Newmark Grubb ACRES (NGA) is pleased to announce the release of the market report snapshots for the first quarter of 2017.
In the industrial market, an already low direct vacancy rate inched lower to 3.69% with 473,347 square feet (SF) absorbed in Q1 2017. Of the 3.1 million SF currently under construction, 68% is already pre-committed. Leasing and owner-user sales transaction SF volume were both slightly down year-over- year due partly to a dearth of available product, but prices per SF were up across most product types. Medium distribution had one of the largest year-over- year increases in lease rates at 17%.
The office market was fairly anemic with net absorption for Q1 at 41,805 SF. Direct vacancy rates for Classes B and C leveled out, and the Class A vacancy rate rose from a low in 2015 of 4.18% to 7.19% in Q1 0217, due in part to new construction coming to market. Lease transaction SF volume is down year-over-year but lease rates are up with Class C increasing the most. Owner-user sales transaction SF volume rose over 300% year-over- year.
Investment transaction dollar volume in Q1 2017 was the lowest of the past five first quarters but the number of transactions was the second highest of the past five. Multifamily investment transactions made up almost 50% of the total investment transaction dollar volume. Year-over- year cap rates were down for industrial, multifamily and office but up for retail.
In the 0-9,999 SF segment of the retail market, number of leases, lease rates and leased SF were up year-over- year but were all down in the 10,000+ SF segment. The number of owner-user sales is up year-over-year by 15% but the transaction SF and dollar volumes are both down with more transactions in the smaller segments. Single tenant investment sales dominated the number of investment transactions with close to 60% of the total Q1 transactions, an increase of 73% year-over- year.
To access more detailed reports, please visit our website at www.ngacres.com/market-research.