FIRST QUARTER 2014 COMMERCIAL REVIEW
COMMERCIAL REAL ESTATE PRICES REGISTER
BROAD GAINS IN FEBRUARY
The two broadest measures of aggregate pricing for commercial properties within the CCRSI—the value-weighted U.S. Composite Index and the equal-weighted U.S. Composite Index—gained 1.1% and 1.7%, respectively, in February 2014. Both reached double-digit growth over the previous 12-month period as the pricing recovery extended to smaller markets and secondary property types.
STRONGER ABSORPTION TRENDS BOLSTERING PRICING GAINS
For the 12-month period from March 2013 through March 2014, net absorption across the three major property types — office, retail and industrial — totaled 378.2 million square feet, a 15.3% increase from the prior 12-month period. Consistent with recent pricing trends, net absorption in the General Commercial segment rose 48% during the same period, compared with a 5% annual gain for the same period in the Investment Grade segment.
Washington DC Office Vacancy: Increased slightly to 14.4% in the first quarter. The surrounding suburban markets also increased slightly to 16.4%. A graph of the National Office Vacancy Rate is as follows:
Washington DC Retail Vacancy: Was down slightly to 4.3% blended across all retail property types. Traditional neighborhood shopping centers had a vacancy rate of 6.7%; warehouse specialty retail centers had a vacancy rate of 2%. A graph of the national retail vacancy rate current and projected is as follows:
Sales of newly-constructed homes fell by 14.5% in March, a significant drop underscoring that the housing market is slowing some. Higher interest rates and inclement weather are contributors to the slowing.
New single-family homes sold at an annual pace of 384,000 (seasonally adjusted) according to data released Wednesday by the Census Bureau and the Department of Housing and Urban Development. That’s a pace that is 13.3% slower than the sales rate one year earlier. Nevertheless, the median sales price of new homes sold in March was $290,000, the highest rate ever.
The government agencies estimated that the (seasonally adjusted) supply of new single-family homes for sale at the end of March was 193,000. That represents about a 6-month supply, which is considered a healthy housing market. (source: Forbes & HAHB)
Tyler-Donegan 1st QTR Completed Transactions
The Lohman Group
Heath Med Realty Partners represented The Lohman Group in leasing 6549 square feet for 10 years for an urgent care facility at the Sunrise Shopping center in Oxon Hill, Maryland. HMRP is involved in identifying multiple locations for this client and other likeminded medical clients looking at retail space in order to bring their services closer to the customer.
Tyler-Donegan represented Mosaic Power in their expansion from their 103 S. Carroll St. location to a larger facility at 45 E. All Saints St. in downtown Frederick. This stand-alone 5,000 sf facility includes office and technological research space and was leased for a five year term. Mosaic Power, LLC produces their “Smart Grid” monitoring system that helps businesses become Green. The device connects to electric hot water heaters through the internet and their proprietary software manages the way your water heater uses electricity unlike peak-usage products that simply turn it on or off.
2502 Urbana Pike
Tyler Donegan listed and sold 2502 Urbana Pike in Urbana/Frederick, MD. This 25,000 square feet office and warehouse building is a multi-tenant building on 3 acres. TD represented the seller and David Palank of CBRE represented the purchaser (CaerVision). The purchaser will occupy approximately 3500 square feet which is currently vacant within the building.
Keller Properties, LLC
Tyler-Donegan Real Estate represented Keller Properties, LLC in leasing of two of their retail spaces at the Rosemont Center in Frederick, MD. The tenants included St. Johns Fellowship Church and VRocks Vape Shop. The center is located at 1713 Rosemont Avenue, Frederick, 21702.