Pierce R. Neinken’s Post

Thanks to Ronald Davis and the Phoenix Business Journal for including my commentary and CoStar data in their latest cover story. Though the onset of COVID is now 4+ years in our rearview mirror, pandemic-driven shifts in demand are still causing uncertainty in the Phoenix office market. Check out the below article comparing the Valley's current performance to pre-COVID and expectations moving forward.

Denver Business Journal’s latest roundup highlights top deals and dealmakers from the second quarter of 2024, showcasing a steady performance with larger leases in the industrial and office sectors signed this quarter.  We’re thrilled to be included on the list with our successful office renewal of 29,00+ square feet for Tuff Shed, Inc. at 1777 S. Harrison St., underscoring our dedication to securing the right office spaces to fit our clients’ needs.  Check out the full article to see some of the other top deals this quarter! 📈🔍  #DenverRealEstate #CommercialRealEstate #TributaryRealEstate #TopDeals #OfficeLeases #RealEstateSuccess #MarketTrends

I recently revisited a 2006 New York Times real estate article, that, despite its age, holds relevant strategies for today's market, particularly in times of a perceived weak office leasing environment. The article highlights Jacques Catafago's decision to renew his lease early at the Empire State Building, a move made in anticipation of market changes. This example is instructive for current tenants facing a tenant-friendly market. This suggests that considering early lease renewals can be wise. Understanding both market trends and landlord inclinations is also crucial. In a tenant-friendly market, landlords may prefer retaining existing tenants to reduce replacement costs. However, tenants must carefully weigh the immediate benefits of today’s rates against the possibility of future market shifts. To navigate the market and secure optimal lease terms and locations, a combination of strategic foresight and assertive negotiation is key. Remember, leverage is constantly shifting. Know when its your time.

D.C. is betting big on a new office makeover scheme. The Central Washington Activation Program is throwing $19 million over three years at turning offices into anything but housing. Hotels, shops, even fancier offices - because 21.6% vacancy isn't enough empty space, right? The numbers are substantial: $5 million in 2027, $6 million in 2028, and $8 million in 2029. That's a 60% increase in just two years. Meanwhile, the residential conversion program is capped at $41 million by 2028, feeling like the forgotten middle child. This isn't just for downtown anymore. The program covers a 1,750-foot radius beyond "Central Washington," stretching from Dupont Circle to NoMa, and even dipping into Capitol Hill. DowntownDC BID's Gerren Price is all in, hoping to fill some of those 50,000+ square foot ghosts haunting the city. But with office foreclosures piling up faster than political promises, is this too little, too late? Will this $19 million bet pay off, or is D.C. just rearranging deck chairs on a 21.6% vacant Titanic? Time, and your tax dollars, will tell. . https://lnkd.in/gdP_Hdqu

🎉 Big News! United Group has once again been crowned Albany's #1 Commercial Real Estate Developer by Albany Business Review! Dive into the latest article featuring a Q&A with our President & CEO, Michael Uccellini, for a glimpse into his insights on the future of the real estate and office markets in the Capital District. 

Kathy Hochul just kicked off New York's office-to-resi goldrush with major new conversion incentives. And mogul Marc Holliday made it clear - it's game on for opportunistic plays. "You've gotta get going right now," Holliday warned on SL Green's earnings call. With '26 permit deadlines for max tax benefits, the conversion land grab can't wait. SL Green is sprinting out the gates by turning vacant 750 3rd into apartments. But the bigger prize? Pulling a huge office overhang off the market to refill their emptying skyscrapers. We're talking upwards of 40M SF of zombie office space getting repurposed long-term. An entire borough's worth of value unlocked from obsolescence. The real money, though? Manfucaturing institutionally-branded multifam at discounts to replacement cost. Crazy arb plays like BIG's Vancouver condos trading at sub-4% exit caps. For NYC, it's a no-brainer to incentivize these bold conversions. Glitzy new housing with no new construction. Huge win-win. This SL Green move is just the opening salvo in a systemic rebirth via strategic arbitrages. The smart money bets on manufactured housing shortages = outsized profits. With Manhattan office vacancies projected to hit 18%+ this year and luxury rental rates forecasted to spike another 10%+, this arb opportunity will only intensify. Expect office-to-resi trades to emerge as the definitive value play in NYC. https://lnkd.in/giQhgjFH

Office building 311 South Wacker recently faced a challenge as one of its major tenants, Monroe Capital, relocated just half a mile north to 155 North Wacker. The move was driven not only by the latter's high-end amenities but also its debt-free status, allowing landlord Morgan Stanley to offer appealing lease terms in a competitive market. In an era where remote work policies dampen office space demand and rising interest rates increase debt carrying costs, being debt-free gives building owners a significant advantage in attracting tenants. Eric Feinberg, co-head of Savill’s Chicago regional office, notes that 155 North Wacker's flexibility in concession offerings has been a key draw for tenants and prospects. #CommercialRealEstate #OfficeSpace #PropertyManagement #RealEstateInvestment #FinancialStrategy #BusinessGrowth #MarketInsights #WorkFromHome #TenantAttraction #DebtFreeInvesting #ChicagoRealEstate #OfficeLeasing #OfficeTrends #RealEstateDevelopment #TenantRetention #CorporateRealEstate #WorkspaceDesign #InvestmentStrategy #BuildingOwners #OfficeMarket #AssetManagement #UrbanDevelopment

Over the past year, South Florida's commercial real estate market has shown resilience despite broader economic challenges. BUT we’re seeing slower rent growth, especially in the industrial sector, where rent hikes have dropped from 10% to 5%. A slowdown in leasing, particularly from big logistics companies, has led to lingering empty space (+/- 700k SF in Fort Lauderdale). This is a positive sign for tenants. Retail is holding steady with low vacancy rates of around 3%. With limited new construction on the horizon, don't expect to see this number expand much. Tough sledding with limited optionality will continue for retail tenants. Offices are 'struggling' with vacancies of over 8% - although this remains well below the US average of 13%. Miami’s still buzzing with new office builds, but with companies downsizing, there’s a lot of uncertainty. Tenants continue to have a wide range of feasible options within both urban and suburban submarkets - adding to the already lengthy decision-making timelines. On the multifamily front, vacancies are creeping up in areas like Palm Beach and Fort Lauderdale. Developers are throwing in big concessions—think two months of free rent—to fill these spots. Rather than taking a hit on rates, Landlords are getting creative with rent abatement and improvements to stay competitive, especially for luxury spaces and older offices. It’s an interesting time for South Florida real estate as the market keeps shifting.

For the 5th consecutive year, CompStak® published the Top Ten Most Valuable Manhattan Office Leases signed in 2023 with #therealdeal *This year's top ten list demonstrated an uptick in #renewals and #lawfirm deals from years past. *Notably, deals in #newconstruction were conspicuously missing from this list which reflects a falling large block supply in that slice of the Manhattan office market rather than a lack of interest. *There has been heightened demand for newly built and trophy office space over the last few years and new deliveries like #OneMadisonAvenue and #TwoManhattanWest have opened significantly pre-leased. For more on this year's top most valuable leases, please read our latest CompStak® blog. Brigette Palombo Jacob Thomas https://lnkd.in/ezFtsehP

Do YOU know? What’s the Impact of Nearby Transit on Office and Multifamily Property Values? Being located near public transit can have a substantial impact on the value of office and apartment buildings. Check out this article to learn more... https://lnkd.in/gqp78FDY