From REALTOR Magazine:
Keep an eye on commercial real estate markets in metros that position themselves as 24-hour cities with a global pathway to international markets, says the Urban Land Institute (ULI) in a rating of the top commercial real estate markets for 2008.
The hottest commercial real estate market in the country? New York City, where vacancies are in the mid-single digits and rents have skyrocketed. ULI dubs the Big Apple, â€œAmericaâ€™s 24-hour city.â€
Prices for industrial and office space might be at an all time high, but according to the report, â€œthe weak dollar means the cityâ€™s â€˜monsterâ€™ prices look cheap to foreign investors who are â€œpouring and parking money into Manhattan real estate.â€
All the markets to watch have similar attributes to New York. All have a major international airport and/or shipping port and walkable residential neighborhoods. Each also has â€œmade a concerted effort revitalize downtown areas or close in urban hubs that make them magnetsâ€ for corporate headquarters, business elites and a highly educated workforce and also capotes the largest share of investor dollars, says ULI in their annual report, â€œEmerging Trends in Real Estate.â€
Seattle, where a concentration of mixed-use development draws residents to new downtown neighborhoods, is another standout. A strong and highly diversified economy resulting from a large number of corporate headquarters and the cityâ€™s position as an important hub on Asian commerce routes contribute to its top ranking on the commercial markets to watch.
Other top commercial markets to watch, according to ULI, are:
- Washington, D. C. â€œThe government never stops and the ever churning Washington real estate market cushions against abrupt downturns,â€ concludes the report.
- Los Angeles. Office markets in Orange Country might be softening but ULI says those in West LA have never been stronger. LA/Long Beach remains the nationâ€™s top port.
- San Francisco. A resurgence of technology business is propelling the market in this city. View space commands over $1,000 a square foot.
- Boston. Investors are keeping a close eye on this market, says ULI, even though new industries recycle office spaces left vacant by recent corporate headquarters departures.
- San Diego. â€œA leading indicator for a market correction,â€ says ULI.
- Denver. A retooled downtown has created what ULI calls an â€œurban burb,â€ a hip and exciting urban core in the midst of a sprawling suburban area connected to downtown via light rail.
Smaller markets to watch include: San Jose, Calif.; Honolulu, Hawaii; Austin, Texas; Raleigh-Durham and Charlotte, N.C.; Portland, Ore.; Sacramento, Calif.; Las Vegas, N.V.; Orlando and Tampa, Fla; Salt Lake City, Utah, Jacksonville, Fla.; Nashville, Tenn.; and Minneapolis, Minn.
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