%
- SLCo Suburban Class C - 16.14%
- Davis County Class C - 15.93%
- SLCo Suburban Northwest - 15.00%
- Provo Class A - 13.57%
- Orem Class B - 12.39%
- SLCo Periphery Overall 12.13%
- Davis County Class B 12.13%
- SLCo Periphery Class B - 12.05%
- Provo Class B - 11.47%
- Provo Overall - 11.45%
- SLCo Suburban Southeast - 11.23%
- SLCo Suburban Overall - 11.08%
- SLCo Totals - 10.92%
- SLCo Suburban Northeast - 10.82%
- Orem Class A - 10.66%
- SLCo Suburban Central East - 10.06%
- SLC CBD Overall - 9.88%
- Utah County Class A - 9.72%
- SLCo Suburban Class B - 9.42%
- Utah County Class B - 9.23%
- SLCo Suburban Class - 9.03%
- Utah County Totals - 8.78%
- SLC CBD Class B - 7.79%
- Orem Condo - 5.83%
- SLCo Suburban Southwest - 5.35%
- Utah County North Condo - 5.29%
- Utah County Condo - 5.01%
- Weber County Class A - 4.92%
- SLCo Suburban Central West - 4.60%
- SLCo Periphery Class A - 4.08%
- Davis County Class A - 4.06%
- Provo Condo - 3.89%
- Utah County North Overall - 3.04%
- Utah County North Class B - 3.03%
- Utah County South Condo - 2.97%
- Utah County North Class A - 2.73%
- Utah County South Overall - 2.20%
- Utah County South Class B - 1.98%
- SLC CBD Class A - 1.90%
Source: Commerce DRG Mid-Year 2006
Research Ways to Reduce Sexual Violence!
- The Criminal Justice Response to Sexual Violence:
From Adolescence to Late Adulthood
- POSTED: 10/25/2006
- FUNDING SOURCE: Dept. of Justice
- ELIGIBILITY: Nonprofits, public agencies, and
- $ AVAILABLE: $750,000 GRANTS
- MAX GRANT SIZE: N.A.
- DEADLINE: 1/30/07
- CONTACT INFORMATION: Catherine C. McNamee,
- DESCRIPTION: Grants to research ways to reduce
sexual violence and increase women's safety by
informing and improving policy and practice in the
criminal justice system.
Understand Bullying and Sexual Violence!
- Understanding Risk and Protective Factors for
- Perpetration and the Overlap with
- POSTED: 11/7/2006
- FUNDING SOURCE: DHHS
- ELIGIBILITY: Nonprofit and public agencies
- GRANTS AVAILABLE: 2 MAX
GRANT SIZE: $300,000
- DEADLINE: 1/9/07 (LOI); 2/21/07 (Final)
- CONTACT INFORMATION: Rebecca Leeb, 770-488-
- DESCRIPTION: Funding to discover the underlying
mechanisms that link bullying and sexual violence and
research ways to treat and reduce both.
Improve Post-Secondary Education!
- Bridges to the Baccalaureate Program for
- POSTED: 11/8/2006
- FUNDING SOURCE: DHHS
- ELIGIBILITY: Community colleges and other IHEs
- $ AVAILABLE: $14,000,000 GRANTS AVAILABLE:
9 MAX GRANT SIZE: $200,000
- DEADLINE: 1/18/07
- CONTACT INFORMATION: Adolphus Toliver, 301-
- DESCRIPTION: Grants to establish partnerships
between community colleges or universities to
develop programs that prepare associate degree
students with academic potential for admission and
successful completion of undergraduate degree
program in biomedical and/or behavioral science
Office Space Vacancy Rankings
This weeks leads
- Global Survey of Business Confidence
- Global business confidence is soft. While
sentiment has been more stable this fall, after falling
sharply this summer, it continues to edge lower,
particularly among firms in residential real estate,
transportation and, increasingly, throughout
manufacturing. Vehicle manufacturers couldn't be
more pessimistic. Firms continue to invest strongly in
equipment and structures, but notably less so in
recent weeks, and are liquidating inventories. The
best news is on pricing, with price pressures back to
where they were in early 2005. Hiring is down from
its peak earlier this year, but it is holding firm.
Confidence is strongest in South America, firming a
bit in recent weeks, and weakest in Europe.
- Consumer Credit (G19)
- Consumer credit declined in September by
$1.2 billion to $2.37 trillion. This marks the first
month-to-month decline in consumer credit since
March. The details of the report show that the latest
decline in consumer credit was driven by a hefty
reduction in nonrevolving credit, which fell 3.2% at
an annual rate. On the other hand, revolving credit
increased 4.1% at an annual rate.
- International Trade (FT900)
- The nominal U.S. trade deficit in goods and
services narrowed by 6.8% in September. The U.S.
trade deficit came in at $64.3 billion, $4.7 billion less
than August's revised $69.0 billion, according to the
Bureau of Economic Analysis. In September, exports
increased and imports decreased. The goods deficit
with China, however, widened 4.4% to $23.0 billion.
Crude oil prices decreased in September, which in
return decreased the nation's total import bill for
energy-related petroleum products to $25.8
- Import and Export Prices
- The U.S. Import Price Index declined 2.0%
for the second consecutive month in October. The
decrease was again led by declining petroleum prices,
which fell 8.3% in October following a decrease of
9.7% in September. Export prices fell 0.4% in
October, after declining by the same amount the
- Record China Trade Surplus
- China's trade surplus increased in October to
a record $23.8 billion.
- Chain Store Sales
- Chain store sales rose by 1% in the week
ending November 4, the biggest weekly gain since
June, according to the ICSC. Year-over-year growth
held steady at 2.3%, the lowest since late July. Low
gasoline prices and colder than normal weather
remained supports to sales.
- Wholesale Trade (MWTR)
- Wholesale inventories were above consensus
expectations, coming in up 0.8% for September.
Wholesale sales were down 1.2%, and the I/S ratio
rose to 1.18.
- MBA Mortgage Applications Survey
- Mortgage demand increased 8.8% in the
week ending November 3. Purchase applications
increased 7.1% and refinance applications increased
- Oil and Gas Inventories
- Crude oil inventories rose 0.4 million barrels
for the week ending November 3, according to the
Energy Information Administration, slightly below
expectations of a 0.7 million barrel build. Distillate
inventories fell by 2.7 million barrels, well above
expectations of a 0.5 million barrel draw. Gasoline
stocks fell 0.6 million barrels, slightly above the
expectations of flat inventories. Refinery activity
moderated some last week. This is a moderately
bullish report, due mostly to the surprisingly large
drop in distillate inventories.
|This Weeks Leads:
- Rave Motion Pictures Theater
- Rave Review Cinemas trades as Rave Motion
Pictures Theater at
27 locations throughout AL, AR, FL, IL, IN, LA, MA,
PA, OH and TX.
The movie theaters occupy spaces of 70,000 sq.ft.
to 90,000 sq.ft.
in freestanding locations, malls, entertainment,
lifestyle, power and specialty centers.
Growth opportunities are sought nationwide during
the coming 18 months.
A land area of 13 to 15 acres is required.
For more information, contact:
Rave Review Cinemas
3333 Welborn Street, Suite 100
Dallas, TX 75219
- Malco Theaters operates 35 locations throughout
AR, KY, MO, MS and TN.
- The movie theaters occupy spaces of 50,000
sq.ft. in freestanding locations and malls.
- Growth opportunities are sought throughout the
existing markets during the coming 18 months, with
representation by Michael Lightman Realty Co.
- For more information, contact:
- Michael Lightman
- Michael Lightman Realty Co.
- 5100 Poplar Avenue
- Memphis, TN 38137
- Fax 901-767-5241
- Web site: www.malco.com.
- First Trading Corp. trades as Camille La Vie and
Group USA at 32 locations in 17 states and in Puerto
- The stores, selling women’s clothing, shoes and
formal wear, occupy spaces of 10,000 sq.ft. to
20,000 sq.ft. in outlet centers.
- Growth opportunities are sought nationwide
during the coming 18 months. Typical leases run two
to five years.
- Preferred demographics include a population of
500,000 within five miles earning $35,000 as the
average household income.
- For more information, contact
Amirniroumand, First Trading Corp., 25 Enterprise
Avenue, Secaucus, NJ 07094; 201-867-6005; Web
- Game Stop
- Game Stop, Inc. trades as Game Stop at 4,622
locations nationwide and in Canada, Puerto Rico and
- The stores, selling home
computer software and accessories, video hardware
and software and games, occupy spaces of 1,500
sq.ft. in malls, power and strip centers.
call for 400 openings nationwide and internationally
during the coming 18 months.
- For more information, contact
Boone, Game Stop, Inc., 625 Westport Parkway,
Grapevine, TX 76051; 817-424-2000, 817-722-7360;
Email: firstname.lastname@example.org; Web site:
- RA Sushi
- RA Sushi operates nine locations throughout AZ,
CA, IL and NV.
- The restaurants occupy spaces
of 5,000 sq.ft. in entertainment centers and inline
- Growth opportunities are sought
throughout Los Angeles, Orange and San Bernardino
counties in CA during the coming 18 months, with
representation by CB Richard Ellis.
- For more information, contact
Boyer, CB Richard Ellis, 1840 Century Park E., Suite
700, Los Angeles, CA 90067; 310-550-2579, Fax 310-
203-9624; Email: email@example.com; Web site:
www.cbre.com, www.rasushi.com and
- Wetzel’s Pretzels
- Wetzel’s Pretzels operates 250 locations
throughout AZ, CA, CO, CT, FL, GA, HI, IA, ID, IL, IN,
KS, MD, MI, MN, MO, MS, NV, NJ, NY, OH, OR, TN,
TX and WA.
- The stores, which specialize in hot
pretzels, hot dogs and lemonade, occupy spaces of
400 sq.ft. to 700 sq.ft. in malls.
opportunities are sought throughout the northeast
and northwest during the coming 18 months.
Typical leases run 10 years.
improvements are required.
- Auntie Anne’s is cited
as competition. The company is franchising.
- For more information,
Dutchess, Wetzel’s Pretzels, 35 Hugus Alley, Suite
300, Pasadena, CA 91103; 626-432-6900 Ext. 18,
Fax 626-432-6904; Email: firstname.lastname@example.org; Web
"Problem-solving" is not planning, and
"Planning" is not the same as "problem-
Effective planning can not be done without
addressing the problems that are critical.
Not all problems deserve attention.
Bonneville Research is a Utah-based consulting
firm providing economic, financial, market and policy
research to public and private sector clients
throughout the intermountain west.
Our services include:
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Analysis and Budgets
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Each of our studies is tailored to address the
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their weaknesses and protect against internal
vulnerabilities and external threats.”
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