Despite these setbacks, there was a notable increase in the under-construction pipeline, which reached 4.5 million square feet as of January. The jump marked a significant increase from the previous January, when a single project measuring 300,000 square feet was underway.

Projects, such as Ely Lily and Co.’s campus at the LEAP Research and Innovation District in Lebanon, Ind., are helping to sustain the market’s pipeline. In May, the company announced an additional $5.3 billion investment, building on the $3.7 billion already committed.

Later in the year, the firm revealed plans for the $4.5 billion Lily Medicine Foundry, the first facility to integrate research and manufacturing. These developments are keeping the market afloat and demonstrate a commitment to innovation and growth.

Smallest development pipeline among peer markets

Indianapolis’ industrial sector had nearly 4.5 million square feet under construction at the end of 2024, according to CommercialEdge data. These projects accounted for 1.2 percent of the market’s total inventory, slightly below the national average of 1.7 percent.

Compared to its peers, Indianapolis had the smallest amount of space underway. Phoenix ranked first with 22.3 million square feet, followed by Dallas (18.9 million square feet) and Houston (12.4 million square feet).

Early last year, Simtra BioPharma Solutions announced an expansion exceeding $250 million for its sterile fill/finish manufacturing campus in Bloomington, Ind. The new 150,000-square-foot facility is expected to be operational by this summer.

Another facility that is expected to come online this year is Sephora’s build-to-suit distribution center in Avalon, Ind. Developed by VanTrust Real Estate, the 746,672-square-foot facility broke ground last year and is part of the firm’s Avon Landings Commerce Park.

Completions remain below national figures

In 2024, Indianapolis had 6.1 million square feet in industrial completions across 13 properties, accounting for about 1.6 percent of total stock. This figure was below the national average of 1.9 percent.

Among its peer markets, Indianapolis had the least amount of new industrial space delivered last year. Phoenix led with 36 million square feet, followed by Dallas with 27.6 million square feet and Chicago with 14.9 million square feet.

Deliveries are expected to remain steady in 2025, as 4.2 million square feet of industrial space broke ground last year and are slated for delivery.

This quarter, Ambrose Property Group completed Building III, a 233,000-square-foot facility in Whitestown, Ind., within the Indianapolis Logistics Park Northwest. The first phase of the campus will comprise three buildings totaling more than 700,000 square feet.

Indy asset prices less than half the U.S. average

In 2024, the Indianapolis industrial real estate investment volume amounted to $320.7 million in sales from the 46 assets totaling 4.4 million square feet that changed hands. This placed the metro behind all its peer markets.

On average, Indianapolis assets traded for $73 per square foot, significantly lower than the national average of $167 per square foot. The Bay Area recorded the highest sale prices nationally at $414 per square foot, followed by Orange County ($314 per square foot) and Los Angeles ($294 per square foot).

In January, Libitzky Property Cos. acquired Park 130 @ Whitestown Building 3, a 319,336-square-foot facility in Whitestown, for $28.4 million. Sold by EQT Exeter, the property houses a distribution center operated by Frito-Lay.

Vacancy rates continue to rise

As of January this year, Indianapolis’ average industrial vacancy rate stood at 9.1 percent, marking a 650-basis-point increase from the previous year. This rate was also 1.1 percent higher than the national average. Among its peers, Orange County (5.0 percent) posted the lowest figure, followed by Atlanta (7.2 percent) and the Inland Empire (7.9 percent).

In May, Cummins Inc. leased a 1.1 million-square-foot building at Mohr Logistics Park, a 475-acre industrial campus. Mohr Capital completed the building in 2023.

As of January, the average listing rate within the Indianapolis metro was $4.9, notably lower than the national average of $8.4. Among peer markets, Orange County ($16.6) had the highest rate, trailed by Los Angeles ($15) and the Bay Area ($13.5).

The post Indianapolis Industrial Sector Fell Short in 2024 appeared first on Commercial Property Executive.

AST has officially opened Robert Wood Johnson University Hospital Ambulatory Medical Pavilion, a 229,000-square-foot medical outpatient building in New Brunswick, N.J. Robert Wood Johnson University Hospital, an RWJBarnabas Health facility, master-leases the property.

The developer broke ground on the project in October 2021, financing its construction with a $120.6 million construction loan from UMB Bank, according to CommercialEdge information. Jones Lang LaSalle Securities arranged the deal.

READ ALSO: Why MOBs Are Still a Strong Bet for Investors

Development partners included Torcon as general contractor, as well as Jarmel Kizel as architecture and mechanical engineering and O’Donnell & Naccarat as structural engineer. Langan Engineering provided civil engineering services. Kelso & Burgess provided legal land use services and Greenbaum, Rowe, Smith & Davis LLP legal transactional services.

The medical office real estate market is experiencing growth, a Savills report forecasting a 26 percent rise in outpatient demand over the next decade. This increase is primarily driven by the aging population, despite the current economic uncertainties affecting the commercial real estate sector.

Part of a larger campus

Located at 210 Somerset St., the facility is adjacent to the Robert Wood Johnson University Hospital campus and less than a mile from downtown New Brunswick. Newark Liberty International Airport is 24 miles away.

The medical facility features a ground-floor lobby with a café and a connection to the parking garage. Services at the Class A building include cardiovascular and neuroscience, plastics and reconstructive, as well as gastroenterology. The mid-rise also has an audiology center.

The 15-story building is part of the three-phase redevelopment of a 1.2-acre city block that began in 2006. Earlier phases included the construction of an 854-space parking garage and a 125,000-square-foot medical office building dubbed 10 Plum. That facility is also leased to RWJUH.

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Sterling Bay has secured $88 million in bonds in partnership with Piper Sandler Special District Group, a specialty financing firm, to begin infrastructure work this spring at Redtail Ridge—a 2.6 million-square-foot mixed-use life science campus in Boulder County, Colo.

Sterling Bay received final approval for the 389-acre Redtail Ridge innovation district in August last year, from the Louisville, Colo., city council. The developer acquired the site more than two years ago. The property had been vacant for more than 20 years and, prior to that, it served as the global headquarters of data storage firm StorageTek.

The first phase of Redtail Ridge’s horizontal infrastructure is set to begin in April. It is being designed in collaboration with architectural firm Perkins & Will and will be constructed by Mortenson. The initial phase is expected to be complete in 18 months, with the first delivery of buildings set to take place in late 2026, according to a Sterling Bay spokesperson.

The developer anticipates constructing two industrial and/or manufacturing buildings—one 95,000 square feet and the second 144,000 square feet—along with a 100,000-square-foot life science building in the first phase, the spokesperson told Commercial Property Executive.

Located along the U.S. 36 corridor between Denver and Boulder, Colo., the campus will also feature a 20,000-square-foot amenity center with a gym, yoga spaces, lounge, conference center and 20 miles of trails and dedicated open spaces. The site will also include a new home for the 160-bed AdventHealth Avista Hospital. The full build out is expected to take six years.

Mixed-use campus breakdown

The mixed-use campus development is designed to meet the growing demand for life science, R&D, biomanufacturing, office and industrial facilities in the region. It is expected to drive economic growth, foster innovation and expand opportunities for the life science sector in Colorado.

READ ALSO: Prism Places, McWhinney Plan Mixed-Use Districts Near Denver

Last year, Sterling Bay estimated that Redtail Ridge’s construction will generate $43 million in taxes and fees. Once complete, the campus is expected to provide $24.4 million annually in tax revenue, while projected annual retail sales might reach $144 million.

Plans call for six districts across the campus with built-to-suit opportunities available:

• Life Sciences District West—294,695 square feet of life science development with 825 parking spaces
• GMP/Industrial District—462,804 square feet of GMP development, 612,400 square feet of industrial development and 2,200 parking spaces
• Life Sciences District East—177,375 square feet of life science development with 492 parking spaces
• R&D District—123,722 square feet of R&D development with 390 parking spaces
• Office District—336,127 square feet of office space with 1,425 parking spaces
• Retail/Life Science—14,000 square feet of retail space, 111,646 square feet of life science development and 460 parking spaces

Proximity to bioscience programs

Redtail Ridge will benefit from its proximity to four bioscience programs at University of Colorado-Boulder, Colorado State University, University of Denver and University of Colorado-Denver. Colorado continues to solidify its reputation as an innovation destination due to the rapidly growing life science ecosystem and record-breaking private and NIH funding that has exceeded $9 billion over the past five years, according to Sterling Bay.

The campus will be within 30 miles of Denver International Airport, downtown Denver and Boulder. Nearby major life science companies include Agilent Technologies, Eli Lilly & Co., KBI Biopharma and Novo Nordisk.

The post Sterling Bay Secures $88M for Denver-Area Mixed-Use appeared first on Commercial Property Executive.

Panelists speaking on the first day of the 2025 Real Estate Technology Conference, hosted in Las Vegas, revealed refined, precise tastes for technology, particularly in the realm of artificial intelligence. These discussions occurred at the heels of recent breakthroughs in agentic artificial intelligence and a valuation of the industry at more than $180 billion.

From tenant experience app features to construction design software preferences, panelists from across the industry are well aware of what works and what doesn’t.

Artificial intelligence: CRE’s new cell phone?

At a keynote discussion titled Investing in Innovation: Building Strategy to transform Real Estate, panelists from the office, multifamily and software sectors agreed that the use of artificial intelligence has become more of a necessity for employees looking to maximize productivity than another tool at their disposal.

One area where this is present is lead interception for leasing at office properties; something as simple as a chatbot can respond to inquiries on a perpetual basis, while an agentic model may be capable of autonomously communicating with potential tenants. “It’s a game-changer that we couldn’t do with humans fast enough,” said Andrew Segal, chairman & CEO of Boxer Property.

The humans at Boxer Property probably agree. According to Segal, they went from using some form of AI platform roughly 500 times a month in September of last year to more than 2,000 times in January. Where efficiency is concerned, “when you combine it with offshoring, it’s not an option anymore; it’s like saying you are not going to use a computer,” Segal said.

Yao Morin, JLL’s technology officer, compared the adoption at her firm which has developed a proprietary GPT model to the ubiquity of cell phones. “Nowadays, you can’t go without your phone,” Morin said.

Of course, universally adopting artificial intelligence for nearly every part of a workflow is easier said than done. A key question was how to get decades-long employees to embrace the technologies. Morin prefers a brass-tacks approach, where existing users share the way they use these technologies with the rest of their team.

Others mix carrots and sticks. Konrad Koczwara, ElevateOS’ founder & CEO, prefers the former. “If you have a group of 10 people, you will have a group of three that is going to be curious, and those are the ones you should incentivize and reward to train the rest,” Koczwara told the panel.

Segal, on the other hand, is all in. “You can get in line, or you can use it to write your resume,” he quipped. “It’s not going to replace everyone’s jobs, but it will make them a lot more productive,” Segal said.

Optimized offices

During a discussion about the best ways to keep office buildings active and occupied, slumped occupancy and space activations were viewed not so much as the result of lackluster amenities or programming, but suboptimal adoptions of technology.

A prime example of this is tenant experience apps, often used from filing work orders to reserving conference space. Despite all the programming and amenity spaces that they are capable of showcasing, “they’re not getting the traction of tenants,” said Maja Sofic, first vice president of property management at CIM Group.

Sometimes, this is outside operators’ control; developers making the applications one-stop shops for everything from work orders to lunch reservations can often be counter-intuitive if they include sensitive payment information that some tenants are forbidden from divulging.

“It’s a struggle for people to even download the app, and that is because of the companies they have,” said Todd Januzzi, president of Paramount Group Inc., an office REIT with holdings in New York City and San Francisco. “We have some household name banks, with 4,000 people in a building not downloading the app; law firms won’t (touch) it, and financial services won’t use wallet or payment features” Januzzi added.

READ ALSO: Office Owners Scale Back Concessions

But there are some workarounds. Januzzi’s company thought to make visitor access to amenity spaces exclusive to a tenant experience app. “They sign a waiver saying that they won’t be nefarious, and they’re in,” But without it, you’re not going anywhere,” Januzzi detailed.

Sofic, on the other hand, sees the use of apps that can book spaces at multiple locations as providing employees with a degree of flexibility that will make in-person office work more appealing. “There’s so much traction in that space of jumping on your phone and plugging in; that gives the modern tenant that flexibility,” Sofic said.

Builders tough it out

If there is one industry that is being hampered the most by the current macroeconomic environment, it’s construction; labor shortages and potentially hiked supply costs are putting a thorn in the side of builders looking to go vertical.

But necessity is the mother of invention, and the digital environment, particularly the realms of automation and data analytics, give developers an edge when it comes to making projects faster and more efficient.

AI algorithms can potentially evaluate innumerable iterations of a building design in a matter of seconds, while some large language models can mimic the expertise of retired welding experts. Almost by accident, some of the technologies are uniquely suited to the present moment; “tariffs on or off, if someone said they are going from concrete to steel, with some of the tech you are seeing today, you can make your pivot a lot quicker,” said Thomas Scarangello, managing principal & senior advisor of Thornton Tomasetti.

One consequence that Scarangello has observed is a leveling of the architects’ and construction firms’ playing fields, giving smaller firms a leg up. “Eight years ago, you had to build your own data team and extract data from your systems, but if you look to today, solutions have now come out that do that work for you, and serve you the data in a more clean and transformed matter.”

But it’s still up to the data teams to make the best decisions using them. “Data is the new oil, but it’s more of a crude oil. We need to refine it into something useful,” Scarangello said.

The post RETCON Special Report: Refined Tech Palates appeared first on Commercial Property Executive.

At the end of 2024, the biggest office metro in the country continued to struggle with new supply, while investment activity picked up pace since 2023, according to CommercialEdge data. Manhattan transaction trends are similar to the sector’s performance on a national level.

Considering the evolution of return-to-office policies, rising maturing debt and high construction costs, the metro showed mixed signals. The borough’s total sales volume for 2024 was the largest in the country and marked a 76 percent year-over-year increase. However, with the increase in discount deals, the average sale price per square foot dipped to $363.62 per square foot.

Manhattan office sales prices dip

In 2024, 11.3 million square feet of office space across 47 properties changed ownership in Manhattan, adding up to a total volume of $4.1 billion. Last year’s investment volume marked a 76 percent jump, compared to 2023’s total. Among gateway markets, Manhattan kept its leading position, followed by Washington, D.C., with $3 billion in deals, and Los Angeles, with $2.1 billion.

Investor appetite in the borough increased consistently throughout last year—from the $99.2 million recorded at the end of the first quarter, to the fourth quarter’s $1.4 billion. One of Manhattan’s biggest transactions last year was Bloomberg Philanthropies’ $560 million acquisition of 980 Madison Ave. The company picked up the 118,635-square-foot asset in June after the seller, RFR Realty, defaulted on a $197.6 million loan.

Office assets in the metro traded at an average sale price of $363.62 per square foot—significantly above the national average of $171.61 per square foot, but much lower than in 2023. Manhattan registered the second-highest prices among gateway cities, with Miami emerging as the most expensive metro in the U.S., at $395.24 per square foot. San Francisco came in third, with $345.22 per square foot.

Since the start of 2025, eight properties amounting to approximately 3 million square feet traded in the metro. The sales volume added up to $1.4 billion, at an average of $462.05 per square foot. The biggest transaction so far this year was Haddad Brands’ $357 million acquisition of Two Park Avenue in NoMad. Morgan Stanley sold the 1.1 million-square-foot high-rise.

A steady pipeline with large projects

As of December, Manhattan’s under-construction pipeline included 2.7 million square feet of competitive space, representing 0.6 percent of existing stock—lower than the national average of 0.8 percent. Among gateway markets, Boston led with 3.4 percent, followed by San Francisco’s 2.3 percent.

In terms of underway stock, Manhattan placed sixth in the nation. Across similar markets, Boston led the rankings with 8.7 million square feet, followed by San Francisco (3.8 million square feet) and Dallas (2.9 million square feet), while the borough outperformed Los Angeles and Miami, with 1.9 million square feet ad 1.8 million square feet, respectively.

The list of significant office projects underway remained unchanged since our last update. The largest project under construction is the upcoming global headquarters of JPMorgan Chase, at 270 Park Ave. in the Plaza District. The company broke ground on the 2.5 million-square-foot, Class A+ office tower in 2020, with estimated completion by the end of August 2025.

Construction starts crash

At the end of 2024, developers delivered 1.4 million square feet across four properties in Manhattan, representing 0.3 percent of existing stock and reflecting a 75.7 percent year-over-year drop. Among gateway markets, Boston topped the charts with 6.7 million square feet completed, marking a 27.3 percent annual increase, while most similar markets registered notable declines, including Washington, D.C.’s 50 percent dip.

Notably, The Walt Disney Co.’s New York new headquarters dubbed 7 Hudson Square, came online last year. Totaling 1.3 million square feet, this property was completed in August 2024, with Silverstein Properties as developer.

Meanwhile, only two projects broke ground in the borough, comprising 356,000 square feet and marking a massive 594 percent year-over-year decline. When adding projects in planning stages to the relative-to-total-stock pipeline, the figure reached 3 percent—just north of to the national average of 2.9 percent and on par with Los Angeles.

Manhattan rents decreased in 2024

As of December, Manhattan’s office vacancy rate stood at 16.6 percent—below the national figure of 19.8 percent and up 20 basis points year-over-year. The borough’s rate was lower than in Boston (17 percent) and Washington, D.C. (18.5 percent). Miami posted the lowest office vacancy in the nation at 15.2 percent, while San Francisco’s 28.8 percent was on the other side of the spectrum.

Since our previous update, Manhattan fell from its leading position as the priciest metro for office leasing. As of December, asking rents averaged $68.42 per square foot—still more than double the national average of $33.11 per square foot. San Francisco’s $70.56 per square foot took the lead.

One of the largest leases of 2024 was Bloomberg’s 924,876-square-foot renewal and expansion at 919 Third Ave.

Office-to-residential policies in NYC

According to CBiz, the value of office spaces in New York City dropped by 40 percent since the pandemic, while one in five buildings vacant.

In early December 2024, the City Council adopted the City of Yes Housing Opportunity, enabling owners with underutilized office assets built between 1961 and 1991 to convert them to residential buildings with multiple types of housing, according to the city’s website.

Introduced in 2023, the Office Conversion Accelerator Program is another option, assisting landlords in conversion projects designed to generate a minimum of 50 residential units. Additionally, the state also launched two new exemption programs for the 2025 fiscal year, offering tax incentives to developers that propose conversions with at least 25 percent in affordable housing units.

CommercialEdge’s Conversion Feasibility Index, a tool launched earlier last year, helps evaluate a building’s potential for residential repurposing. At the start of this year, Manhattan had 907 buildings with a CFI score between 90 and 100, placing them in the Tier I category.

In June last year, Sunlight Development purchased an office building at 95 Madison Ave., also known as the Emmett Building, with plans to convert it into a 70-unit residential building. The developer paid $65 million for the 141,161-square-foot, Class B office asset, and secured a $20 million loan held by Bank Hapoalim. This 16-story, historic building holds a CFI score of 93, CommercialEdge shows.

Coworking constantly improves

The coworking sector expanded in Manhattan through 2024, its 285 locations totaling 11.6 million square feet remaining the largest inventory in the country. The borough's flex office supply saw a notable increase from the 9.5 million square feet recorded at the end of 2023.

Other markets with large coworking inventories included Chicago (7.1 million square feet), Los Angeles (6.5 million square feet) and Dallas (5.2 million square feet). Manhattan’s share of flex space as percentage of total leasable office space stood at 2.3 percent—above the national figure of 2 percent. Among gateway markets, Miami led the ranking with a 3.8 percent figure.

At the end of last year, WeWork remained the flex office provider with the largest footprint in Manhattan, with operations totaling 2.6 million square feet across 29 locations. Industrious (1.5 million square feet), Regus (697,950 square feet), Convene (603,800 square feet) and Spaces (567,000 square feet) also maintained a strong presences in the borough.

The post Manhattan Office Sector Leads in Sales Volume as Prices Dip appeared first on Commercial Property Executive.

Atlanta is the new leader in the amount of space leased compared to the amount vacated, achieving 705.8 megawatts of positive net absorption in 2024, according to the firm’s North American data center trends report.

Last year, Atlanta absorbed nearly 39 times more space than at year-end 2023 (18 MW). The market recorded the highest volume of colocation leasing activity ever, spurred by GPU-as-a-Service tenants.

GPUaaS is a cloud-based service that allows on-demand access to high-performance graphics processing units, or GPUs.

A colocation data center facility allows businesses to rent space to house their servers, networking equipment and storage devices. It will enable them to place their hardware in a third-party data center while maintaining ownership and control over their equipment, unlike a cloud service where the provider owns the infrastructure.

Astounding numbers

The data center inventory numbers in the Atlanta market are astounding. Last year, it increased by 222 percent to 1,000.4 MW as the market accommodated demand by ramping up data center space under construction.

In the year’s second half, the market saw 2,159.3 MW under construction, representing a 195 percent annual increase in under-construction totals. That tops the eight primary North American data center markets in CBRE’s report.

As for new developments in the market, AWS plans to invest $11 billion in new data center development. Meanwhile, Lincoln Property Co.’s acquisition of a DXC data center shows it plans to redevelop it into a 30 MW colocation facility.

Ryan Mallory, Flexential’s COO, told Commercial Property Executive that Atlanta is emerging as the new “data center alley.”

GA Power/Southern Co. recently brought the Vogtle reactors online, delivering approximately 4GW of power capacity and unlocking significant development potential, Mallory said.

READ ALSO: Data Center Demand Keeps Surging Despite Challenges

“Additionally, Georgia has implemented robust sales tax incentives to attract high-paying jobs to communities hosting data centers,” he added. “This powerful combination of abundant power, available land and supportive communities has firmly placed Georgia on the technology map.”

However, Georgia is not the only market experiencing this surge.

In Texas, markets such as Dallas-Fort Worth, Austin and San Antonio have grown remarkably in the past 24 months, according to Mallory.

“These cities benefit from reliable power, a favorable tax environment, a high-quality workforce and communities that welcome the data center industry—a sector known for its high-paying, low-impact nature,” he said.

Overall, the exceptional quality of the product and the availability of land and power differentiate the U.S. market, Mallory added. “With historically high-growth regions slowing or pausing data center development, there has never been a better time to be in the data center business in North America.”

CBRE said tax incentives, available land and greater power accessibility make markets such as Charlotte, Northern Louisiana and Indiana potential growth areas for hyperscale and colocation providers.

This, despite some saying that Deep Seek might curb data center demand.

As for investment, CBRE reported that the average sale price increased year-over-year. Eleven asset sale transactions exceeded $90 million, while five surpassed $400 million.

AI impacts data center project locations

“As the demand for data centers has increased significantly, we have seen a shift in where these projects are being developed,” Todd Johnson, director of real estate development at Ryan Cos., told CPE.

“Traditionally, data centers were situated near metropolitan areas to minimize latency, but newer AI models have reduced the need for this proximity. Now, data centers are being developed in more remote locations where there is ample power supply.”

Seeking more energy

Avison Young’s data center market report for the fourth quarter of 2024 indicates that data center inventory continues to hit record highs in the U.S., with commissioned colocation power expanding nearly 50 percent over the previous 12 months. Yet, vacancy rates remain at historic lows, at just 1.6 percent.

In 2024, CBRE stated that North America doubled the data center supply under construction compared to the previous year to a record 6,350.1 megawatts. This is a 12-fold increase from the 456.8 MW under construction in 2020.

Given this growth, the energy needed to power these assets has become a focus.

As power generation and transmission timelines continue to stretch with rising demand, more data center developers are considering self-generation as a temporary supplement or a long-term solution, according to Howard Huang, a market intelligence analyst with Avison Young.

“Natural gas is gaining traction due to its abundance, affordability and faster deployment compared to waiting on grid transmission while sidestepping many of the limitations of solar and wind.”

Andrew Batson, head of U.S. Data Center Research for JLL, told CPE that the North American data center market reached unprecedented demand levels in 2024, with vacancy rates plummeting to record lows amid insatiable tenant demand and limited supply.

JLL’s research found that most markets have doubled or tripled since 2020.

“Power availability remains the primary challenge, with average wait times for grid connections extending to four years in most markets,” Batson said.

“As a result, data center development is expanding into new territories in search of power, with emerging markets seeing increased activity. In 2024, AI represented about 15 percent of data center workloads; by 2030, it could grow to 40 percent. AI will be a key source of growth for the sector.”

The post This Market Tops the Nation for Data Center Absorption appeared first on Commercial Property Executive.

Lovett Industrial has entered the Nashville market with the purchase of 10.4 acres in Hendersonville, Tenn. This swath of land will be the development site of Innovation Way Logistics Center, a 107,500-square-foot industrial property.

Powers Brown Architecture is the lead architect, while Kimley-Horn serves as the project’s civil engineer. Groundbreaking is scheduled for July 2025 and delivery is expected in June 2026.

Carrying the address 230 Innovation Way, the site is along New Shackle Island Road, offering direct access to Interstate 65 and U.S. Route 31E. Nashville International Airport is some 21 miles south.

Upon delivery, Innovation Way Logistics Center will be a rear-load building with a clear height of 32 feet and 215 feet in depth, having 29 dock-high doors and two drive-in doors. The property will also feature a 130-foot truck court and 120 parking spaces. Stream Realty Partners’ Griffin Farriss, Bradley Worthington and Andrew Fletcher will handle marketing and leasing.

READ ALSO: Manufacturing Surge Drives Industrial Expansion

The Nashville industrial real estate market had a decent 2024, according to fourth-quarter report from Colliers. The sales volume exceeded $1.4 billion, marking a 37 percent year-over-year increase.

Meanwhile, industrial space absorption totaled nearly 4.3 million square feet, and 4.0 million square feet were delivered, though that caused a slight bump in overall vacancy, to 4.1 percent. Almost 4 million square feet of industrial space were under construction as of the end of December, according to Colliers.

Lovett’s recent activity across the U.S.

Lovett has been active across a wide swath of the country in recent months:

•  In July, the company obtained entitlements for the development of a 298,000-square-foot facility in Chino, Calif., in the Inland Empire West submarket. Construction was scheduled to start in the fourth quarter of 2024.

•  The following month, Lovett delivered Broadway Logistics Center, a 201,329-square-foot Class A industrial building in Denver. Cushman & Wakefield was assigned to lease the spec project.

•  In October, Lovett broke ground on Highway 1 Commerce Center, a Class A spec last-mile logistics project in Philadelphia. The warehouse is slated for delivery by the third quarter of this year.

•  And in December, the developer broke ground on a 339,280-square-foot Class A logistics park in the Dallas-Fort Worth area. This project’s completion is also expected in the third quarter.

The post Lovett Industrial Enters Nashville Market appeared first on Commercial Property Executive.

The significant financing deal comes as the AI data center demand grows. In January, J.P. Morgan provided a $2.3 billion loan to the joint venture of Blue Owl Capital, Crusoe Energy Systems and Primary Digital Infrastructure for the development of a build-to-suit data center project in Abilene, Texas. The campus will be designed, developed and operated by Crusoe.

Novva’s Salt Lake City campus, up close

Construction of the second phase at Novva’s Salt Lake City campus began in December 2023 and is slated for completion in 2026. Phase 3 construction began in January 2024 and is also expected to deliver by 2026. Both phases will feature 318,000-square-foot data centers and each will have the capacity to produce 72 megawatts of critical IT load.

The 175 megawatt campus, which will span about 1 million square feet when completed, was fully leased in 2023 to a leading global tech company. The first phase began operations in 2023 and has the ability to operate without water year-round and cool with ambient air. When fully operational, the complex is expected to consume approximately 84 percent less water than similar data centers in the region.

READ ALSO: From Data Center YIMBY to NIMBY?

The project is taking shape at 6477 Wells Park Road, roughly 18 miles from Salt Lake City International Airport and 22 miles from downtown Salt Lake City. The property has access to four long-haul fiber routes and includes a 200 megawatt substation with N+1 redundancy.

The location is attractive for data center operations because it offers low-cost power, low disaster risk, low latency, no sales tax on equipment purchases and a high-altitude cold desert climate, Novva CEO Wes Swenson said in prepared remarks.

J.P. Morgan acted as lead arranger and Starwood Property Trust acted as arranger for the financing. Simpson Thacher & Bartlett LLP served as legal counsel for CIM Group and Novva Data Centers.

Data center growth

The Salt Lake City property is Novva’s flagship. The firm also operates data centers in Colorado Springs, Colo., and Las Vegas. Other developments will come online in Reno, Nev., San Francisco and Mesa, Ariz.

Novva announced plans for the Mesa campus in August 2024. The company is expected to invest more than $3 billion over the next decade on the 160-acre property marking its first foray into Arizona. The first phase will have 96 megawatts of capacity and is slated for completion in late 2026.

The post CIM, Novva Land $2B for Data Center Development appeared first on Commercial Property Executive.

The Metroplex’s office sector remained steady in 2024, with more than 2.9 million square feet under construction and 2.8 million square feet delivered across 18 properties, CommercialEdge data shows. Additionally, Dallas office construction starts picked up last year, as 1.7 million square feet broke ground, marking a 50 percent increase year-over-year.

However, the metro still faces a few challenges. The vacancy rate rose 330 basis points year-over-year as of January, clocking in at 24 percent. Additionally, as loan delinquencies increased, property owners have been more frequently selling their underperforming office buildings at a discount.

Construction activity remains above national average

Dallas’ office construction pipeline at the end of 2024 totaled more than 2.9 million square feet, accounting for 1 percent of the metro’s inventory. That was 20 basis points higher than the national threshold, as well as peer markets such as Houston (0.8 percent) and Atlanta (0.5 percent) but lagged behind Austin (3.7 percent).

When taking into account projects in the planning stages as well, the market’s share jumped to 4.6 percent. Additionally, Dallas’ office construction starts in 2024 amounted to 1.7 million square feet from the 17 projects that broke ground. That represents a more than 50 percent increase year-over-year.

In April, a joint venture between Pacific Elm Properties and KDC obtained $290 million for the construction of Parkside Uptown, a 500,000-square-foot development in Dallas. The developer broke down on the project in 2023 using funds from a $300 million note and expect to deliver it in 2027.

Office deliveries drop year-over-year

Dallas’ office construction activity led to 18 properties coming online in 2024, which totaled more than 2.8 million square feet. That accounted for 0.8 percent of its total stock, slightly above the 0.7 national average. However, that figure was still almost 30 percent lower year-over-year.

Among peer markets, the metro had the largest share of office space delivered. Atlanta and Austin (2.2 million square feet each) were slightly behind, while

Last quarter, Ryan Cos. completed Ryan Tower, a 409,000-square-foot office building in Plano, Texas. The 23-story high-rise, which was already more than 50 percent leased at the time, is part of the $3 billion mixed-use development Legacy West.

Office-to-residential conversions on the rise

Investors remain keen on office-to-residential conversions due to ongoing challenges in the office sector, such as rising vacancy rates. CommercialEdge’s Conversion Feasibility Index, powered by Yardi, assesses the practicality of repurposing buildings based on factors like walkability, age, and floorplate shape.

The CFI score classifies buildings into three tiers, with Tier I being the most suitable for conversion. In the Metroplex, there are 43 office properties totaling 4.8 million square feet in this category and 353 properties spanning 43.1 million square feet in the Tier II category.

At the end of last year, Pacific Elm Properties completed the office-to-residential conversion of 14 stories within Santander Tower, a 50-story downtown building. Despite the building having a lower CFI, the developer repurposed the space into 291 units.

Dallas office prices below the national average

After ranking fourth nationally in terms of sales in our last market update, Dallas saw a decrease in investment volume. The metro registered $1.5 billion in assets trading last year, with the average price per square foot standing at $107, considerably lower than the $174 national average.

However, only gateway markets surpassed the Metroplex, with peer metros such as Phoenix and Atlanta ($1.4 billion each) ending the year with less sales. Manhattan continued to lead nationally with $4.9 billion.

In one of the largest deals of the year, Provident Realty Advisors acquired Lakeside Campus, a two-building office campus totaling 807,354 square feet in Richardson, Texas. Trigild sold the 1991-completed asset that features a 16-story building and a four-story low-rise.

Vacancy rate continues to increase

Dallas’ vacancy rate at the end of the January clocked in at 24 percent, 330 basis points higher year-over-year, and considerably above the 19.7 percent national average. San Francisco (29.3 percent) continued to have the most vacant space, followed by Austin (27.8 percent).

At the end of the year, Merit Energy Co. signed a 104,034-square-foot lease at Nuveen Real Estate’s Two Lincoln Centre in Dallas. The firm will mover from a 127,000-square-foot space that is less than 2 miles from the new location.

The metro’s listing rate as of January was $31.4, a 14.9 percent increase year-over-year. Among peer markets, Austin ($45.8), Atlanta ($32.3) and Charlotte ($35.9) fared better, while Houston ($30.1) trailed behind.

The Metroplex’s coworking inventory grows

The Metroplex’s coworking inventory as of January reached 5.2 million square feet across 284 locations. That accounted for 1.8 percent of the market’s total office stock, 20 basis points under the national average.

Miami (3.8 percent) continued to have the largest share of coworking space nationally. Among peer markets, Dallas was on par with Houston and Austin, while Atlanta (2.2 percent) fared better.

Regus remained the largest coworking space provider in the Metroplex with 598,606 square feet across 35 locations. The company was followed by Lucid Private Offices (414,617 square feet), Caddo (274,500 square feet) and HQ (254,757 square feet).

Last year, Workbox entered the Metroplex’s coworking sector, opening a 50,000-square-foot shared office space location in downtown Dallas, at Asana Partners’ Victory Plaza. WeWork previously occupied the location but failed to renegotiate the leasing terms following its Chapter 11 exit.

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Whiting-Turner’s will build its corporate headquarters with the help of architect Gensler as part of a 50-year ground lease agreement, which will be a cornerstone of long-term collaboration between the two organizations.

The 150,000-square-foot office building is expected to be completed in 2028. It will include a safety-focused training center and connect Whiting-Turner and Goucher College to the surrounding Towson area, 8 miles north of Baltimore.

The facility will also introduce young adults to career opportunities in construction and design.

For the past 51 years, Whiting-Turner’s headquarters have been the Hampton Plaza Office Building on East Joppa Road in Towson.

Six months earlier, Goucher College and Edenwald Senior Living announced plans for Maryland’s first university retirement community.

It will combine cultural and educational activities through Goucher with the amenities and services of a Life Plan Community to foster lifelong learning and connection.

Whiting-Turner has been active in supporting the Baltimore area. It recently announced that it will partner with the Boys and Girls Clubs of Metropolitan Baltimore and the Baltimore Ravens to create a Hilton Recreation Center that will serve 2,000 youth annually.

In December, Whiting-Turner was part of a group that began construction for VanTrust on the 526,119-square-foot Building C at the 2.4 million-square-foot Platte International Commerce Center development in Kansas City.

Delivery is expected in July for the facility, which might be expanded to 1.1 million square feet.

The post Whiting-Turner Brings Corporate HQ to Goucher College appeared first on Commercial Property Executive.

Ridgecut Road, a real estate investment firm focused on the Northeast market, will soon break ground on I-84 Orange County Logistics Center, a 146,075-square-foot industrial project in Montgomery, N.Y.

Pratt Design Studio provided architecture services, while Premier Design + Build Group will serve as general contractor. Completion is expected in the fourth quarter.  

The facility will rise on a 13.6-acre site at 14 Moosilauke Drive, along Route 208 in Lower Hudson Valley, just north of Interstate 84. New York Stewart International Airport is 8 miles away.

When complete, I-84 Orange County Logistics Center will have 36-foot clear ceiling heights, 31 dock doors and two drive-in doors. The property will also feature LED lighting and an ESFR sprinkler system, as well as 83 car and 16 trailer parking spaces. JLL Vice Chairman James Panczykowski and Vice President Zach Antonucci lead the Northeast Industrial team that has been retained as exclusive leasing agent.  

Corporate neighbors include Amazon, FedEx, UPS, Staples, Medline and XPO Logistics. The site’s location provides easy access to New York City, but also to the Port of New York and New Jersey, one of the area’s most significant industrial drivers. In line with most other ports in the country, it saw a significant rise in tonnage processed in 2024, up 11.4 percent year-over-year, according to Savills. However, potential new impending tariffs could alter activity going forward. 

The post Ridgecut Road to Break Ground on New York Industrial Project appeared first on Commercial Property Executive.

As one of Atlanta’s most historically rich and culturally vibrant neighborhoods, West End is on the cusp of a transformative redevelopment. The reimagining of the 1973-built Mall West End into One West End is more than just a construction project—it’s a collaborative effort shaped by the voices of the local community.

Built on a 12-acre site, the old mall is set to be demolished and replaced by a mixed-use project following a $450 million investment from developers The Prusik Group and BRP Cos.

With a phased timeline leading up to a 2028 completion target for the first phase, this project aims to preserve the essence of West End while ushering in a new era of opportunity. Plans call for 125,000 square feet of retail, including a grocery store, a fitness center, diverse dining options and local boutiques, as well as approximately 900 mixed-income residences, including affordable and student housing, a 150-key hotel and 12,000 square feet of medical office space.

Commercial Property Executive reached out to BRP Cos. Managing Director Andy Cohen and The Prusik Group Principal Andrew Katz for details about their plans at One West End.

READ ASLO: What’s in Store for Retail in 2025?

This is a massive project with broad implications for the those living in the neighborhood. To what extent have community voices had an influence on this development so far?

Katz: We’ve been collaborating with the local community since day one. Over the past three and a half years, both public and private community members have played a crucial role in the planning process and have been deeply involved at every step. We’ve listened to the community to understand what services are most important to them and, more critically, to identify what’s missing. The invaluable insights and feedback from the community have guided us in shaping a plan that truly reflects their vision. 

How do you plan to honor the cultural heritage of Mall West End within the new development?

Cohen: The historic West End of Atlanta is a vibrant neighborhood rich in history and cultural diversity. We’re still in the early stages of our project, with the existing mall closing at the end of January. At this time, the digital time capsule is our first activation for the Mall West End to be honored in the community, but there are certainly many more activations to come down the pipeline in the years ahead. The next activation will be the groundbreaking ceremony. 

What will happen with the legacy tenants at the former mall? Are you supporting them in any way?

Katz: Many of these tenants have been integral to the community and the property’s history for decades, fostering relationships with generations of families who shop at their businesses. To ensure these long-standing businesses remain operational during the construction phase, several tenants will be relocated to a temporary onsite space at 850 Oak St.

This allows them to continue serving the community throughout the project’s duration. The tenants relocating include The Burning Sands, Dendera Cosmetics, True Hair and American Deli, while Planet Fitness will remain in its current location during the first phase. All of these businesses will also have the opportunity to move into permanent locations within One West End once it opens. 

How will the addition of grocery stores, fitness center and particularly a hotel impact the neighborhood and existing local businesses in the area?

Katz: Once complete, the property will feature approximately 125,000 square feet of retail space, featuring a diverse mix of tenants, including a grocery store, fitness facility, traditional in-line retail, food and beverage options and local boutiques. We also intend to include affordable commercial space designated for qualified small, local businesses. Additionally, the development includes a planned 150-key hotel.

The addition of key anchor businesses, such as grocery stores and fitness centers, is essential to our strategy of driving foot traffic and encouraging visitors to stay and shop, rather than just passing through. Currently, the neighborhood lacks hotels, so visitors are forced to stay downtown or in nearby areas. With the new hotel, visitors will now have the opportunity to stay in West End, supporting local businesses and directly contributing to the community’s economic growth. By introducing grocery and fitness-anchored retail alongside the hotel, we’re creating consistent touchpoints for both residents and visitors. This will ultimately boost foot traffic, foster a lively environment, and enhance the safety, prosperity and overall well-being of businesses and consumers alike. 

Tell us more about the residential component of the project. How many of the 900 residences will be dedicated to low-income residents?

Cohen: One West End will feature approximately 900 mixed-income residences, with at least 30 percent of the units available to those earning between 50 percent and 80 percent of the area median income. Situated just steps away from the Atlanta University Center Consortium—the oldest and largest consortium of historically Black colleges and universities in the world—the property will also provide housing options specifically designed for students. Eligibility for housing will be determined based on income qualifications.

Are there any sustainability or green building practices being incorporated into the design of One West End?

Cohen: Yes, while we are in the early stages of the design process, we can confirm that sustainable and green building practices will be integral to this project’s design and construction. Across our portfolio, many of our developments meet green criteria, including LEED certifications, Enterprise Green Communities and other relevant metrics based on building type and location.

Since our inception, we have prioritized developing properties that serve the people who live, work and use these buildings every day. This commitment involves successfully engaging in complex, large-scale public-private partnerships and designing sustainable structures that contribute to a cleaner environment. 

READ ALSO: Which Asset Classes Stole the Spotlight in 2024?

Can you provide an update on the project’s timeline and any potential challenges you foresee in meeting the 2028 completion target for the first phase?

Cohen: The redevelopment of the Mall West End will be a multi-year process, with the project team actively engaging residents, legacy business owners and other stakeholders throughout the process. Demolition will begin this year, with phase one completion slated for late 2028, early 2029. 

Katz: One of the main challenges we face is the size of the site, which we’re working to reconnect and revitalize. Right now, it’s an outdated mall with a large surface parking lot. Our plan involves reconstructing the street grid, upgrading infrastructure, utilities and more. This project isn’t just about building one structure, it’s about completely rebuilding and reintegrating the site into the surrounding neighborhood, creating a cohesive and connected community within its footprint. 

How do you envision One West End evolving over the next decade in relation to the West End community?

Katz: Looking ahead, we see One West End becoming a central hub for the West End community. Right now, the area lacks a true neighborhood center, but our project is designed to fill that gap by connecting AUC students, local residents, businesses and the health-care sector. With additional redevelopments planned for the Mall West End site and improved access to amenities such as grocery stores and fitness centers, One West End will evolve into a vibrant, bustling destination.

Cohen: This project will create a safer, more welcoming neighborhood while instilling a sense of pride in the community. By offering housing and local job opportunities, we aim to ensure that people can live, work and thrive right here. Ultimately, we’re building a more integrated, prosperous community, laying the foundation for a brighter and more prosperous future for the West End. 

The post Bridging Past and Future: Inside the One West End Redevelopment in Atlanta appeared first on Commercial Property Executive.

Supermicro plans to build a roughly 3 million-square-foot industrial complex in San Jose, Calif., marking its third Silicon Valley campus.

Construction is set to kick off this year on the park’s first building, which will measure more than 300,000 square feet.

Supermicro manufactures liquid coolers for AI factories, which reduce the carbon footprint of data centers and lower operational costs. The tech company is bound to triple its footprint in San Jose, where it owned roughly 1.5 million square feet of office and manufacturing space as of June 2024.

Supermicro’s future campus

The first building of the campus will rise at 550 E. Brokaw Road, on the site of a former Fry’s Electronics store. The San Jose-based firm went out of business in 2021 following a series of store closings.

Supermicro purchased the 20-acre site for $80 million last February. At the time, the property was entitled for the development of a 1.9 million-square-foot office campus.

In October, Supermicro filed the current plans for the manufacturing and office complex., designed by Arc Tec. Pacific Gas & Electric Co. will deliver the campus’ energy requirements, PG&E Vice President Teresa Alvarado said in prepared remarks.

Silicon Valley’s supply-restrained industrial market

Silicon Valley’s industrial pipeline had just 2 million square feet under construction as of December, according to a report by CBRE. The market’s vacancy rate stood at 3.3 percent at the end of 2024, tightening 30 basis points year-over-year.

With no industrial deliveries during 2024’s last quarter, the market is undergoing supply challenges, the same source shows. AI hardware companies drive industrial demand in Silicon Valley as they’re looking for specialized facilities with heavy power. However, only 17.5 percent of the available space in December could provide 4,000 amps or more.

Hines Interests seeks to capitalize on this demand. Last June, the company broke ground on a three-building advanced manufacturing campus in San Jose, which was the largest industrial development in Silicon Valley at the time. Completion is expected this summer.

The post Supermicro Eyes 3 MSF Bay Area Expansion appeared first on Commercial Property Executive.

The five include the realignment of global supply chains, shifting generational housing preferences, the rise of data centers as critical infrastructure, the continued importance of life science clusters and the need for localized strategies in fragmented markets.

“One of the more unexpected takeaways from our research is the extent of demand fragmentation across real estate sectors,” TCC Director of Research Louis Rosenthal told Commercial Property Executive.

“Initially, we expected this to be a temporary post-Covid effect, but the data points to a deeper structural shift,” Rosenthal said. “We see this playing out in the form of highly localized housing demand patterns, the growing divide between premium and commodity office space, and the divergence between big-box and smaller-footprint logistics facilities, among other examples.”

Industrial sector growth via supply chain shifts

Supply-chain reconfiguration started as a short-term reaction to the pandemic and geopolitical tensions of the early 2020s, but now “shifting trade alliances, reshoring initiatives and geopolitical shifts are reshaping real estate development opportunities in ways that signal a possible long-term realignment,” the Trammell Crow note explains.

The trend actually predates the pandemic, though it has accelerated since then. The changes aren’t merely “deglobalization,” the note points out, but a more nuanced reconfiguration.

For real estate, especially the industrial sector, the upshot of the change is increased demand, as businesses rethink far-away production and consider inventory stockpiling closer to home as insurance against the kinds of disruptions seen recently.

READ ALSO: The Future Demand for Industrial Is Decarbonized

But the change for the industrial sector will be more fundamental than that, TCC explains, as U.S.-based advanced manufacturing kicks into higher gear, with a renewed domestic emphasis on the likes of semiconductors, clean energy components and electric vehicles. “These initiatives are catalyzing demand for logistics infrastructure near manufacturing hubs, ports and rail yards,” the note posits.

Housing: A Tale of Generational Convergence

In the residential sector, a lot is going on, TCC points out: Millennials are busy forming families, Gen Zers are kicking off their careers and expanding the renter pool, and Baby Boomers (who are still around) are transitioning into retirement. 

Gen Z will be especially active in the near term, contributing at least 1.5 million net new households in 2025, the note explains, citing John Burns Consulting data. There are currently 46 million 18- to 27-year-olds in the U.S., and they have roughly the same housing aspirations as previous generations: renting early, ownership later, especially as they start families.

But the U.S. demographic outlook is about more than each group moving into a different phase of life and the potential impacts on residential markets. In 2025 and beyond, there are complicating factors: housing costs are rising and the definition of life-work balance is changing, creating overlapping and sometimes competing housing needs across the generations.

“These demographic shifts present a unique opportunity for lower-density multifamily housing in inner and second-ring suburbs, where space, affordability and community align with the preferences of renters across generations,” the note predicted. While mostly those opportunities are in the suburbs, there is still a place in some urban areas for top product, particularly in convenient locations.

Data centers now strategic infrastructure

TCC characterizes data centers in 2025 and beyond as strategic infrastructure, vital to powering the entire digital transformation. That includes AI, but much more than that.

For its part, AI holds immense transformative potential for the economy and property markets, the note explained, though its impact is likely to vary across economic sectors, industries and property types.

“A gradual, longer-term adoption scenario encourages prioritizing adaptable spaces that can evolve alongside technological advancements… while avoiding premature commitments to speculative, AI-specific features, product types and markets that may take longer to materialize,” the note said.

With all that in mind, the company is focusing on developing data centers in markets with the right balance of a number of key factors. First, access to large population centers, but also proximity to financial hubs, e-commerce centers and national security and defense operations. There also needs to be supportive infrastructure and power availability, and (last but hardly least) land affordability.

Clusters anchor life science demand

The life science boom isn’t new, either, but as the immediate post-pandemic momentum in the sector fades, 2025 will be a “pivotal year” for the sector, according to TCC. The key going forward is balancing cyclical supply challenges with structural drivers, namely advances in biotech, and other health-care and aging therapies, which will continue to be robust over the long term.

The concept of clusters is at the heart of the company’s life science strategy. Clusters are bio-innovation hubs where research labs, universities, hospitals and manufacturing facilities form innovative business ecosystems.

“These clusters generate consistent demand for space, premium rents and, in some cases, public policy incentives that drive further development,” the TCC note explained.

READ ALSO: Life Science Trends to Watch in 2025

Established life science clusters include Boston and San Francisco, and examples of emerging ones are Raleigh, N.C., and Los Angeles. In any case, according to TCC, the challenge for 2025 and beyond lies in meeting the sector’s evolving needs by delivering the right space in the right places.

Fragmented demand poses challenges (and opportunities)

The final factor detailed in the TCC note is what it calls “micro-market nuances.” Knowing broad market, or even submarket trends, is well and good, but ours is a time of fragmentation of demand.

“Our research highlights the fragmentation of demand, showing how migration patterns, affordability challenges, and tenant preferences can vary significantly within the same submarket,” the note said.

Thus, identifying resilient micro-markets, even within markets that are sluggish overall, can be critical to identifying development opportunities. Data is a powerful tool for uncovering these opportunities, but it is only a starting point that depends on the ability and experience needed act on it.  

The post 5 Trends Defining CRE Development in 2025 appeared first on Commercial Property Executive.

Put another way, even that conservative estimate of the economic damage adds up to about 4 percent of California’s GDP.

That’s the beginning of the context for Rising from the Ashes: Assessments on the Impacts to CRE Post the LA Wildfires, a new report from JLL Research.

As day after day of news video footage from the fire zones showed, the heaviest property damage was to single-family residences, nearly 11,000 of which were destroyed, representing more than half of the SFR stock in the two fire zones (Palisades and Eaton). In addition, more than 300 multi-housing structures were destroyed.

On one hand, the 11,000-odd housing units destroyed or significantly damaged represent just 0.4 percent of the market’s housing stock, yet the estimated 24,000 families displaced by the fires have to live somewhere.

READ ALSO: 5 Overlooked Insurance Gaps That Could Hit Your Bottom Line

And JLL reminds us that Southern California was already a long-term supply-constrained market. As higher-income families relocate to single-family rentals, others will spill over into the multifamily sector. “Already the exacerbation of Los Angeles’ multi-housing supply shortage will result in elevated rent growth in the medium term,” according to the report.

Impact to retail, office, industrial  

Though less publicized, the region’s retail, office and industrial commercial real estate sectors were also hit. About 200 commercial buildings, predominantly retail properties and food-and-beverage establishments, were destroyed. They represent, JLL stated, nearly half of the retail establishments and about one-third of the total retail space in the fire zones.

In the near term, home centers and hardware retailers could benefit. “Longer term,” JLL added, “mixed-use developments may be a way to address both the housing shortage exacerbated by the fire as well as replace the lost retail space, which has not been growing for a long time.”

The fires’ effects on office space are expected to be indirect, potentially by displacing office workers, especially in the professional and technology services sector and the media and entertainment sector.

The impacts on industrial real estate could be more direct, with rebuilding efforts boosting the demand for warehouse space and IOS properties.

Additionally, JLL reported, home appliances, furnishing and day-to-day necessities must be replaced, further bolstering the need for warehousing. “This will help lower industrial vacancies in and around the affected areas, particularly in the San Fernando Valley and San Gabriel Valley markets where total vacancy currently stands at 4.2 percent and 5.8 percent, respectively.”

Given the efforts by the state government to streamline rebuilding, JLL noted, the real challenges lie in physical construction. “Due to significant demand, labor and materials will be expensive, further complicating rebuilding efforts.”

Finally, those generally higher replacement costs for commercial real estate have the potential to make existing buildings more attractive for investors.

The post How Rebuilding From LA’s Wildfires Is Impacting CRE appeared first on Commercial Property Executive.

New construction starts in 2024 totaled only 9.8 million square feet—a steep drop from the 83 million square feet recorded in 2019, while 54.7 million square feet of space was under development at the end of December 2024.

According to CommercialEdge data, the top ten metros on this list included 29.3 million square feet of completed office space. This accounted for 67.8 percent of the total square footage that came online last year in the nation. Here are the top markets for office deliveries in the country in 2024:

1. Boston

In 2024, developers in Boston completed 6.4 million square feet of office space across 22 properties. This marked a 21.5 percent increase from 2023, when the metro saw nearly 5.3 million square feet in completed projects across 13 properties.

Significant projects that came online last year in the life sciences hub include 10 Prospect St., a 205,000-square-foot building in Somerville, Mass., deisgned by SGA. US2, the partnership of Magellan Development Group, RAS Development, Cypress Equity Investments and Affinius Capital, completed the LEED-Gold certified, life science property in early 2024.

Meanwhile, construction starts in the past year totaled 1.1 million square feet across four properties—a 64.1 percent decrease when compared to the previous year’s figures, when 3.1 million square feet across 10 properties broke ground. As of December, Boston had 8.7 million square feet under construction across 26 properties, ending last year as the market with the largest pipeline. The figure represented 3.4 percent of existing stock, way above the national average of 0.8 percent.

Significant projects currently underway in the metro are generally life sciences-driven. One of them is Tishman Speyer’s Harvard Enterprise Research Campus in Allston, Mass., that had its first phase, a 440,000-square-foot lab component, top out in August 2024. Meanwhile, one of the metro’s most active developers, BioMed Realty, topped out 585 Kendall, a life science project totaling 637,000 square feet in Cambridge, Mass.

2. Seattle

Another life sciences sector-driven market, Seattle recorded 4 million square feet of delivered space across 11 properties in 2024. The figure marks a 36.3 percent increase from the 2.9 million square feet that came online in 2023.

Notable completions of last year include Skanska’s The Eight, a 729,000-square-foot office building in Bellevue, Wash. The 26-story property was more than 80 percent preleased prior to its delivery and marked Bellevue’s first speculative office project to be developed in the last six years.

In terms of construction starts, The Emerald City saw only one project break ground in 2024, totaling 80,000 square feet. When compared to the previous year, when 691,700 square feet across 22 properties commenced construction, the metro saw a drastic 88.4 percent drop in construction starts, driven by the year’s economic challenges. Despite this decrease, at the end of last year there were 10 properties under development in Seattle, totaling approximately 5.2 million square feet.

3. Dallas-Fort Worth

The third metro on our list is The Metroplex, with 2.8 million square feet across 19 properties that came online in 2024—marking a 29.4 percent decrease from the year before last, when developers completed 4 million square feet across 26 properties.

Construction starts in Dallas also marked an impressive drop: the metro recorded only 884,365 square feet across 10 properties that broke ground in 2024, representing a 73.1 percent decrease from 2023. For context, the metro had nearly 3.3 million square feet across 22 properties that started construction at the time.

Meanwhile, the metro’s under construction pipeline included 4.1 million square feet of space across 24 properties as of December. One of the largest projects underway is 23Springs, a 642,000-square-foot mixed-use project in Uptown Dallas. The project topped out in October last year and includes a 26-story office tower and two restaurant buildings.

4. San Diego

Our list of top markets for office deliveries continues with San Diego, that had 2.7 million square feet across 19 office properties delivered in 2024. When compared to the year before last's data, when developers completed only five properties totaling 748,807 square feet, San Diego’s last year inventory marked an impressive surge in completions, with a 266.5 percent increase.

However, on the construction starts front the numbers were reversed: 2024 recorded only 310,956 square feet across four properties that broke ground—representing an 85.8 percent decline from the 2.2 million square feet that started construction in 2023.

As of December, San Diego’s pipeline included 3.6 million square feet across 21 properties. One of the largest projects under development is a life science building totaling 426,927 square feet in the metro’s Torrey Pines submarket. Developed by Alexandria Real Estate Equities, the project at 4135 Campus Point Court is already fully preleased by Bristol-Myers Squibb Co. The development is within the company's 2 million-square-foot Alexandria Point campus.

5. San Francisco

Another top market for office deliveries that's driven by the life sciences sector, San Francisco, saw 2.7 million square feet of completed space in 2024, across 13 properties. A notable delivered project was the 327,000-square-foot life science building at 651 Gateway Blvd. BXP completed the 16-story project in March. The amount of last year’s completions was slightly larger when looking at the previous year: 2023 had recorded 2.2 million square feet of new space across 15 properties. This marks a 22.5 percent increase in 2024’s projects that came online.

In contrast, 2024 construction starts included only three properties totaling 316,000 square feet—marking an 89.7 percent drop when compared to the nearly 3.1 million square feet that broke ground in 2023. However, San Francisco’s completions may pick up in 2025: the metro ended last year with 4.5 million square feet across 20 projects under construction.

6. Washington, D.C.

The nation’s capital had 2.4 million square feet of completed office space across 11 properties, making it number six on our list of top markets for office deliveries. This reflects a 50 percent decline from 2023, when 14 projects reached completion, contributing with 4.9 million square feet.

D.C.’s developers opted for Class A and A+ assets, while one of the largest projects to reach completion in 2024 included 3901 Fairfax Drive, a 201,000-square-foot building in Arlington, Va., developed by Skanska. Construction activity remained sluggish: the capital city ended 2024 with one of the smallest pipelines across gateway markets: only 1.5 million square feet across seven projects were underway.

7. Austin

Austin’s 2024 deliveries mirrored the previous year’s, remaining on the same seventh place on our list. Developers completed 2.2 million square feet across 22 properties—representing a 21.1 percent drop when compared to 2023’s data, when 39 projects totaling 2.9 million square feet were added to its inventory.

However, developers broke ground on slightly more projects in 2024 than the year before last: Austin had 1.4 million square feet in construction starts that marked a 15.6 percent uptick compared with the 1.2 million square feet that broke ground in 2023.

The metro ended 2024 with one of the most active pipelines in the nation in terms of actual square footage: 33 projects were underway, totaling 4.2 million square feet.

8. Bay Area

The Bay Area added 2.1 million square feet of completed space across nine properties in 2024. This marked a significant decrease of 48.6 percent from the 4.2 million square feet completed in 2023.

A recent completion is The Landing’s first building, a 300,000-square-foot office property in Burlingame, Calif. The property is part of King Street Properties’ two-building life science campus on the San Francisco Peninsula. The Bay Area’s under development pipeline included 3.6 million square feet at the end of 2024.

Meanwhile, construction starts on the metro included only two projects totaling 202,631—marking a significant drop of 86.2 percent when compared to the 1.5 million square feet that broke ground in 2023.

9. Atlanta

Deliveries included 12 office projects totaling 2.1 million square feet, placing Atlanta among the lowest-performing markets in terms of added inventory. This marks a 27.6 percent increase from 2023, when 1.7 million square feet came online.

Among large completions was Science Square Labs, a 368,258-square-foot office building. The property is the first phase of Science Square, a life science district expected to include 1.8 million square feet of mixed-use space.

Atlanta also placed on the ninth spot on our list in terms of under-construction space, ending 2024 with 1.3 million square feet underway. Meanwhile, only one, 200,000-square-foot property started construction last year, representing a massive drop of 82.9 percent from 2023 construction starts, that included nearly 1.2 million square feet of space.

10. Raleigh-Durham

Raleigh-Durham landed on the last spot on our list of top markets for office deliveries, with completions totaling 1.7 million square feet across 14 properties. That marks a 29.4 percent increase from the previous year, when 10 properties totaling 1.3 million square feet came online.

Developers broke ground on four properties totaling 517,165 square feet, slightly below the previous year, when construction starts included 650,879 square feet—the difference represents a 20.5 percent decrease. Meanwhile, Raleigh-Durham ended last year with 1 million square feet of space underway across seven properties.

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More than two years after breaking ground, L’Oréal Groupe has completed its nearly 250,000-square-foot scientific research center in Clark, N.J., and has begun full operations at the Union County property. The $160 million facility is L’Oréal’s largest outside of France and biggest investment in a R&I center.

L’Oréal started work on the project at 30 Terminal Ave. in September 2022 and began welcoming some employees in mid-2023. It replaces the company’s existing facilities in the New Jersey area.

The center features a 26,000-square-foot modular laboratory and a consumer center for product testing and co-creation that will accommodate up to 400 consumers daily. The property also has a mini-factory to scale final formulations before full-scale production.

Sustainability highlights include 10,000 solar panels, which meet 70 percent of the center’s energy needs, an eco-retention pond for stormwater management and employee-led gardening and composting initiatives that create a green workspace.

Flagship R&I center

The facility, now considered the flagship in L’Oréal’s global scientific research ecosystem, will employ more than 600 scientists, engineers and researchers. The team at the center, which complements R&I hubs in France, Brazil, South Africa, India, China and Japan, will be working across product innovation, development and testing to develop high-quality and safe beauty products, including hair, skin and makeup.

L’Oréal USA, the largest subsidiary of L’Oréal Groupe, is headquartered in New York City. It employs more than 12,000 people and operates administrative, research, manufacturing and distribution facilities across 16 states. In April 2021, L’Oréal USA opened a second company headquarters in El Segundo, Calif., in the Los Angeles area.

New Jersey growth

Revlon, another global personal care product company, is also moving its science and innovation lab within New Jersey. In November, Revlon leased 62,000 square feet at The Northeast Science and Technology Center, a 100-acre campus in Kenilworth, N.J., dedicated to research and development innovations. The firm was the first tenant there since pharma giant Merck left.

With more than 12 million square feet of space, New Jersey is one of the top 10 life science clusters in the U.S., as ranked by JLL. Of the top 20 pharma companies, 14 are located in New Jersey and eight of the top R&D companies are also in the state, according to Newmark’s third-quarter life science market report for Northern New Jersey.

In January, global oncology company BeiGene completed its $800 million manufacturing and clinical development center in Hopewell, N.J. The campus marked one of the largest recent investments in biopharmaceutical manufacturing in the U.S.

The post L’Oréal Completes $160M Research Center appeared first on Commercial Property Executive.

These conversions challenge architects to blend innovation with heritage, and to find higher and better purposes for commercial buildings that don’t serve their communities like they once did.

Reusing an old structure doesn’t come without potential setbacks, however, and these projects give designers an opportunity to showcase their flair for problem-solving. Supply-chain issues; surprise details and damage; and insufficient natural lighting are some of the problems that architects have learned how to overcome. Today, more architects are advocating for adaptive reuse as opposed to new construction, and investors are in tune with this trend.

“Our clients always want to hear about value-adds for their projects, and adaptive reuse has that ability to improve their return on investment,” said Joshua Zinder, managing partner of integrated design firm JZA+D.

The following projects are stellar examples of turning old bones into new and higher uses.

A Makeover Steps From the US Capitol Building

20 Mass

BEFORE: D.C. government office building completed in 1973
AFTER: Class A office and hotel mixed-use destination
ARCHITECT: Leo A. Daly

Occupied by a government agency for most of its 50-year life, the trapezoidal structure at 20 Massachusetts Ave., N.W., in Washington, D.C., wasn’t unique in any way. Most locals perceived it as just another blunt, federal building. But after Office Properties Income Trust and The RMR Group poured $200 million into its renovation, not only did they infuse new life into this old structure but they also gave it a new purpose.

A team of architects from Leo A. Daly completely changed the building’s vibe and its relationship with the surrounding area. Under the management of MGAC, the original seven-story structure was converted into a 10-story, 427,690-square-foot mixed-use property known as 20 Mass. Designed to harmonize with the historic avenues of D.C., the project rejuvenated the streetscape with retail spaces, a four-star Royal Sonesta hotel and Class A office accommodations, all tied together with shared amenities and crowned with a green roof and penthouse.

“Ensuring a viable return on investment for the owner was a challenge,” said Irena Savakova, vice president at design firm Leo A. Daly. “The key was creating the correct ratio of office-to-hotel space, paired with perfectly planned amenities.”

The original floorplate was shaped as a deep trapezoid that wasn’t appropriate for modern workplace and hospitality needs because it made it difficult for natural light to reach the interior. In response, the design team introduced a new skylight that illuminates most of the building, with a secondary atrium space providing simulated sunlight.

Though challenging, such adaptive-reuse projects come with a lot of benefits. “The most sustainable buildings are the ones that exist,” noted Savakova. In many urban centers across the country, more than half the office buildings are currently empty or unattractive to prospective tenants, so the potential for more office conversions is immense.

“I’d like to see transformative placemaking conversions, where the utilization of these structures becomes more and more popular, especially in those cities with abundant empty building stock,” she added.

We see adaptive reuse as a more efficient use of economic and material resources.

—Joel Fuoss, Principal, Trivers

Housing Sacramento’s Unhoused

St. Clare at Capitol Park, Sacramento

BEFORE: 180-key hotel in Sacramento, Calif.
AFTER: Affordable and permanent supportive housing
ARCHITECT: Page & Turnbull

Completed in the early 1900s, Capitol Park Hotel at 1125 Ninth St. in downtown Sacramento, Calif., has served multiple purposes over the years—from a business college to a furniture store and, more recently, a hotel. In fact, it was Sacramento’s largest historic downtown single-room occupancy residential hotel. Following a comprehensive restoration process led by Page & Turnbull architects, the property reopened as permanent housing for individuals transitioning out of homelessness.

“Recycling these buildings can help with our housing crisis,” said Peter Birkholz, president & principal of Page & Turnbull.

To make this complex project a reality, more than a dozen different grants and tax credits, including historic tax credits, were put together by Mercy Housing California and the Sacramento Housing and Redevelopment Agency and their partners. The city of Sacramento contributed $20.3 million to the project.

The Capitol Park Hotel’s 180 rooms were converted into 134 studios, all with bathrooms and kitchens, with 64 units set aside for unhoused residents living with a serious mental illness.

Additionally, the refurbished building now includes ground-floor retail space, a shared dining hall, bike storage, laundry facilities, management offices and spaces reserved for individual counseling, all less than a block away from the State Capitol. The first-floor lobby—a double-height space that features the original black-and-white restored tile floor—acts as a popular gathering space for residents.

The rehabilitation preserved the exterior walls of the former hotel and its interior structure. Reusing original structures has undeniable benefits, particularly when factoring in environmental and financial aspects.

“Adaptive reuse—whether for residential or other uses—helps us meet climate change goals by preserving the embodied energy of the structures,” believes Birkholz.

Furthermore, the conversions maintain cultural connectivity by retaining elements of the past so that buildings can tell their stories to future generations.

St. Louis Gem

The Victor

BEFORE: 735,000-square-foot warehouse in St. Louis
AFTER: Mixed-use property with apartments, retail and coworking
ARCHITECT: Trivers

With an expertise spanning roughly half a decade, St. Louis-based architecture studio Trivers has been working on adaptive-reuse projects across the city since its founding in 1975.

“With rising borrowing and construction costs and an excess of already-built square footage in the U.S., we see adaptive reuse as a more efficient use of economic and material resources,” said Joel Fuoss, principal at Trivers. He noted that conversions are faster, cheaper to build and have less of a negative environmental impact compared to new construction.

The firm is behind the transformation of the Butler Brothers Building, a historic, 735,000-square-foot multistory warehouse in the city’s Downtown West neighborhood. Dating back to more than a century ago, the building occupies an entire city block at 1717 Olive St. and served as a regional distribution center for a while, but for much of its existence, it was underutilized or even empty.

In 2020, Development Services Group acquired the building, which is listed on the National Register of Historic Places. The firm invested $130 million in renovations. Dubbed The Victor, the property now includes 400 new apartments, amenities, retail spaces and parking. The Victor even has design and technology features that accommodate today’s hybrid work models, including common areas on each floor and a coworking space on the ground level.

With historically significant properties such as this one, the restoration of valuable architectural and design elements is crucial. For the Victor, the robust original structure featured reinforced concrete with a masonry perimeter and fire walls. Nearly all seven million bricks of the exterior masonry were restored, along with most of the original cast-in-place concrete structure.

Read the March 2025 issue of CPE.

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The borrower was a joint venture of InLight Real Estate Partners and an Ares Management Real Estate fund. The loan will be used for lease-up of the project in addition to construction.

As currently planned, the first phase of Eastport Logistics Park will feature four buildings with clear heights of 32 to 36 feet, 135- to 185-foot truck court depths, 222 dock doors, 418 trailer parking stalls and 691 car parking spaces.

The two larger buildings (100 and 200) will total approximately 312,000 square feet, and the two smaller buildings (300 and 400) will total about 132,000 square feet. The second phase will offer build-to-suit options as large as 688,000 square feet.

READ ALSO: Port Activity Rebounds

The development’s location in Jacksonville’s Northside submarket is just off I-295, 5 miles from the I-95 interchange and 4 to 5 miles from the Port of Jacksonville’s Dames Point, ICFT CSX and Blount Island terminals. The project also has the capability for rail service by CSX, a main line of which abuts the property to the north.

The park is scheduled to deliver in the first quarter of 2026. 

Languid activity

The industrial real estate sector in Jacksonville’s Northside submarket has an overall vacancy of 5.7 percent on an inventory of about 32.5 million square feet, according to a fourth-quarter report from Cushman & Wakefield. Net absorption in the latest quarter was a negative 84,000 square feet, which was about on par for the region as a whole. This reflected a surge in deliveries of warehouse/distribution space with little preleasing.

Just after New Years, Affinius Capital provided a $77.4 million loan to ForeFront Commercial Real Estate, in conjunction with an Ares Management Real Estate fund, for their development of West Worth Commerce Center, a 992,000-square-foot industrial campus in Fort Worth, Texas.

Last fall, Affinius collaborated with Bank OZK on two loan deals.

The pair extended a $135 million loan to a joint venture of DECA Cos. and Wildcat Capital Management for the development and lease-up of an 850,000-square-foot industrial property in Perris, Calif.

They also loaned $83.8 million to a joint venture between Lincoln Property Co. and Goldman Sachs for the construction and lease-up of Waterstone, an 894,000-square-foot, four-building industrial development in Kyle, Texas, near Austin.

In each transaction, Bank OZK was the senior lender, while Affinius originated the subordinate portion of the note.

The post InLight, Ares Management JV Lands $82M for Industrial Project appeared first on Commercial Property Executive.

Apple is working on a 250,000-square-foot AI server manufacturing facility in the Houston area as part of a four-year, $500 billion investment in the U.S. Completion is scheduled for 2026.

The firm will use the factory to produce servers for Apple Intelligence, its AI system for iPhone, iPad and Mac computers, previously manufactured outside the country.

Apple’s $500 billion plan also includes hiring around 20,000 new employees across the U.S. Targeted sectors feature R&D and software development, as well as AI and machine learning.

READ ALSO: Industrial Real Estate’s Future Depends on Adaptability

The technology giant also intends to grow its U.S. Advanced Manufacturing Fund from $5 billion to $10 billion. The fund’s expansion includes a multibillion-dollar commitment from Apple to produce advanced silicon in TSMC’s Fab 21 facility in Arizona, where it already employs more than 2,000 workers.

Also part of the $500 billion investment, Apple will establish a new manufacturing academy in Michigan and expand its R&D investments to advance innovative fields like silicon engineering. The firm will also expand its data center capacity in North Carolina, Iowa, Oregon, Arizona and Nevada.

Long-time partners

Apple will develop the new factory together with long-time partner Foxconn, according to Reuters. Last year, the subsidiary of Taiwan-based Hon Hai Precision Industry Co. acquired an industrial facility and additional land to boost its AI server production in Houston. This expansion project is expected to bring $225 million in capital investment.

Foxconn also owns a 3,000-acre, multi-building development in Wisconsin dubbed Science and Technology Park, which focuses on advanced manufacturing and data infrastructure production, and a 6.2 million-square-foot industrial facility in northeast Ohio, used for electric vehicle production.

One of the strongest manufacturing markets

Houston is home to more than 7,000 manufacturers with a total annual production worth more than $75.1 billion, according to the Greater Houston Partnership. The metro also ranks second in the U.S. for manufacturing GDP.

Houston’s industrial pipeline at the end of last year reached 12.4 million square feet, the third largest nationally, surpassed only by Phoenix (22.4 million square feet) and Dallas (18.9 million square feet), according to the latest CommercialEdge report. The market’s vacancy rate clocked in at 7.2 percent as of December, 80 basis points below the national average.

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“We’ve reached a critical juncture where the surge in demand for decarbonization-enabling sites presents a significant opportunity for property owners,” JLL Division President–Global Industrials Meaghan Elwell told Commercial Property Executive. “They have the capabilities to enhance energy efficiency, adjust rental rates upward and ultimately boost their property values.”

To compile the report, JLL evaluated the leased footprint of major occupiers in 18 major industrial and logistics hubs in North America, Europe and Australia, assessing current supply and construction pipelines, and analyzing publicly stated sustainability targets and other relevant details. The 900 occupiers in the study represent about 850 million square feet of leased space. 

JLL found that occupiers are taking a stronger interest in decarbonization-enabling sites for a number of reasons, but top of this list is power availability and security. Increased automation, fleet electrification, the surge in advanced manufacturing, and competition with data centers for limited energy resources are reshaping market dynamics. 

Occupiers are thus prioritizing energy-smart buildings to drive operational efficiencies, and for good reasons. Energy-efficiency upgrades can reduce costs by 10 percent to 35 percent for industrial properties, the report explains. Fleet electrification can save logistics companies 6 percent to 8 percent in overall P&L.

Another factor is the age of industrial portfolios. As inventory ages rapidly—with 76 percent of industrial stock over a decade old in the U.S., and 69 percent in Europe—retrofitting buildings will be a strategy for owners to mitigate obsolescence risk, and allow them to attract top tenants.

READ ALSO: C-PACE in NYC: Will the Program Finally Take Off?

Also, the sector faces heightened operational security threats from climate risk, the report explains. That is due to complex operations and a greater presence in areas more vulnerable to extreme weather events.

Struggling to meet the demand

The demand for decarbonized sites is there, but the industrial market will struggle to meet that demand, though the overall results will vary by market and industry, JLL found. Across the 18 hubs researched in its study, 41 percent of projected demand for low carbon space will not be met by 2030.

In some instances, industrial and logistics landlords may be a little behind the curve in offering energy-efficient features.

“It’s particularly striking that more landlords and owner-occupiers haven’t leveraged industrial warehouse rooftops for solar installations—a commercial real estate decarbonization strategy that could help tenants to offset escalating energy costs while advancing carbon reduction objectives,” Elwell said.

Average lease terms are about seven years for industrial tenants, which means that leases inked now need to consider the 2030 targets of reducing emissions by 50 percent—an interim goal for many occupiers. So while the goal is a number of years off, the impact is now, with occupiers re-evaluating their current spaces in light of their future carbon reduction targets, the report explains.

Tenant activities are typically responsible for 90 percent to 100 percent of operational carbon emissions in industrial buildings, according to the report, compared to 55 percent to 75 percent in offices. So, collaboration between tenants and landlords, especially in the form of co-investments, will be key for the further decarbonization of the sector, JLL found.

The post The Future Demand for Industrial Is Decarbonized appeared first on Commercial Property Executive.

Los Angeles and Long Beach saw the most significant growth as they benefited from shippers that diverted cargo ahead of the first ILA strike in nearly 50 years, as well as efforts to move freight ahead of labor and tariff uncertainties. Baltimore and Montreal were the only ports that saw decreased volumes.

Savills anticipates that short-term strategies such as front-loading will continue in 2025, if trade policy volatility remains. Additionally, as supply chains diversify, trade will be reduced between U.S. ports and China.

“The data confirms importers are front-loading freight, yet warehouse leasing has been slow,” Mark Russo, vice president of industrial research for Savills, told Commercial Property Executive.

“We expect a demand recovery in port markets in 2025, driven by inventory movement and ultimately dependent on the consumer’s health.”

Danny Williams, executive managing director at Newmark, concurred that the front-loading of imports due to tariffs and cargo re-routes from Gulf and East Coast distributors has bolstered LA-LB’s TEU import volume in recent months.

“Longer rail dwell times, however, suggest a good portion of this cargo is destined for markets outside of Southern California,” Williams said.

READ ALSO: Industrial Sector Transitions as Supply Shrinks

A moderate uptick in touring and leasing activities can be observed, according to his colleague, Dain Fedora, head of Southwest U.S. research at Newmark.

“However, occupiers are still proceeding with caution due to remaining uncertainty surrounding tariffs, inflation, etc.,” he said.

Port development activity brisk

CRG recognized the increasing demand for logistics and distribution space near major ports early on, making strategic investments in key markets like Savannah, Mike Demperio, the company’s executive vice president of the Southeast region, told CPE.

The Cubes at West Port and The Cubes at Interstate Centre II are examples of the company’s commitment to support supply chain efficiencies in proximity to the Port of Savannah, according to Demperio.

The Cubes at West Port is a 764-acre master-planned industrial park in Bryan County, Ga., approximately 25 miles west of Savannah. The development will include a 1 million-square-foot industrial facility for Lecangs.

The Cubes at Interstate Centre II is a 300-acre development within the broader Interstate Centre industrial park in Bryan County, Ga., approximately 25 miles west of Savannah.

“The project was designed to accommodate growing demand for logistics and warehouse space, driven in part by the recent expansion of the Port of Savannah, located about 30 miles east,” Demperio said.

CRG’s first building at the development, the 700,000-square-foot Building A, was leased to McKesson Medical-Surgical in November 2021. The second warehouse, the 465,250-square-foot Building E, has been completed, while Buildings B and C are currently under construction.

A fifth building is also planned. Upon completion, The Cubes at Interstate Centre II will comprise nearly 4.3 million square feet of Class A industrial space.

“As container volumes continue to rise, we anticipate strong demand for well-located, state-of-the-art distribution centers to help companies mitigate congestion and labor challenges while optimizing access to major transportation networks.”

Houston, Jacksonville, Georgia markets stay active

JLL reported that there have been substantial transaction volume increases in Houston (20 percent increase year-over-year) and Jacksonville (48 percent increase year-over-year), according to Trent Agnew, senior managing director & industrial group leader at JLL.

Notable deals such as Stonepeak acquiring over 1.8 million square feet of industrial space in Jacksonville and purchasing Houston’s Independence Logistics Park demonstrate strong interest from diverse investors who believe these markets will outperform the broader industrial market, including core funds, separate accounts and infrastructure funds, he said.

“Looking ahead, we anticipate a marked increase in activity in established markets like New Jersey and Southern California,” Agnew told CPE.

“As leasing demand accelerates in 2025, following the container growth experienced in 2024, and rents bottom out, these markets will offer an attractive entry point for investors who have been historically priced out.”

Earlier this year, Avison Young reported on two speculative Class A industrial buildings totaling 540,408 square feet that are coming to the new Northeast Georgia Inland Port.

Alliance Industrial Co. will break ground this quarter on the Alliance 985 Business Park, which is slated to be delivered in early 2026 at 3605 Atlanta Hwy Flowery Branch, Ga.

Avison Young has arranged the sale of the 66.75 acres of land needed for the development. The first building will be 113,536 square feet, and the second will be 426,872 square feet.

The post Port Activity Rebounds appeared first on Commercial Property Executive.

The 18-acre campus will be located at the intersection of Harvill and Placentia avenues, and is set to feature the county’s first mental health urgent care and crisis residential program for children under 13, addressing a critical gap in health-care service. The facility is also aiming to provide a range of services focused on every level of recovery, including urgent behavioral health treatment, supportive housing and outpatient care. Additionally, the campus will also feature primary and specialty medical care, dental services, substance abuse disorder treatment and a pharmacy that will be open to the public.

READ ALSO: Why the Medical Outpatient Sector Is Poised for Growth in 2025

Those services will be housed in several buildings:

• Building 2: Community Wellness and Education Center—99,200 square feet;
• Building 3: Children and Youth Services—40,800 square feet;
• Building 4: Urgent Care Services—50,900 square feet;
• Building 5: Supportive Transitional Housing—192,500 square feet;
• Building 6: Extended Residential Care—66,700 square feet.

Plans at The Wellness Village also call for amenities that promote community interaction and holistic recovery such as green spaces and gardens for relaxation and mediation; sports courts and lawn for physical activity and recreation; a public market and café for community gatherings.

In addition to PMB as developer, the team includes Boulder Associates as architect; Snyder Langston as design-builder and PMB Real Estate Services as property manager. Morgan Stanley, JLL, Kensington Advisors, P3 Foundation, Advocates for Human Potential Inc. are among the developer’s financial partners. The California Department of Health Care Services awarded more than $80 million in grants to RUHS for the construction of the campus through its Behavioral Health Continuum Infrastructure Program.

More MOBs underway

The Wellness Village is not the only health-care facility that PMB is working on in California. Just last month, the developer and Sharp Rees-Stealy topped out the 75,000-square-foot medical outpatient building at 480 H St. in Chula Vista, Calif., a San Diego submarket. Completion is expected later this year. The three-story facility is set to provide advanced health care, including primary and specialty care, urgent care, physical therapy, radiology, cardiology, neurology and laboratory services. The building will also feature ground-floor retail space, including a pharmacy and a café.

In Arizona, PMB is working alongside Abrazo Health on the Abrazo Health Litchfield Medical Building, a 46,000-square-foot facility in Goodyear. The two-story project is also expected to come online this year. It is the city’s first combination of medical offices and inpatient rehabilitation programs. Abrazo Health committed to 27,000 square feet at the building, while MedCure will occupy 5,000 square feet.

The post PMB Tops Out $580M Inland Empire Campus appeared first on Commercial Property Executive.

Standard Real Estate Investment Partners has joined forces with Brennan Investment Group to build Laredo Pinnacle Development II, a 433,000-square-foot industrial project in Laredo, Texas.

The cross-dock development will rise near Mines Road in the Pinnacle Industry Center, a roughly 1,400-acre master-planned industrial park located about 7 miles from World Trade Bridge and roughly 14 miles from Columbia Bridge.

The speculative development will allow for either single- or multi-tenant usage. It’s set to feature four drive-in doors, two truck courts, 156 dock doors, as well as 197 trailer parking spots.

This isn’t Brennan’s first Laredo project. Last year, the company teamed up with Grandview Partners to develop a 393,796-square-foot industrial facility also within the Pinnacle Industry Center.

Brennan launched its U.S. Border division in 2022 to invest across the entire U.S.-Mexico boundary, from San Diego to Brownsville, Texas. The firm looks to capitalize on the nearshoring phenomenon, Managing Principal Troy MacMane said in prepared remarks.

Industrial development near U.S.’s top trade port

In 2024, Laredo took the title for the number one port nationwide with $339 billion in trade, a figure up 5.9 percent year-over-year, according to U.S. Census data analyzed by WorldCity. The area’s constant growth spurred the city to earmark more than $2 billion in road and infrastructure improvements over the next two decades.

Development in this emerging industrial market is booming. Last May, SE Legacy Development broke ground on the first phase of a $7.4 billion master-planned project. And six months later, Realterm and Titan Development announced their intention to develop a 440,300-square-foot facility in this city.

The post Brennan JV to Build Industrial Project Near US-Mexico Border appeared first on Commercial Property Executive.

Dallas-based Provident Industrial is expanding Gateway Logistics Park in El Paso, Texas, with the development of Phase 4—three Class A industrial buildings totaling 497,280 square feet. The first three phases comprised three buildings with a total of 921,759 square feet and have since been sold.

Construction has already begun on Phase 4, which is located 7.5 miles north of the Ysleta-Zaragoza Port of Entry in Juarez, Mexico. The industrial park also has direct access to Loop 375, which offers connectivity to Interstate 10.

The three new assets are taking shape just east of the initial phases. When complete, Buildings 4 and 5 will each feature 147,420 square feet and a shared 205-foot truck court. Building 6 will have 202,440 square feet and feature a 130-foot truck court and 44 trailer parking stalls.

READ ALSO: Top 10 Markets for Industrial Deliveries

Harvey Cleary serves as general contractor, with Pritchard Associates overseeing construction management. Provident Managing Director Case Van Lare and Chris Martin, director of Southwest Industrial Development & Acquisitions, are leading the project.

The developer sold the property’s Buildings 1 & 2 to EQT Exeter in August. Building 1, which has 308,200 square feet, was completed in November 2023, while the 267,100-square-foot Building 2 came online in April 2024. The 345,394-square-foot Building 3 was also acquired by EQT in August.

Other Provident deals

Last month, Provident broke ground on a fully entitled industrial site at 500 E. Bardin Road in Arlington, Texas, in the heart of the Dallas-Fort Worth metro. The 161,408-square-foot A20 Logistics Center is scheduled for delivery in the first quarter of 2026.

Also in January, the developer sold two industrial buildings in Plano, Texas, to Rosewood Property Co. Delivered in 2021, the facilities were part of the second phase of Plano Commerce Center development that totaled 300,000 square feet. Building C had changed hands in June.

And in December, Provident sold the newly built Hall Road Distribution Center in Houston to David Wang and Yong Lin, owners of the local seafood logistics company, Ocean Kingdom. The 139,000-square-foot asset is just south of Hobby Airport along Beltway 8, offering direct access to Interstate 45 South.

The post Provident Industrial Breaks Ground on Phase 4 of El Paso Project appeared first on Commercial Property Executive.

Employees began moving into the building in November. Currently FNB Financial Center is about 70 percent occupied, with roughly half of that space taken up by FNB. A JLL team led by Market Director JC Pelusi represents ownership in commercial lease negotiations.

Buccini Pollin Group was the lead developer of the building, which was designed by Gensler. Since breaking ground in 2021, the development of FNB Financial Center has generated over $7 million for a Hill District community-directed reinvestment fund and put over $3 million into programs to benefit minority-owned businesses, along with the Hill District Federal Credit Union, according to Buccini Pollin.

The tower features an amenity floor with a fitness center, conference rooms, lounge space and a Wi-Fi-enabled, tenant-only terrace. The bank’s space includes a trading floor for capital markets employees, with a suspended LED stock ticker visible from the building exterior.

READ ALSO: Top 100 Office Leases of 2024 Point to Stabilization

The property has achieved LEED Gold certification, with a number of health- and wellness-oriented features, including floor-to-ceiling windows for natural light and advanced HVAC systems. There is also a ground-floor retail space of 15,000 square feet, with a coffee bar, full-service café and public plazas.

Pittsburgh’s soft office market

In the fourth quarter of 2024, the Pittsburgh market turned in negative net absorption of 109,953 square feet, spurred by losses totaling 142,437 square feet in the central business district, according to JLL data. Much of that was driven by EQT’s downsize at 625 Liberty and FHLB’s departure from 601 Grant St.

Even so, “the completion of FNB Financial Center marked a significant milestone for Pittsburgh’s office market in the fourth quarter,” JLL noted in its market report. “Despite challenging market conditions, the project delivered nearly 70 percent preleased.”

The completion of the building not only changed the downtown Pittsburgh skyline, but it “injected new life” into the Lower Hill District, JLL reported, and will likely be a catalyst for future development in the area.

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SPARC Kips Bay will transform an entire city block at East 25th Street and First Avenue on Hunter College’s Brookdale Campus into a life science innovation, career and education hub with more than 2 million square feet of academic, public health and life science space. The project was first announced in October 2022 and is expected to create more than 3,100 permanent jobs and generate $42 billion in economic impact over the next 30 years. NYCEDC expects to start deconstruction of the campus by the end of this year.

The Innovation East development, basically around the corner at 455 First Ave., will replace the former Public Health Lab with a new life science hub. The Public Health Lab will relocate to a new, modern facility at Harlem Hospital, which is expected to be complete by the end of this year. Demolition of the existing 455 First Ave. building is expected to take place in 2026, with construction of Innovation East starting in 2027.

To dive more deeply into SPARC Kips Bay, the campus will include life science research labs for companies of various sizes; clinical classrooms and teaching labs for three City University of New York schools: Hunter College School of Nursing, CUNY Graduate School of Public Health & Health Policy and Borough of Manhattan Community College; outpatient ambulatory care services and a training simulation center for NYC Health + Hospitals (H+H); a new forensic pathology center for the Office of the Chief Medical Examiner; and community and retail spaces.

The project will also feature more than 1.5 acres of public improvements, including new publicly accessible open space, a new ADA-accessible 25th Street pedestrian bridge over the FDR Drive, streetscape improvements and flood protection measures.

READ ALSO: Life Science Trends to Watch in 2025

In February 2024, NYCEDC issued a Request of Expressions of Interest to identify a tenant to operate a life science center at SPARC Kips Bay. NYCEDC will potentially allocate up to $100 million of city capital in support and expects to announce its selection in the spring.

In the meantime, last September NYCEDC chose Skanska as the construction manager to oversee SPARC’s first phase, of more than 600,000 square feet, following deconstruction of existing buildings on the Hunter College campus. The total anticipated contract award was expected to be about $1.6 billion, and construction is scheduled to begin at the end of this year and to be completed in 2031. 

The total anticipated contract award is expected to be in excess of $1 billion, and construction is expected to begin at the end of this year and to be completed in 2031.

Currently, NYCEDC expects to release an RFP seeking developers to build 1 million square feet of life science space and modern facilities for H+H and OCME as part of SPARC’s second phase.

The 500,000-square-foot Innovation East will be more or less just across First Avenue from SPARC, at 455 1st Ave., and will have the potential to create more than 1,000 permanent jobs. New York City’s own Taconic Partners is among the major players in this project, having conceived it in response to an RFEI from the city in 2018.

NYCEDC did not reply to Commercial Property Executive’s request for additional information.

Addressing the labor shortage

To the extent that this expansion of the Kips Bay Science District is aimed at connecting the projects’ eventual tenants into New York City’s educational institutions, this could be a smart strategic move.

A mid-2024 life sciences outlook from Cushman & Wakefield remarked that even though hiring in the sector was lackluster, finding talent to fill certain positions remains challenging in today’s labor market. In some markets, employers must post job openings up to five times to fill specific roles, according to the report.

In New York City, Cushman & Wakefield reported, life sciences job postings were open for a median of 24 days.

The post NYC Projects Worth $1B Get Green Light appeared first on Commercial Property Executive.

Oceanview Life and Annuity Co., an affiliate of Bayview Asset Management, is the lender. Scheduled to open in phases starting late 2025, West Harbor is currently 80 percent preleased.

Upon completion, the 42-acre area will feature high-end retail, entertainment and dining. Plans call for 117,205 square feet of leasable building space and 204,000 square feet of ground area, along with a 6,200-seat amphitheater. The development represents a $500 million investment into the waterfront community.

The city of Los Angeles and the Port of Los Angeles selected Jerico Development and The Ratkovich Co. through an RFP process. The development will also provide direct waterfront access, including 200,000 square feet of leasable waterside space designated for vessel excursions and other waterfront attractions.

Newmark advised the West Harbor team and arranged the recapitalization by providing an accretive capital solution for the project’s completion and stabilization.

READ ALSO: Why C-PACE Lenders Remain Resolute

The refinancing, structured with a new senior loan and subordinate C-PACE financing, was arranged by Newmark Executive Vice Chairman Bill Fishel, Directors Alethia Halamandaris and Wyatt Strahan, and Associates Anna Sporrong and Broderick Flagg.

This full leverage, non-recourse refinancing of the West Harbor development will provide the time and resources required to bring the experiential retail project to fruition, Fishel told Commercial Property Executive.

Construction financing of this manner of leasehold real estate in any environment is challenging, he added. “The incredible outcome we achieved here belies the decade-plus of work by the Port of San Pedro and the Jerico and Ratkovich teams alongside the thoughtful, differentiated approaches of both Bayview and Petros, pairing existing PACE, bridge and new PACE financings to elegantly effectuate a new waterfront experience for the region.”

In one of South Florida’s largest office deals last year, Bayview Asset Management renewed its 55,071-square-foot office lease at Merrick Park, at 4425 Ponce de Leon Blvd. That deal was led by Colliers Vice Chair Stephen Rutchik and Vice President Tom Farmer, who represented landlord Brookfield Properties.

This week, a 146,901-square-foot grocery-anchored retail center in Los Angeles was financed for $32 million by 21 Alpha Group and Intelligent Design Real Estate through Forbright Bank for Crenshaw Plaza.

The post Los Angeles Retail Project Obtains $62M Refi appeared first on Commercial Property Executive.

As part of a private-public partnership, Formwork Development and Jefferson Facilities Inc. have opened Primary Workspace, a 13,000-square-foot coworking space in an historic schoolhouse. The building is in Gretna, La., across the Mississippi from New Orleans. The 1911-built property stood vacant for more than 50 years. 

Primary Workspace opened after extensive renovations, with a $3.5 million price tag. The City of Gretna contributed $2.7 million in American Rescue Plan Act funds, while the remaining $800,000 came from Louisiana State Historic Tax Credits. 

Schoolhouse-turned-coworking

The 20,000-square-foot property is at 519 Huey P Long Ave., comprising office space, as well as 2,800 square feet of for-lease retail space. The available space stands alongside a German Cultural Museum, the only tenant that has remained operational while the rest of the property was vacant. Primary Workspace’s amenities include a restored two-story auditorium, a boardroom and for-rent event space. 

Formwork Development led the project from the private sector side. Jefferson Facilities Inc., acting on behalf of Jefferson Parish and the city, was the public-sector partner. Studio BKA worked as architect and interior designer, alongside general contractor Perrier Esquerré Contractors.  

The coworking industry has began adapting to a growing trend towards smaller, community-focused environments, reflecting the modern worker’s preference for adaptable and team-oriented spaces. In a recent 2025 outlook, coworking space providers opened up about the essential role of flexible offices in the modern work culture, as well as what the sector needs to remain resilient.

The post Historic New Orleans Building Gets New Life as Coworking appeared first on Commercial Property Executive.

Kearny Real Estate Co. and Dune Real Estate Partners have completed Harbor Logistics Center, a 163,000-square-foot Class A industrial facility in Santa Ana, Calif.

The warehouse came online on the site of a former 200,000-square-foot office campus, which was demolished nine months prior. TDA Investment Group provided a $50 million construction loan for this project, with a maturity date set in 2027, according to CommercialEdge. CBRE will oversee the leasing efforts at the industrial property.

Harbor Logistics Center is at 3100 S. Harbor Blvd., close to John Wayne Airport and one mile from Interstate 405. Ports of Los Angeles and Long Beach are both within 30 miles from the property, while Los Angeles International Airport is 37 miles away.

The facility is the only industrial building with 36-foot clear heights within a 4-mile radius. The property features ESFR sprinkler systems, a 7,000-square-foot office component, 17 dock-high doors, two grade-level doors and heavy power capacity, as well as 241 vehicle parking spots and a 185-foot-deep truck court. CBRE Senior Vice President Keith Greer, together with Executive Vice Presidents Ben Seybold and Sean Ward, are its leasing brokers.

Orange County, the tightest industrial market

At the end of 2024, Orange County was the tightest industrial market in the nation for occupancy, a recent CommercialEdge report shows. The region closed the year with a 4.2 percent vacancy rate, way below the national rate of 8 percent. Orange County was also the most expensive market in the U.S. for rent prices, asking rents averaging $16.20 per square foot.

Meanwhile, the county’s under-construction pipeline was the second-smallest in the nation, totaling just 1.5 million square feet. One of the underway projects is Bake Freeway Business Park, a 380,000-square-foot campus in Irvine, Calif., developed by Tishman Speyer and Mitsui Fudosan America.

The post Kearny, Dune Deliver Orange County Project appeared first on Commercial Property Executive.

Additionally, the metro logged $599 million in office sales last year. This figure represents a considerable increase, nearly doubling the amount registered in 2023, but still the lowest investment volume among gateway markets.

The city also strengthened its position as one of the most active life sciences markets across the country, ranking seventh by its construction activity in the sector. Between 2019 and October 2024, more than 1.8 million square feet of life science space across nine projects broke ground in the metro.

More office projects to come online

Last year, Seattle’s office sector saw the delivery of 11 properties, accounting for 4 million square feet—about 2.2 percent of the metro’s total inventory. Compared to 2023, this figure increased by more than a third.

Among gateway markets, Boston took the lead with almost 6.4 million square feet completed, while Seattle was close behind. Chicago (1.0 million square feet) and Los Angeles (955,510 square feet) were at the opposite pole.

In the second quarter of last year, Office Properties Income Trust completed the renovations of Unison Elliott Bay, a three-building, 300,000-square-foot life science lab, R&D and office space. The project began in March 2022.

In terms of pipeline, more than 5.1 million square feet of office space across 10 projects were under construction at the end of December, which will add about 2.8 percent to the market’s stock. Of them, two developments totaling 691,700 square feet broke ground in 2024.

One of the largest projects under construction that is scheduled to come online this year is Amazon’s Tower 1 at Bellevue 600. The 43-story building will comprise more than 1.1 million square feet and is the first phase of a development that is set to also include a 31-story high-rise.

Government agencies focus on office-to-residential conversions

With the trend of converting office spaces into residential units gaining momentum, CommercialEdge has launched a tool designed to evaluate the feasibility of repurposing properties across different markets. According to its Conversion Feasibility Index, Seattle ranks high, with around 4.7 million square feet of office space demonstrating strong potential for conversion.

Last summer, the Seattle City Council enacted a legislation aimed at removing regulatory obstacles by granting extensive exemptions from dimensional and design development standards. This initiative is intended to address the issue of vacant office spaces across the city, with a particular focus on the downtown area.

In August, Orton Development proposed a conversion plan for the almost 100-year-old Joseph Vance Building. If approved, the project would generate about 155 residential units. The building’s CFI score stands at 92, according to CommercialEdge, making it a strong candidate for repurposing.

Office sales register new heights

Seattle reached $599 million in office investment volume last year, almost double the figure registered in 2023. Although assets traded at an average of $260.45 per square foot, significantly surpassing the national average of $175.97, the market experienced the lowest transaction volume among gateway metros.

Manhattan registered the highest sales nationally, with $3.9 billion in assets changing hands. Washington, D.C. ($2.6 billion) and Los Angeles ($1.9 billion) trailed behind.

In September, Alexandria Real Estate Equities sold 1165 Eastlake Ave. E, a 100,086-square-foot life science building for $150 million. Fred Hutch Cancer Center acquired the asset completed in 2021. The developer also formed a joint venture with the buyer for two adjacent buildings, where it will maintain a 30 percent ownership.

A month earlier, the first skyscraper in Seattle, The Smith Tower, changed hands. A group of local investors led by GT Capital bought the 42-story property from Goldman Sachs. The 268,700-square-foot tower dates from the 1910s and was renovated in 1990s and 2010s.

Completions lead to surge in vacancy rates

Seattle’s office vacancy rate at the end of December clocked in at 26.3 percent, rising 380 basis points year-over-year. During the same month, the national average was 19.8 percent.

Among gateway markets, only San Francisco posted a higher rate, reaching 28.8 percent. Miami (15.2 percent) and Los Angeles (16.0 percent) were at the opposite end.

In one of the largest office leases in the area in recent years, Pokémon signed a 374,000-square-foot lease at Skanska’s The Eight, a 26-story mixed-use development in Bellevue, Wash. The building totals about 729,000 square feet, out of which 541,000 are destined for office use.

In June, TikTok decided to expand its office presence in the market and signed an additional 150,000-square-foot lease in downtown Bellevue, Wash. The tenant will occupy seven floors at Kemper Development’s Lincoln Square North Tower, where it had already committed to 132,000 square feet across six floors in January.

Coworking sector remains on par with national trends

As of December, Seattle’s coworking sector consisted of more than 3 million square feet, accounting for 1.9 percent of the market’s office stock. Among gateway metros, only Boston (1.8 percent) and Washington, D.C. (1.6 percent) had a smaller percentage of shared space out of total inventory, while Miami (3.8 percent) took the spotlight.

In the first quarter of last year, CENTRL Office took over the former WeWork shared space at the Kelly-Springfield Building in Seattle. The firm will operate the 53,365-square-foot space under a management contract with landlord Legacy Cos., after WeWork vacated the offices in February, filing for Chapter 11 bankruptcy.

Regus (445,380 square feet) became the largest flex office provider in the Emerald City as of December, followed by WeWork with 339,476 square feet. These operators were followed by extraSlice (296,437 square feet) and Industrious (189,675 square feet).

The post Seattle Office Maintains Values, But Trades Are Few appeared first on Commercial Property Executive.

This shift is primarily due to an oversupply from record-setting development activity in 2021 and 2022, which have surpassed tenant demand, according to CommericalEdge data.

Leveraging its strategic location and well-developed rail and airport infrastructure, Chicago’s industrial market continues to demonstrate resilience and flexibility. Even with the pipeline shrinking to half of the previous year’s volume, the metro area remains a key player in industrial development. The Windy City delivered almost 14.9 million square feet of logistics space last year, while the investment volume reached roughly $2.7 billion.

Sales volume increases

Last year, Chicago’s industrial investment volume totaled approximately $2.7 billion, surpassing the $2.2 billion recorded in 2023. Despite this increase, assets traded at an average of $92 per square foot, up slightly from $89 the previous year. A total of 242 properties—amounting to approximately 32.6 million square feet—changed hands in the metro in 2024.

Only Kansas City ($42 per square foot) and Indianapolis ($73 per square foot) recorded lower numbers. Meanwhile, New Jersey ($213 per square foot), Dallas ($173 per square foot) and Phoenix ($162 per square foot) continued post high prices.

In one of the larger transactions of last year, Stonepeak purchased a three-building, 1.7 million-square-foot rail-served logistics portfolio for $125 million. The fully leased assets are part of CenterPoint Intermodal Center–Joliet/Elwood—the largest inland port in North America. The properties are in Elwood, Ill., at 26318-26634 S. Walton Drive, 21561 Mississippi Ave. and 26634 Mississippi Ave.

Industrial development still active

At the end of December, Chicago’s industrial sector had 7.6 million square feet under construction, according to CommercialEdge data. The pipeline represented 0.7 percent of total stock, below the 1.7 percent national average and other peer markets such as Phoenix (5.3 percent), Kansas City (3.9 percent) and Dallas (1.9 percent).

Near the end of last year, Trammell Crow Co. broke ground on the first building of Plainfield Business Center, an industrial campus to total more than 8 million square feet in Plainfield, Ill. Taking shape on approximately 52 acres at 26220 W. 143rd St., the property will feature 40-foot clear heights, 80 dock doors expandable to 160 and 211 trailer parking stalls. 

One month prior, CyrusOne also commenced construction on its second data center campus in Aurora, Ill. The project comprises two buildings totaling 446,000 square feet and will deliver an initial IT capacity of 40 MW with scalable capacity to meet future growth needs. The development is taking shape at 2725 Bilter Road.

Deliveries slow down

Last year, The Windy City delivered 41 properties totaling almost 14.9 million square feet—accounting for 1.4 percent of the metro’s total inventory, slightly lower than the national average of 1.8 percent. This amount was notably less than the 29.4 million square feet completed in 2023.

Among its peer markets, only Phoenix (32.7 million square feet) and Dallas (29.1 million square feet) recorded more completed space, CommercialEdge data shows.

HSA Commercial Real Estate delivered Highland Commerce Center of Somers, one of the largest speculative industrial buildings in Wisconsin. Located at 2655 113th Ave., the 918,884-square-foot distribution facility is directly off Interstate 94 at the Burlington Road Interchange in Kenosha.

Bridge Industrial also completed the 669,914-square-foot Building 2 and the 707,953-square-foot Building 3 of Bridge Point Melrose Park, a cutting-edge industrial campus that will exceed 1.5 million square feet in the coveted O’Hare submarket in Melrose Park, Ill.

Vacancy rate higher than the national average

At the end of December, the metro’s vacancy rate clocked in at 9.7 percent—above the 8 percent national average—climbing 570 basis points year-over-year and being the fifth-highest rate across top U.S. markets. Among peer markets, Indianapolis (9.8 percent) and Dallas (9 percent) recorded similar numbers.

In one of the largest recent industrial deals in Greater Chicago, Crow Holdings has signed a full-building lease at 9850 Mississippi St. in Merrillville, Ind. The more than 1 million-square-foot industrial facility is part of the 195-acre Silos at Sanders Farm master plan.

W. P. Carey also inked a 1.6 million-square-foot industrial lease at 701 Central Ave. in University Park, Ill. A global tech and logistics company occupies the entire building, marking it as one of the largest deals in the market.

The post Chicago Industrial Market Showed Resilience in 2024 appeared first on Commercial Property Executive.

After years of accelerated expansion, the U.S. industrial sector is now moving toward a more sustainable growth pace. Although the macroeconomic context could pose challenges, specific markets will likely continue to outperform.

One such market is Dallas-Fort Worth, which had 18.9 million square feet of industrial space underway as of December, second only to Phoenix with 22.4 million square feet under construction, a recent CommercialEdge report shows.

The metro was also among the country’s top markets for industrial deliveries in 2024. Demand for such assets in North Texas is mainly supported by the surge in population, steady job creation and the more affordable cost of living compared to other parts of the country.

Commercial real estate investment and development firm Holt Lunsford Commercial has been active in this area since 1993. Recently, the company completed Gateway Crossing Logistics Park, a 127-acre project in Forney, Texas, developed in partnership with Principal Asset Management. The three-building campus encompasses almost 1.8 million square feet of leasable space. Commercial Property Executive asked Managing Principal Canon Shoults his views on the prospects for industrial in north Texas.

READ ALSO: Industrial Real Estate’s Future Depends on Adaptability

How is the demand for industrial properties in Dallas-Fort Worth reflected in your portfolio?

Shoults: The growth of Holt Lunsford Commercial’s Dallas-Fort Worth industrial leasing and property management business has been lockstep with the surge in the industrial market here. Since 2020, the asset class as a whole has been the benefactor of the perfect storm in the North Texas area. The region is also strategically located to service several parts of the U.S., which is only compounded with our major international airport and multiple intermodal rail locations for both BNSF and Union Pacific.

Which submarkets in the area are currently more in demand and why?

Shoults: North Fort Worth and South Dallas represent the two submarkets with the majority of the bulk product. Subsequently, these two submarkets represented almost 70 percent of the overall market-wide lease absorption. Both offer access to key distribution routes, labor markets and rail intermodals. While still a very healthy overall industrial market, 2024 saw a decline in market-wide leasing activity. Much of this situation can be attributed to tenant uncertainty throughout the year related to the presidential election and interest rates. 

Considering the current economic climate, how do you expect the industrial market in north Texas to evolve?

Shoults: Forecasting into 2025, we expect the overall Dallas-Fort Worth industrial market to remain in demand, albeit at historical norms rather than unprecedented growth. However, rent growth is expected to slow or stall in some pockets due to current vacancy from recent deliveries. Manufacturing tenants, foreign companies and 3PL users will continue to be among the key drivers of absorption, as the region’s strategic location and transportation infrastructure continue to attract a diverse mix of businesses.

Despite the pre-COVID-19 normalization, we expect the region to outperform other parts of the country in 2025 as it continues to be the biggest benefactor of population growth, a favorable business climate and large-scale relocation efforts into the market.

What do prospective tenants look for when they choose to lease space at industrial facilities?

Shoults: In today’s market, understanding the tenant’s requirements is a must. This includes understanding their power needs, clear height, racking, office finish and parking needs.

For example, the Dallas-Fort Worth market is attracting more manufacturing-oriented tenants that need heavy power. There are important time and cost factors to discuss in those cases. In 2025, there will be increased demand from foreign companies and manufacturers. Tenants will continue to value Dallas-Fort Worth’s robust workforce availability and labor pools.

Tell us more about the industrial portfolio you manage and the ways you differentiate your properties in this competitive market.

Shoults: My team operates with a unique service philosophy that we’ve coined as our “10 Commandments of Industrial Leasing.” These principles guide every decision and help us create value for our clients. These “commandments” anchor how we operate and cover everything from how to make a standout first impression to what meaningful client follow-up looks like.

Another principle we follow is to ask thoughtful questions. We dig deep to understand the tenant’s needs and to thoughtfully sell the space. One of those key questions is: What are the drivers in selecting the right location? Details matter when helping a prospective tenant envision their future in your space. Understanding the details allows a brokerage team to maximize the value of the listing and formulate the best recommendation for the building owner for a shot at winning the deal. 

READ ALSO: Dallas Industrial Sales Take the Lead

How do you plan to expand your industrial footprint?

Shoults: HLC is doubling down on our relationships with key institutional owners. There is no shortage of institutional capital in today’s market, and the provider that can best service the market and create opportunities for the capital will continue to experience growth.

Development opportunities will continue to drive our business and identifying growing areas to build more industrial product is a priority. Additionally, identifying development opportunities allows us to partner with our clients and provide them opportunities to also expand their footprints.

What’s your outlook on the industrial sector for 2025 and beyond? Are there any emerging trends you’re keeping an eye on?

Shoults: As the Dallas-Fort Worth industrial market continues to evolve, we are seeing tenant needs and profiles change. Our market is evolving to attract more manufacturing uses and growing beyond just a distribution market. This also means that tenant needs are changing and in the coming years we anticipate access to power and fully climate-controlled facilities. A focus on functional industrial facilities will become a key factor when a tenant identifies a new facility.

The post Q&A: What’s Driving North Texas Industrial Demand? appeared first on Commercial Property Executive.

In fact, JLL predicts, manufacturing-related demand will reach 25 percent of U.S. industrial demand by 2028, up from less than 19 percent last year.

Manufacturing demand for space has already expanded in a major way, the report notes. In 2019, such demand represented only 4.3 percent of total industrial space demand. By 2024, that share was 18.8 percent, well over a three-fold increase.

This is a complete turnaround from before 2020. From 2018 to that year, manufacturing requirements decreased 1.9 percent each year, on average. Since 2020, those requirements have increased by 50 percent each year, on average.

Reasons for the change

“A confluence of economic, technological, and geopolitical factors is compelling manufacturers to reassess their operational strategies and locations,” Greg Matter, JLL’s executive managing director of industrial leasing told Commercial Property Executive.

The resurgence has come from a number of different industries, but the prime driver has been in such industries as batteries and electric vehicles, clean energy and semiconductors. The automotive industry, led by EVs and autonomous tech, is expanding, and so are aerospace, defense and AI.

READ ALSO: Sector Transitions as Supply Shrinks

The demand has been in a lot of places, but major markets such as Chicago, Dallas-Fort Worth and Phoenix are benefiting the most.

A number of factors are at play in pushing up demand for manufacturing space, including reshoring, which is at least in part a reaction to supply chain issues during the pandemic, as businesses seek more resilient and stable supply chains.

“As companies seek to optimize their production processes and bring operations closer to end markets, the demand for modern, technologically advanced manufacturing spaces is likely to continue its upward trajectory,” the report noted.

Political support

Political considerations are also important, and the political will seems to be there to support manufacturing growth.

“Amid the ongoing discourse surrounding tariffs, it is evident that there exists bipartisan support for the ‘reindustrialization’ of American manufacturing,” Matter said. “Our data projections indicate that this trend will persist over the coming decade.”

The new administration is pushing protectionist policies that will likely encourage domestic manufacturing, the report explained. Also, the former administration oversaw policies spurring domestic chip manufacturing and sustainable energy manufacturing, which has momentum that is unlikely to be undone.

New development is in the cards

Satisfying the surge in demand for manufacturing space will be more than a matter of retooling or expanding existing facilities, because the average age of existing manufacturing space in the U.S. is 51 years, with more than half between 30 and 60 years old. That is, they are leftovers from the previous golden age of U.S. manufacturing—before the 1980s.

The bulk of the older facilities are in such traditional manufacturing markets as Chicago, Detroit and New Jersey, which will see both new development and updating facilities to use the latest technologies. Markets such as Savannah, Ga., and Phoenix are leading the way in new facility development.

Besides the age of the building stock, other challenges for manufacturing will include finding suitable land, enough power and enough skilled labor, JLL reported.

In terms of land acquisition, a lot of the suitable brownfield sites have already been taken, the result of a “gold rush” for such sites between 2020 and ‘23, the report explained. Much of what is left is functionally obsolete, with the expense of redevelopment enough that greenfield options are also being considered.

As for power, manufacturers will be competing with data centers in the future for access to robust and cost-effective sources of electricity. 

Labor challenges

Manufacturers will also be competing against each other for relatively scarce skilled labor, especially as manufacturing processes become more advanced.

“The most significant challenge facing companies as they seek to scale up operations in the U.S. will be the long-term availability of skilled manufacturing talent,” Matter said.

When considering the establishment of new facilities, decision-making criteria are evolving beyond traditional metrics such as job creation, growth potential and industry concentration, Matter noted. Companies are now incorporating quality of life factors to enhance their ability to attract and retain a high-caliber workforce. 

The post Manufacturing Demand for Industrial Space Is Mushrooming appeared first on Commercial Property Executive.

Simon Property Group Inc. plans to begin a multimillion-dollar transformative project of Smith Haven Mall, a 1.2 million-square-foot shopping mall in Lake Grove, N.Y., on Long Island. The extensive redevelopment will start this summer, targeting completion in 2026.

The renovation project will improve both the exterior and interior spaces of the property. The exterior will be repainted with new signage and entryways. Inside, Smith Haven Mall will have updated flooring, modern fixtures and a revitalized Center Court. The food court will also be transformed with new seating. Outdoors, a green plaza with landscaping and seating areas will be added.

The mall revamp will also feature tenant additions. Zara will open its first location in Eastern Long Island at the property in 2026, Sur la Table will open this fall and Golf Lounge 18 is set to open in March.

READ ALSO: What’s in Store for Retail in 2025?

Smith Haven Mall—originally known as Nesconset Shopping Center—opened its doors in 1969. Since 1995, it has been managed by Simon Property Group. The property has undergone several renovations and expansions over the years, becoming a key shopping destination in the region.

The mall’s tenant roster currently includes more than 130 regional and national retailers such as Barnes & Noble, Apple, Guess, H&M, Claire’s, White House Black Market, LoveSac, Dick’s Sporting Goods, Forever21, Sephora, The LEGO Store, The Cheesecake Factory, Ruth’s Chris Steakhouse, Starbucks and Bahama Breeze.

Located at 313 Smith Haven Mall, the retail property is at the intersection of highways 25 and 347.

Simon’s recent activity

Simon currently has roughly $8 billion in assets under management across the globe and its portfolio encompasses more than 400 retail properties across 24 countries.

In September, the firm updated and extended its $3.5 billion multi-currency unsecured revolving credit facility. This amendment increased Simon’s financial flexibility, giving it a total of $8.5 billion in revolving credit capacity.

And this January, the REIT announced plans to develop Nashville Premium Outlets, a 325,000-square-foot luxury shopping and lifestyle destination, starting next year. The company agreed to purchase a large site in Thompson’s Station, Tenn., and construction expected to begin in 2026.

The post Simon Eyes Long Island Shopping Mall Revamp appeared first on Commercial Property Executive.

On a global level, average net effective costs for prime office space rose by just 0.1 percent compared to the third quarter. The increase was driven by a 0.3 percent growth in gross rental rates and an uptick of 0.2 percent in fit-out costs, moderated by landlord concessions. Overall, the upward trend for the year stood at 1.9 percent.

With a net effective cost to occupier of $206.7 per square foot annually, Midtown Manhattan ranked third among the 35 global markets Savills covers, outpaced only by London’s West End ($277.5) and Hong Kong ($230.4).

The report also highlighted Los Angeles, with a spotlight on Century City. Savills reported that this submarket in particular saw a 5 percent net effective cost-to-occupier growth last quarter.

“With its collections of trophy assets and reputation for safety and extensive retail options, Century City represents one of the best-performing submarkets in Los Angeles,” Henry Gjestrum, JLL research manager in Los Angeles, told Commercial Property Executive.

Nearly 1.6 million square feet of leasing activity has taken place in Century City over the last 12 months, pushing forward the market’s recovery, he added.

Century City is the only market in Los Angeles that has an office tower under construction with a significant amount of preleasing. Office asking rents in this submarket are 81 percent higher than the rest of Los Angeles, according to Gjestrum.

Trophy assets are leading the way in practically every other primary U.S. market, just like in Century City, Jim Schoolfield, managing director at JLL in Los Angeles, told CPE.

“Century City benefits from most tenants being in professional services space where the return to office mandates have been highest,” Schoolfield said.

READ ALSO: Top 100 Office Leases of 2024 Point to Stabilization

Landlords have heavily invested in creating world-class amenities to attract the premier tenants, he added. “Rent growth has been 4 percent from the fourth quarter of 2023 to the fourth quarter of 2024, and the average asking rate is $7.58 per square foot for Class A space, which far outpaces the rest of Los Angeles.”

According to Schoolfield, among the top nine assets in Century City, only 20 full floors are available directly, with a vacancy of 11.4 percent.

“To deal with competing demand, the larger tenants must transact at least 24 months before any lease commencement,” Schoolfield said.

Century City, an outlier

Los Angeles—specifically Century City—is an outlier, according to Eric Segal, MAI, senior managing director of Integra Realty Resources’ Los Angeles office.

“Our data supports the trend highlighted by Savills,” he told CPE. “Century City recorded some of the strongest leasing volumes since early 2020, with intense demand for premium office space driving effective rents higher. This underscores a broader pattern where top-tier assets in key locations thrive, while much of the office sector is still working toward stability.”

Speaking nationally, Segal said the U.S. office market is experiencing a sharp divide.

“While top-tier office buildings in select markets are holding steady or even seeing rental growth, the broader sector continues to struggle with high vacancies and evolving tenant needs,” he said. “The ‘flight to quality’ is real, but it’s happening alongside persistent challenges for aging, outdated office stock that lacks the amenities and flexibility today’s tenants require.”

Miami, New York City lead the way

Nowhere is demand for prime space more evident than in Miami, according to Tere Blanca, founder & CEO of Blanca Commercial Real Estate.

“Demand has been fueled by new-to-market tenants and a growing existing tenant base, sending asking rents skyrocketing,” she told CPE.

In prime (Tier I) CBD properties, asking rates have increased 7.2 percent year-over-year and an astonishing 67.8 percent since the end of 2019, Blanca added. In Brickell, where the only new supply delivered fully leased, prime asking rates have increased by 82 percent since the end of 2019.

“With no new supply expected in the CBD until the end of the decade, we expect owners to continue to mark to market vacant spaces and renew tenants. This will continue to drive healthy rate increases across the CBD market,” Blanca said.

The office sector appears to have bottomed out, with early signs of renewed transaction activity, according to Eli Randel, chief operating officer of Crexi.

“Blackstone’s recent high-profile acquisition in Manhattan suggests the worst may be behind us,” Randel said. “The divide between winners and losers remains stark—amenity-rich, Class A properties continue to attract strong occupancy, while much of the Class C inventory is increasingly becoming obsolete.”

As for national office traffic numbers, Placer.ai reported that nationwide office visits were 40.2 percent lower during January than in January 2019, likely due to a mid-week New Year’s holiday and a polar vortex making travel difficult in many cities.

New York City led for visit recoveries last month, with visits down only 19 percent compared to January 2019. San Francisco ranked last among the cities analyzed, with visits down almost 52 percent.

The rising demand for prime office space is primarily driven by the push for a return to the office, according to Kenneth Salzman, executive managing director & principal at Lee & Associates NYC.

“Many companies’ return-to-office initiatives include offering onsite amenities and securing office locations in desirable areas that address employee conveniences and reduce commute times,” Salzman said. “Midtown Manhattan is a prominent submarket for office space due to its central location, easy access and neighborhood amenities.”

The post Net Effective Office Costs Edge Up appeared first on Commercial Property Executive.

In late January, a bolt from the blue struck the tech world—and, indirectly, commercial real estate. Chinese startup DeepSeek claimed its AI model not only outperformed OpenAI’s data-intensive model, but also that training took a tiny fraction of the resources, including computing power.

If these assertions hold at least some water, one conclusion can be that data center demand might take a big hit, rather than the expansive increase foreseen by virtually everyone just one month prior. That would, in theory, negatively impact development, which has lately been in overdrive.

… Or would it?

Data center experts are skeptical that DeepSeek’s announcement will make much of a dent in the development boom. For one thing, the company’s vaunted efficiency might be over-hyped. More fundamentally, even if DeepSeek’s claims are true, and other AI developers start employing similar data-saving methods, the pace of AI growth is still too relentless to slow down appetite.

In fact, more efficient AI might even add to data center demand, industry veterans said.

READ ALSO: Are Data Centers Immune to CRE Market Forces?

“This is going to make things easier, faster and cheaper—a classic Jevons Paradox in action,” Howard Berry, principal, national data center solutions at Avison Young, told Commercial Property Executive. He’s referring here to an economic theory saying that increasing efficiency associated with a particular resource can counterintuitively lead to increased consumption of that resource, as lower costs lure more buyers into the market.

“We anticipate an overall increase in technology usage and investment, since more affordable and open-source AI technology will attract more participants to the AI market, which will boost data center demand even more than the unprecedented demand we’re currently witnessing,” Kristen Vosmaer, managing director with JLL Data Center Work Dynamics, said.

In speaking with customers and tracking activity following the news, the consensus is that, while models such as DeepSeek may optimize resources at a facility level, there’s still a global, long-term data center capacity shortage, Vosmaer added.

“If the technology delivers as promised, we should fully expect U.S.-based companies to develop similar models, especially with open-source access,” Berry said. “The bottom line is that demand for data center space isn’t going anywhere—if anything, this kind of advancement will drive even more need for high-performance infrastructure.”

There’s more to data centers than AI

DeepSeek’s innovations might shake things up, but AI is only one part of data center demand. Still a very significant driver, indeed, but even optimistic scenarios say that AI will represent less than 50 percent of data center demand by 2030, JLL reported. Lower-intensity workloads such as data storage and cloud-based applications are bound to drive most of total demand.

“All industries are susceptible to innovation-driven disruption, as we’ve seen that play out time and again,” John McWilliams, head of data center insights at Cushman & Wakefield, pointed out. “It’s reasonable to conclude that AI is susceptible to optimization and efficiency gains, and we should probably expect it.”

That said, McWilliams noted that it’s still too early to tell if claims of a vastly cheaper way to produce LLMs will fully shake out. Also, pre-AI demand drivers are still around, and they would have gained steam either way.

“AI catalyzed the need for more cloud infrastructure and network expansion, but it isn’t fundamental to demand for hyperscale and colocation space,” McWilliams said. “Instead, it represents additional demand that runs on top of all that.”

READ ALSO: The Stargate Project Promises a Data Center Boom. Can It Deliver?

The U.S. data center market is tight right now, with vacancy at 4.2 percent. AI efficiency gains could merely increase power availability for other data center needs if existing LLMs were just maintained and not improved, McWilliams also pointed out.

“More likely than not, though, AI firms will continue to improve the quality of their existing LLMs and produce more powerful AI. While each query may require less energy, overall power requirements will likely not see a reduction as demand for AI continues to grow.”

Data center innovation still needed

It’s still time to invest in data center innovation, regardless of DeepSeek or similar models, said Jennifer DiMambro, Arup’s Americas and Global science, industry and technology leader. Rather than slowing down the industry, innovations will only accelerate its growth, Berry added.

More than $500 billion globally has been invested in data centers over the last three years, Vosmaer noted, and these multi-year construction projects are powering through. There will be ongoing refinement in size and power, as is normal in a growing industry, but the underlying premise of growth in AI, cloud and IoT will continue to spur innovation in real estate development and operations.

READ ALSO: Why Big Data Centers Are Going Nuclear

“The most common way companies overpay for data centers is through purchasing too much power,” Jeff Howell, chief growth officer with ENCOR Advisors, told CPE. “Everyone is anxious about not purchasing enough power capacity for their regular applications, and now layering intelligence on top of that takes it to a whole new level.”

Given the power constraints globally stemming from AI, the industry needs breakthroughs in computing efficiency because relying on carbon-free technologies such as wind, solar and nuclear are too slow and won’t meet demand over the next decade, Howell said.

“In Canada, for example, we have world-class nearly carbon-free electricity, but need to dip into oil and natural gas to keep up with data center demand in what was previously a flat electricity market,” Howell added.

“This progress can’t be slowed,” DiMambro told CPE. “These centers are the beating heart of AI, housing the high-performance servers and hardware that make it all possible. As many have already pointed out, increasing efficiency in technology often simply results in increased demand, and the need for smarter, greener data centers will be even more important.”

The post Is the DeepSeek Scare Impacting Data Center Demand? appeared first on Commercial Property Executive.

In terms of completions, only 358 million square feet of industrial space came online in 2024, a significant drop from the past three years, yet still higher than any year before 2020, according to CommercialEdge data. This year, deliveries are expected to decrease further, with only 236 million square feet starting construction in 2024.

Here are last year’s top 10 markets for industrial deliveries in the U.S., based on CommercialEdge data. These metros accounted for almost half of total completions nationally.

1. Phoenix

Phoenix led the nation in completions, contributing more than 9 percent of the total U.S deliveries last year. The metro saw 162 projects come online, amounting to 32.6 million square feet.

This figure is slightly lower than the 34 million square feet delivered in 2023. However, the market had the second-largest under-construction pipeline as of December, with 22.4 million square feet in the works.

In August, IndiCap and Invesco Real Estate completed the first phase of Virgin Industrial Park, consisting of three buildings totaling about 1 million square feet in Glendale, Ariz. Upon full build-out, the campus will include two more facilities, bringing the industrial park to 1.5 million square feet.

2. Dallas

Despite ranking second nationally among the top markets for industrial deliveries, Dallas' completions dropped by 58 percent year-over-year as of December. The metro saw 29.1 million square feet delivered across 114 projects, making up 8 percent of national deliveries.

However, Dallas-Fort Worth continues to thrive as the national leader of cold storage development. Between 2019 and 2024, eight such facilities totaling 2.9 million square feet came online. At the end of the year, The Metroplex also had the third-largest under-construction pipeline, with 19.1 million square feet underway.

One of the largest projects completed in the metro last year was Transwestern Development Co.’s Mid-Cities Logistics, a five-building, 908,300-square-foot logistics hub in southeast Fort Worth, Texas. These facilities are designed for storage, distribution and light manufacturing purposes.

3. Inland Empire

With 70 projects totaling 20.8 million square feet coming online last year, the Inland Empire rounded out the top three markets for industrial deliveries. This figure accounts for almost 6 percent of the U.S. total.

The metro’s completions pipeline mirrored national industrial trends, shrinking from the 26.5 million square feet registered in 2023. One of the largest facilities delivered last year is Affinius Capital’s Building 1 at Beaumont Crossroads Logistics Park II in Beaumont Capital, Calif., spanning almost 1.9 million square feet.

In terms of under-construction pipeline, the metro holds steady. As of December, the Inland Empire had 9.1 million square feet underway across 21 projects.

4. Chicago

Chicago’s industrial deliveries in 2024 amounted to roughly 13.7 million square feet. The metro saw 40 developments coming online, a steep decline from the 83 projects totaling 29.3 million square feet completed in 2023.

Last year, Bridge Industrial completed two buildings within Bridge Point Melrose Park, measuring almost 1.4 million square feet. Upon full build-out, the Melrose Park, Ill., campus will span more than 1.5 million square feet.

Additionally, the metro had 20 projects under construction, which will add about 7.6 million square feet upon delivery. Trammell Crow Co. is currently working on one of the largest developments in the market. The firm broke ground on the first building at Plainfield Business Center in Plainfield, Ill., which is expected to encompass more than 8 million square feet when completed.

5. Houston

Houston’s industrial deliveries in 2024 comprised 67 projects totaling 12.2 million square feet. This represents only 3.4 percent of the national completions and marked a significant decrease from the 29.5 million square feet that came online in 2023 across 121 developments. The metro also had 12.9 million square feet under construction as of December.

Last summer, Capital Development Partners completed Cedar Point Logistics Center Building II, an 800,405-square-foot facility in Baytown, Texas. The building is part of a 90-acre campus that also encompasses an 800,500-square-foot warehouse completed in 2022.

6. Savannah-Hilton Head

Savannah-Hilton Head’s industrial deliveries last year were nearly half of those registered in 2023. The metro saw only 24 projects spanning 11.8 million square feet come online, about 3.3 percent of the national total.

However, the market has a silver lining. As of December, the metro had 14 developments underway totaling 23.9 million square feet, the largest under-construction pipeline in the U.S.

That number is expected to increase as more projects break ground. This month, Trinity Capital and Barings started construction on the second phase of Horizon 16 Industrial Park in Savannah, which will add 1.5 million square feet across six buildings.

7. Las Vegas

Last year, Las Vegas saw more than 11.2 million square feet of industrial space completed across 43 projects. As a result, it was one of the top 10 industrial markets for deliveries. The metro had slightly larger facilities delivered compared to 2023, when 49 developments totaling 10.9 million square feet came online.

The largest warehouse completed last year is NorthPoint Development’s Building 2 within North Vegas Logistics Center, according to CommercialEdge. The facility spans 1 million square feet and is part of a two-building campus totaling more than 2 million square feet.

8. Charlotte

Charlotte’s industrial deliveries dropped by more than 25 percent year-over-year as of December. Last year, the metro saw 37 projects spanning 11.1 million square feet come online. Additionally, the market’s under-construction pipeline at the end of the year clocked in at 5.7 million square feet.

One of the most notable deliveries in the area is The Silverman Group’s 1.4 million-square-foot 1305 Liberty Ridge Road in China Grove, N.C. The Class A fulfillment center was a build-to-suit project for Macy’s.

9. New Jersey

Last year, New Jersey saw more than 10 million square feet of industrial space delivered across 49 projects. This represents a nearly 25 percent decrease from 2023, when 59 logistics hubs totaling 14.2 million square feet were completed.

Following a period of robust construction and leasing activity, the metro is now experiencing a slower pace due to rising vacancy rates and increasing local opposition to new developments. As of December, the market had 5.5 million square feet under construction across 28 projects, the smallest pipeline among these metros.

In June, Bridge Industrial completed Bridge Point 999, a 291,758-square-foot building in South Brunswick, N.J. The developer financed the construction with a $53.5 million loan originated by Mesa West Capital.

10. Austin

In the last decade, Austin has emerged as a prime location for both commercial and residential development. Last year, the metro maintained its status as one of the top markets for industrial deliveries, with 10 million square feet across 88 projects completed, with no single facility exceeding 400,000 square feet.

These numbers are consistent with those in 2023, when 10.6 million square feet came online across 82 developments. Additionally, the market had 13.5 million square feet under construction across 63 projects as of December.

The post Top 10 Markets for Industrial Deliveries appeared first on Commercial Property Executive.

As vacancy rates climbed, loan delinquencies rose, and property values dropped through the year, landlords have increasingly been disposing of their underperforming office assets. Other alternative solutions, such as repositioning or converting, continue to remain popular choices.

Slow construction activity

As of December, D.C.’s office pipeline comprised 1.1 million square feet of space across seven properties, representing 0.3 percent of existing stock—below the national average of 0.8 percent. Among gateway markets, Boston led with 3.4 percent, followed by San Francisco’s 2.3 percent. When adding projects in the planning stages, the figure reached 3.1 percent—exceeding the national average of 2.9 percent and outperforming Chicago’s 2 percent, as well as Manhattan’s and Los Angeles’ 3 percent.

By comparison, at the end of 2023, a total of 3.5 million square feet of office space was under construction in D.C. In December 2024, Boston was the gateway city with the largest under-construction stock (8.7 million square feet), followed by San Francisco (3.8 million square feet). Only Chicago’s pipeline was smaller than the U.S. capital’s, with 870,344 square feet underway.

The largest office project currently underway remains the 420,000-square-foot 600 Fifth St. NW. Developed by Rockefeller Group and Stonebridge, the $375 million development topped out in May, with completion expected by 2026.

Construction starts included 964,674 square feet across three properties, accounting for 0.2 percent of existing stock, while developers completed 2.4 million square feet across 11 properties, representing 0.6 percent of total stock. Among significant completions in D.C. is Dulles Discovery 5, a 514,000-square-foot office building completed in early 2024 in Herndon, Va. Developed by Peterson Cos., the property is within the company’s Dulles Discovery, a 2.4 million-square-foot mission-critical development.

D.C.’s sales volume second in the nation

At the end of 2024, the metro’s office transactions totaled $2.6 billion, with 104 properties comprising 12.3 million square feet changing hands. Last year’s investment volume rose 19.8 percent year-over-year, propelling the metro to second place among gateway markets, behind Manhattan’s $3.9 billion.

The first quarter of last year was the busiest in terms of deals, ending with $947.4 million trading, point after which the sales volume decreased until December. Despite this downward trend, Washington, D.C.’s investment activity in 2024 picked up, compared to 2023, when 9.9 million square feet traded for $1.9 billion.

Significant transactions include CoStar Group’s $373 million acquisition of CEB Tower at Central place, a 560,000-square-foot office building in Arlington, Va. A joint venture between PGIM Real Estate and JBG Smith sold the Class A+ property at 1201 Wilson Blvd. in February.

Another notable deal was MRP Realty’s $225.7 million purchase of Gallery Place at 616 H. St. NW, a 297,002-square-foot property in D.C.’s Seventh Street Corridor submarket. In joint venture with Global Fund Investments, MRP bought the asset after its previous owner defaulted on a $179 million loan backed by the mid-rise building.

Office properties traded at an average sale price of $211 per square foot—above the national figure of $175 per square foot. Across similar markets, Miami emerged as the priciest metro, with $400 per square foot, while the lowest sale prices were recorded in Chicago ($85 per square foot).

Vacancy rate continued to climb

Washington, D.C.’s office vacancy rate clocked in at 18.5 percent as of December—slightly below the national figure of 19.8 percent and marking a 60-basis-point increase year-over-year. The metro’s rate was higher than in Miami (15 percent), Manhattan (16.6 percent) and Boston (17 percent). The highest vacancy rate was recorded in San Francisco, at 28.8 percent.

Significant leases in 2024 include Washington Post’s 300,000-square-foot extension at One Franklin Square. The property totals 612,189 square feet and is owned by Hines and General Motors Pension Fund.

Additionally, Fannie Mae signed a long-term commitment of 340,000 square feet at Midtown Center in downtown D.C. Carr Properties and IGIS Asset Management are the owners of the 867,000-square-foot building.

High potential for office-to-residential makeovers

As vacancies increased in most markets, office-to-residential conversions remained an attractive option for property owners. CommercialEdge launched the Conversion Feasibility Index, a new tool that highlights markets with strong office-to-residential repositioning potential, using a set of property-level scores. Powered by Yardi, the CFI score has three tiers, with Tier I assets being the most suitable candidates.

Washington, D.C. has 72 properties totaling 6.4 million square feet in the Tier I category. Additionally, there are 421 office buildings in the Tier II category, totaling approximately 53.8 million square feet.

Developer Penzance has filed plans for an office-to-residential conversion that includes two buildings in Arlington, Va., within the Rosslyn submarket. The pair of properties are at 1901 N. Fort Myer Drive and at 1911 N. Fort Myer Drive and total 249,684 square feet. The proposed project is set to include two residential towers with 862 apartment units and a condominium tower with 82 units. The 1960s buildings hold CFI scores of 95 and 91 points, respectively.

Coworking gains ground at affordable rates

Washington, D.C.’s coworking sector comprised 6.4 million square feet across 277 locations as of December. Manhattan was the gateway market with the largest flex office footprint (11.3 million square feet), while D.C. outperformed Boston’s 4.9 million square feet. The metro continued to emerge as a hotspot for virtual office providers due to its affordable rates, which last year dropped as low as $80 per month, according to CoworkingCafe.

The metro’s share of flex space as percentage of total leasable office space reached 1.6 percent—lower than the national average of 1.9 percent and than its peer markets. Miami led the ranking with a 3.8 percent figure.

WeWork was the flex office provider with the largest footprint in D.C., with locations totaling 566,182 square feet. The company was followed by Regus (528,779 square feet), Industrious (508,332 square feet, Spaces (453,864 square feet) and Local Works (400,997 square feet).

The post DC Office Investment Picked Up Steam in 2024 appeared first on Commercial Property Executive.

A joint venture of Ryan Cos. and Alidade Capital has broken ground on Chandler Freeways Business Park, a 190,475-square-foot industrial development in Chandler, Ariz. The duo will convert a 175,654-square-foot existing office building as part of the project. Completion is scheduled for the fourth quarter this year.

Plans call for the conversion of the two-story office building into an 87,600-square-foot, single-story industrial facility. Additionally, the developers will build a second, 102,875-square-foot industrial asset. Butler Design Group provided design services.

Chandler Freeways Business Park will feature clear heights between 28 and 32 feet, speed bays ranging from 40 to 60 feet, as well as a total of 26 dock-high doors and 11 grade-level doors.

READ ALSO: Phoenix Industrial Development Remains Fast-Paced

The development is taking shape at 6955 W. Morelos Place, less than 1 mile from Highway 202 and about 19 miles southeast of downtown Phoenix. The Phoenix Sky Harbor International Airport operates 12 miles away.

Ryan Cos.’ office-to-industrial ventures

In November 2024, Ryan purchased the office property for $16.8 million from Landwin Management Co. Verizon had leased the asset since 2004. The office building didn’t start out as such. It was originally built as an industrial facility and later converted into an office building. Now, due to its conversion-minded design, it’s slated to go back to its initial usage.

This isn’t the first time Ryan and Alidade partnered to turn office into industrial in metro Phoenix. The duo joined forces last June to redevelop the 128,048-square-foot Red Mountain Corporate Center in Phoenix into Innovate48, a 163,000-square-foot industrial facility. Completion is expected next quarter.

Metro Phoenix industrial completions hit a new record

Industrial completions skyrocketed last year, with 42.9 million square feet brought online across metro Phoenix, setting a new record, according to a Cushman & Wakefield report. The supply glut led to seven consecutive quarters of vacancy increases, bringing it up to 12.7 percent in December.

Several projects wrapped up during the last quarter. Rockefeller Group completed a 418,400-square-foot distribution center in Surprise, Ariz., while Thompson Thrift brought online the 400,000-square-foot first phase of the Germann Commerce Center in Phoenix.

The post Ryan Cos. JV Starts Office-to-Industrial Conversion in Phoenix appeared first on Commercial Property Executive.

The facility will serve as a centralized hub for Southwire’s distribution and shipping activities in West Georgia, combining the operations of the company’s three existing distribution sites in Villa Rica, Ga.

The new development, which will become one of Southwire’s largest facilities, is expected to be completed by the third quarter of 2026. A year ago, Southwire opened a distribution center in Dallas-Fort Worth.

Georgia continues to bolster its status as the epicenter of industrial real estate in the Southeast due to textbook key factors such as extensive infrastructure connectivity, numerous ports and intermodal terminals, as well as business-friendly state policies, according to Avison Young’s Chris Hoag, CCIM.

READ ALSO: Industrial Real Estate’s Future Depends on Adaptability

“National capital market investors who activate these distribution centers and industrial projects have taken a keen interest in Georgia as they look to capitalize on the Southeast region’s continued population growth,” Hoag said.

Spec industrial projects meet rising demand

In January, Hoag and his colleagues Jason Holland, CCIM, and Andrew Joyner, CCIM, arranged the sale of 66.8 acres of land near the new Northeast Georgia Inland Port on behalf of the buyer, Alliance Industrial Co., for the development of two speculative industrial buildings totaling 540,408 square feet. Building 100 will be 113,536 square feet, and Building 200 will be 426,872 square feet.

To be named Alliance 985 Business Park, Alliance will break ground on the project in the first quarter of 2025 and is slated to deliver in early 2026. Alliance 985 Business Park is designed to meet the increasing demand for industrial space, featuring clear heights of 32 and 40 feet and ample auto and trailer parking.

With immediate access to I-985 and within 15 miles of I-85, it is well-connected to local, regional and national distribution channels. Tenants will benefit from proximity to key logistics hubs such as UPS and FedEx, while the Northeast Georgia Inland Port directly links to the Port of Savannah through Norfolk Southern.

The post Southwire Launches 1 MSF Georgia Distribution Hub appeared first on Commercial Property Executive.

The redevelopment is being financed by the United Nations Development Corp., a public benefit corporation founded in 1968, which will issue as much as $380 million in bonds for the project. Goldman Sachs and Siebert Williams Shank will be the underwriters for the financing.

The plan calls for a number of top-to-bottom building renovations, overseen by architectural firm Spacesmith, whose other projects include the U.S. embassies in Mexico City, Turkey and Indonesia, a number of consulates, the Staten Island Family Justice Center and the Queens Flushing Library, just among its civic designs. The scope of the UN Plaza project will be about 900,000 square feet.

Cushman & Wakefield manages the asset and is spearheading construction management of the renovation through its Project & Development Services team.

Cosentini Associates has been tasked for the mechanical, electrical and plumbing work, with Turner Construction Co. as the overall construction manager, which inked a Project Labor Agreement with the Building and Construction Trades Council. Work is slated to begin sometime in the second quarter and conclude in about two years.

New York City Mayor Eric Adams made the announcement, asserting that the plan would create about 18,000 jobs. As an employer, the UN is already one of New York City’s major ones, employing about 20,000 people, mostly in office positions.

READ ALSO: When Office Meets Hospitality

Besides cosmetic upgrades, the buildings will receive up-to-date energy efficiency systems under the aegis of the state’s BuildSmart 2025 initiative, whose goal is to achieve 11 trillion BTU of energy savings at state facilities this year. By way of comparison, total energy production in the entire state (in 2022) was 512 million BTU, according to the U.S. Energy Information Administration.

Other renovations will be undertaken by tenants in their own space, and there will also be building-wide fire safety system upgrades, and changes to align the structures with updated disability codes and regulations. CBRE acted as advisor to UNDC in the project, and Newmark acted as advisor to the UN for the project.

A slice of history

Famed worldwide, the 1950s UN headquarters building was only the initial development in Manhattan’s Turtle Bay neighborhood. The 358,000-square-foot One UN Plaza and the 369,000-square-foot Two UN Plaza, which include office space but also a hotel on the top floors, along with Three UN Plaza, were developed to meet the needs of the UN as it grew during the 1970s and ’80s.

The redevelopment of One and Two UN Plaza, which are owned by the UNDC, will enable further consolidation of UN personnel, according to the mayor’s office. The United Nations Children’s Fund, which maintains its global headquarters at Three UN Plaza, will own the building in 2026.

NYC office market sees renewed strength

The announcement comes at a time when the New York office market is making something of a comeback from pandemic-era lows. Net absorption for 2024 came in at a negative 5.7 million square feet, though total leasing was 38.1 million square feet, a post-pandemic high, according to Newmark data.

Though still negative, the 2024 absorption represented a considerable improvement for the Manhattan office market, and closer to pre-pandemic levels, such as in 2016, when absorption was exactly the same, Newmark noted. In 2020, there was negative absorption of 20.8 million square feet of office on the island, and in 2021 that total had expanded to 23.6 million square feet.

Overall availability in the Manhattan office market was down 70 basis points quarter-over-quarter in the fourth quarter of 2024, Newmark reported, to 17.9 percent. In Midtown, which includes Turtle Bay, availability contracted much more quickly, down 350 basis points between the third and fourth quarters.

Newmark also reported that leasing activity in Midtown rose to 27.8 million square feet in 2024, the highest level since 2019, and 23 percent higher than the historical long-term average for that metric.

The post United Nations Buildings to Undergo $500M Makeover appeared first on Commercial Property Executive.

RAF Pacifica Group has completed Escondido Logistics Center, a two-building,147,054-square-foot industrial property in Escondido, Calif. Development costs rose to $60 million.

The San Diego Water Authority acquired one of the buildings upon completion, in a $38.8 million deal brokered by Colliers International. Cushman & Wakefield represented the seller in the transaction and is marketing the second property for lease.

RPG secured a $11.4 million construction loan from City National Bank in 2023, CommercialEdge data shows. The company acquired the development site in 2022 for $4.5 million from JRMC Real Estate, according to San Diego County public records.

READ ALSO: Top 5 Markets for Industrial Deliveries

The 7-acre property is at 1903 and 1943 Citracado Parkway, within Escondido Research and Technology Center, a 22-acre business campus. It is near Interstate 15, which allows for easy access to San Diego and Los Angeles. Montgomery-Gibbs Executive Airport is 25 miles away while San Diego International Airport is within 33 miles.

Escondido Logistics Center’s two buildings measure 88,000 and 58,000 square feet. Features include 28-foot clear heights, grade-level loading doors, dock doors and heavy power. RPG envisioned the property to accommodate manufacturing and distribution users.

Executive Vice Chairman Aric Stark and Senior Director Drew Dodds with Cushman & Wakefield are marketing the remaining 58,000-square-foot facility for lease.

Some 5.5 million square feet planned for San Diego

A few large deliveries took shape in metro toward the end of last year. Among these was Chestnut Properties’ 380,000-square-foot Gillespie Field iPark in El Cajon, Calif. In January 2024, the developer secured $91 million in construction funds for the project, which was already 40 percent preleased to GKN Aerospace.

During the last quarter of 2024, the San Diego industrial market had 2.8 million square feet of space under construction, with an additional 5.5 million square feet in the planning and permitting stages, according to a Cushman & Wakefield report. A significant share of this upcoming space is in the Otay Mesa submarket.

The post RAF Pacifica Group Delivers $60M San Diego Project appeared first on Commercial Property Executive.

Cypress Equities, a national real estate investment and development firm, is partnering with New Orleans-based Lauricella Land Co. on the office building at 1600 Convention Center Blvd. Located at the corner of Henderson and Euterpe streets, it will be the first vertical development to be started in the River District, a 39-acre mixed-used neighborhood adjacent to the New Orleans Ernest M. Morial Convention Center.

Shell Plaza is expected to be completed by September 2026. The building will consist of 117,941 square feet of Class A office space fully leased by Shell on floors five to eight. There will be parking on floors two to four and 6,407 square feet of ground-floor retail space. The building will feature column-free floorplates of about 30,000 square feet and include a 3,101-square-foot fitness center.

READ ALSO: Why the Metroburb Model Works

“At this point, the ground-floor retail is intended for a restaurant that will serve as a premiere dining destination for visitors to the River District and adjacent convention center as well as Shell employees and guests,” Chris Maguire, Cypress Equities CEO, told Commercial Property Executive. He said a restaurant tenant has not been announced.

Financing Shell Plaza

Capro Capital, a Las Vegas-based real estate private equity firm, is providing equity for the project. While Maguire declined to release details on the total project cost or financing package, a $74.5 million senior loan was originated by the Tannenbaum Capital Group Real Estate platform, a group of affiliated commercial real estate-focused debt funds focused on primary and secondary metropolitan areas of the Southern U.S.

Sunrise Realty Trust Inc. and Southern Realty Trust, both lenders on the TCG Real Estate platform, closed on a total of $64.5 million. SUNS, a Nasdaq-listed mortgage REIT and institutional commercial real estate lender, closed on a $44 million commitment to the $74.5 million senior loan. SRT, a private mortgage REIT which originates CRE debt investments and provides capital to high-quality borrowers and sponsors, closed on a $20 million commitment. The remainder of the loan was syndicated to an unidentified affiliated lending partner.

Building design highlights

Situated on a 1.6-acre parcel, Shell Plaza was designed by global architecture firm Gensler with a glass curtain wall that will complement the history and vibrant culture of New Orleans. The architecture incorporates elements inspired by the Mississippi River’s shipping industry and will feature metal panels and a palette of bronze, metal, glass and concrete. The building’s sustainable design, which includes LEED certification, will include expansive glass facades, a polycarbonate mesh screen for the parking podium and a rooftop garden with views of the river and downtown. There will also be green areas and public spaces on the lower level along with the retail space.

Employees and visitors to Shell Plaza will have expansive views of the Mississippi River and convenient walking access to downtown New Orleans and residential neighborhoods including the Garden District.

Broadmoor LLC is the general contractor and Integrated Logistical Support Inc. of New Orleans is the civil engineering firm for the Shell Plaza project.

Mixed-use district plans

River District Neighborhood Investors LLC is a group of mixed-use and residential developers selected in 2021 by the New Orleans Ernest N. Morial Convention Center Authority to develop a mixed-use community with sidewalks, bike paths and green spaces designed to revitalize the vacant land along the riverfront. Louis Lauricella, a managing member of Lauricella Land Co., a fourth-generation real estate development firm in New Orleans, is also manager of RDNI.

The largest nonindustrial/oil and gas project in Louisiana history, the River District is expected to generate $43 million of net new annual tax revenues and more than $1 billion in economic activity. In addition to Shell Plaza, plans call for condominiums and apartments, retail space, hotels, restaurants, sports and entertainment venues. Of the anticipated 900 multifamily units, 450 are to be affordable or workforce residences.

The post Shell HQ to Anchor $1B Mixed-Use Development appeared first on Commercial Property Executive.

The Miami office sector posted strong fundamentals throughout 2024, according to the latest CommercialEdge data. The metro marked a more than 41 percent jump in investment volume year-over-year, recording the busiest period in the last quarter.

Last year, high prices in the Magic City placed it fourth in the nation, the market also emerging as the most expensive gateway city for office deals, with assets trading at higher prices than even in Manhattan. Additionally, Miami’s end-of-2024 vacancy rate was the lowest in the U.S.

Significant projects boost Miami’s pipeline

As of December, the metro had 1.8 million square feet of space underway across 18 properties, accounting for 2.6 percent of existing stock—way above than the national average of 0.8 percent. Among gateway markets, Boston led the rankings with 3.4 percent, while Miami outperformed San Francisco (2.3 percent), Seattle (1.2 percent), Los Angeles (0.7 percent) and Washington, D.C. (0.3 percent). When adding projects in planning stages, Miami’s share reached 9.6 percent, second after Austin (12.6 percent).

The list of the largest projects under construction in the metro saw no changes as of December. Royal Caribbean’s new headquarters remains the largest development, scheduled to come online in early 2026. The 380,000-square-foot project is rising at 1050 Caribbean Way in Miami’s central business district.

The second-largest project underway is UHealth Medical Center at SoLé Mia, a 363,000-square-foot medical office development in North Miami. Turnberry and LeFrak Organization are the developers, with the completion date pushed to September 2025.

Projects that started going vertical last year added up to nearly 1.4 million square feet across 10 properties, representing 1.7 percent of the existing stock. Additionally, developers completed 1.2 million square feet across nine properties—accounting for 1.5 percent of total stock.

The largest office project underway for years, the 640,000-square-foot 830 Brickell tower by OKO Group and Cain International came online in October 2024. The project was the first Class A tower to be constructed in Miami’s urban core in more than a decade, and currently includes top-tier tenants such as Microsoft, Blackstone, WeWork and CI Financial Corp.

A top market for residential makeovers

Office-to-residential conversions emerged as an attractive option in recent years. As a response to this trend, CommercialEdge launched a tool that measures a building’s potential for residential conversion and highlights which markets post strong repurposing fundamentals. The Conversion Feasibility Index scores include three tiers, with Tier I properties being the most attractive candidates for such makeovers.

At the end of 2024, Miami had 21 office properties totaling nearly 2.9 million square feet within the Tier I category, while the Tier II included 138 buildings totaling 11.5 million square feet. The metro has a notable amount of office space posting high potential for residential conversions, with 3.7 percent of its office assets in Tier I and 12.4 percent in Tier II—emerging above the national averages 2.7 percent and 12.1 percent, respectively.

Ending the year as the priciest office market

Last year, Miami’s office sector saw in $1.4 billion in deals, with 46 properties totaling 3.5 million square feet changing hands—marking a 41.3 percent increase over the year. The volume reached $159.8 million at the end of the first quarter, while investment activity picked up during the second and third quarters. The last quarter ended with $668.7 million in deals—representing a 70.1 percent year-over-year growth.

In terms of total sales volume, Miami ranked fourth in the nation, after Los Angeles ($1.2 billion), while Manhattan led the rankings with $3.9 billion. The metro outperformed Chicago ($1.1 million), San Francisco ($786.6 million) and Seattle ($598.8 million).

Notable deals included the $443 million acquisition of 701 Brickell, a 685,215-square-foot high-rise. Nuveen Real Estate sold the 33-story property in one of the largest office transactions in Florida.

In 2024, Miami assets changed hands at an average sale price of $400 per square foot—above the national average of $175 per square foot. The Magic City emerged as the most expensive office metro in the nation, outpacing Manhattan ($369 per square foot), San Francisco ($350 per square foot) and Los Angeles ($281 per square foot). Chicago recorded the lowest figure among gateway markets, with an average sale price of $85 per square foot.

Mami’s vacancy rate lowest in the U.S.

Miami’s office vacancy rate stood at 15.2 percent as of December—below the national average of 19.8 percent and marking a 30-basis-point raise. The metro’s rate increased through 2024, from the 12.4 percent recorded in January.

The Magic City’s vacancy was the lowest across the nation. Miami was followed by Manhattan (16.6 percent), Boston (17 percent) and Chicago (18.8 percent), while San Francisco posted the highest U.S. rate at 28.8 percent.

Notable office leases that closed last year in Miami include DigitalBridge’s headquarters relocation agreement: a 79,141-square-foot deal in Delray Beach Fla. Later on, in September, MetLife Real Estate Management secured a 128,450-square-foot renewal at Wells Fargo Center in downtown Miami. The lease represented the largest office commitment in the city’s central business district in recent years.

Coworking share the highest in Miami

The coworking sector in Miami comprised approximately 3 million square feet across 144 locations as of December, slightly less than in Seattle (3 million square feet). Manhattan led the rankings with 11.3 million square feet, followed by Chicago (7.7 million square feet) and Los Angeles (6.5 million square feet).

Miami’s share of flex office space as percentage of total leasable office space reached 3.8 percent, the highest across gateway markets and above the national average of 1.9 percent. The coworking provider with the largest footprint in the metro remained Regus, with operations totaling 379,211 square feet. The companies that followed were WeWork (268,578 square feet), Spaces (226,223 square feet), Quest Workspaces (221,749 square feet) and Industrious (215,000 square feet).

In early December, Regus signed a 45,789-square-foot full-building lease in Miami Beach, Fla. The deal came after WeWork closed its location at Azora Exan’s 429 Lenox in May.

The post Miami’s Office Market Topped the Charts in 2024 appeared first on Commercial Property Executive.

The developments include the 181,993-square-foot Building 7, the 249,413-square-foot Building 11 and the 194,195-square-foot Building 12. Building 7 is slated for completion in the fourth quarter, while the other two will be complete by the first quarter of 2026.

Building 7 will feature a 32-foot clear height, as will Building 12. Building 11 will be taller, at 36-foot clear height. Building 7 will also include 39 dock doors, while Building 11 will have 54 dock doors and Building 12 will have 48 dock doors.

READ ALSO: Industrial Real Estate’s Future Depends on Adaptability

Horizon 16 is on Jimmy Deloach Parkway and Interstate 16, a site that is one of the last developable parcels that can accommodate bulk distribution within 15 miles of the Port of Savannah, according to the developers.

Phase Two is a follow-up of the completed Phase One, which includes 1.1 million square feet across three facilities and is 74 percent leased to such tenants as Ferguson and Harbor Freight. 

Evans serves as the project’s general contractor, while architect Atlas designed it. CBRE Senior Vice President William Lattimore is handling leasing at the property.

Trinity and Barings have formed joint venture partnerships to develop industrial properties before. The companies recently developed 85 Exchange, a 1.3 million-square-foot industrial park outside of Charlotte, N.C., which includes Amazon as a tenant.

Savannah industrial market in growth mode

Savannah is currently an industrial boom town, with 24 industrial projects underway as of the end of 2024’s last quarter, according to a Colliers report, totaling some 9.9 million square feet. Of that total, 69 percent (6.8 million square feet) were spec developments, while 31 percent (3 million square feet) were build-to-suit facilities. Completions totaled 15.8 million square feet.

Meanwhile, net industrial absorption was 693,000 square feet—excluding Hyundai and related suppliers—bringing the total for 2024 to 8.8 million square feet. The vacancy rate witnessed a minor uptick to 9.29 percent from the 9.25 percent recorded by the end of the third quarter.

And Savannah is preparing for more industrial growth as its infrastructure expands. The Port of Savannah is already the fourth-largest port by TEUs in the U.S., according to the Bureau of Transportation Statistics, and 14th in total tonnage. The U.S. Army Corps of Engineers continues its Savannah Harbor Expansion Project to deepen the entire harbor from its current 42-foot depth to 47 feet, which will add to its capacity.

The post Trinity Capital, Barings Expand Savannah Industrial Campus appeared first on Commercial Property Executive.

Florida’s waterfront commercial development boom is being driven by migration, demographic shifts and evolving tenant preferences, creating a surge in demand for mixed-use, lifestyle-driven spaces.

According to Ryan Shaw, first vice president of investments at Marcus & Millichap, “waterfront development in Florida is shifting away from traditional, single-use zoning, instead evolving into multi-functional destinations where people can live, work, relax and socialize in one integrated space.”

These waterfront developments in Florida are attracting both residents and tourists by offering vibrant, sustainable communities that cater to modern lifestyles. The appeal of these waterfront spaces has grown in the post-pandemic era, with tenants prioritizing amenities like food, beverage and entertainment as key features of new projects, Shaw added further.

READ ALSO: Why Mixed-Use Developments Are All About the Right Synergies

Florida continues to attract a significant number of residents, especially from the Northeastern U.S. Many newcomers are downsizing from single-family homes and seeking access to resort-style amenities without the burden of maintenance, elaborates Dominic Pickering, executive director at BTI Partners. This trend, coupled with growing demand for waterfront living in Florida, has led to a shift in the types of commercial developments that are taking root along Florida’s shores.

The natural human connection to water also plays a critical role in driving demand for Florida’s waterfront development.

“Waterfront spaces offer relaxation, connection to nature and a unique sense of place, making them ideal for dining, leisure and community interaction,” said Andrew Hellinger, principal at URBAN-X. However, in areas like Miami-Dade County, limited available waterfront land has increased competition and demand among developers.

Despite a recent slowdown in demand due to rising construction costs, increased supply and the impacts of natural events, the overall outlook for Florida waterfront commercial developments remains strong. Mika Mattingly, executive vice president at Colliers, emphasizes that Florida’s business-friendly environment and high livability ratings continue to support demand for premium waterfront properties, particularly in South Florida, where luxurious new projects remain highly sought after.

In response, developers are adapting to these market shifts by creating Florida waterfront developments that blend convenience, walkability and vibrant amenities, while prioritizing long-term sustainability in the face of climate challenges.

Florida’s transformative waterfront developments

This adaptability is evident in Florida’s waterfront commercial developments. The state’s coastline is undergoing a remarkable transformation, with an influx of commercial waterfront developments that blend office, retail, hospitality and entertainment spaces with scenic waterfront access. From Miami to Tampa, these waterfront developments are harnessing the state’s natural beauty and booming growth to create vibrant, mixed-use destinations that appeal to both businesses and residents alike.

In Miami, the Miami River Landing project exemplifies this shift, offering a dynamic combination of office, retail and residential spaces along the river. Its proximity to key urban amenities and waterfront views makes it a highly desirable location for businesses looking to establish a presence in Miami’s growing commercial waterfront development district.

READ ALSO: How Coral Gables Is Cementing Its Status as a Top Office Market

Similarly, the $2 billion Bahia Mar redevelopment in Fort Lauderdale is positioning itself as a commercial waterfront hotspot, offering luxury amenities, a marina and retail outlets. This ambitious project aims to transform the area into a “Mini Monaco,” further enhancing its appeal as a waterfront commercial development destination, while hosting events like the Fort Lauderdale International Boat Show, which draws millions annually.

On Tampa’s waterfront, the Water Street Tampa project stands out as a major Florida commercial waterfront development. This mixed-use project combines office spaces, retail, hospitality and public areas with a walkable design, aiming to become the city’s new economic hub. Nearby, 401 East Jackson is an office tower offering sweeping views of the waterfront and proximity to downtown amenities, reflecting Tampa’s increasing appeal as a commercial waterfront center along the Gulf Coast.

The Westshore Marina District in Tampa also blends commercial and luxury waterfront living, featuring high-end retail, dining and office spaces. This 52-acre development is anchored by the exclusive Marina Pointe, with a private marina offering access to the Gulf of Mexico, making it a prime location for businesses that value both luxury and waterfront accessibility.

North Bay Village, situated between Miami and Miami Beach, is another area drawing significant commercial waterfront development interest. MG Developer’s revitalization of this location includes a variety of new office, hotel and restaurant concepts that cater to the area’s growing demand for Florida waterfront commercial spaces.

Tackling challenges, seizing waterfront opportunities

Florida’s waterfront development is a balancing act, with developers navigating a complex landscape of rising costs, environmental concerns and evolving regulations. According to Alex Zylberglait, executive managing director of investments at Marcus & Millichap’s Miami office, Florida’s waterfront development faces significant challenges due to escalating land prices, rising construction costs and higher insurance premiums.

Additionally, the demand for infrastructure improvements—such as upgraded transportation and water systems—adds complexity to projects, often resulting in impact fees. Stricter building codes, implemented after the Surfside building collapse, are also reshaping how developers approach planning and execution, further influencing the development landscape.

Environmental sustainability is a critical factor influencing Florida waterfront projects. Developers must protect fragile ecosystems like mangroves and coral reefs, which play vital roles in biodiversity and storm protection.

Shoreline stabilization and sea-level rise adaptation are now standard considerations in project planning. MG Developer emphasizes the importance of incorporating eco-conscious features, while also ensuring compliance with stringent environmental regulations. Pollution control is another pressing issue, with initiatives to maintain clean waterways becoming a priority for long-term project viability.

“Waterfront spaces offer relaxation, connection to nature and a unique sense of place.”

—Andrew Hellinger, Principal, URBAN-X

At the same time, waterfront commercial projects are evolving to meet growing demand for vibrant, multi-use destinations. Developments like Tampa’s Water Street and Riverwalk are setting new standards by integrating retail, dining and entertainment into dynamic urban spaces. Miami River projects similarly combine hospitality, nightlife and marina access, offering both functionality and luxury.

The focus is expanding beyond traditional oceanfront locations to include riverfronts and bayfronts, as seen in Jacksonville and Fort Lauderdale, which offer untapped potential for innovative Florida commercial waterfront hubs.

Looking ahead, resiliency will shape Florida’s waterfront developments. Elevated construction, stormproof designs and sustainable materials are becoming the norm, ensuring projects can withstand rising sea levels and extreme weather. As Shaw notes, emerging markets like Cocoa Beach and North Bay Village are poised for growth, driven by improved infrastructure and accessibility. According to Hellinger, “rising sea levels and extreme weather events are reshaping development strategies, with a focus on resiliency and long-term viability.”

Florida’s waterfronts are not just about scenic views—they are evolving into dynamic commercial waterfront centers that balance economic opportunity with environmental responsibility, setting the stage for sustainable growth over the next decade.

Read the February 2025 issue of CPE.

Wave are images by Magnilion/iStockphoto.com

The post What’s Propelling Florida’s Waterfront Development Rush? appeared first on Commercial Property Executive.

A joint venture between Trammell Crow Co. and Clarion Partners has broken ground on the third and final phase of Weiser Business Park in Cypress, Texas. Upon completion in October 2025, this stage will add 628,012 square feet of speculative industrial space in two buildings, expanding the campus to 1.7 million square feet.

Cadence Bank provided construction financing, which according to CommercialEdge clocked in at $32.5 million. Cadence also issued a note of $31.9 million for the previous phase, which debuted in 2023 and added 521,600 square feet to the industrial park.

Seeberger Architecture provided design services for phase three, which comprises two facilities. A&F General Contractors is also part of the development team. The same crew worked on Weiser Business Park’s second phase.

READ ALSO: Industrial Real Estate’s Future Depends on Adaptability

The duo will feature a cross-dock configuration and 36-foot clear heights, as well as a combined total of 136 dock doors and eight ramp doors. The two buildings will pursue LEED certification upon completion.

The 130-acre Weiser Business Park rose on the site of the former Weiser Airpark, which opened in the mid-1940s and shuttered its operations in 2019. Carrying the addresses 14311 and 14281 Fallbrook Drive, the last two infill construction sites are 24 miles northwest of downtown Houston.

Buildings one through four are 93 percent leased. The tenant roster includes Western Post, a warehousing operator based in China, and Pratt Industries, a packaging manufacturing company, as well as R.S. Hughes, a distributor of industrial supplies, among others.

Metro Houston’s industrial starts outpace deliveries

Greater Houston’s industrial pipeline encompassed 11.5 million square feet of space underway in December, according to a Cushman & Wakefield report. Speculative industrial developments accounted for 95 percent of the total under-construction space.

During 2024’s last quarter, construction starts clocked in at 4.0 million square feet, outpacing industrial deliveries—which landed at 2.0 million square feet—for the first time since 2022’s fourth quarter, the report shows.

The market’s vacancy rate stood at 5.5 percent at the end of 2024, a 120-basis point decline compared to 2023, the same source reveals. This drop was due to less supply hitting the market last year. Just 16.4 million square feet of industrial space debuted in 2024, as opposed to 35 million square feet in 2023.

As deliveries dwindled and vacancy tempered, new projects may take root in select submarkets this year, Cushman & Wakefield predicts. One industrial development that broke ground earlier this year was the 463,000-square-foot Patriot Business Park in Houston’s Northern submarket. Investment & Development Ventures and Standard Real Estate teamed up for the campus, which is slated for delivery in 2025’s third quarter.

The post Trammell Crow, Clarion Kick Off 628 KSF Industrial Project appeared first on Commercial Property Executive.

This first phase consists of two speculative Class A warehouses totaling 1,556,350 square feet on 215 acres. Building 1 measures 538,450 square feet, while Building 2 is 1,017,900 square feet.

The cross-dock facilities feature 40-foot clear heights, 185-foot concrete truck courts, abundant trailer and car parking, more than 290 dock door positions and four drive-in ramps. Each building features a roofing system that can accommodate future solar panels, ample electrical service, an ESFR fire protection system and a 3,900-square-foot, air-conditioned office area.

A Trammell Crow spokesperson confirmed to Commercial Property Executive that there is no leasing at the property yet.

READ ALSO: Atlanta’s Industrial Sector Among the Busiest in 2024

Designing of Jackson 85 North’s second phase is underway and includes two additional speculative warehouses measuring 210,080 and 524,160 square feet. Phase Two could also accommodate a build-to-suit warehouse of up to 750,000 square feet.

When the project was first announced in January 2023, the plans for the second phase featured a single building of about 700,000 square feet.

Jackson 85 North is about 60 miles northeast of Atlanta, with easy access to Interstate 85 and the rest of metro Atlanta.

Marketing and leasing for the entire project are being led by Wilson Hull & Neal Real Estate.

Ports, inland and not

Metro Atlanta’s northeast submarket will be benefitting from a major development by the Georgia Ports Authority, according to a new report from CBRE. The 104-acre Northeast Georgia Inland Port is expected to break ground within the next year.

The inland port will feature 9,000 feet of working track initially, a quantity that will eventually double, as well as a start-up capacity of 80,000 container lifts, all to be served by Norfolk Southern. Strategically, the facility is intended to expand the Port of Savannah’s reach into Northeast Georgia, in part from the fact that it’s less than 20 miles from I-85.

In late October, Trammell Crow Co. and MetLife Investment Management completed a quite different industrial project at the other end of the U.S., a two-story industrial property totaling about 702,000 square feet. Seattle Metro Logistics is about 3 miles from the Port of Seattle.

The post Trammell Crow, CBRE IM Deliver 1st Phase of Atlanta-Area Project appeared first on Commercial Property Executive.

Lincoln Property Co. has completed Maverick Distribution, a 435,680-square-foot industrial facility in Houston. The Class A property was developed in a joint venture with HIMCO and is currently available for lease.

Texas Exchange Bank provided a $28.5 million construction loan originated in September 2023, according to Harris County public records. The same source shows that Lincoln Property Co. purchased the development site in 2022, from The National Realty Group Inc. The development team included Powers Brown as architect of record and EE Reed as general contractor.

Maverick Distribution is at 18239 Aldine Westfield Road, covering a 26-acre lot. The property allows easy access to interstates 45 and 69, as well as to Beltway 8. George Bush Intercontinental Airport is within 4 miles from the property, downtown Houston is within 18 miles and William P. Hobby Airport is within 30 miles. Notable corporate neighbors in the area include Amazon, Coca Cola, Sysco and Farouk Systems, among others.

The property includes 40-foot clear heights, being the first asset with such ceiling capacity in the North Houston area. The building was designed to meet highly technical needs of advanced logistics companies. It also includes cross-dock configuration with 102 overhead doors, ample column spacing, ESFR sprinkler systems and 70-foot speed bays. Additionally, Maverick Distribution features ample parking spaces, with 289 vehicle parking spots and 134 trailer parking spots.

Lincoln Property Co.’s Executive Vice President Kevin Wyatt, Leasing Representative Robert Willard and Associate SuAnna Sanchez are leading leasing efforts for Maverick Distribution. The property has spaces that are divisible to as much as 100,000 square feet or can be used by a single tenant.

Houston’s industrial pipeline

As of December last year, Houston’s pipeline had 12.4 million square feet underway, a recent CommercialEdge report shows. The metro ranked third among top U.S. markets, outpaced only by Phoenix (22.4 million square feet) and Dallas-Fort Worth (18.9 million square feet).

Recent developments include GreensPORT Logistics Park, a two-building, 535,478-square-foot project that broke ground in October. Developed by Jackson-Shaw, the complex is expected to come online in the third quarter of this year.

In recent months, Hines also broke ground on Grainger’s Houston Texas Distribution Center, a 1.2 million-square-foot project in Hockley, Texas. The property will become one of Grainger’s largest facilities, hosting about 400 employees in the first year.

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Moreover, the market had 8.2 million square feet under development during the same period, significantly surpassing the 3.3 million square feet recorded in December 2023.

Despite this growth, the metro’s vacancy rate increased 310 basis points year-over-year, as the influx in new supply put a dent in the metro-level average. Throughout the year, 9.3 million square feet of industrial space was delivered.

However, recent major projects underscore the market’s resilience and robustness. In January, Hines and Aubrey Corp. announced plans for a 10 million-square-foot mixed-use development, encompassing more than 2,390 acres. The industrial segment of this project will occupy more than 1,200 acres across two campuses, with the rest of the space being used for data center, retail, hotel and residential purposes.

Development pipeline grows, still below national average

At the end of December, Atlanta’s industrial sector had 8.2 million square feet under construction, more than double the 3.3 million square feet registered in December 2023. The 26 projects in the pipeline are expected to account for 1.4 percent of the metro’s total inventory.

The market’s development index was below the 1.7 percent national average, but above peer markets such as Chicago (0.5 percent), Indianapolis (1.2 percent) and New Jersey (1.0 percent). Phoenix (4.5 percent) continued to lead nationally.

At the end of the year, The Broe Group acquired a 14-acre site in Georgia’s Fulton County Industrial District for the construction of a 225,000-square-foot build-to-suit facility. The building will have rail service, with pad-ready construction expected this February.

Additionally, 18 projects totaling almost 4.9 million square feet broke ground last year. One of them is Stonemont Financial Group’s Stonemont Park 75 South, a 903,701-square-foot industrial development in Locust Grove, Ga. In June, the firm obtained a $42.5 million construction loan for the three-facility campus.

Industrial completions remain steady

Last year, Atlanta’s industrial market saw 26 properties coming online, totaling almost 9.3 million square feet—about 1.6 percent of the metro’s total inventory. This figure was slightly lower than the 9.7 million square feet completed in 2023.

Compared to peer markets, only Indianapolis (6.1 million square feet) and Kansas City (4.5 million square feet) saw less space delivered. Phoenix (32.7 million square feet) saw the most completions, followed by Dallas (29.1 million square feet) and Chicago (14.9 million square feet).

Last year, Panattoni Development completed the almost 1.4 million-square-foot Building 6 within Speedway Commerce Center, a 546-acre industrial campus in Hampton, Ga. Target agreed to prelease the distribution center in October 2023.

Assets trade for less, investment volume grows

Atlanta’s industrial investment volume reached roughly $2 billion last year, about $100 million higher than in 2023. However, assets traded on average for $108 per square foot, a slight year-over-year decrease from $116.

Among peer markets, New Jersey ($213 per square foot) and Phoenix ($162 per square foot) remained in the spotlight, while Chicago ($92 per square foot) and Indianapolis ($73 per square foot) were at the opposite end of the spectrum.

In one of the largest deals in the metro from last year, ATCAP Partners purchased Gwinnett Park, a 12-building, 753,700-square-foot light industrial park. Dogwood Industrial Properties, an investment platform of TPG Real Estate, sold the campus completed between 1973 and 1986.

Atlanta’s vacancy rate among the lowest nationally

At the end of December, Atlanta’s industrial vacancy rate clocked in at 6.8 percent, 310 basis points higher year-over-year. However, the figure is still 1.2 percent below the national average. Among peer markets, the metro had one of the lowest vacancy rates, while Indianapolis (9.8 percent) and Chicago (9.7 percent) had the most available space.

In November, Samaritan’s Purse signed a 172,000-square-foot, full-building lease at a warehouse at 1347 Highway 92 in Acworth, Ga. The charitable organization will use the space to process Christmas gifts for children. Prologis acquired the facility in 2023 from Link Logistics.

Other notable leases in the area include Souto Foods’ commitment to 200,000 square feet at Sugarloaf Logistics Hub, a 2.2 million-square-foot master-planned industrial development in Lawrenceville, Ga. Foxfield and AEW Capital Management are the owners of the property that also includes a cold storage element.

The post Atlanta’s Industrial Sector Among the Busiest in 2024 appeared first on Commercial Property Executive.

Ben E. Keith Foods has started construction on a 707,000-square-foot distribution center in Alachua, Fla. The project is expected to reach completion by fall 2026.

The warehouse is taking shape on a 148-acre lot on Technology Avenue within Interstate 10 Industrial Park, according to Milton Post. The firm acquired the site in June for $13.5 million, Alachua County records show.

This will be Ben E. Keith Foods’ second Florida location. The first one is a 83,500-square-foot warehouse in Gainesville that became one of the company’s holdings after it acquired Florida Food Services Inc. in 2022.

READ ALSO: Industrial Real Estate’s Future Depends on Adaptability

The firm has 10 divisions, shipping to 20 U.S. states. The upcoming facility will house its Florida Division headquarters and help expand its reach in the Southeast region.

When complete, the property will have 105 dock doors and parking for 120 tractor trailers. It will feature advanced logistics systems and 24/7 intake and outtake operations for better serving customers.

Industrial development in Greater Jacksonville

Industrial projects under construction in Greater Jacksonville, Fla., totaled 6.9 million square feet in the last quarter of 2024, a recent Colliers report shows. However, the pipeline is expected to shrink as construction starts were less often when compared to the last seven years. The majority of underway developments were warehouse or distribution facilities, while cold storage projects amounted to nearly 900,000 square feet.

In August, VanTrust Real Estate received approvals for a 547,000-square-foot warehouse within Imeson Park South in North Jacksonville. The speculative facility will be the developer’s fifth project to be constructed at the 3 million-square-foot master-planned campus.

The post Ben E. Keith Expands in Florida With 707 KSF Facility appeared first on Commercial Property Executive.

On the heels of outsized development that started in the pandemic and trailed off last year, industrial real estate investors and owners must now position themselves for the next stage of growth, challenged by high vacancies and growing tenant expectations.

Most of the issues that industrial owners and developers need to deal with today stem from a few years ago. From 2022 to 2023, more than 1.1 billion square feet of industrial space came online in the U.S. To put into perspective how enormous this volume was, the 330.7 million square feet completed in 2024 through November was still more than every year over the past 100 years prior to 2020, the latest CommercialEdge report shows.

This supply boom is what’s keeping vacancy rates elevated today. Overall, vacancy stood at 7.5 percent in November, way above the 4 to 2 percent range from three years ago, the same source shows.

On the plus side, tenants have much more high-quality product to choose from and this isn’t expected to change anytime soon due to the ongoing success of e-commerce, as well as reshoring and manufacturing.

Industrial sector’s tenant-favorable start to 2025

Decision-making around leasing is taking longer due to macroeconomic uncertainties, while maximizing logistics efficiency is resulting in footprint consolidations, leaving even more space empty as new supply outstrips net absorption. This focus on logistics efficiency will likely be a major trend for the industrial sector in 2025 and beyond. Businesses are prioritizing the efficiency of their transportation networks, access to infrastructure and proximity to consumers over securing lower rates in strategic locations, Executive Vice President & Head of Leasing and Customer Solutions at Link Logistics, Brandon Page, told Commercial Property Executive.

Nationwide, rents grew just 6.9 percent over a 12-month basis through November, the same CommercialEdge report shows, and industrial owners are expecting lower levels of construction this year to eventually lead to further rental stabilization, especially in the second half of 2025 as more space becomes absorbed. Page believes that users will continue to seek high-quality, well-located assets in infill locations as they continue to focus on optimizing their supply chains.

READ ALSO: Industrial Demand Slips, But Avoids a Slump

Several markets across the U.S. are poised for success, albeit for different reasons, given this context. Continued population growth across the Sun Belt, for example, will benefit markets like Dallas-Fort Worth, Atlanta, Nashville, Tenn., along with South Florida. On the other hand, regions like Chicago, Austin, Texas, and the Carolinas are bright spots that will benefit from the increase in domestic manufacturing.

With so much supply on the market, speculative development is expected to taper off. Speculative industrial development accounted for more than 80 percent of all deliveries through the first three quarters of 2023, with a similar trend occurring last year as well, according to Cushman & Wakefield Senior Director for Americas & Head of Logistics and Industrial Research Jason Price. The upward pressure on vacancy, coupled with the higher cost of capital, led to 2024 being the tail end of this outsized activity, as new starts fell sharply.

Despite all this, speculative development is not totally out of the cards for Prologis, the company’s Global Head of Research Melinda McLaughlin said. Nevertheless, activity will remain selective, targeting high-demand locations with minimal availabilities and competition. Companies that have significant land bank positions will be able to capitalize most on this, as economic conditions improve.

Reshoring, manufacturing growth will be a net positive

Flex industrial, manufacturing and R&D spaces are the most sought-after asset types by investors, according to surveys published by PwC and ULI in their Emerging Trends in Real Estate 2025 report. Although land availability and operational cost challenges led to a slower pace of onshoring, this will continue to be a main driver for industrial in 2025 and beyond.

In the Sun Belt and Midwest, clean energy manufacturing projects are expected to continue to grow. Proximity to key infrastructure—ports, rail and other major transportation hubs—along with access to essential materials, skilled workforces and suppliers are what attract manufacturers to these regions. The nature of production makes it more likely that these facilities are owner-occupied and thus removed from the competitive stack, noted McLaughlin. However, these create a spillover effect, spurring the growth of supplier networks that need to be nearby.

After location, the second-most important consideration in both leasing and development will be power availability, especially in the case of manufacturing, the PwC/ULI report highlighted. In this aspect, industrial real estate will increasingly compete with the data center sector, especially in regions like California, Nevada and Phoenix, where access to power is a growing barrier to entry.

Investments in automation, sustainability to ramp up

Electricity and water requirements are also tied to the growing popularity of automation, robotics and supply chain visualization technologies. Automation remains a significant capital improvement, but only a few groups are able to leverage it within their facilities. Over time, costs associated with this are expected to decrease, while operational efficiency will grow, making automation more accessible for warehouse users, according to Page.

Growing power requirements make it imperative for the sector to continue investing in renewables and sustainable building practices. At least 40 percent of industrial users are implementing net-zero goals, McLaughlin said.

Innovations like net-zero-ready facilities, rooftop solar and the electrification of logistics fleets—which in turn creates more demand for EV battery production—will play central roles going forward. The financial returns on sustainability, from direct investment and energy cost savings to indirect ones like customer retention and alignment with investor expectations, will far outweigh the short-term challenges.

As the industrial sector grows and evolves, developers and providers that can foster collaborative relationships with customers will stay ahead of the competition. The inevitable recovery in leasing activity will depend on smart growth, with sustainability and digitization as key differentiators in navigating global supply chain dynamics.

The post Industrial Real Estate’s Future Depends on Adaptability appeared first on Commercial Property Executive.

The location is at the intersection of interstates 65 and 840. The town is about 25 miles south of Nashville.

Simon will develop the mixed-use center in collaboration with Nashville-based Adventurous Journeys Capital Partners. That company works in the hospitality, mixed-use and residential sectors; its brands include Graduate Hotels, Marine & Lawn Hotels & Resorts and Field & Stream Lodge Co.

Preliminary project plans call for about 75 retailers, as well as restaurants and a hotel. Residential options and big-box retailers could be added at a later time.

A Simon spokesperson told Commercial Property Executive that the project is in such an early stage that a site plan and renderings are not yet available.

READ ALSO: Retail Development Is Bouncing Back, but the Game Has Changed

Simon already has some noteworthy retail assets in the Nashville area. These include the super-regional  Opry Mills, the metro’s largest shopping destination, featuring more than 200 stores and 20 restaurants. Another is The Mall at Green Hills, which Simon owns through a joint venture with Taubman Realty Group.

Last September, Simon Property Group LP amended, restated and extended its $3.5 billion credit facility. The move was intended to give Simon more financial flexibility as it expands experiential options at many of its malls.

Good neighborhood

Demand for retail space in Nashville rose steadily in 2024, according to a fourth-quarter report from Matthews Real Estate Investment Services. Available space was tight, however, despite the 1.3 million square feet delivered throughout the year. About 760,000 square feet was under construction as of December, a pipeline still below the metro area’s average for the past 10 years.

Based on Nashville’s strong population growth, Matthews predicted that retail vacancy will likely remain below 3.5 percent through the next five years, below the national average.

The post Simon Eyes Nashville Mixed-Use Center appeared first on Commercial Property Executive.

Tractor Supply Co. will develop an 865,000-square-foot distribution center in Nampa, Idaho, marking a nearly $225 million investment in the local economy. The building targeting LEED certification can be expanded by 150,000 square feet, according to plans filed with the city’s planning and zoning commission.

The development team includes Kimley Horn and H&M Architects/Engineers. Groundbreaking is slated for this spring and completion is expected by late 2026 or early 2027.

Upon delivery, the facility will serve more than 200 Tractor Supply stores throughout the Pacific Northwest. The project’s blueprints also include a hazardous storage facility which is set to stock flammable, combustible and corrosive liquids for commercial distribution.

READ ALSO: Industrial Sector Settles After Supply Surge

The site is at the northeast corner of Midland Boulevard and Ustick Road, about 23 miles west of downtown Boise, Idaho, and roughly 5 miles from Nampa’s city center. The location is also close to U.S. Route 26, Interstate 84 and Caldwell Executive Airport.

This will be Tractor Supply’s first distribution center in the Pacific Northwest region. At a national level, the company operates 10 such centers in New York, Arizona, Maryland, Georgia, Texas and Indiana, among other states.  

Boise’s industrial market sees vacancies spike

Boise had 1.5 million square feet of build-to-suit and 560,000 square feet of speculative industrial space as of December, according to a Cushman & Wakefield fourth-quarter 2024 report. Completions totaled more than 3.6 million square feet.

Meanwhile, the vacancy rate went up for the fourth consecutive quarter at the end of the year, landing at 7.9 percent in December. The index climbed 270 basis points year-over-year as overall absorption was down 54.2 percent from 2024’s quarterly average.

The post Tractor Supply Co. to Build Idaho Distribution Center appeared first on Commercial Property Executive.

Hines and Aubrey Corp. have teamed up to develop Aubrey Village, a mixed-use project spanning more than 2,390 acres in Bartow County, Ga., within Greater Atlanta. The multi-phase development’s timeline will stretch up to 12 years.

The industrial component will take up more than 1,200 acres across two separate campuses that are located on the project’s opposite ends. Another 600 acres are entitled for a mixture of retail and residential uses.

Upon completion, Aubrey Village will encompass up to 10 million square feet of manufacturing, data center, logistics, retail, restaurant and hotel spaces, as well as residential properties. The housing component will feature single-family homes, townhomes and apartments for 2,800 families.

READ ALSO: Why Mixed-Use Developments Are All About the Right Synergies

During Phase One, which is scheduled to kick off later this year or early 2026, Hines will work on the site’s infrastructure. Aubrey Parkway, the mixed-use development’s primary roadway, will connect all sections of the project.

Aubrey Village will take shape roughly 52 miles northwest of downtown Atlanta within Pine Log, a 14,000-acre former wildlife management area that The State Department of Natural Resources leased for almost 50 years. That changed in May 2023 when Aubrey Corp. opted not to renew the agreement.

Lee & Associates Executive Vice President Jim Ramseur and Research Coordinator Samantha Wheeler represented Aubrey Corp. in creating the joint venture with Hines. Ramseur Real Estate Advisors will provide counsel on the commercial and residential parcels.

Close to several employment centers

Situated alongside U.S. Route 411 at the Interstate 75 interchange, the site is also close to several current and future large employers operating in Bartow County.

Hyundai Motor Group, together with SK On, invested up to $5 billion in a new electric vehicle battery manufacturing facility at Bartow Centre, a zoned manufacturing and industrial site located on Highway 411. That factory is set to become operational this year.

Qcells, a solar industry operator, also invested $2.5 billion in a manufacturing facility within the county’s borders. Upon delivery, the property will produce 3.3 gigawatts of solar ingots, wafers, cells and finished panels. Construction work began in 2023.

And, earlier this month, county officials approved the rezoning of another 500 acres at Pine Log. The site, to be transformed into a granite mining quarry, is about 9 miles from the future Aubrey Village.

The post Hines JV Eyes 10 MSF Atlanta Mixed-Use Project appeared first on Commercial Property Executive.

Nestle USA has opened its new beverage factory and distribution center in Glendale, Ariz., a 630,000-square-foot facility. The company broke ground on the $675 million project in 2022.

Initially, Nestle wanted to construct the facility within the 1,340-acre Woolf Logistics Center masterplan, on a site the company acquired in December 2021. That development was supposed to span 625,000 square feet and cost about $400 million.

The newly completed project is located at 8351 N. 150th Ave. The 139-acre property is less than 26 miles from downtown Phoenix and 29 miles from Phoenix Sky Harbor International Airport.

READ ALSO: Phoenix Industrial Development Remains Fast-Paced

Nestle will use the manufacturing building to produce creamers for several of its go-to brands, including Coffee mate, natural bliss and Starbucks. It plans to employ 300 people.

The facility has 10 drive-in doors and 38 dock-high loading doors, as well as levelers and bumpers, and is equipped with advanced technology and digital tools, allowing it to adapt production to meet evolving consumer needs and trends.

The factory recycles and repurposes as much as 75 percent of its treated water using advanced management tools. It also uses renewable electricity to reduce carbon emissions and is zero waste for disposal.

The new manufacturing facility represents Nestle USA’s 20th food and beverage factory, adding to its over $3 billion investment in upgrading its manufacturing capabilities across the U.S. in recent years.

Phoenix’s industrial pipeline tops the nation

Phoenix’s industrial sector continued to lead nationally for under-construction inventory, with 24 million square feet underway as of November, according to a CommercialEdge industrial report. The metro’s vacancy rate during the month clocked in at 7.2 percent, slightly below the 7.6 percent national average.

In November, Thompson Thrift completed the first phase of Germann Commerce Center, spanning 400,000 square feet. Upon full build-out, the project rising in the southeast Phoenix suburb of Queen Creek will total 1 million square feet.

Other recent notable developments in the area include Rockefeller Group’s completion of a 418,400 square-foot distribution center on 24 acres in Surprise, Ariz.  Surprise Pointe Commerce Center can fit as many as four tenants and has 80 dock doors.

The post Nestle Opens $675M Manufacturing Facility appeared first on Commercial Property Executive.

Office deals in Denver posted a 31.3 percent year-over-year drop, but the metro’s total office investment placed it among the top-performing U.S. markets, outpacing San Francisco. Meanwhile, even if the metro’s vacancy rate became one of the highest ones in the nation, Denver still closed some significant leasing agreements since the start of the year.

As of November, there were 680,961 square feet of office space under construction across seven properties, accounting for 0.4 percent of total stock—below the national rate of 0.8 percent. The figure was on par with that of Detroit’s and Phoenix’s, while it outpaced that of Portland’s (0.1 percent). When adding projects in prospective and planning stages, Denver’s rate reached 2.8 percent of existing stock—still below the national rate of 3.0 percent.

Notable office projects came online

In terms of office supply, Denver’s pipeline outpaced that of Phoenix’s (529,050 square feet), Charlotte (524,657 square feet), while Atlanta led across similar markets, with 1.7 million square feet. One of the largest office developments currently underway in the metro is Beacon Capital Partners’ Steel House, a 309,308-square-foot project in Denver’s Five Points submarkets. Construction on the 12-story project started in February 2023, with $100.2 million in construction financing by Bank OZK. The project is designed to received LEED Gold and WELL certifications.

Another notable development nearing completion is the 134,393-square-foot CV Innovation Campus, a life science project in Louisville, Colo. Developed by Koelbel & Co., the project is an adaptive reuse development of a former 1996-built Lowe’s store into life science and R&D space aimed for biotech and pharmaceutical companies.

Year-to-date through November, developers had broken ground in 690,666 square feet across six properties, while deliveries totaled nearly 1.3 million square feet across seven properties—accounting for 0.7 percent of existing stock and marking a 19.8 percent year-over-year growth.

A recently delivered project is the 726,450-square-foot 1900 Lawrence, a Class A+ high-rise in Denver’s central business district. Completed in August, the 30-story office tower was developed by Riverside Investment & Development and financed by a $242 million loan by Bank OZK. Currently marketed for lease by JLL, the property is considered the largest skyscraper delivered in Denver in four decades.

Denver’s potential for office-to-residential makeovers

As vacancies continue to increase in most markets, office-to-residential conversion emerged as a trend for office owners across the U.S. CommercialEdge launched The Conversion Feasibility Index, a new tool that evaluates which markets show strong office-to-residential repurposing fundamentals, based on a set of property-level scores.

Denver had 18 properties totaling 1.7 million square feet in the Tier I category, with CFI scores between 90 and 100 points. Meanwhile, 212 properties accounting for 22.1million square feet of space made up the Tier II category, with CFI scores between 75 and 89 points.

One example of an office-to-residential project currently underway is the 124,000-square-foot building at 4340 S. Monaco St., that was purchased by Shea Properties. The company started the adaptive reuse project, with plans to add 143 affordable residential units. Originally completed in 2001, the Class A four-story property has been vacant for the past five years.

A drop in office sales

Year-to-date through November, Denver investors traded $768 million in office assets, with 60 properties totaling 8.2 million square feet of space that changed hands at an average sale price of $119 per square foot—below the national average of $179 per square foot. Among similar markets, deals were pricier in Phoenix ($164 per square foot), Portland ($164 per square foot), Atlanta ($148 per square foot), while Denver prices per square foot outpaced the ones from Houston ($107 per square foot) and Dallas ($115 per square foot).

The total sales volume in the metro was 31.3 percent lower on a year-over-year basis and placed Denver 13th among the top 25 U.S. office markets, outpacing San Francisco ($747 million), Seattle ($687 million) and San Diego ($651 million). Among notable deals in Denver is the $45.5 million sale of TeleTech Headquarters, a 271,678-square-foot property in Englewood, Colo. CommonSpirit Health, a Catholic hospital chain, acquired the property at 9197 S. Peoria St. from TeleTech Services, with plans to turn it into a medical campus.

Another significant deal is the $31.2 million sale of Sisters Grove Pavilion, a 116,367-square-foot medical office building in Colorado Springs, Colo. Harrison Street and MedCraft Investment Partners bought the property from CommonSpirit Health in October.

Office vacancy continues to rise

As of November, Denver’s office sector had a 24.6 percent average vacancy rate, one of the highest rates in the nation, and marking a 320-basis-point increase over the same period of last year. While the national rate was set at 19.4 percent, Atlanta and Phoenix were the similar markets with lower vacancy rates, with 17.8 percent and 18.4 percent, respectively.

Significant deals in the metro include Bet365’s 120,000-square-foot lease at One Platte, a 250,000-square-foot building owned by Nichols Partnership and Shorenstein. The U.K.-based sports betting firm opened its new U.S. corporate headquarters at the property in October, with the move expected to bring nearly 1,000 jobs in the area.

In May, Brookfield Properties signed a 121,000-square-foot renewal agreement at 717 17th St., a 693,565-square-foot property in downtown Denver. The tenant is Johns Manville, a Berkshire Hathaway subsidiary that will continue to use the space as its global headquarters through at least 2035.

A high share of flex office space

As of November, Denver’s coworking sector reached 3.7 million square feet of space, representing 2.2 percent of total leasable office space—above the national figure of 1.9 percent.

The largest flex office provider in Denver remained Regus, with operations totaling 694,250 square feet of space. The company was followed by WeWork (307,846 square feet), Expansive (229,867 square feet), Spaces (180,252 square feet) and Office Evolution (155,916 square feet).

The post Denver’s Office Sales Slow as Deliveries Tick Up appeared first on Commercial Property Executive.

The Texas Heritage Marketplace name applies to both the 750,000-square-foot regional shopping center and to the larger mixed-use project, which will eventually also encompass 550 apartments in two communities, plus almost 300,000 square feet of medical office space and self storage units.

The 165-acre site is at the southeast corner of I-10 and Texas Heritage Parkway.

NewQuest’s own architectural team aimed at creating a walkable environment with ample green space. The focus of this is a huge Heritage oak tree that was saved from the path of the recently completed parkway and relocated to the center of the development. (The Heritage oak is a hybrid of the English oak (Quercus robur) and the Bur oak (Q. macrocarpa).

READ ALSO: What’s in Store for Retail in 2025?

NewQuest reportedly has spent about 10 years preparing for this project, biding its time till the right point in the area’s rapid population growth—56 percent since 2020—and until the 6.5-mile Texas Heritage Parkway was completed. The latest trigger was the developer having secured Target as a 149,000-square-foot anchor tenant.

Patience is a virtue

Texas Heritage Marketplace might be part of a pattern for NewQuest. In the 1990s the developer acquired a 65-acre site in Tomball, Texas, also in metro Houston, but didn’t break ground on The Grand at 249, a 404,256-square-foot retail center there, until years later. In October 2023, Commercial Property Executive reported that the center had reached 96 percent preleasing.

Metro Houston’s overall economy is doing well, with job growth of 1.8 percent, above the national average 1.4 percent, year-over-year, according to a fourth-quarter report from Cushman & Wakefield.

The retail market, naturally, is thriving. Though average vacancy bumped up slightly, to 5.4 percent in the fourth quarter, closing 2024 significantly below historical averages.

In the Katy submarket specifically, vacancy was 4.7 percent on an inventory of 31.4 million square feet. Asking rents were up a landlord-pleasing 7.3 percent year-over-year, to $24.82 NNN asking, Cushman & Wakefield reported.

The post NewQuest Breaks Ground on $400M Mixed-Use Project appeared first on Commercial Property Executive.

Despite two bumpy decades, retail has demonstrated it’s capable of resilience and innovation. Recent data from PwC and the Urban Land Institute shows that vacancy levels are down, and high-growth areas are seeing a surge of demand for lifestyle and retail options. These trends, along with the anticipation that interest rates will remain stable, have engendered a sense of cautious optimism.

For the savvy retail developer, 2025 holds the promise of opportunity, as long as projects can adapt to new economic realities. And while uncertainty is always a function of the future, the new trends shaping retail development are becoming clearer.

Building where the people are

In the past, a lot more retail developers could buy land, build and assume the customer would follow. Today, higher land and construction costs mean funding a project and squeezing out a profit is more challenging. So, retail developers are increasingly following the people. This has led to the most significant growth in Sun Belt states including Florida, Arizona and Texas.

Even so, building in a high-growth area isn’t enough. “When we first saw lifestyle centers being launched, there was an aspirational mindset that failed to adapt to the realities of a particular area,” said Todd Caruso, retail investor lead for the Americas with CBRE. “There was also a mindset that an architect’s dream of something that worked in California would work just as well in Dallas. Obviously, this simply isn’t cost effective.”

Instead, sophisticated owners and developers are using location analytics to break down potential markets before they break ground. Using technologies such as geofencing and mass mobile retail analytics, developers can more clearly determine how many square feet a community can support. It also lets them match the format of the space and the mix of tenants that are going to succeed in a specific neighborhood.

Thinking outside the big box

Even before COVID-19, the industry faced record numbers of retail vacancies and a flood of bankruptcies and mass store closures, hitting aspirational brands the likes of Lord & Taylor and Nieman Marcus, as well as retail stalwarts such as Sears, JCPenney and Toys ‘R’ Us. Instead of aspirational brands, John Feeney, senior vice president at The Boulder Group, sees the industry moving toward brands that focus on both affordability and convenience. 

“We deal primarily with corporate tenants with strong balance sheets. Standout retailers in the net-lease sector with big expansion plans include Dollar General, TJX Cos. (TJ Maxx, Marshalls, HomeGoods), Dutch Bros and Chipotle,” mentioned Feeney. “As these tenants expand, they continue to target locations where they can offer their customers convenience.”

Thinking outside the box store also means that retailers are embracing a mixed-use model that blurs the line between shopping centers and community hubs. And while it may be possible to repurpose existing space, new development offers greater opportunities that may not be otherwise possible.

“New developments allow for the creation of spaces that speak to the soul of a community and foster social engagement while also meeting the evolving needs of modern retailers and consumers,” thinks Ron Bondy, executive vice president of leasing at Midwood Investment & Development. “They also offer an opportunity to incorporate cutting-edge design and optimize for sustainability and efficiency.“

Integrating retail into communities

Many retail projects are now linked to residential projects, as many developers assume convenient access to shops and dining can help draw residents. But offering shopping options isn’t enough. Now, many commercial projects include lifestyle options such as medical offices, gyms, workspaces and even sports facilities.

James Cook, Americas director of retail research at JLL, pointed to one example, The Bluhawk in Overland Park, Kan. “It’s anchored by a huge 420,000-square-foot sports and entertainment complex. With youth sports booming in America, this center is serving an underserved population, parents and families at all-day youth sports events looking to shop and grab a bite while they’re there.”

Retail developers are also looking at ways to activate their space to ensure the public will want to use it. Whether it’s an open-air trick-or-treating event, serving as the rally point for a 5K charity run or an experience tied to a streaming series, a retail space that’s open to the community and is social-media friendly will benefit from increased traffic and positive word-of-mouth.

Embracing omnichannel design

Online sales have been growing for the past 25 years, with data from the U.S. Federal Reserve showing e-commerce climbing from less than 1 percent of retail sales in 2000 to more than 15 percent by the end of 2023.

But brick-and-mortar stores are still part of retailer recipes. Shoppers who order items online will often opt for in-person pickup to save time and avoid delivery costs. Having a physical location for product returns and exchanges can develop customer loyalty and give retailers opportunities to up-sell in-store and position themselves for future sales.

READ ALSO: What’s in Store for Retail in 2025?

In an omnichannel world, new retail developers have realized that their design approach has to integrate both their e-commerce platforms and their physical locations.

Omnichannel design starts before the consumer even enters the store. Electric car owners will want charging stations, while those using public transport or rideshares will need dedicated and convenient areas to find their ride.

Once inside, omnichannel design means that retailers need to offer pick-up and delivery staging areas, curbside pickup and return spots. It also requires seamless integration of e-commerce apps with the store so shoppers can find what they need in less time and with less hassle.

For lifestyle centers that include restaurants, this also means accommodating the growth of food delivery apps by setting up special parking, entrances and waiting areas for drivers and diners who’d rather get their food to-go.

New retail development’s cautiously optimistic future

There is plenty of opportunity in new retail development, still. However, that optimism has also been tempered by an understanding that retail models of the past need to adapt to a changing consumer landscape.

As Bondy puts it, “Retailers are not opening as many stores as they did 15 years ago, so the importance of each location as a brand expression is magnified. For landlords, success will hinge on curating tenant mixes that reflect and serve the community’s specific needs and speak to who they are.”

The post Retail Development Is Bouncing Back, but the Game Has Changed appeared first on Commercial Property Executive.

Construction giant HITT Contracting has broken ground on a new headquarters building, a 270,000-square-foot structure in Falls Church, Va., which is part of metro Washington, DC. Completion is slated for early 2027.

Designed by architectural firm Gensler, the six-story building at 7125 W. Falls Station Blvd. will be largely office space for HITT, featuring collaborative work zones, wellness facilities and a 1-acre outdoor terrace. In its vicinity will be more than 55,000 square feet of urban parks, along with a 1,400-square-foot interactive digital experience pavilion designed to be a gathering place for locals.

The ground floor will feature a full-service conference center, café, and access to urban parks. The building’s second floor will feature various employee amenities, collaboration spaces, and access to the roof deck. Four additional floors of offices will also offer workspaces designed with neurodivergence in mind to support a variety of working styles.

READ ALSO: 2024 Employment Picture

HITT headquarters will also feature a 40,000-square-foot research lab developed in partnership with Virginia Tech’s Coalition for Smart Construction. HITT is a founding partner of the coalition, which is a university and industry collaboration that will engage with federal and state agencies with the goal of driving innovation in the construction sector.

The headquarters will aim to achieve LEED Platinum certification and meet net-zero energy and net-zero carbon goals. Among other features toward that end, the building will be powered by a 100,000-square-foot photovoltaic solar canopy and wind turbines, offsetting all its energy needs.

A HyperWall building envelope system, developed with building composites, will offer a stronger and more efficient construction, HITT notes. Other sustainable elements will include a power over ethernet system for lighting, power and data. Office furniture in the building will be produced from recycled materials from HITT’s 3D printing farm.

Research projects at the new HQ

HITT is one of the 20 largest contractors in the U.S., with 2024 projected revenues of $8.4 billion. The company employs nearly 1,900 workers across 14 office locations and job sites nationwide.

HITT’s R&D division will carry out more than 20 research projects at the new headquarters, according to the company. Notable ventures already in progress, which will continue at the new facility, include the development of a newly patented prefabricated building skin that reduces weight and increases speed to market.

The contractor is also pioneering the first use of the Caracol Heron AM robotic arm installed in the U.S. for 3D printing. That technology is aimed to augment traditional construction methods, as part of a larger effort to use robotics on-site.

The post HITT Breaks Ground on DC-Area HQ appeared first on Commercial Property Executive.

Trammell Crow Co. and Diamond Realty Investments have completed Mid I-5, the largest speculative industrial facility ever built in the Pacific Northwest region. Project partners were civil engineer Gibbs & Olson, general contractor Sierra Construction and HPA Architecture. Construction began in August 2023.

The 1,185,327-square-foot building and soon-to-be LEED-certified property is at 2700 Talley Way in Kelso, Wash. The location is adjacent to Interstate 5 and the busy Exit 36, 2 miles north of the Washington-Oregon state line and less than 50 miles from Portland, Ore.

READ ALSO: Industrial Sector Settles After Supply Surge

The single-story, cross-dock facility has 8,000 amps of electrical service, 40-foot clear heights, 650 feet of building depth, 348 trailer parking stalls, 427 auto parking stalls and 219 dock doors.

There’s enough connected land to accommodate 475 additional trailer stalls, a yard area or 225,000 square feet of additional building space. Cara Nolan of CBRE Portland and Andrew Stark of CBRE Seattle handle the marketing and leasing efforts at the property.

“Portland has seen industrial development migrate further north and south along I-5 as developable property has become increasingly hard to find or problematic to develop,” Tyler Sheils, SIOR, senior managing director – Logistics and Industrial at JLL, told Commercial Property Executive.

He added the region has also seen an increase in tenant requirements or owner/user build-to-suits of more than 500,000 square feet over the last 10 or so years.

Low supply for large industrial spaces

In 2024, the wider Portland metro area saw three occupiers commit to spaces of more than 500,000 square feet.

“The Mid I-5 Industrial Park is the only project that could accommodate a 500,000-square-foot tenant in a modern Class A facility that is currently available,” Sheils said. “There is one additional project under construction that will deliver in 2025. Users of this size will have very few options to consider.”

Despite Portland experiencing negative absorption in 2024, direct rents continued to climb largely due to new construction, according to JLL research. They increased modestly in the third quarter to reach $0.87 per square foot on the shell, marking a 3.6 percent year-over-year increase.

After the market saw new sublease space increase by 80 basis points over the past two quarters, JLL reported that sublease availabilities have slowed substantially, adding a marginal 16,000 square feet in Q4.

The post Trammell Crow JV Delivers Northwest’s Largest Industrial Facility appeared first on Commercial Property Executive.

The AI-spurring Stargate Project was front and center at the White House the day after the inauguration of President Donald Trump, but its real estate footprint remains undetermined beyond a group of data centers under construction in Abilene, Texas, about 150 miles west of Fort Worth.

Such a large expansion would face the same challenges as the industry as whole already does, including constraints on energy, construction resources and good sites for data centers, experts tell Commercial Property Executive.

$100 billion flood of investment

“We have a significant power issue that has to be solved before we need to consider construction resources,” Pat Lynch, CBRE’s global head of data center solutions, told CPE, referring to the industry’s ever-growing need for power. “It’s also challenging to know if there will be enough construction resources, because the timeline for allocating the capital to the project is still unknown.”

“Before considering construction resource availability to fulfill the announced $100B investment by the Stargate joint venture, we need to consider what power availability looks like,” agreed John McWilliams, a research manager at Cushman & Wakefield and the firm’s head of data center insights,.

“This is the first thing that developers are going to look at when evaluating a new project,” McWilliams said. “Can the grid support an x-megawatt project? This is also going to show significant variance from market to market.”

The announcement promised that Stargate would deploy $100 billion “immediately” as the beginning of an investment of $500 billion over the next four years “building new AI infrastructure for OpenAI in the U.S.,” which presumably means a large expansion in data centers, though no specifics were given. It is possible that some large percentage of the total would go toward developing power infrastructure for the new data centers, which is acknowledged to be a critical need to make Stargate work.

READ ALSO: Why Big Data Centers Are Going Nuclear

Nor is it clear whether the announced total funding includes previous funding for data centers announced by the lead companies, or whether they have that kind of capital to begin with. Tech mogul Elon Musk publicly asserted that they did not, which was in turn denied by SoftBank, which, together with OpenAI, Oracle and MGX, collectively formed Stargate. The partners made the project announcement on the first full day of the second Trump administration, with the president asserting his support through unspecified emergency declarations.

Assuming the capital can be deployed, and even if only a large percentage of that $100 billion goes into developing data centers per se, that could potentially represent an enormous bump for a sector that is already booming, and exacerbate the industry’s growth woes.

Through the first six months of 2024, a total of 78 data center projects began construction nationwide, according to Dodge Construction Network data, totaling more than $9 billion in investment. This is the largest value and number of projects that data centers have ever seen in a first half going back to 2008.

Data center growth capacity strained

“The Stargate initiative is a game-changer for data center development, but it’s going to test the industry’s capacity to deliver,” said Howard Berry, Avison Young principal of national data center solutions.

“We’re already seeing pressure on supply chains for critical materials like semiconductors and electrical components, and addressing those bottlenecks will require close coordination with suppliers and a proactive approach to securing resources,” he noted.

According to JLL’s 2025 global data center outlook, an estimated 9.8 GW is projected to break ground globally in 2025 across hyperscale and colocation segments, with 4.4 GW of that new construction in North America. Separately, 3.3 GW is likely to reach completion in North America this year.

“Most of that space is already pre-leased and won’t be enough to satisfy current demand,” Kristen Vosmaer, Managing Director, JLL Data Center Work Dynamics, told CPE. 

Thus there are enormous market incentives in play to spur growth among data centers, but Vosmaer said the challenges of growth can be met.

“While the supply chain and labor market remain somewhat constrained in some markets, these challenges are overcome by proper planning and collaboration,” Vosmaer noted.

Labor remains another big piece of the equation, Berry added. The shortage of skilled workers such as electricians, HVAC technicians and IT professionals means prioritizing training programs and actively bringing new talent into the field.

Cost is also a factor. Data center building costs have increased by more than 35 percent since the beginning of 2019, McWilliams told CPE, citing Cushman & Wakefield Research data.

There are also currently significant lead times required for data center components, some as high as 30 to 38 weeks to order generators and nearly 12 months for switchgear, McWilliams said. Labor availability and costs, show significant variance across markets with labor availability higher in larger markets.

“We are hearing about extended lead times for electrical equipment – switchgear, transformers, and so on, for development that is a challenge delaying construction timelines,” agrees Gordon Dolven, director of Americas data center research at CBRE.

“On the labor front, construction workers, mechanics, electricians, and plumbing experts are all required for a modern facility,” Dolven said. “Site selection factors into proximity to major airports for this specific reason.”

Tricky site selection challenges ahead

The data centers under construction in Abilene, now under the Stargate Project aegis, include 10 buildings totaling 5 million square feet, with a planned expansion of another 10 buildings of similar size, Oracle Chief Technology Officer Larry Ellison said at the announcement.

Stargate also said that talks are ongoing with local officials around the country to find sites for more data centers, but didn’t identify any particular locations. Virginia, Ohio and Texas are the top states for data center construction, with the accessibility of power infrastructure, a lower cost or wider availability of land, and the competitive tax incentives offered by the states figuring into their popularity, Dodge explains.

Adding further data centers to the largest markets, or even in other parts of the country, stands to be sometimes problematic, as the race will be on the sites necessary for expansion and competition for those sites will be fierce. Localities in various parts of the country are also pushing back on data center development as it stresses electric grids.

For example, a number of legislators from both parties in the Virginia General Assembly—whose state is home to more data centers than any other—are working on measures to tighten state oversight of data centers, perhaps even pause development, though for now no proposal is likely to pass.

To deal with site selection issues, one strategy that the data center industry is going to pursue is turning to emerging markets with ample power capacity, potentially opening new sources of labor as well, Vosmaer said.

Nevertheless, site selection will be increasingly tough, perhaps even more so as a flood of Stargate properties comes to market to compete for sites as well.

“Finding and preparing development-ready sites is an equally pressing challenge,” Berry noted. “Even if you locate a site with potential for power, you’re looking at a three- to four-year wait just to secure a breaker or transformer to turn that power on. That’s a serious bottleneck.”

Part of the solution is partnering with groups that already have a head start in addressing these issues, but the industry also needs to rethink its reliance on the traditional power grid.

“The future of data centers lies in self-generating power through technologies like SMRs (small modular reactors) or gas turbines,” Berry said. “Not only does this provide reliability, but it also creates the opportunity for data centers to feed power back to the grid using low-emission resources, making them a net positive for the broader energy ecosystem.”

The post The Stargate Project Promises a Data Center Boom. Can It Deliver? appeared first on Commercial Property Executive.

PMB and Sharp Rees-Stealy have topped out the 75,000-square-foot medical outpatient building at 480 H St. in Chula Vista, Calif., a San Diego submarket. The development team includes HGW as architect and Pacific Building Group as general contractor. Completion is expected later this year.

Project partners also feature Solaris Community Capital as new market tax credit consultant, Chase New Markets Corp. as civic community partners and Border Communities as new market tax credit lenders.

Located in South San Diego, the facility is taking shape on more than 15 acres within walking distance of downtown Chula Vista, while downtown San Diego is 9 miles northeast. Other medical providers in the area include Scripps Mercy Hospital and the Sharp Chula Vista Medical Center.

READ ALSO: Why the Medical Outpatient Sector Is Poised for Growth in 2025

Upon delivery, the three-story medical facility will provide advanced health care including primary and specialty care, urgent care, physical therapy, radiology, cardiology, neurology and laboratory services. Additionally, the building will comprise ground-floor retail space, including a pharmacy and a café.

The property will also include a 127,000-square-foot parking structure with 375 stalls. The low-rise will have a second-floor pedestrian bridge connected to the parking structure.

San Diego MOB sector holds steady, despite rising vacancies

Only 135,884 square feet of medical office space were under construction in metro San Diego in the third quarter of last year, according to a Cushman & Wakefield report. The figure represented 0.9 percent of the market’s inventory. Meanwhile, the medical office overall vacancy rate clocked in at 7 percent, up 40 basis points year-over-year.

In August, Turner Impact Capital’s Healthcare Facilities Fund received a $29.1 million loan for a 64,231-square-foot medical office building in Chula Vista, Calif. The borrower will use the funds to convert the mid-rise and another one in Costa Mesa, Calif., into modern medical facilities.

The post PMB Tops Out San Diego-Area MOB appeared first on Commercial Property Executive.

The campus is BeiGene’s U.S. flagship facility and its first U.S. manufacturing site. The other two are in Guangzhou and Suzhou, China. The company does have several U.S. offices in Cambridge, Mass.; Ridgefield, N.J.; Fulton, Md.; San Mateo, Calif.; and Emeryville, Calif.

IPS-Integrated Project Services LLC, a provider of engineering, procurement, construction management and validation services, and Meyer, a national architecture and design firm, played integral roles in the development and delivery of the three-year Hopewell project that expands BeiGene’s integrated manufacturing and research and development footprint in the U.S.

READ ALSO: Life Science Trends to Watch in 2025

Located on a 42-acre property at the 433-acre Princeton West Innovation Campus, the state-of-the-art facility provides flexibility for BeiGene to scale production of its cancer medicines. The company aims to create hundreds of new high-tech jobs at the site by the end of 2025.

The campus features the most advanced technology in the biopharmaceutical industry with the ability to expand to 1 million square feet over time. The end-to-end manufacturing capabilities create cost, speed and technology advantages as well as supply chain resiliency.

As lead architect, IPS led the design and delivery of the campus, including the biopharmaceutical manufacturing and utilities facilities as well as critical technical systems. The company also ensured the project met strict regulatory requirements.

Meyer provided ground-up architecture and interior design services along with overall campus design support for the 100,000-square-foot office and lab building, cafeteria and on-site café. The new facility combines office and lab functions. It also includes critical mechanical and utilities systems needed to support BeiGene’s clinical R&D capabilities.

Other project partners included developer Lincoln Equities Group, structural engineer Mainstay Engineering Group, civil engineer Van Note-Harvey Associates and construction manager DPR Construction.

Centrally located campus

BeiGene acquired the site from Lincoln Equities Group in November 2021 and broke ground on the project in April 2022. Lincoln Equities Group and H.I.G. purchased the Princeton West Innovation Campus in 2020 from former owner, Bristol-Myers Squibb, which had made more than $500 million in capital improvements before the sale.

The Mercer County campus is centrally located between New York City and Philadelphia less than 5 miles from Interstate 295, which provides access to Interstate 95. The campus has more than 30 buildings including biological product development and clinical manufacturing facilities, R&D assets, office buildings, a data center, a conference center, a fitness center, a child development center and parking garage.

In addition to BeiGene, other companies located at Princeton West Innovation Campus include Enzene Biosciences, Gennao, GenScript ProBio and PTC Therapeutics. The campus has space available for lease as well as development rights and build-to-suit opportunities.

New Jersey’s top life science market

One of the top 10 life science clusters in the U.S. as ranked by JLL, New Jersey’s market includes more than 12 million square feet. Of the top 20 pharma companies, 14 are located in New Jersey and eight of the top 10 R&D companies are also in the state, according to Newmark’s third-quarter life science market report for Northern New Jersey. The report noted demand for available lab space exceeded 1 million square feet as of late last year.

Several significant life science deals have been announced at other New Jersey life science campuses in recent years  In November, Revlon chose a 62,000-square-foot space at The Northeast Science and Technology Center in Kenilworth, N.J., for a science and innovation lab. NEST is a 100+acre campus dedicated to research and development innovations owned by a joint venture of Onyx Equities and Machine Investment Group. The JV acquired the campus from Merck, which moved out of all the campus buildings except one. Revlon said the facility’s existing lab infrastructure played a key role in its decision to lease space at the NEST.

Meanwhile, HELIX Health + Life Science Exchange, a 4-acre innovation district built by SJP Properties and New Brunswick Development Corp. near Rutgers University in downtown New Brunswick, N.J., is scheduled for delivery in the third quarter of 2026. The 1.2 million-square-foot project will house the New Jersey Innovation HUB and Rutgers Robert Wood Johnson Medical School.

The post IPS, Meyer Complete $800M Biopharma R&D Project appeared first on Commercial Property Executive.

BioMed Realty has topped out 585 Kendall, a 637,000-square-foot life science building in Cambridge, Mass. Development partners include CBT Architects, Suffolk Construction, Takeda and Global Arts Live.

The developer broke ground on the project in October 2022 and last year took out a $683.1 million construction loan from Sumitomo Mitsui Bank, according to CommercialEdge information. Completion is scheduled for next year.

Takeda Pharmaceuticals already preleased the development’s 600,000-square-foot office and lab space. The company will establish a dedicated research and development facility at the property. However, Takeda’s suburban campus will remain in Lexington, Mass., at 95 Hayden Ave.

READ ALSO: Boston Office Vacancy Up, Deliveries Higher

Located at 585 Kendall St., the proposed LEED Gold-certified building is taking shape less than 4 miles from downtown Boston and Boston Logan International Airport. The 16-story structure is also adjacent to Kendall Square.

When complete, the mid-rise will also include a 30,000-square-foot performing arts center with a 400-seat space, as well as flexible multipurpose rooms for workshops and meetings and an indoor garden developed in partnership with Global Arts Live.

Boston’s growing life science inventory

Boston leads nationally for life science construction activity, according to CommercialEdge research. Between 2019 and October 2024, almost 16.9 million square feet were underway in the market across 60 projects. In 2024 alone, more than 680,000 square feet of life science space broke ground, while deliveries amounted to 2.8 million square feet.

Last year, The Davis Cos. and Invesco Real Estate completed the second phase of The Quad, a 554,019-square-foot life science campus also in Cambridge. Scheduled to break ground this spring, the last phase will comprise 280,000 square feet.

The post BioMed Realty Tops Out Boston Life Science Building appeared first on Commercial Property Executive.

Developments and completions in metro Houston were below national figures as well. About 1.8 million square feet were under construction as of November, accounting for 0.7 percent of total stock. In terms of deliveries, less than 1.4 million square feet came online in the first eleven months of the year.

The metro’s investment volume remained steady, registering $940 million during the same period. However, assets traded well below the $179 per square foot national threshold, also due to several foreclosures in the metro.

Developments and completions remain below national figures

As of November, Houston’s underway pipeline consisted of almost 1.8 million square feet. This accounts for 0.7 percent of the metro’s total stock, faring better than Washington, D.C. (0.4 percent) and Phoenix (0.4 percent), but slightly below the 0.8 percent national index. Boston (3.6 percent) and Nashville (3.6 percent) had the largest share of under-construction space out of total inventory.

The market’s share of office space in the development and planning phases stood at 1.9 percent of existing stock, still under the national figure (3.0 percent). Atlanta (2.3 percent), Dallas (4.9 percent) and Austin (12.9 percent) were some of the more active metros.

One of the largest projects underway in Greater Houston is Building 5 within the South Campus Research. The University of Texas System is developing a seven-story, 600,000-square-foot office and research facility, expected to come online in the third quarter of 2027.

In terms of completions, Houston’ office sector saw roughly 1.4 million square feet coming online year-to-date as of November, accounting for 0.5 percent of its total stock. This figure was also lower than the national average, which stood at 0.6 percent, and represented an almost 50 percent drop year-over-year.

Among other major markets, the metro fared betted than Denver (1.3 million square feet) and Phoenix (646,629 square feet) but trailed behind Austin (2.1 million square feet) and Dallas (2.8 million square feet).

Earlier this year, Skanska completed 1550 on the Green, a 28-story, 382,000-square-foot office building in the city’s downtown. The high-rise is LEED Platinum-certified and has ground-floor retail space.

Office-to-residential conversions gain traction

Last year, CommercialEdge introduced the Conversion Feasibility Index, a tool powered by Yardi designed to evaluate the potential of converting office buildings into multifamily residences. As the trend of office-to-residential adaptive reuse gains traction, the CFI offers crucial insights for investors.

While Texas metros may not rank among leading U.S. markets for repurposing buildings, Houston currently has 152 office properties—totaling 24.9 million square feet—with a score higher than 75, placing them as Tier I and II candidates for potential conversions.

Earlier this year, DeBartolo Development completed the $100 million office-to-residential conversion of 1801 Smith Street, a 20-story office building in downtown Houston which had a CFI score of 86, indicating that the asset bore strong conversion potential. Dubbed Elev8, the residential property now features 372 luxury units.

Additionally, the company is currently working on another adaptive reuse project: the conversion of a 19-story office high-rise totaling 827,596 square feet. Upon completion, the development will generate 311 apartments.

More Houston assets doomed to foreclosure

Houston’s office investment volume year-to-date as of November clocked in at $940 million. The metro was surpassed by markets such as Austin ($990 million) and Atlanta ($1.1 million), while Denver ($768 million) and San Francisco ($747 million) were at the opposite pole.

Assets traded at $107 per square foot on average, well below the $179 national figure. Manhattan ($379 per square foot) remained the most expensive market, followed by Washington, D.C. ($213 per square foot) and the Bay Area ($293 pe square foot).

In November, The National Bank of Kuwait sold the Twentyfour25 Galleria for $27 million, after it foreclosed on the 285,000-square-foot office building. The previous owner, an entity associated with Jetall Capital, defaulted on a $51.7 million loan.

Earlier this summer, Interra Capita Gorup acquired The Esperson Buildings, two properties spanning 600,000 square feet, following foreclosure. The firm paid $12 million for the assets, previously owned by Contrarian Capital Management.

Houston’s vacancy rate decreases year-over-year

Houston’s office vacancy rate at the end of November clocked in at 24.3 percent, a 120-basis-point decrease year-over-year. Despite the drop, the metro’s share of available space was considerably larger than the 19.4 percent national figure.

Among other secondary markets, Austin (27.7 percent) fared worse, while Dallas (23.0 percent) and Atlanta (17.8 percent) performed better.

In September, Enterprise Products Partners signed a 23,537-square-foot leasing agreement with Frost Brown Todd at its 1.3 million-square-foot 1100 Louisiana St. The legal counselors will occupy a full floor at the high-rise.

Greater Houston’s listing rates as of November reached $30.2, posting a 0.8 percent growth year-over-year. This figure was also below the $32.9 U.S. index, but closer to peer metros Dallas ($30.5) and Nashville ($31.0).

Coworking inventory remains constant

Houston’s office shared space inventory as of November totaled 4.5 million square feet across 229 locations. This accounted for 1.8 percent of the market’s total inventory, slightly below the 1.9 percent national rate.

The metro’s inventory was on par with Dallas, but surpassed Philadelphia (1.5 percent) and Austin (1.7 percent). Miami remained in the lead, with 3.7 percent of its total stock designated as coworking space.

Regus remained the largest coworking operator in the metro, with 574,106 square feet across 34 properties. The Cannon (444,341 square feet) and Workstyle Flexible Offices (372,169 square feet) rounded up the top three.

The post Houston Office Figures Lag Behind National Metrics appeared first on Commercial Property Executive.

We’re ready to honor your achievements!

The 2025 CPE Influence Awards recognize the commercial real estate industry’s most noteworthy properties, projects and transactions. Does your office have unique design elements that attract tenants? Are you the top broker at your firm? Were you able to successfully reposition a property? We want to celebrate your successes.

Entries are due by 6/6.

We will be offering an early bird pricing until 3/28 of $275 for the first entry and $225 for each additional entry. After that, the first entry will be $325 and additional entries will be $275.

Explore our categories:

• Best Amenities
• Broker of the Year
• Brokerage Office of the Year
• Most Innovative Corporate Strategy
• Most Effective DEI Program
• Best Design
  • Data Centers
  • Industrial
  • Mixed-Use
  • Office
  • Retail
• Best Development
  • Data Centers
  • Industrial
  • Mixed-Use
  • Office
  • Retail
• Development Company of the Year
• Best ESG Program
• Executive of the Year
  • Industrial
  • Mixed-Use
  • Office
  • Retail
• Best Financing
• Humanitarian Award
• Interior Design
• Best Investment Transaction: Portfolio
• Best Investment Transaction: Single Property
• Best Lease
• Most Effective Property Management Program
• Property Manager of the Year
• Most Effective Repositioning/Redevelopment Plan
• Rising Star
• Top CRE Social Media Influencer
• Most Innovative Technology
• Unbuilt

The 2025 winners will be selected by a panel of judges representing expertise across all commercial disciplines. Interested in being considered for the judging panel? Email Jessica Fiur.

Winners will be announced and honored later in the year.

Questions? Contact Editor-in-Chief Jessica Fiur.

The post Enter the 2025 CPE Influence Awards appeared first on Commercial Property Executive.

Wexford Science & Technology and The University of Maryland, Baltimore have opened 4MLK, an eight-story, 250,000-square-foot life science building in Baltimore.

The developer broke ground on the facility, which is part of the university’s BioPark, in the fall of 2022. An $81.5 million loan originated by Ventas financed the construction, according to CommercialEdge information.

The multi-tenant lab and office building is the third such facility developed by Wexford within the campus.

READ ALSO: Life Science Trends to Watch in 2025

Located at 4 N. Martin Luther King Jr. Blvd., the mid-rise is within walking distance of the University of Maryland, Baltimore and less than 1 mile from downtown Baltimore. The Baltimore/Washington International Thurgood Marshall Airport is some 9 miles away.

The property comprises 160,000 square feet of Class A wet lab-capable space, 35,000 square feet of flexible, scale-in-place lab and innovation infrastructure and a 16,000-square-foot civic lounge and assembly space, along with an adjacent public plaza.

The building will house Wexford’s headquarters. In addition, a key tenant will be The University of Maryland School of Medicine, which will establish its new Edward & Jennifer St. John Center for Translational Engineering and Medicine at 4MLK. This center will enhance research collaborations and jointly develop cutting-edge innovations.

Part of a larger life science campus

The BioPark spans 14 acres and includes nearly 1.2 million square feet of laboratory, office, health-care and community-oriented space across seven buildings. Upon full occupancy, 4MLK will be home to the largest concentration of bioscience companies in the Greater Baltimore region.

The national life science construction pipeline has shown remarkable resilience, with 54.7 million square feet of new space underway between 2019 and October 2024, according to CommercialEdge data. Key life science clusters continue to prosper despite general economic challenges, largely due to their reliance on direct research and in-person collaboration.

The post Wexford, University of Maryland Complete Baltimore Life Science Building appeared first on Commercial Property Executive.

To facilitate the development, PowerHouse and Poe have secured access to an initial power capacity of 335 megawatts for the campus, which will be expandable to 402 megawatts. A new switch station will be built by regional utility LG&E, which is slated to be completed by September 2026, along with a dedicated on-site substation. 

Water is equally important for the development. The campus will benefit from Louisville Water Co.’s excess capacity within its water treatment system, as well as the nearby Ohio River, with an average of 75 billion gallons flowing by Louisville daily.

READ ALSO: Data Center Demand Keeps Surging, Despite Challenges

In the data center industry, Kentucky and southern Indiana have been relatively minor players, but there are indications that that is beginning to change. In 2024, Facebook parent Meta unveiled plans for a $800 million data center project in Jeffersonville, Ind., which is in metro Louisville.

Also last year, the Kentucky legislature enacted a 50-year tax-exempt program for a wide range of activities involving data centers: the sale, purchase, use, storage, consumption, installation, repair and replacement of data center equipment in large population centers in the Commonwealth, effectively Jefferson County. The Poe-PowerHouse project is taking advantage of the new tax exemption.

PowerHouse has 87 data centers underway or completed, representing more than 5.9 gigawatts of power, in six U.S. markets. Recent deals include receiving a $600 million loan for a 50 megawatt build-to-suit data center development in Northern Virginia along with partners Blue Owl Real Estate and Chirisa, and the purchase of 122 acres in Charlotte, N.C., to build a 300 megawatt data center campus in partnership with real estate investment management firm Town Lane.

Louisville-based Poe Cos. specializes in multifamily, industrial and hospitality development. The company’s partnership with PowerHouse represents its first foray into data centers.

Data center boom unrelenting and power hungry

Power is now key to the growth of the industry. Data centers use between 100 to 200 kWh per hour, or 72,000 to 144,000 kWh per month, according to IT infrastructure specialist PivIT. By contrast, the average American home consumes 10,500 kWh per year.

The U.S. has the most hyperscale data centers—north of 5,300 such facilities, PivIT notes. In 2019, the nation’s data center load was 19 gigawatts, a total that could reach 35 gigawatts by the end of the decade. 

Data centers also contribute to climate change through their energy consumption, though they don’t do so directly by producing carbon dioxide; the electricity they consume does, PivIT explains. Data centers are responsible for about 1 percent of global energy-related emissions.

The post PowerHouse JV Eyes Kentucky’s 1st Hyperscale Data Center appeared first on Commercial Property Executive.

Atlanta’s office sector headed toward 2024’s end with mixed performance, but continued to show more resilience than other Sun Belt markets, CommercialEdge data shows. Office buildings in Atlanta still traded at below-average rates, while the market’s overall vacancy managed to remain at relatively healthy levels, considering the sector’s woes.

A new coworking provider entered the market in 2024, while overall investment volume remained muted. Development was active in some areas, notably with big life science projects taking shape, along with some mixed-use.

Supply expansion stays on track

Atlanta had 1.7 million square feet of office space under construction as of November, which was 0.8 percent of existing inventory—on par with the national figure. Adding planned and prospective developments to the mix brings the share to 2.3 percent of stock.

Compared to other Sun Belt metros, Atlanta was severely behind Austin, Texas (3.7 percent of stock underway), but slightly ahead of Charlotte (0.7 percent) and Houston (0.7 percent).

READ ALSO: Office Report: Coworking Spaces Evolve for Post-Pandemic Needs

Portman Holdings’ office building within the mixed-use Spring Quarter project had been the largest under construction as of November—it was completed last month. The asset has 530,000 square feet of office, 15,000 square feet of private terraces and 20,000 square feet of amenity space. The larger mixed-use development is also slated to eventually include 40,000 square feet of retail, 370 luxury rental units and 600 market-rate units.

Developers completed 11 office buildings encompassing 1.6 million square feet across metro Atlanta year-to-date through November. This was 0.7 percent of existing inventory, 10 basis points above the U.S. and 20 basis points ahead of Houston (0.5 percent).

Georgetown Co., Beacon Capital Partners and RocaPoint Partners completed the first building of Campus 244, an adaptive reuse of a 1970s building, in the Perimeter North submarket. The asset has 377,775 square feet of rentable office space and is part of a larger mixed-use project, which is set to also include restaurants, retail and a hotel.

Another significant completion earlier in 2024 was Trammell Crow Co.’s first phase of Science Square, developed in partnership with Georgia Advanced Technology. The 368,258-square-foot building includes lab and clean room space, base-building systems, a 38,000-square-foot solar array and an energy recovery system.

Conversion potential grows

As office utilization continues to evolve and demand is nowhere near pre-pandemic levels, many owners are looking toward alternative solutions. Conversions to residential use continue to rise in popularity and Atlanta’s office sector is no exception. CommercialEdge created the Conversion Feasibility Index, a score calculated from various building characteristics aimed to help developers and investors identify office assets that have a high potential for conversion.

Atlanta had 16 office buildings—encompassing 2.6 million square feet—in the Tier I category for office-to-residential conversion, which have a CFI ranging from 90 to 100. It also had 74 properties—11.7 million square feet—in Tier II, which have a CFI between 75 and 89.

Invest Atlanta partnered with several companies—including The Integral Group, The Atlantic Cos., T. Dallas Smith & Co. and Lalani Ventures—to redevelop three office assets in the metro’s CBD, Atlanta Business Chronicle reported. The buildings at 1, 2 Peachtree St. and 14 Marietta St. total nearly 2 million square feet and are estimated to yield roughly 600 multifamily units, but plans are not final yet. Originally an office tower, 2 Peachtree St. NW dates back to 1966 and rises 44 stories. Holding a CFI score of 75, the property is slated to include 200 affordable units upon conversion.

Atlanta office sector’s vacancy below nation’s average

Office vacancy across metro Atlanta stood at 17.8 percent as of November, up 80 basis points year-over-year. Meanwhile, the national average increased 120 basis points, to 19.4 percent. Compared to its Sun Belt peers, Atlanta’s vacancy fared better than Austin (27.7 percent) and Houston (24.3 percent), but lagged Charlotte (16.4 percent).

Significant lease deals this year included a mix of renewals and new agreements. In September, T-Mobile renewed its 100,000-square-foot lease at CP Group and Farallon Capital Management’s One Ravinia.

In November, Jamestown signed a new tenant at its Ponce City Market. CONA Services agreed to occupy 49,000 square feet at the mixed-use property. The IT company will relocate from its 10 10th St. NE office, where it occupies 32,600 square feet.

Some larger deals took shape earlier this year, such as Building and Land Technology’s 180,000-square-foot agreement at Concourse Office Park in Sandy Springs, Ga. Newell Brands is the new tenant, set to move in by mid-2025.

New coworking firm enters Atlanta

In November, Atlanta had around 4.4 million square feet of shared office space, which was 2.1 percent of the market’s total rentable inventory. The coworking segment continued to steadily grow across the metro, with the share of coworking space being 20 basis points above the national figure. Compared to other Sun Belt markets, Atlanta outperformed Charlotte (1.9 percent), Houston (1.8 percent) and Austin (1.7 percent).

Last month, coworking provider e|spaces entered the Atlanta market. The company leased a 32,030-square-foot, full-floor space at Adventus Realty’s 1600 Parkwood Circle asset. Most of Atlanta’s flexible office is in suburban areas, and e|spaces’ first location is no exception, being in the Cumberland/Galleria submarket.

The post Atlanta Office Sector Shows Resilience appeared first on Commercial Property Executive.

Developer Gilbane and NJ Transit Corp. are planning to develop a 500,000-square-foot, 25-story office building in Camden, N.J. The project is part of the $250 million redevelopment of Camden’s Walter Rand Transportation Center, which has been underway since 2021.

The tower, which will be called the Beacon Building, would be partly occupied by Cooper University Health Care, which is undergoing a $3 billion expansion that will also include three new clinical towers. There is the possibility that the state of New Jersey will relocate civil courts to the Beacon Building.

READ ALSO: Why the Medical Outpatient Sector Is Poised for Growth in 2025

The Beacon Building will have five floors measuring 27,000 square feet each and 20 more measuring 18,000 square feet, according to Camden County.

Other aspects of the Walter Rand redevelopment will include updates to the site’s transportation center, originally developed in 1989, as well as a new parking structure and a public square. The PATCO Speedline subway and the River Line light rail connect to the center, along with a number of bus lines. NJ Transit owns the site, and Gilbane is the master developer.

The developers have not announced how much the structure will cost, nor its source of financing. They do note that the building will be the tallest in southern New Jersey outside of Atlantic City. The space will service the growth of “eds and meds” in this part of suburban Philadelphia, the developers assert.

Class A office demand in South Jersey

The demand for medical office space is robust in southern New Jersey, with almost 200,000 square feet of space leased in 2024 by the end of the third quarter, according to Newmark, which predicts that demand will continue to grow in 2025 as employment in the sector grows. Overall office space occupancy edged up 0.2 percent quarter-over-quarter in the third quarter of 2024.

Class A office space has the advantage in leasing. As of the third quarter of 2024, Class A office vacancy in southern New Jersey came in at 13.2 percent, or 206 basis points lower than the overall office vacancy rate, noted Newmark, with an annual average of an 117-basis point delta since 2020. That compares with a gap of only 62 points (with Class A vacancy lower) in the years between 2016 and 2019.

Health-care employment is a prime driver of office space use in the region, Newmark reported, along with leisure and hospitality and government. Health-care employment in Greater Philadelphia grew 4.8 percent year-over-year as of the third quarter of 2024, the most of any sector.

The post Gilbane JV Unveils Plans for Largest South Jersey Office Tower appeared first on Commercial Property Executive.

The company, a global data center operator with more than 30 sites worldwide, announced the acquisition of the property in Upper Burrell, Pa., for its latest project, TECfusions Keystone Connect. The price TECfusions paid Arconic Corp., a metal manufacturer that was spun out of Alcoa Corp. in 2016, for the 1,395 acres, was not disclosed.

TribLive.com reported TECfusions has already spent more than $150 million to prep Building J on the site and repurpose Buildings C and D. Arconic had announced plans to sell four of seven buildings on the site in 2022, according to the Western Pennsylvania news website. Alcoa still has a presence on the site as well.

READ ALSO: Data Center Demand Keeps Surging, Despite Challenges

By using an adaptive reuse strategy, TECfusions will be able to rapidly deliver infrastructure to meet the growing demand for artificial intelligence and high-performance computing. The company said the campus has 12 MW of immediate capacity. A brochure for the site, located within New Kensington in Upper Burrell Township, notes 1 GW has already been leased. Among the site advantages listed in the brochure are contract to deployment in less than six months and the availability of tax abatements and incentives.

The project has received a $2 million grant from Pennsylvania’s Redevelopment Assistance Capital Program, a program to incentivize design, acquisition and construction of improvement projects. Information released about the funding noted three buildings will be reserve powered by a dual fuel energy-efficient, low-emission on-site microgrid. The number of microgrids is growing throughout the U.S., particularly  for use at energy-intensive properties like data centers, industrial, advanced manufacturing, health-care, retail and critical infrastructure developments.

TECfusions states the facility will feature on-site power generation using natural gas, enabling dual utility and microgrid capabilities that will ensure reliability, efficiency and reduced dependency on increasingly costly utility power. The firm may also export excess power to support the local electrical grid.

The first phase of TECfusions Keystone Connect will include equipment, emergency generation, UPS systems, electric switchgear, transformers, breakers, cabling and building materials, according to the RACP. To be eligible for RACP funding, projects must have a regional or multi-jurisdictional impact and generate substantial increases or maintain current levels of employment, tax revenues, or other measures of economic activity.

Expanding in Virginia

The news about TECfusions’ plans for the Western Pennsylvania data center campus comes just two months after the firm obtained a 15-year loan of approximately $300 million to fund the development and expansion of its Clarksville, Va., data center property. The loan will fund the Phase 1 buildout and other company key initiatives including providing AI-ready infrastructure and sustainable power generation solutions.

The Clarksville site will have four data halls with a combined capacity of 37.5 MW. C-Hall already came online in September and construction of D-Hall is expected to be completed next month.

The expansion was needed to serve the needs of one of its key tenants—TensorWave—which leased 1 GW of AI infrastructure capacity at the facility, marking one of the largest commitments in the sector.

TECfusions acquired the original 22.5-acre site and 196,000-square-foot facility with 500 kilowatts already live and immediately began upgrading it. The company recently acquired 66 acres for a planned expansion.

The post TECfusions Unveils Massive Data Center Campus Near Pittsburgh appeared first on Commercial Property Executive.

Globally, the data center capacity is likely to expand 15 percent per year through 2027, perhaps more, with capacity in the Americas (led by the U.S.) expanding to roughly 30 gigawatts.

One of the prime spurs of data center growth will be the parallel growth of AI applications, which are expanding rapidly across nearly all U.S. and global industries. Capital expenditures on the technology have risen sharply during this decade, including that by Alphabet, Amazon, Meta and Microsoft, with preliminary estimates putting the total at more than $200 billion in 2025, or more than twice as much as in 2020.

AI demand will mean more than just accelerated power demand, but also a push for further miniaturization in data center design. JLL anticipates that advances in chips will eventually reach 250 kW per rack, an amount the report calls “astounding.”

“The ability to train, iterate and improve AI models at much faster speeds is making the entire AI ecosystem more valuable,” the report noted. “The pace of AI innovation will continue to accelerate with each new generation of GPUs.”

READ ALSO: Are Data Centers Immune to CRE Market Forces?

Though AI will continue to grow, for the data center industry, data storage and cloud-based applications still make up the majority of demand. Optimistic adoption scenarios suggest that AI workloads will still represent less than 50 percent of data center capacity in 2030.

Energy demand

Data centers use a considerable amount of energy, but they will actually represent a relatively small portion of the near-future increase in demand for energy, despite media attention on the subject. Currently, only about 2 percent of electricity worldwide goes toward powering data centers. The increase in electricity demand by data centers through 2030 is projected to be less than a third of that needed for both EVs and air conditioning.

Even so, the fact that data centers tend to cluster in certain places, such as Northern Virginia, tends to put pressure on power grids in those places. In Virginia, data centers represent more than a quarter of power demand. Such concentrations will pose challenges in the further development of data centers, with much of the delay associated with securing easements and regulatory approvals.

Nuclear power is emerging as a solution to meet the demands of data centers, according to JLL. Some of that demand will be met by conventional reactors, but much might eventually be met by small modular reactors, which can provide a scalable range of power, from 1.5 MW to 300 MW. SMR technology is still being developed, however, and may not make an impact on the data center power industry until the 2030s.

Data center efficiency

Power isn’t the only challenge faced by the data center industry, according to the JLL report. As AI expands, cooling increasingly dense and power-hungry data centers will be increasingly urgent. The development of more energy-efficient chip architectures and advanced liquid cooling systems will be part of the industry’s response.

The need for more immersion cooling will change the design of data centers, the report explains, with liquid cooling more important than ever for high-density racks.

“Immersion cooling introduces new challenges in structural design due to weight consideration,” the report says. “The weight of the largest cooling baths can reach up to four metric tons when filled with equipment and cooling fluid, which requires significantly reinforced flooring.”

Despite the challenges facing data centers, investors will remain interested in the sector, JLL predicted. Different classes of investors generally have different goals in data centers: Institutional investors have been acquiring global operators, while private equity focuses on funding development. Alternative investors buy individual assets when they can.

This year promises to be another record year for data center development, with an estimated 10 GW projected to break ground globally in 2025. On the other hand, a relatively small number of data centers trade each year because they simply don’t come on the market that often. 

Global data center investment sales have averaged just $7 billion annually since 2020, JLL reported. That compares to an annual average of $241 billion for office assets over the same period.  

The post Data Center Demand Keeps Surging Despite Challenges appeared first on Commercial Property Executive.

Meanwhile, the construction unemployment rate was 3.7 percent, down one-tenth of a percent in the same period last year.

Honolulu, Seattle, Boston, Phoenix, Chicago, Las Vegas and Washington, D.C., experienced increases over the national average this quarter. New York City, Denver, Los Angeles, Portland, Ore., and San Francisco saw increases below the national average.

Following 20 months of decline, Rider Levett Bucknall’s Architectural Billings Index is 50.3, showing a balance between firms with increased and decreased billings.

In the third quarter, construction costs were up 1.07 percent nationally, the lowest increase in the past three years.

Inflation vs. tariffs

A key finding from the research highlights the relative impact of inflation versus tariffs on construction material costs, Paul Brussow, president of Rider Levett Bucknall, told Commercial Property Executive.

“When analyzing specific materials like rebar and structural steel, the data reveals that regional inflation has had a far greater effect on costs than tariffs,” Brussow said.

“Applying this trend to future forecasts suggests that efforts to mitigate financial risks should focus less on tariffs and more on regional inflation impacts, which consistently proves to be the primary driver of material cost increases.”

READ ALSO: Will Your Construction Costs Go Up in 2025?

Although he anticipates more volatility than last year, the construction industry is well-positioned to respond strategically, Andrew Volz, research manager of project and development services at JLL, told CPE.

“Some reliable bright spots are on the horizon, including data centers, health care, manufacturing, energy and other infrastructure,” Volz said. “These industries demand a lot from the construction industry, and those needs will continue evolving and growing for the foreseeable future.”

Volz added that commercial real estate is only increasing in complexity as we’re looking toward future economies, cities, and people living and working in them. The construction industry needs an incredibly ambitious plan and heaps of creativity to keep up with these demands.

A positive outlook for NYC

RLB’s latest quarterly cost report should be an encouraging sign for the New York City commercial real estate and development communities, according to Michael Webb, partner of the real estate group at Farrell Fritz.

Despite the looming presence of broader economic and socio-political uncertainties and pressure, construction costs in the New York region increased year-over-year at a rate less than the national average.

“Nationally, but particularly in our region, there is a well-documented shortage of all forms of housing, including multifamily.”

For example, it is currently estimated that the Long Island region requires an additional 150,000 housing units (if not more) to meet demand.

“Hopefully, stabilizing construction costs will spur developers to tackle and commence construction of all housing categories in 2025 to help balance the supply-demand equation.”

The post What’s Driving Construction Cost Increases appeared first on Commercial Property Executive.

Lincoln Property Co., Gigabit Fiber and Tradition Holdings have formed a partnership for the development of a data center campus in South Dallas. When complete, the facility dubbed GigaPop will include more than 800,000 square feet of data center and tech space across four buildings and boast up to 540 megawatts of power. Construction is scheduled to commence this quarter.

Designed for cloud computing and artificial intelligence users, with high-capacity and low-latency optical networks, the $1 billion project will rise on a 131-acre lot of entitled land. The site is at 1745 Stainback Road in Red Oak, Texas.

READ ALSO: More Data Centers, Please!

The campus will provide edge colocation, dark fiber and carrier-class IP transport services that will benefit the other 15 sites underway in the area, Gigabit Fiber CEO Tom Spackman said in prepared remarks. Its first component will be a 2 megawatt facility totaling 7,500 square feet.

The site is in the center of South Dallas’ data center hub, 4 miles east of Interstate 35 and 4 miles west of Interstate 45, along the recently opened Loop 9 Highway.

The location is also 24 miles from another Dallas-Fort Worth development, PowerCampus Dallas. The 115-acre data center project in Lancaster, Texas, is developed by SkyBox Datacenter in partnership with Bandera Ventures and Principal Asset Management.

Multiple data center projects underway in DFW

The South Dallas submarket currently has multiple projects underway that will deliver more than 1.5 gigawatts of capacity, according to Lincoln Executive Vice President Ryan Sullivan. Some 678 megawatts are already under construction and expected to reach completion this year and in 2026.

The metro’s largest project is a hyperscale campus in Grand Prairie, Texas, that will become one of the largest data center complexes in the country. To be developed by Provident Data Centers and PowerHouse Data Centers, the facility is expected to generate 1.8 gigawatts at full build-out.

In September, DataBank started construction on a 480 megawatts project also in Red Oak. The campus will include eight data centers.

The post Lincoln Property JV Eyes $1B Data Center Campus appeared first on Commercial Property Executive.

Glenstar Logistics has completed the first of five buildings at the $415 million, 290-acre Cherokee Commerce Center 85 in Gaffney, S.C. The speculative, cross-docked 550,520-square-foot building can be expanded to 1.3 million square feet.

Upon full buildout, the industrial park adjacent to Interstate 85 in upstate South Carolina’s Cherokee County industrial corridor will total up to 3.6 million square feet. Potential uses include warehousing and distribution, advanced manufacturing, food processing, assembly/light manufacturing and refrigeration/cold storage.

Glenstar Logistics, the industrial arm of Chicago-based Glenstar, is developing CCC-85 in partnership with Creek Lane Capital. The project was announced in the fall of 2022. In July 2023, the developers received the final approval for a tax incentive package from the Cherokee County Council.

READ ALSO: Industrial Settles After Supply Surge

The developer began vertical construction of the first building in August. CrossHarbor Capital Partners provided a $38.2 million construction loan in September 2023 for the first phase of the project.

The development team includes general contactor The Conlan Co., architecture firm Ware Malcomb and SeamonWhiteside as civil engineer.

A large South Carolina industrial park

The first building features 40-foot clear heights, 56-by-50-feet column spacing, 60-foot speed bays, up to 232 dock doors, four drive-in doors and flexible parking. The asset will be able to accommodate up to 200MW of power within three years.

The other four warehouses that will complete CCC-85 will range between 211,640 square feet and 1.7 million square feet, and will also feature 40-foot clear heights, 56-by-50-feet column spacing and 60-foot speed bays.

Located at the four-way Interstate 85/Highway 105 interchange, CCC-85 sits across I-85 from Boysen’s manufacturing plant, which supplies BMW’s manufacturing facility 31 miles away in Spartanburg, S.C. The park is also 35 miles from Inland Port Greer and some 50 miles from metro Charlotte, S.C. From CCC-85, tenants can reach more than 135 million consumers within a day’s drive, according to the developer.

Industrial momentum in Cherokee County

Vacancy in Cherokee County had decreased to 6.1 percent by the end of the third quarter of 2024, according to a Colliers industrial report. Colliers also noted that in-market tenants are beginning to trade older Class B and C buildings for Class A space.

There was an uptick in distribution and manufacturing users interested in leasing space in the new building, according to Brian Netzky, Glenstar Logistics managing principal. That came especially because of the propertyțs heavy power profile and water and sewer capacity. Netzky also said in prepared remarks that tenants have begun to make leasing commitments at a faster pace than earlier in 2024, and he expects that momentum to continue in 2025.

Recent Glenstar Logistics sale

In October, a joint venture between Glenstar Logistics and Columnar Investments sold Tri-County 75, an 818,000-square-foot industrial park in Fort Myers, Fla., to an affiliate of Walton Street Capital in a deal arranged by CBRE.

The developers had secured $97.5 million in financing from Square Mile Capital Management in 2022 for the four-building speculative park campus. At the time of the sale, the park was 95 percent leased.

The post $415M South Carolina Campus Debuts appeared first on Commercial Property Executive.

The outpatient facility will accommodate numerous specialty clinics. Many of the clinical services to be officed there are already available at the campus, but moving them to the new medical office building is intended to free up space in the hospital.

The expansion will also include the construction of a four-story hospital building that will add 72 new inpatient beds, as well as four operating rooms, three new surgical procedure rooms, eight new rooms for imaging and 10 more rooms for the emergency department. Delivery is expected by summer 2028.

READ ALSO: Why the Medical Outpatient Sector Is Poised for Growth in 2025

Cincinnati Children’s estimates that the initial overall investment in the Liberty Campus expansion will be $365 million, to include design, construction and medical equipment.

Hospital media staff have not replied to Commercial Property Executive’s request for additional information.

The 61-acre Liberty Campus opened in August 2008. It handled about 109,000 visits in its first year, a volume that has ballooned to more than 282,000 patient encounters a year, including an average of 60 surgeries a day.

Cincinnati health-care real estate on the rise

The health-care real estate market in Cincinnati saw several upticks in the third quarter of 2024, according to a Colliers report. The occupancy rate increased to 93.8 percent, up by 10 basis points over the quarter and 50 basis points over the year.

Meanwhile, absorption totaled 192,732 square feet in Q3, up from 124,770 square feet year-over-year. However, construction activity slowed down to only 137,000 square feet, signaling a tendency of stabilizing existing properties rather than building new product.

The post 150 KSF MOB to Rise on Cincinnati Campus appeared first on Commercial Property Executive.

Ralph Zucker, the mind behind the transformation of the iconic Bell Labs facility in New Jersey, talked to Commercial Property Executive about his metroburb model and how it changed the Holmdel community.

Under his leadership, Inspired by Somerset Development brought back to life an underutilized research facility and turned it into a blend of office, retail, dining and recreation spaces that serves the entire local community—known as Bell Works.

Now, he’s replicating this “self-contained metropolis in suburbia” concept in the Chicago area, and other municipalities are already following suit. Here’s a glimpse into the future of the metroburb model.

READ ALSO: Return-to-Office Traffic Reaches Record Level

Looking back, how would you describe Bell Works’ journey?

Zucker: I was immediately captivated when I first toured the iconic Eero Saarinen-designed Bell Labs property in Holmdel, N.J., in 2008. With a background in human-scale environments, I saw immense potential in the 2 million-square-foot building, once the birthplace of groundbreaking innovations like the transistor and modern-day cell phone technology. Rather than simply serving as an office campus, I envisioned it as a vibrant hub. The central pedestrian street, slicing through the heart of the building, could be transformed into a dynamic space filled with shops, offices and public areas for community gatherings and meaningful connections.

What did it take to turn a historic property like Bell Labs into the modern place Bell Works is today?

Zucker: We spent five years obtaining the necessary approvals and entitlements to bring our concept to life. This process involved attending dozens of town hall meetings, running outreach campaigns and engaging with residents and stakeholders to demonstrate that the project was not only viable but also capable of energizing the community. To offer a glimpse of how we could transform the building into the vibrant hub it is today, we hosted a ‘block party’ in the main atrium, reimagining the space to showcase our vision of a metroburb—a place where people can shop, work, play, dine, connect, innovate and find inspiration. 

What role did historic preservation play in the transformation of Bell Labs?

Zucker: The transformation that followed was meticulous. We crafted a master plan to convert the building’s interior from a single-tenant research facility into a dynamic, mixed-use space. We successfully secured historic tax credits from the National Park Service, which helped fund the renovation. As a result, the property was added to the National Register of Historic Places.

Over time, businesses began moving into the reimagined property and foot traffic increased, bringing to life the metroburb model we had envisioned years earlier. Today, Bell Works is recognized as one of the great downtowns, not just in Holmdel, but throughout Monmouth County, drawing visitors from across the state. It stands as a model for how to revitalize a sprawling, underutilized asset into a thriving hub for business and community. 

Bell Works is now almost fully leased. Tell us more about the existing tenant mix and the type of spaces that are still available.

Zucker: Bell Works is home to a diverse mix of tenants, which are a large part of its unique identity as a metroburb. Today, the building houses Fortune 500 companies, startups, restaurants, retailers, fitness studios, health-care practitioners, a public library, a Montessori School and an entire indoor pedestrian street called The Block.

Most recently, we expanded our dining options with the opening of our first full-service restaurant, Mabel, just shortly after opening Miznon Kosher, a fast-causal Mediterranean eatery from celebrity chef Eyal Shani. Other recent additions to The Block include Exclusive Cuts, an upscale barbershop; ARMR Studio, a modern martial arts and self-defense training studio, and Peticures, a luxury pet spa offering premium grooming services.

While Bell Works is currently 98 percent leased, there’s still room for more businesses to join this thriving community. We offer flexible solutions for tenants of all sizes and types, enabling any company to benefit from being here. We also offer Ready-To-Wear office suites, providing turnkey solutions ranging from 500 square feet to 5,000 square feet, which feature unique, custom designs that balance function and style.

Did you make any changes to your leasing strategy after the pandemic to reflect tenants’ evolving preferences?

Zucker: Truthfully, not much needed to change when the pandemic hit in terms of leasing strategies, design and amenities—Bell Works was ahead of its time from the start. When we created the metroburb, our vision was to design a mixed-use office environment that offered everything people needed within one ecosystem. This concept is exactly what the post-pandemic world has come to embrace.

How did you specifically adapt to tenants’ need for more flexibility in the workplace?

Zucker: We did add new layers to the ecosystem to reflect the changing tenant preferences, especially in an era where work models are constantly evolving. We’ve prioritized flexibility by offering customizable spaces and flexible leasing options that accommodate smaller teams and a wide range of needs. In 2020, we introduced coLab, our membership-based coworking space, which provides flexible workspaces for smaller teams and startups, including shared and dedicated desks, as well as private executive suites. With skyrocketing demand, plans for coLab 2.0 are already underway.

In 2021, we launched Campus, a fully furnished, flexible leasing option for medium-size companies transitioning back to the office postpandemic, which remains fully leased today.

What do you think makes Bell Works resilient in the face of market shifts?

Zucker: It’s worth noting that there will never be a perfect, one-size-fits-all model for leasing strategies, as the market is shaped by changing business demands and workforce behaviors. We developed Bell Works with adaptability at its core, ensuring it was designed not only to meet today’s needs but also to thrive amid future market shifts.

By doubling down on what we had already been doing, we set ourselves up for success postpandemic. We were able to get people excited to return to the office because they have everything they need in one place. Want to get a workout in before work? No need to rush. Need a haircut during lunch? No problem. We’ve created a dynamic environment where people can thrive both inside and outside the office and that’s a big part of our continued success.

What role does Bell Works play in the broader Holmdel community, and how do you ensure it continues to be a welcoming space for both tenants and the public?

Zucker: At Bell Works, we’ve always aimed to create more than just a workplace. By opening the facility to the public daily from 6 a.m. to midnight, we’ve transformed it into a dynamic destination where visitors can shop, dine and engage in a variety of activities. Whether on the basketball court or the rooftop, the common theme is connection.

We also host a wide range of events and public activations, including rooftop fitness classes, a weekly Bell Works Fresh farmers market, industry conferences, community fundraisers, networking events, 5k runs around the campus and more. On any given day, Bell Works attracts up to 6,000 visitors and the best part is that not all of them are here to come to work.

READ ALSO: What’s Defining Office in 2025?

What impact has Bell Works had on the local economy and surrounding area so far?

Zucker: The redevelopment of Bell Works has significantly impacted the local economy by creating countless jobs, attracting businesses and raising awareness of the area. Transforming the former Bell Labs site—once closed to the public and exclusively for employees—into a vibrant, mixed-use development has drawn an expansive range of tenants and visitors.

This surge in foot traffic has not only bolstered local businesses but also spurred growth in the surrounding community. In fact, we’ve been able to lower taxes for Holmdel citizens thanks to our significant tax contributions to the township. We’ve also become a hub for arts and culture, hosting events like our annual Fourth of July fireworks, theatrical performances at Bell Theater and exhibitions such as the recent “The Landscape Architecture Legacy of Dan Kiley.” 

How has the success of Bell Works influenced your approach to similar projects, like the Bell Works site in Illinois?

Zucker: The success of Bell Works has proven the scalability of the metroburb model, which we’ve successfully applied to Bell Works Chicagoland. The flexible office spaces at Bell Works New Jersey have been integral in shaping our approach to Chicagoland. There, we replicated the mix of office, retail, dining and amenities, while tailoring each part to fit the local market.

This careful market attention has led to a 92 percent occupancy rate on the east side, having leased the entire marketplace and more than 400,000 square feet postpandemic, with plans for a residential component.  

What started as a redevelopment of an underutilized space in Holmdel has now become a model that other municipalities are eager to replicate. Our success has sparked interest from communities across the country, showcasing Bell Works as a blueprint for revitalizing former commercial properties into vibrant, mixed-use environments.

What does the future of the metroburb concept look like, and how do you see it evolving over the next five years?

Zucker: The metroburb model is certainly here to stay, but over the next five years, we expect it to evolve with a greater focus on attracting diverse tenants and enhancing lifestyle offerings. At Bell Works New Jersey, for example, we’re adding five all-season pickleball courts and planning to further develop our lower level to accommodate a potential bowling alley or spa. These additions reflect a comprehensive, 360-degree approach to lifestyle amenities that we believe will resonate strongly with our community. Building on our successes, we’re committed to delivering more of the same—but even better.

Additionally, we anticipate a stronger integration of residential components, such as the townhomes and apartments we’re adding at Chicagoland, to meet the growing demand for live-work-play environments.

What’s next for Inspired by Somerset Development?

Zucker: We’re excited to begin phase two of Bell Works Chicagoland as the east side of the building approaches full capacity. This next phase will focus on redeveloping the western portion, creating additional space for retailers, businesses and office tenants. We’re also moving forward with the residential component of the metroburb, introducing 164 townhomes and 300 apartments to provide much-needed housing for the growing community. 

We’re eager to expand upon the success of our metroburb model, with plans to bring it to additional properties in the region.

The post Why the Metroburb Model Works: An NJ Success Story appeared first on Commercial Property Executive.

Investment & Development Ventures and investor Standard Real Estate have broken ground on Patriot Business Park, a three-building industrial campus in the North Houston submarket. Delivery is expected in the third quarter of 2025.

The partners teamed up for the development of this project—initially dubbed Veterans Memorial Business Park—in August. Located at 10326, 10328 and 10330 Veterans Memorial Drive, the site has immediate access to Beltway 8 and Interstate 45.

When complete, the campus will include three front-load buildings of 219,000 square feet, 151,000 square feet and 93,000 square feet, each with 32-foot clear heights. Key features include ESFR sprinkler systems and advanced design specifications tailored to accommodate tenants as small as 46,000 square feet.

Stream Realty Partners Managing Director Tyler Maner and Executive Vice President Jeremy Lumbreras are overseeing leasing efforts at the property.

Strong construction activity in Houston

About 3.3 million square feet of industrial space started construction in the third quarter of 2024, accounting for about one-third of the total 10 million square feet of space under construction last year across the Houston market, according to a Cushman & Wakefield report.

One of the projects that broke ground then was Blue Ridge Commerce Center, a five-building, 1.4 million-square-foot campus developed by Trammell Crow. Completion is expected this summer.

The report also noted the metro’s industrial demand has remained “exceptionally consistent, posting 8.4 million square feet of new leasing activity during Q3 2024.” The North submarket, with 2.3 million square feet leased, and Northwest submarket, with 1.8 million square feet leased in the third quarter, recorded the highest demand totals for the second consecutive quarter, accounting for nearly half of the quarter’s total leasing activity.

Stream Texas deals

Stream Realty Partners has been active in its home state of Texas. The firm’s Senior Vice Presidents Forrest Cook and Jeff Rein, together with Associate Connor Land, will spearhead the leasing efforts for Ironhead Commerce Center, a four-building, 906,271-square-foot industrial park in Northlake. The property is being developed by a partnership of Alliance Industrial Co. and Barings.

In Dallas-Fort Worth, Stream’s Senior Vice Presidents Sarah Ozanne and Mac Hall and Vice President Lena Thomas will manage leasing efforts at 635 Exchange, an industrial project of about 600,000 square feet. Creation and PGIM Real Estate are partners in the development that is slated to break ground this summer.

The post IDV, Standard Break Ground on Houston Industrial Park appeared first on Commercial Property Executive.

Provident Data Centers has entered into a joint venture with PowerHouse Data Centers for the development of a hyperscale campus in Grand Prairie, Texas. When complete, it will be one of the largest data center campuses in Texas and the U.S.

The multi-phase development will be designed as a shell campus with ample power sourcing that will meet the growing demand for data centers from industry operators in the Metroplex.

The partners intend to break ground on the 768-acre project in the second quarter of this year, according to the Dallas Business Journal. Phase One is set to generate some 500 megawatts of power, while the entire campus is expected to generate 1.8 gigawatts at full build-out.

READ ALSO: Are Data Centers Immune to CRE Market Forces?

This will be the second Metroplex data center development for PowerHouse. The company entered the market in May with a project developed in partnership with Harrison Street. The upcoming data center in Irving, Texas, will total approximately 1 million square feet and generate 200 megawatts.

Owned and operated by American Real Estate Partners, PowerHouse has 25.5 million square feet of data center space in various stages of development across six key markets. The portfolio totals more than 5.9 gigawatts.

Dallas-based Provident Data Centers has developed north of 50 projects in six states since its inception. Their campuses generate more than 3.8 gigawatts of power.

A hotspot for data centers

In the first half of 2024, the Metroplex had 637.5 megawatts in underway projects and 848 megawatts in operation, according to a Cushman & Wakefield data center report. The metro is one of the top five data center markets in the country, but more affordable than Northern Virginia or Silicon Valley.

One of the current developments is DataBank’s project in Red Oak, Texas. Coming online on 292 acres, the data center campus will total 480 megawatts across eight buildings at full build-out.

The post PowerHouse, Provident Team Up for DFW Project appeared first on Commercial Property Executive.

Vertical Cold Storage, sponsored by Platform Ventures, has opened its 311,000-square-foot multi-modal distribution facility in Kansas City, Mo. The center, which features 47,000 pallet positions, includes blast freezing technology and multiple rooms that can be converted from +35 degrees F to -20 degrees F.

Vertical Cold Storage broke ground on the facility in November 2023. At the time, it was the firm’s eighth such property. Innovative materials and systems were used in the building design and construction to reduce energy consumption. Primus Builders served as lead contractor.

READ ALSO: Top 10 Markets for Cold Storage Development

The facility is at 14820 Cleveland Ave., adjacent to the CPKC intermodal terminal in South Kansas City and within 30 miles of the BNSF, Union Pacific and Norfolk Southern terminals, giving it reach to and from anywhere in North America.

“Kansas City is a strategic hub … ideal for efficient distribution,” Mark Smid, CFO for Vertical Cold Storage, told Commercial Property Executive. “Its strong food and beverage production base and proximity to two-thirds of the U.S. population within a two-day drive made it the perfect choice for expanding our footprint.”

Vertical Cold Storage also has distribution centers in and around Chicago, Dallas, Indianapolis and Miami, among others. In July, the firm acquired its 10th cold storage facility, a warehouse in Dotham, Ala.

Appetite for cold storage

The vacancy rate for cold storage has significantly outperformed the overall broader industrial market since the inception of record keeping, according to Ed Halaburt, managing director at JLL Capital Markets.

He told CPE “This is likely due to a more constrained development pipeline within cold storage and the inelastic demand for food despite economic conditions.”

And the subsector is poised for growth, attracting investors, developers and financiers alike. “C-PACE financing, available in Missouri and on a near-national level, has become an increasingly popular construction and bridge financing tool across markets and asset classes, including cold storage, due to its flexible and cost-effective terms,” Francisco Crespo, director of originations with Nuveen Green Capital, told CPE.

“Nuveen Green Capital recently provided C-PACE financing for Class A cold storage projects, one in Philadelphia and another in Jacksonville, Fla.,” Crespo added. “By utilizing C-PACE, the sponsor was able to fill a gap in the project’s capital stack and obtain more leverage.”

The post Vertical Cold Storage Opens Kansas City Facility appeared first on Commercial Property Executive.

ForeFront Commercial Real Estate, along with an Ares Management Real Estate fund, has obtained a $77.4 million loan to finance the development of West Worth Commerce Center, a 992,000-square-foot industrial campus in Fort Worth, Texas. Affinius Capital originated the loan.

West Worth Commerce Center is set to include four buildings with 32-foot to 36-foot clear heights, 274 dock-high doors, 12 drive-in doors, and parking for 235 trailers and 912 cars. The property is just off Interstate 820 between interstates 30 and 20, providing connectivity to the Metroplex area.

READ ALSO: Industrial Sector Settles After Supply Surge

The development is about 35 miles from DFW International Airport and 45 miles from Dallas Love Field Airport. The location serves the area’s growing e-commerce, logistics and distribution needs, and the west Fort Worth submarket in particular  demonstrates robust absorption, Affinius Managing Director Tom Burns said in prepared remarks. 

Affinius Capital, previously known as USAA Real Estate and Square Mile Capital Management, is an institutional real estate investment firm with about $64 billion in assets under management. Last year, the company provided part of the financing for Edenvale Industrial Park, a 636,000-square-foot project in San Jose, Calif.

DFW industrial boom moderates

Industrial development in the Dallas-Fort Worth market slowed in the third quarter of 2024, according to a Colliers report. Construction activity was down to 19 million square feet, the smallest total since Q2 2017, marking a 5 percent quarter-over-quarter drop.

The decrease came on the heels of a spurt of development in response to pandemic-era demand for product. Following eight consecutive quarters of new supply of more than 10 million square feet, the third quarter deliveries dropped sharply, to 5.8 million square feet.

There is still some overhang of space, however. The vacancy rate thus remained unchanged from the previous quarter, staying at 9.6 percent, the report shows.

The post ForeFront JV Lands $77M for DFW Industrial Project appeared first on Commercial Property Executive.

Fort Street Partners and Chestnut Healthcare Real Estate have formed a programmatic joint venture to acquire and develop up to $150 million in assets over the next four years. The duo will focus on core and value-add investments in outpatient medical and surgery centers in the Greater Salt Lake City area.

JLL Capital Markets arranged the venture between the two firms, which have previously collaborated on at least two other Utah deals last summer.

In June, Fort Street Partners secured the equity for a 20,399-square-foot medical project in Syracuse, Utah, through Chestnut Healthcare. Located at 3000 W. Antelope Drive, the development is scheduled to come online later this year and is fully preleased to three regional physician groups.

READ ALSO: Challenges Create Opportunities, Says MOB Investor

A month later, the two companies obtained equity placement for the Eagle Mountain Medical Center development, a 24,655-square-foot medical building at 4263 N. Pony Express Parkway in Eagle Mountain, Utah. The two-story facility is expected to come online toward the end of this year.

JLL Capital Markets Director CJ Kodani and Managing Director Mark Root led the team that arranged the joint venture.

MOB sector remains steady

The medical office real estate sector is on an upward trajectory, with a Savills report forecasting a 26 percent rise in outpatient demand over the next decade, primarily due to the aging population, and despite the current economic uncertainties affecting the commercial real estate sector.

Economic incentives, particularly decreasing interest rates, are anticipated to boost MOB investment going forward. However, the medical labor market is far from keeping pace, with the sector facing a significant shortage of specialists, especially physicians and nursing staff.

The post Chestnut Healthcare, Fort Street Form $150M JV appeared first on Commercial Property Executive.

Despite a slow start in early 2024, San Francisco’s office construction activity picked up pace as the year progressed and became one of the largest in the nation. Developers are continuing to break ground on new developments, with most projects belonging to the life science sector, according to CommercialEdge data.

In contrast, the market’s sales activity was low through 2024, on par with 2023’s trend. Nevertheless, San Francisco emerged as the priciest office market in the U.S., surpassing Manhattan in terms of average sale price per square foot.

Second-largest pipeline in the country

As of November, 3.8 million square feet of office space was under construction across 20 properties in San Francisco, representing 2.3 percent of existing stock—above the national figure 0.8 percent. Among similar markets, Boston led the rankings with 3.6 percent, while San Francisco outperformed Los Angeles (0.7 percent), Manhattan (0.6 percent) and Chicago (0.3 percent). When adding office projects in planning stages, San Francisco’s share reached 9 percent, second after Miami (9.4 percent) and surpassing Boston (8.6 percent).

In terms of square feet underway, San Francisco had the second largest pipeline, after Boston’s 9.3 million square feet. The vast majority of the project rising within the market are life science developments.

Kilroy Realty’s Buildings D, E and F at Kilroy Oyster Point, slated to aid 865,000 square feet of space, is one of the largest projects under construction. A trio of life science buildings are part of the developer’s 3 million-square-foot waterfront project in South San Francisco. Construction commenced in 2022 and the delivery date was pushed to the end of 2025.

Another notable project is IQHQ’s The Spur, a 326,000-square-foot high-tech life science building at 580 Dubuque Ave. in the same submarket. Backed by a $275 million construction loan, the development topped out earlier this year and is expected to come online in early 2025.

Year-to-date through November, developers delivered 2.7 million square feet across 13 properties in the metro, representing 1.4 percent of total stock, while construction starts included 911,700 square feet of space across three properties—accounting for 0.5 percent of total stock.

Among notable properties that came online recently is Lane Partners’ Southline Building 1, a 375,000-square-foot life science building at 30 Tanforan Ave. also in South San Francisco. The property, financed by a $373 million construction loan, represents the first phase of Southline, an office and R&D development that will comprise up to 3 million square feet of space.

Office-to-residential conversions in San Francisco

The office sector is still struggling with high vacancies and office-to-residential conversions have emerged as an attractive option. Recently, CommercialEdge launched the Conversion Feasibility Index, a Yardi-powered tool that measures a building’s potential for a residential makeover.

The CFI score has three tiers, with Tier I office properties being the most suitable candidates. San Francisco had 112 properties—totaling 11 million square feet—in the Tier I category. Additionally, the metro had 295 office building in the Tier II category, totaling nearly 36.3 million square feet.

Work has begun on the repurposing of the historic Humboldt Bank Building. In October, Forge Development Partners started the conversion of the 1908-built mid-rise totaling 91,804 square feet. The developer plans to invest $70 million in the reimagining of the office building into a 124-unit residential community. The Seligman Group is the owner of the property that bears a CFI score of 91 points.

Prices high, low investment activity

Year-to-date through November, San Francisco’s office sector saw $747 million in deals, with 29 properties totaling nearly 1.9 million square feet changing hands. The metro continued last year’s limited sales activity: in 2023, transactions amounted to $722 million and 2.3 million square feet.

Among gateway metros, San Francisco’s total sales volume surpassed only Seattle’s ($687 million), while Manhattan led the nation with $3.8 billion in deals.

One of the priciest sales in San Francisco this year was the $222.2 million acquisition of Sand Hill Commons, a 133,000-square-foot, two-building office campus in Menlo Park, Calif. The buyer was Norges Bank Investment Management, that acquired a 97.7 percent ownership stake in the property from Clarion Partners and Invesco Real Estate.

Office properties changed hands at an average sale price of $384 per square foot—significantly above the national average of $179 per square foot. Among gateway markets, San Francisco emerged as the priciest office market, outperforming the usual leader Manhattan ($379 per square foot), that was followed by Miami ($376 per square foot), Los Angeles ($355 per square foot) and Washington, D.C. ($213 per square foot).

San Francisco’s vacancy rate highest in the U.S.

San Francisco’s office vacancy rate clocked in at 27.7 percent as of November—surpassing the national figure of 19.4 percent and marking a 400-basis-point increase. Tech markets are posting some of the highest rates in the country, with San Francisco and Austin ranking first.

In contrast, one of the lowest rates were registered in similar markets, such as Miami (14.4 percent), Los Angeles (15.7 percent), Manhattan (16.7 percent) and Boston (16.8 percent). The only gateway metro with a significant increase in vacancy was Seattle, that recorded a 25.8 percent figure.

In May, Google gave up 300,000 square feet of office space at One Market Plaza, a two-building office complex totaling 1.6 million square feet in San Francisco. Nevertheless, notable office leases transpired recently in the metro. Among them is Alexandria Real Estate Equities Inc.’s 258,581-square-foot, long-term deal with Vaxcyte Inc. The company has been an anchor tenant at Alexandria Center for Life Science, a two-building property in San Carlos, Calif.

Flex office providers increasing operations in the metro

San Francisco’s coworking market comprised 3.7 million square feet of space as of November, more than in Miami and Seattle, that had 2.9 million square feet each. The share of flex office space as percentage of total leasable office space in the metro reached percent 2.2 percent, above the national figure of 1.9 percent.

The flex office provider with the largest footprint in the metro remained WeWork, with operations totaling 736,795 square feet. The companies that followed were Gateway Labs by Lilly (438,339 square feet), Regus (337,544 square feet), Studio by Tishman Speyer (237,947 square feet) and Spaces (186,402 square feet).

The post San Francisco Office Construction Rebounds Amid High Vacancy appeared first on Commercial Property Executive.

The decline in office projects under construction did not avoid Western U.S. markets. The following list shows leading markets for office development underway in the region, while also highlighting projects delivered through the first eleven months of 2024.

The top four markets had a combined office pipeline amounting to only 694,266 square feet, a significant drop from the 1.6 million square feet that broke ground during the same interval in 2023. In terms of office deliveries, developers completed almost 2 million square feet, whilst some 2.9 million square feet had come online in 2023. The difference marks a 31 percent decrease in new office space across the metros in the region. Here are the top markets for office development in the Western U.S., based on CommercialEdge data.

Phoenix

Phoenix had 373,247 square feet of office space spread across seven properties under construction as of November. The metro is still struggling with supply and posted one of the smallest pipelines among Sun Belt metros.

Developers broke ground on all these projects during the same month, while office deliveries totaled 646,629 square feet across 10 properties year-to-date as of November. SunCap Property Group’s Gilbert Spectrum’s Building 3 remains the largest office project under construction in Phoenix. The 119,222-square-foot building is part of the company’s Gilbert Spectrum project, a 64-acre office campus in Gilbert, Ariz., that will include 850,000 square feet of office, tech and flex industrial space.

In contrast, nine properties broke ground during the same period last year, totaling 619,213 square feet, while developers delivered 712,719 square feet across 12 properties.

Denver

In terms of space underway, Denver followed with just under 200,000 square feet across five properties. There were seven office projects totaling 1.3 million square feet that were completed as of November.

One of them is 1900 Lawrence, developed by Riverside Investment & Development, that includes 726,450 square feet of Class A space. Rising 30 stories in Denver’s central business district, the high-rise is one of the largest skyscrapers delivered in the metro over the last 40 years.

When looking at last year’s data, Denver had 776,904 square feet across seven properties under construction, while developers completed 10 other properties, or 1.4 million square feet.

Salt Lake City

Salt Lake City had only two properties totaling 84,655 square feet underway as of November, both starting construction in the same period. There were 91,638 square feet of space across three delivered properties. This amount marks an 84 percent decrease compared to 2023 data, when 574,349 square feet of office space was completed. In terms of space under construction, Salt Lake City had 214,867 square feet across five properties underway at this point in 2023, a 60 percent decrease from the current pipeline.

Boise and other metros with limited activity

Boise, Idaho had only one office project underway as of November, totaling 37,067 square feet, with no significant deliveries recorded this year. In 2023, developers delivered 255,500 square feet of office space across three properties in the capital city of Idaho.

Other large Western markets on the list include Las Vegas, Reno, Nev., Albuquerque, N.M., and Tucson, Ariz. These posted either a too limited pipeline or barely any development underway as of November, showcasing the overarching slowdown in office development, not only in the region but in the country at large. This year’s numbers show that only Las Vegas and Albuquerque saw any significant office completions, with 458,810 square feet across six properties, and 95,000 square feet across a single property.

When looking at 2023 data, three properties totaling 402,042 square feet of office space came online in Las Vegas. The only metro where developers delivered significant properties was Albuquerque, with these buildings totaling 110,915 square feet.

The post Top Markets for Office Development in the West appeared first on Commercial Property Executive.

Retail construction starts exhibited a dynamic activity pattern in 2024, with sharp contrasts between the first and second halves of the year, CommercialEdge data shows.

Early in the year, construction starts surged, with February standing out for a staggering 164 percent year-over-year increase—or nearly 3 million square feet. March and May also posted significant growth at 80.6 percent (1.9 million square feet) and 139.4 percent (2.6 million square feet), respectively, reflecting strong developer confidence and efforts to meet pent-up demand.

Mid-year activity began to moderate, as June recorded a 35.3 percent rise, followed by July’s 64.5 percent growth, which translated into 1.7 million square feet. These figures, while positive, suggested a cooling trend compared to the earlier months. By August, the pace had further slowed, with a 44 percent year-over-year increase, or 1.1 million square feet in project starts.

September showed a significant decrease in pace, with a 53.3 percent decline in construction starts. The downward trend continued through the end of the year: October’s activity showed a 85.5 percent decrease year-over-year, while November’s 96 percent drop marked a dramatic near-halt in new projects.

The sharp second-half contraction may reflect economic pressures, including high interest rates, shifting consumer habits, or a pullback in retail demand. These patterns highlighted by CommercialEdge underscore a pivotal year for the sector, moving from optimism to caution as developers reassess future opportunities in an evolving retail landscape.

—Posted on December 27, 2024

The post Retail Construction Starts Surged in H1 2024 appeared first on Commercial Property Executive.

The seven-story waterfront project at 9551 E. Bay Harbor Drive reportedly will be both the only trophy office building on Bay Harbor Islands and Miami’s only Class A office building offering private boat access. It will feature 75,000 square feet of “ultra-luxury office space” and a ground-floor waterfront restaurant, in a location across from the Bal Harbor Shops.

3650 Capital provided the financing. Construction will start at the end of this month and is scheduled for completion in late 2026. Leasing will be handled by Cushman & Wakefield.

The developers could not be reached for further information.

The project is driven by an influx of high-net-worth residents to Bay Harbor Islands and the resulting need for luxury office space for companies supporting this migration, Irwin Tauber, co-founder & CEO of Taubco, said in a company statement.

READ ALSO: When Office Meets Hospitality

The ground-floor restaurant reportedly will offer in-suite dining service for building tenants, while the building will feature private boat slip access and dockage, along with a rooftop venue.

The building has been designed by Miami-based architect Luis Revuelta, known for multiple luxury buildings in Miami.

Cushman & Wakefield Vice Chair Brian Gale, with Executive Managing Directors Andrew Trench and Ryan Holtzman, and Senior Director Edward Quinon, will oversee office leasing efforts.

Scanty preleasing

Overall vacancy in the Miami-Dade office market has risen by 80 basis points year-over-year, driven by the recent delivery of 830 Brickell, according to a third-quarter report from Cushman & Wakefield. The 556,000-square-foot building was 93 percent preleased, but the new tenants are still building out their respective spaces.

Adjusted for that blip, the overall vacancy would be about 15.1 percent, although a total of seven office projects with a combined 837,000 square feet are underway, with only 14 percent preleased. Net absorption nonetheless remains positive, Cushman & Wakefield reported.

In July, CMC Group nailed down a $69.9 million refinance for its 4000 Ponce, a 190,000-square-foot office building in the Miami suburb of Coral Gables, Fla. The floating-rate, five-year loan was provided by City National Bank of Florida and arranged by a JLL team.

The post JV Secures $74M Loan for Metro Miami Building appeared first on Commercial Property Executive.

635 Exchange, the larger of the two at about 600,000 square feet, will consist of three buildings on a 36-acre site at the intersection of I-35E and I-635 in Dallas. Creation is partnering with PGIM Real Estate to develop the property.

Designed and constructed by LGE Design Build, 635 Exchange is slated to break ground in the summer of 2025, with SVPs Sarah Ozanne and Mac Hall and VP Lena Thomas of Stream Realty managing its leasing efforts. The facilities will feature flexible building heights of 32 to 36 feet, trailer parking and immediate access to transportation corridors.

In north suburban Fort Worth, Dallas-based Creation is poised to break ground on Triad 820, a three-building, 137,000-square-foot logistics center developed in partnership with a real estate fund advised by Crow Holdings Capital. Located on 9 acres along Anderson Boulevard in Haltom City, the project is a follow-up to Creation’s nearby 820 Exchange, which traded to CBRE Investment Management in 2021.

READ ALSO: Dallas Industrial Sales Take the Lead

The project will include 28-foot clear heights, front-load units, 125-foot-plus truck court depths, two storefronts per building, EV charging stations and secured yards. LGE Design Build will design and build this property as well, with an anticipated completion by late 2025. NAI Robert Lynn will oversee the leasing efforts.

The two developments represent Creation’s latest efforts in its home state, which is one of eight states in which the company is active. Since 2020, Creation has started development of about 1.3 million square feet in Dallas-Fort Worth and Houston, with plans to enter the Austin, Texas, market later in 2025. The company will also diversify beyond industrial projects next year, venturing into mixed-use developments in Texas for the first time.

DFW’s strong industrial market

Industrial development in the DFW market is still on fire, coming in second nationwide for square footage underway (after Greater Phoenix), with 16.4 million square feet under construction as of October, according to CommercialEdge data. Phoenix totals 28.1 million square feet and is also a market in which Creation has been active, recently selling the 301,000-square-foot Midway Commerce Center for $57 million.

As a percentage of existing stock, DFW’s industrial development isn’t quite as high, coming in ninth nationwide at 1.8 percent, CommercialEdge reported. Again, Phoenix is far and away the most active market, with development totaling 6.7 percent of existing stock. DFW also has plans in the works for 5.1 percent more industrial space (including projects underway), compared with 15.8 percent for Phoenix.

Investors have taken note of DFW, however, CommercialEdge noted. Industrial investment activity in Dallas is $3.8 billion year-to-date as of October, the highest total nationwide, leading such other markets as the Bay Area ($3 billion), Chicago ($2.6 billion) and Houston ($2.5 billion).

The post Creation Launches DFW Industrial Projects appeared first on Commercial Property Executive.

10. Warner Bros. Sells Burbank Studios for $375M

The entertainment company continues to occupy space at the property as primary tenant.

9. CRE Sentiment Index Hits All-Time High

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8. Top Projects That Will Reshape Seattle

From ground-up developments to neighborhood revitalizations, here are some of the projects that will redraw the metro’s skyline.

7. Top Commercial Property Management Companies of 2024

Find out which firms made CPE’s annual ranking of leading service providers.

6. Top Destinations for Corporate Relocations

CPE identified eight metros that are the biggest draws for company headquarters. Here’s where, how and why.

5. Meta Reveals Pick for $800M Project Site

Operations at the 700,000-square-foot data center campus will start in 2026.

4. 2024 Top Commercial Real Estate Developers

Find out which firms made CPE’s annual list of industry leaders.

3. AI Is Changing the Game for Data Centers: JLL

What this tectonic shift in the sector means for demand, development and investment.

2. What’s Next for Industrial Real Estate?

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1. 2024 Top CRE Brokerage Firms

CPE unveils the 20 leading firms overall—plus the top performers for investment and leasing—in our latest annual ranking.

The post Top Posts of 2024: Readers’ Choice appeared first on Commercial Property Executive.

Los Angeles’ office sector is ending the year with a new supply struggle, while investment activity picked up, placing the market among the most active metros in the country in terms of transactions, CommercialEdge data shows. The increase is paired with one of the highest prices in the nation, as Los Angeles was the third-priciest office metro in the country as of October.

With the rise of office vacancies across gateway markets, Los Angeles has fluctuated throughout the year, showing a slight improvement in September. Despite the difficult office landscape, there were some notable office leases that closed in the metro, with one of them dubbed the largest new office lease signed so far in 2024.

As of October, the metro had 1.5 million square feet of space under construction across 13 properties, representing 0.5 percent of the existing stock—nearly half the national rate of 0.9 percent. The metro only outperformed Chicago’s 0.3 percent among gateway markets. Boston led the fold with 4.3 percent, followed by Miami (2.9 percent), San Francisco (2.3 percent), Seattle (1.3 percent) and Manhattan (0.6 percent).

L.A. office development continues on large-scale projects

When it comes to square footage, the City of Angels’ pipeline outperformed Chicago in absolute numbers, too (1.9 million square feet under construction), as well as Washington, D.C. (2.3 million square feet), while Boston led the nation in this regard also, with 10.4 million square feet underway.

The largest office development currently underway remains the 731,250-square-foot Century City Center, developed by JMB Realty. Rising 37 stories at 1950 Avenue of The Stars, the Class A high-rise’s construction started in August 2023, with completion scheduled for early 2026. The project is financed by a $575 million construction loan provided by Crestbridge.

Another notable project is Echelon Studios’ 388,000-square-foot office component at 5601 Santa Monica Blvd. Developed by BARDAS Investment Group, in partnership with Bain Capital, the creative office and studio will be part of the companies’ two-building, 600,000-square-foot campus project. The development, backed by a $300 million construction financing, commenced construction last month and is expected to come online in April 2026.

Developers started construction on eight projects in the first 10 months of the year, totaling 419,000 square feet. With planned and prospective projects added, the metro’s pipeline reached 2.8 percent of total stock—still below the national figure of 3.2 percent but higher than Manhattan’s 2.5 percent.

Meanwhile, developers delivered 1.2 million square feet of space across 15 properties, with one of the largest being the 331,000-square-foot office building at 444 Universal Hollywood Drive in Studio City, Calif. Developed by NBC Universal, the 11-story Class A+ building was completed in September. The amount of office space delivered in the metro marked a 28.6 percent drop in year-over-year completions.

Los Angeles’ office inventory shows strong candidates for office-to-residential conversions

As developers and office investors struggle with high office vacancy rates and shifting market conditions, the interest in office conversions is picking up across the nation. The Conversion Feasibility Index is a new tool developed by CommercialEdge that shows property-level scores based on a comprehensive list of building features, assessing the building’s potential for residential conversion.

The index showed that in July, Los Angeles had more than 20 percent of its existing office inventory as solid candidates for residential conversions, above the national average of 14.8 percent of total stock.

Some examples of planned office-to-residential conversions include the makeover of 6380 Wilshire Blvd., a 150,246-square-foot office building in the metro’s Wilshire Corridor submarket. Jamison Services, a prolific developer of office to apartment projects in Los Angeles, filed plans last year to convert the 1967-built property intro a 210-unit residential community. CommercialEdge data shows a CFI score of 79 points, making it a Tier II candidate.

Jamison Services is now converting the 18-story South Tower of The Towers on Wilshire office campus, with plans to add 255 residential units and an extra 19th floor. The 217,406-square-foot office property originally came online in 1961 at 695 S. Vermont Ave. CommercialEdge shows a CFI score of 81 points, making it a Tier II property.

Pricey deals put LA among best-performing metros

More than 10 million square feet across 53 office properties changed hands in the metro for a total of $1.8 billion through the first 10 months of this year, with Los Angeles ranking fourth among the best-performing metros in the U.S. The investment volume marked a 30.6 percent year-over-year increase—way above the national average of 4.1 percent but almost the same as last year’s data.

Across peer markets, the metro’s investment activity outperformed those of Boston ($1.1 billion), Chicago ($987 million), Miami ($983 million), San Francisco ($722 million) and Seattle ($668 million), while Manhattan led the rankings with $3.3 billion in sales.

Significant sales included the $185 million acquisition of 2220 Colorado Ave., a 201,006-square-foot office building in Santa Monica, Calif., occupied by Universal Music Group. The property was acquired by Drawbridge Realty from Clarion Partners, after 20 years of ownership.

Another notable deal was the $141.5 million sale of 9536 Wilshire Blvd., a 178,174-square-foot office property in Beverly Hills, Calif. The property is part of Wilshire Rodeo Plaza, a 300,000-square-foot office-and-retail asset spanning an entire city block. The Mateen Brothers, including Tinder founder Justin Mateen, acquired the asset from Nuveen as part of a $211 million deal, marking the largest property deal in this submarket since 2019.

Office assets in Los Angeles traded at an average sale price of $354 per square foot—above the national average of $177 per square foot and higher than the prices recorded in Manhattan ($344 per square foot), Seattle ($263 per square foot) and Washington, D.C. ($225 per square foot). Los Angeles ranked third across the priciest office markets in the U.S., with San Francisco leading ($392 per square foot) and Miami following ($369 per square foot).

Vacancy still on the rise, despite large leases

Los Angeles’ office vacancy fluctuated in 2024, but as of September it stood at 16.3 percent. One significant deal that closed recently is CIM Group’s 198,553-square-foot lease in downtown Los Angeles, at its City National 2CAL, a 1.4 million-square-foot skyscraper. The tenant is Southern California Gas Co., which will use the space at the property as its new headquarters. The deal is the largest new office lease signed so far in 2024.

Cruzan signed a 32,241-square-foot deal at its Wilshire & Pal, a creative office building totaling 110,000 square feet in Beverly Hills. The tenant is global music company Concord, which will move its Los Angeles office to the redeveloped property.

The largest lease extension in the metro remains Snap Inc.’s 467,000-square-foot deal at Santa Monica Business Park. The tenant signed a 10-year commitment at the 1.2 million-square-foot creative office campus, owned by BXP, where it was a tenant since 2017.

Los Angeles is still a coworking hotspot

As of October, the coworking sector in the City of Angels consisted of 6.5 million square feet, ranking as the fourth-largest flex office hub in the country after Manhattan (11.2 million square feet), Chicago (6.8 million square feet) and Washington, D.C. (6.7 million square feet). Other gateway markets with significant coworking footprints included Boston and San Francisco, with 4.8 million square feet and 3.6 million square feet, respectively.

Year-to-date through October, the flex office provider with the largest footprint in the metro was Regus (735,656 square feet), followed by WeWork (709,408 square feet), Spaces (594,194 square feet), Premier Workspaces (517,623 square feet) and Industrious (427,407 square feet).

The latter signed a 19,000-square-foot lease in Century City, Calif., in April at Watt Cos.’ North Tower of Watt Plaza, a 476,120-square-foot office property. The flex office provider entered into a 10-year agreement for a full floor of the property. During the same month, Industrious also opened a new 20,752-square-foot coworking location in Westwood, Calif. The flex office space is at Douglas Emmett’s Westwood Center, a 333,830-square-foot property.

The post Strong Deals and High Prices Keep LA Among Top Office Markets appeared first on Commercial Property Executive.

The Opus Group has started construction on 33 Commerce Center, a 250,829-square-foot speculative industrial project in Marysville, Ohio. Completion is scheduled for August 2025.

The development team includes AST Engineering as structural engineer and Lee & Associates Principals Mike Spencer and Todd Spencer as exclusive leasing brokers in charge. Besides developer, The Opus Group is also the designer, general contractor and architect of the project.

READ ALSO: Industrial Report: Automation and AI Shape Future Demand

The Class A, multi-tenant building will include 32-foot clear heights, interior and exterior LED lighting, four storefronts with clerestory windows, a 3,870-square-foot office component, 24 docks, four drive-in dock doors and trailer parking spaces. The property is designed for light assembly and manufacturing uses.

The asset is within Marysville’s 33 Innovation Park, an industrial campus owned and developed by Union County Marysville Economic Development Partnership. It includes customized development sites from 7 acres to 165 acres, one completed industrial building and two others in planning stages.

The master-planned campus allows for easy access to the Columbus, Ohio, metro and the Midwest region via interstates 270, 70 and 71, as well as to Ohio’s 33 Smart Corridor.

Columbus’ pipeline in top 10 nationwide

Columbus has one of the most active industrial pipelines in the Midwest, a recent CommercialEdge report shows. The metro had nearly 8 million square feet underway as of November, outperformed only by Kansas City, Mo., which had 11.7 million square feet. The amount represented 2.5 percent of existing stock, ahead of the 1.8 percent national figure. Columbus also ranked fifth nationwide among the top U.S. markets in terms of amount of space underway.

The post The Opus Group Kicks Off 251 KSF Columbus Project appeared first on Commercial Property Executive.

One to four tenants can fit within the Surprise Pointe Commerce Center, which features 80 dock doors, a 190-foot truck yard, a 36-foot clear height, 103 truck trailer parking stalls, 466 auto-parking stalls and custom-designed office space.

Rockefeller Group was excited about the opportunity to develop in Surprise, Noah Goldstein, development associate for Rockefeller Group’s West Region, told Commercial Property Executive.

“We were attracted by its perfect blend of strategic location, business-friendly environment and proximity to TSMC,” he said. “Given the rise in emerging industries calling Surprise home, we saw a chance to contribute to the city’s growth during such a formative time.”

Rockefeller Group has been active in developing industrial buildings in the Phoenix and Arizona market for decades, including projects in Chandler, Gilbert and Tucson. Further, Rockefeller Group has developed multifamily projects in Goodyear, Gilbert and North Phoenix, with several projects under construction in the Laveen area of Phoenix.

The Phoenix-area market continues to thrive

As for distribution center demand, Goldstein said the past two years have been slower compared to the exciting run-up seen during the COVID-19 era, but the future of Phoenix is as exciting as ever.

“We expect demand to continue pushing up as the state sees more job, labor and housing growth. Every week, we read about new companies moving their regional or corporate headquarters to the city, and we expect this trend to continue.”

READ ALSO: How Automation and AI Shape Industrial Demand

Interstate 10 and Loop 303 are easily accessible to the site, which is also near U.S. 60, Interstate 17 and Loop 101. Therefore, the facility can also serve Tucson, Las Vegas, all of Texas and Albuquerque, N.M.

Cooper Fratt and John Werstler of CBRE are marketing the project for lease or sale.

Layton Construction was its general contractor, Ware Malcomb the designer and Rockefeller Group’s civil engineer was Hunter Engineering.

In September, a joint venture of Matan Cos, Mitsubishi Estate New York, Chuo Nittochi and Taisei USA LLC, along with Rockefeller Group, began construction on the first phase of Port 460 Logistics Center in Suffolk, Va. The plan is for it to comprise about 5 million square feet.

The first phase of the 540-acre campus will consist of 2.4 million square feet across five buildings. The second phase will comprise four facilities totaling 2.6 million square feet.

In May, construction began on the Rockefeller Group Logistics Center at Carneys Point, a two-building, more than 1.1 million-square-foot campus in Carneys Point, N.J. This is Rockefeller’s second such project in Southern Jersey. Rockefeller built a 345,600-square-foot warehouse in Mount Holly, N.J.

The post Rockefeller Group Wraps Phoenix-Area Project appeared first on Commercial Property Executive.

Additionally, the market has a strong development pipeline, with 16.5 million square feet under construction. Of that, 13.3 million square feet broke ground in the first 10 months of this year. Phoenix is the only metro to surpass Dallas, with 28.1 million square feet underway.

Despite strong sales and development figures, the metro faces some headwinds, too. With 48.5 million square feet of industrial space coming online during the same period, the Metroplex’s vacant space saw a worrisome increase: the vacancy rate almost doubled year-over-year, from 4.1 percent to 8.3 percent. That figure is also higher than the 7.2 percent national average.

Dallas sales reach new heights

Dallas’ industrial investment volume topped the national figures, taking the spotlight. The metro registered $3.8 billion in sales year-to-date as of October, marking a $1.1 billion increase compared to the same period in 2023. The market was followed by the Bay Area ($3.0 billion), Chicago ($2.6 billion) and Houston ($2.6 billion).

However, assets in the Metroplex traded for $113 per square foot on average, below the $129 national figure. The Bay Area ($465 per square foot) was the priciest market in the first 10 months of the year, while Houston ($108 per square foot) and Chicago ($100 per square foot) fared worse.

Earlier this fall, Stonepeak acquired two Fort Worth industrial assets totaling 1.1 million square feet from institutional investors advised by J.P. Morgan Asset Management. The two properties, Alliance Gateway 61 and Alliance Gateway 53, are rail-served.

Completions almost halve, still higher than national figures

Dallas’ industrial sector saw 27.4 million square feet coming online year-to-date as of October. The 99 delivered properties account for 2.8 percent of the market’s total stock, 120 basis points above the national average. However, completions in the metro almost halved year-over-year. In the first 10 months of 2023, roughly 48.5 million square feet came online across 137 properties—about 5.2 percent of the metro’s stock at the time.

Compared to peer markets, only Phoenix (29.0 million square feet) surpassed the Metroplex. The Inland Empire (19.2 million square feet), New Jersey (7.9 million square feet) and Atlanta (7.1 million square feet) trailed behind.

In November, Transwestern Development Co. completed the five-building Mid-Cities Logistics spanning 908,300 square feet. The developer broke ground on the 65-acre project in February last year and took out a $64.5 million construction loan from Fifth Third Bank.

Second-largest development pipeline in the US

In terms of the development pipeline, Dallas’ industrial sector ranked second nationally, as well. The metro had 16.5 million square feet of industrial space under construction, representing 1.7 percent of its total inventory—slightly below the 1.8 percent national figure.

Phoenix (28.1 million square feet) remained in the first place, followed by Philadelphia (12.7 million square feet), Kansas City (11.7 million square feet) and Houston (11.6 million square feet). As of October, year-to-date starts in the Metroplex account for 13.3 million square feet, a considerable decrease after averaging about 42.6 million square feet between 2021 and 2023.

In October, Hillwood announced plans to break ground on Alliance Westport 24, a 1.1 million-square-foot industrial building in Fort Worth, Texas. The speculative facility rising within a 27,000-acre campus is slated to come online in the fourth quarter of next year.

Other notable activities in the area include Foundry Commercial’s office-to-industrial conversion project in Plano, Texas. The firm is replacing a 250,000-square-foot building completed in the 1980s with two industrial facilities totaling more than 300,000 square feet. Completion is scheduled in the first quarter of 2026.

Vacancy rate more than doubles as facilities come online

Dallas’ industrial vacancy rate as of October reached 8.3 percent, more than double the 4.1 percent registered during the same month in 2023. Additionally, the figure was 110 basis point above the 7.2 percent national index. Among other major industrial markets, Indianapolis (9.1 percent) posted a higher vacancy rate, while Atlanta (6.1 percent) and the Orange County (4.3 percent) had less available space.

During the same month, the Metroplex’s average rent clocked in at $6.17, registering an 8.1 percent growth compared to year-ago figures. Orange County ($15.95) was the priciest metro, followed by Los Angeles ($15.05), the Bay Area ($13.49) and Miami ($12.07).

Earlier this year, Google signed a 1.1 million-square-foot lease within Majestic Realty’s Creek Business Park in North Fort Worth, according to CommercialEdge. This extension is part of the company’s strategy to invest $1 billion in the state to support cloud and data infrastructure.

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Located on 89 acres at 315 S. Rutherford Blvd., the first phase of MTIC will consist of a rear-load, 234,588-square-foot building and a front-load 149,150-square-foot building. Both will feature 36-foot clear heights. Building 1 will also have up to 56 dock doors and 188 parking spaces, while Building 4 will include up to 40 dock doors and 177 parking spaces.

A timetable for construction of the final two assets is not available but Building 2 is expected to be a 216,405-square-foot rear-load building and Building 3 is planned as a 103,777-square-foot rear-load building.

The buildings can be used by single or multiple tenants. The developers anticipate receiving inquiries from a wide variety of potential tenants, from local warehousing users to larger, more regional distribution users. Major companies in the area include Lineage Logistics, FedEx, Americold Logistics and Amazon.

Close to Nashville and highway

MTIC will be situated within Nashville’s primary core Interstate 24 submarket and about 36 miles southeast of downtown Nashville. The property is strategically positioned to serve both downtown Nashville and the broader regional area due to its proximity to I-24.

Ryan Dodge, a partner and managing director at New York-based real estate finance and management firm PCCP, said in prepared remarks the I-24 corridor has been experiencing high user demand and limited supply due to high barriers to entry. Noting the Greater Nashville area is projected to continue seeing an in-migration of population and wealth, Dodge said they expect the industrial sector in the region to remain robust.

READ ALSO: Automation and AI Shape Future Industrial Demand

The Nashville industrial market had 224 million square feet of inventory and a 3.7 percent vacancy rate at the end of the third quarter, according to the developers. JLL reported in its third-quarter 2024 market report the Nashville market had 4.7 million square feet of speculative development under construction, with tenant demand at nearly 6 million square feet. That should lead to rising rents. With positive macroeconomic conditions in the Southeast region, JLL expects Nashville to continue to be viewed as a highly desirable market for tenants and investors.

William Sisk, Brett Wallach and John Zeffrey of Lee & Associates in Nashville are handling leasing for the property owners.

Earlier Nashville JV

PCCP and DRG have worked together in Tennessee in the past. In October 2022, they announced the formation of a joint venture to build Beechcroft Industrial Park, a speculative three-building, 815,530-square-foot project in Spring Hill, Tenn., near a major General Motors manufacturing plant. Beechcroft Industrial Park includes a 228,580-square-foot rear-loading building, a 244,950-square-foot rear-loading building and a 342,000-square-foot cross-docked building. The 63-acre site is 38 miles south of downtown Nashville.

More PCCP industrial projects

In November, PCCP formed a joint venture with CRG to develop The Cubes at Alpha, a 575,900-square-foot industrial park on a 37-acre site in Alpha, N.J. Delivery is expected by the third quarter of 2025. The project will be aimed at e-commerce, distribution, 3PL and manufacturing uses. The Cubes at Alpha will have two buildings measuring 270,900 square feet and 305,000 square feet. Located near Interstate 78, the property is about 24 miles southwest of Allentown, Pa., and about 60 miles east of The Port Authority of New York & New Jersey.

In June, PCCP teamed with another joint venture partner, BBX Logistics Properties, for The Park at Delray, a 40-acre industrial campus in Delray Beach, Fla. Phase one of the project includes the development of a 200,000-square-foot building. Upon completion, it will feature three buildings totaling more than 670,000 square feet.

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A joint venture between Trammell Crow Co. and Realty Income Corp. has broken ground on a 655,200-square-foot, build-to-suit industrial facility for The Home Depot in Stockton, Calif. The $100 million project is slated for completion in 2026.

The development has been in the works for several years, according to prepared remarks by Trammell Crow Principal Will Parker. As of 2023, plans called for five bulk docks and 22 flatbed docks, as well as parking spaces for 180 trailers, 235 vehicles and 70 trucks.

READ ALSO: Automation and AI Shape Future Industrial Demand

Located at 320 McCloy Ave., the site is less than 3 miles the Port of Stockton, which moved some 4.3 million metric tons of cargo in 2023. Interstate 5 and the Stockton Metropolitan Airport are roughly 3 and 9 miles away, respectively.

The project is slated to add four rail tracks to the Port’s existing infrastructure and feature a solar renewable energy component. The property will also include 350,000 square feet of outside storage space.

The Port of Stockton issued a 50-year ground lease to Trammell Crow for the 58.7-acre site. Construction also includes remediation of the contaminated land previously utilized by the U.S. Navy.

Cushman & Wakefield Executive Managing Director Tyson Vallenari represented the Port of Stockton in the ground lease negotiations, while CBRE Vice Chairman Tom Davis worked on behalf of Trammell Crow Co.

Home Depot warehouses’ state of play

This isn’t the first time Trammell Crow and The Home Depot collaborated on a build-to-suit facility. In 2021, Trammell delivered a 614,676-square-foot building in Lithonia, Ga., roughly 22 miles east of downtown Atlanta.

Home Depot’s warehouse and distribution center assets nearly doubled between 2018 and 2023, growing from 56 to 111 million square feet. But the retailer started downsizing this footprint this year, vacating 879,000 square feet near Chicago and another 480,000 square feet in the Inland Empire. Furthermore, the company began looking to sublease a 1.3 million-square-foot facility in Goodyear, Ariz., and a 1.1 million-square-foot warehouse near Columbus, Ohio.

Central Valley’s industrial pipeline loses steam

The industrial supply pipeline of California’s Central Valley thinned out throughout the year, reaching 900,000 square feet underway in September, down from 4.1 million square feet in March, according to a report by Colliers.

Meanwhile, the market’s industrial vacancy rate reached 7.8 percent, marking a 40-basis-point increase over the quarter. The hike resulted from the speculative industrial deliveries throughout the third quarter, which added 1.1 million square feet of vacant space to inventory.

One of the industrial projects currently underway in the Central Valley is Walmart’s 900,000-square-foot warehouse, also in Stockton. That fulfillment center is slated for delivery in 2026 as well.

The post Trammell Crow JV Kicks Off $100M Home Depot Facility appeared first on Commercial Property Executive.

Terry Commercial Realty intends to develop The Gateway, a 40,000-square-foot restaurant and retail property in the exurban Atlanta town of Jasper, Ga. Plans are still in the early stages, with permitting still ahead.

The property will be part of a master-planned community with about 400 residential units within walking distance of its commercial buildings. All residences are slated for completion before the opening of The Gateway.

Initial renderings focus on a common area and green space that will be flanked by an anchor restaurant on one side and a food hall on the other. Designed to have a town-square vibe, the common area could house a wide variety of events, from morning yoga and cornhole tournaments to live music, Dave Terry, president & founder of TCR, said in prepared remarks.

READ ALSO: Retail’s Big Space Race

Evan Lockwood at Wilson Hutchison Realty, the project’s leasing agent, envisions such tenants as coffee shops, pizzerias, boutique retail and coworking spaces. The locally based TCR itself dates from late 2022, with a focus on development and redevelopment efforts in Pickens County.

The property will be off the main road through the area, Georgia State Route 515, which connects northern Georgia’s mountainous region with the outer suburbs of Atlanta. Jasper, seat of Pickens County, is in the northern reaches of the Atlanta MSA.

Atlanta retail in demand

The greater Atlanta retail market is tight, with a vacancy rate of 3.7 percent in the third quarter of this year, according to a Colliers report. The rate witnessed was up 30 basis points over the year, but still remained below the market’s five-year average by 50 basis points.

Though demand is there, supply continued to grow at a relatively slow pace. The market’s new deliveries totaled 230,000 square feet in Q3, barely above half of the square footage that came online same time last year.

Meanwhile, Atlanta’s retail development pipeline reached an all-time low at 800,000 square feet. During the third quarter of 2023, 1.9 million square feet were underway.

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After a slow year for capital markets and investment, executives attending ICSC’s annual New York City event found reason to expect broad-based momentum to benefit the retail sector in 2025.

“What is a little different is that a lot of institutional capital that’s been sitting on the sidelines is starting to get impatient,” Joseph Lowry, senior vice president for business acquisitions and development at Levin Management Corp, said last week. Returns in the sector are more attractive compared to other property types, he added.

The biggest recent example of the new institutional interest in the sector is Blackstone’s $4 billion acquisition of Retail Opportunity Investments Corp. The purchase of the grocery-anchored REIT specialist represents “the first time that Blackstone has been active in our space in a very long time,” noted Jeff Edison, chairman & CEO of Phillips Edison & Co. A big plus for retail real estate investment, Edison added: “The psychology is starting to move toward a more consistent view that we’re in a stable environment.”

READ ALSO: ICSC Special Report: Retail’s Big Space Race

Along with stepped-up interest from institutional investors, ICSC attendees predicted that debt capital will be more available. “We expect more lenders to enter into the market,” said Matthew Mousavi, senior managing principal & national co-head of net lease and west investment properties at SRS Real Estate Partners. Likely examples: smaller banks, credit unions and CMBS issuance, he added.

Boosting investor appeal

Multiple factors may be adding to retail assets’ appeal to investors. “The store has become much more active in the overall supply chain,” observed Brandon Isner, head of retail capital markets research at Newmark.

The retail supply chain has become dramatically more efficient over the past 10 to 15 years, as the inventory-to-supply ratio has improved drastically, he added. Stores fulfill a significant share of online purchases, and when customers return items to stores, they regularly buy something else.

A variety of capital markets challenges will linger into 2025. “Refinancing is top of mind for us,” because of the elevated cost of capital when loans come due. A property may have been financed at 3.5 percent, but that rate won’t be available again when the time comes, he noted. Nevertheless, he added, “We’re not seeing a flood of distress.”

Retail redevelopment rises

Site selection and financing remains a challenge in much of the country. That points to redevelopment as a strategy of choice. Densification of retail properties with multifamily, office or other asset categories can be a winning strategy all around. As Isner noted, “Office joined to retail will (often) outperform the market as a whole.”

“Landlords are looking to bring an older property up to current standards,” noted Levin Management CEO Matthew Harding. At Blue Star Shopping Center, a grocery-anchored property in Watchung, N.J., the firm recently led a makeover highlighted by upgrades to such areas as landscaping, parking and facades.

The $12 million project also features new public space and infrastructure for electric vehicle charging. A ground-up, 72,000-square-foot Shop Rite will replace the supermarket chain’s former store at the center, which will be reconfigured to accommodate multiple tenants.

Mixed-use redevelopment will also continue to be a key strategy. “Nobody’s building 1 million-square-foot retail anymore,” observed Kristin Mueller, president of JLL’s property management unit.

She cited Bluhawk, a mixed-use destination in Overland Park, Kan., as a showcase for the new wave of retail development. Developed by an affiliate of Price Brothers, the property offers retail, residential and office components. In what’s said to be the first anchor of its kind, the property is anchored by AdventHealth Sports Park at BluHawk. The $125 million, 420,000-square-foot indoor sports and entertainment complex offers an ice rink, basketball courts, a family entertainment component and a training center. “Retail is being redeveloped in close proximity to these non-traditional anchors,” Mueller noted.

The post ICSC Special Report: What’s Ahead for Retail Investment? appeared first on Commercial Property Executive.

Life sciences assets continue to be among the most sought-after projects for developers in the area, driven by increasing demand for cutting-edge research facilities and innovation hubs. The subsector accounted for 8.6 million square feet of the 10.8 million square feet of office space under construction.

Boston’s investment volume is also holding steady, with total sales amounting to $1.1 billion. Additionally, the city remained one of the most expensive office markets nationwide in terms of rents, averaging $53.35 per square foot, a 17.0 percent growth year-over-year.

Office developments continue to reshape the city’s skyline

Boston’s office under-construction pipeline at the end of October stood at almost 10.8 million square feet, continuing to lead nationally, based on CommercialEdge data. This accounts for 4.3 percent of its existing inventory, almost five times larger than the 0.9 percent national rate. San Francisco (3.8 million square feet), Austin (3.5 million square feet) and San Diego (3.1 million square feet) trailed behind the metro.

Earlier this summer, Tishman Speyer topped out the first phase of its Harvard Enterprise Research Campus in Allston, Mass. The 440,000-square-foot lab component broke ground last November and is a collaboration of the company with Harvard University and The Harvard Allston Land Co. The master plan is one of the biggest construction projects in Boston and is expected to total about 900,000 square feet of residential, office and retail space.

In terms of completions, the metro saw 5.7 million square feet coming online as of October. The 19 delivered properties account for 1.9 percent of Boston’s inventory, considerably above the 0.6 percent national figure. It also marks an 11.4 percent year-over-year improvement.

Among gateway markets, Boston ranked first in terms of completions as well. Chicago (4.8 million square feet), Seattle (3.9 million square feet) and Manhattan (3.1 million square feet) also ranked high nationwide, while Miami (1.1 million square feet) and Washington, D.C. (1.9 million square feet) saw less space coming online.

In October, a joint venture of CBRE Investment Management, Leggat McCall Properties and Granite Properties completed the conversion of 40 Thorndike, a 475,000-square-foot mixed-use building in Cambridge, Mass. The property, previously a courthouse and jail from the 1940s, includes 422,000 square feet of office space and 48 affordable units.

Government agencies grant more funds for conversions

This year, CommercialEdge has developed the Conversion Feasibility Index, a Yardi-powered tool meant to assess an office property’s suitability to multifamily conversion. As the office-to-residential adaptive reuse topic continues to gain momentum, the CFI provides valuable insights for investors.

State and national agencies are also actively supporting this trend. Recently, the City of Boston announced the extension and additional funding for its Office to Residential Conversion Program. The state is contributing $15 million to encourage the adaptive reuse of larger office buildings into housing.

One of the projects that received approvals from the Boston Planning & Development Agency earlier this year is 85 Devonshire St., which involves the conversion of three adjacent office buildings into one community totaling 95 residential apartments. KS Partners is developing the project, which is set to also include 19 affordable units and retail space, CommercialEdge data shows. The property’s CFI score stands at 79, meaning that while a solid candidate for conversion, some roadblocks will be present in the process. .

Metro Boston is one of the top markets suitable for office adaptive reuse. About 5.9 million square feet of its office space has strong potential for conversion, accounting for 1.9 percent of the city’s total stock.

Boston pricey deals remain extant

Sales in the metro in the first 10 months of the year accounted for $1.1 billion. Boston’s office assets traded for $187 per square foot on average, slightly above the $177 national average.

The market ranked sixth nationally in terms of office investment volume. Manhattan ($3.3 billion) remained in the spotlight, followed by Washington, D.C. ($2.5 billion). San Francisco ($722 million) and Seattle ($668 million) were some of the gateway metros that were at the opposite end of the spectrum.

In one of the most expensive deals per square foot, Azora Group acquired 149 Newbury Street, a 45,495-square-foot office and retail building for $101 million. The mixed-used asset came online last year and traded for about $2,220 per square foot.

Vacancy rate rises sharply, still below the national average

Boston’s office vacancy rate at the end of October clocked in at 16.8 percent, 650 basis points higher year-over-year, the second-highest increase among the top markets. Despite the worrisome increase in vacant space, the metro’s metrics were below the 19.4 national average and large leasing deals still happened.

For example, back in August Bain Capital signed a 378,000-square-foot lease renewal and expansion at BXP’s 200 Clarendon St., a 1.7 million-square-foot office tower in Boston. The company initially signed a 208,000-square-foot, 15-year agreement at the building in 2010.

Additionally, Commonwealth of Massachusetts’ Division of Capital Asset Management and Maintenance signed a 106,000-square-foot leasing agreement at Tishman Speyer’s One Federal Street. Six government agencies are expected to occupy two full floors at the more than 1.1 million-square-foot building for at least 10 years.

The metro also fared better than most of the other gateway markets, except for Manhattan (16.7 percent), Miami (14.4 percent) and Los Angeles (15.7 percent). However, San Francisco (27.7 percent) and Seattle (25.8 percent) had more space left vacant.

Boston coworking’s space trails behind gateway markets

Boston’s office sector comprised more than 4.8 million square feet of shared office space across 207 properties. This represents 1.8 percent of the metro’s total inventory. Among gateway markets, only Washington, D.C. (1.7 percent) had a lower share of coworking space, while Miami (3.8 percent), Manhattan (2.2 percent) and San Francisco (2.1 percent) were at the opposite end.

Additionally, the metro saw a $24 increase in the average monthly rate as of the third quarter of this year, reaching $399 per month, according to CoworkingCafe. The national average during the same time was $300.

Regus was the company with the largest shared space inventory in the market as of October, owning 588,565 square feet across 32 locations. The firm was followed by WeWork (448,716 square feet) and Industrious (223,830 square feet).

Earlier this month, WeWork entered into a revenue-sharing agreement under which it will continue to operate on a three-floor coworking space in Boston. The 64,323-square-foot space is within Fortis Property Group’s State Street Financial Center, a 1.1 million-square-foot, 36-story tower.

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Blue Owl Real Estate, Chirisa and PowerHouse Data Centers have received a $600 million loan for a 50 megawatt build-to-suit data center development in Northern Virginia. Newmark arranged the financing through a syndicate headed by Société Générale.

Located in the 300-plus-acre Chirisa Technology Park in Richmond, the project is preleased to hyperscale graphics processing unit provider CoreWeave. The development broke ground earlier this year and is scheduled to deliver its initial capacity in 2025.

Newmark’s Jordan Roeschlaub and Jonathan Firestone, along with Clint Frease, Nick Scribani, Ben Kroll and John Caraviello, in collaboration with Brent Mayo, secured the loan.

Newmark did not reply to Commercial Property Executive’s request seeking additional information about the property and the financing.

READ ALSO: Are Data Centers Immune to CRE Market Forces?

Blue Owl Real Estate is a leading real estate private equity platform with $27 billion in assets under management. Chirisa is a global investor active across digital infrastructure and real estate in the Americas and Europe. PowerHouse Data Centers is owned and operated by American Real Estate Partners and offers turnkey data center solutions, from site selection and acquisition through design, construction and operations.

Their $5 billion joint venture emerged just this past fall, focusing on developing large-scale AI/high-performance computing data centers on a build-to-rent basis. The Richmond development is the partnership’s first.

Tighter than tight

The data center market in Northern Virginia remains the nation’s largest, with an inventory of more than 2,600 megawatts and another 1,150 megawatts under construction in the first half of the year, according to a CBRE report. NoVa was also the second-tightest data center market in the U.S. after Hillsboro, Ore., the vacancy rate reaching 1.5 percent at the end of June.

In response to increasing concerns about power constraints, one proposed data center campus in Virginia will be sited near an existing nuclear power plant and will be accompanied by a hydrogen production facility and several small modular reactors. Green Energy Partners is developing the campus, the first of its kind in the U.S., on a 641-acre site in Surry and plans to invest $6.5 billion over the next 13 years.

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