Atlanta
The Perimeter Center business district experienced the greatest positive absorption in the second quarter among all metro Atlanta office markets, according to local commercial real estate firm Richard Bowers & Co. The northern suburb of Atlanta absorbed 303,711 square feet in the latest quarter, with a vacancy rate of 13.2 percent. Perimeter Center also recorded the highest average asking rent among suburban markets, at $22.92 per square foot. Buckhead/Lenox followed Perimeter Center in net absorption with 183,199 square feet, the Atlanta Journal-Constitution reported.
Boston
The downtown Boston office market posted positive net absorption from April through June for the 15th straight quarter, but availability increased as large blocks of space in several buildings came online, according to CB Richard Ellis. Downtown saw just 42,000 square feet of positive absorption, despite several large leases coming from financial services firms, including a 450,000-square-foot lease by Wellington Management and a 196,000-square-foot deal by Bank of America. Office buildings that came to market in the latest quarter include a 517,000-square-foot tower at Atlantic Wharf and two buildings comprising 355,000 square feet at the Christian Science Center.
Hotel occupancy rates are expected to slip next year in Boston as business travelers and tourists tighten their budgets in response to rising airfare and the second-highest average room rates in the country, the Boston Globe reported. The Pinnacle Advisory Group forecasted a 1 percent decline in occupancy for both Boston and its suburbs in 2009, with rates expected to drop to 76 percent in the city and to 62 percent outside Boston. Despite the negative outlook, Starwood last month unveiled two concept hotels in nearby Lexington: the first Aloft hotel in New England, marketed to tech-savvy travelers, and the eco-friendly Element hotel, the first in the country.
Chicago
The Chicago-area retail market took a hit in the second quarter as the vacancy rate rose to its highest level since 2003, according to CB Richard Ellis. Vacancies climbed to 8.65 percent from April through June, up from 7.93 percent in the previous quarter and 7.51 percent in the year-ago period. Vacancies haven’t been this high since the market posted a 9.19 percent vacancy rate in the third quarter of 2003, Crain’s Chicago Business reported. Linens ‘n Things and Sharper Image were among the chain stores to close sites in the second quarter. Steve & Barry’s, which has 12 stores in the Chicago area, filed for Chapter 11 bankruptcy protection last month.
Detroit
Year-over-year home sales climbed in June for the sixth straight month in metro Detroit, driven by a 55 percent increase in sales in the city. A total of 990 homes sold there in June, up from 639 in the year-ago period, the Detroit Free Press reported. Inventory dropped in metro Detroit to 67,888 in June from 74,989 in June 2007, while pending sales increased 32 percent in the same period, according to Farmington Hills-based Realcomp, a multiple listing service. Sales in neighboring Oakland, Livingston and Macomb counties, however, dropped from year to year.
Las Vegas
For the sixth consecutive month, Las Vegas saw an increase in home sales in June as inventory remained stable, the Las Vegas Review-Journal reported. According to the Greater Las Vegas Association of Realtors, 2,226 single-family homes sold in June, a 50 percent increase from June 2007 and up from 2,026 sales in May. Listings remained flat in June, increasing just 0.2 percent from the previous month to 23,388 units and down 1.1 percent from a year ago. The median home sales price, however, declined 4.9 percent from May to $225,000 and 26.2 percent from June 2007.
Los Angeles
Asking rents for Los Angeles County’s Tri-Cities office market fell slightly to $3.01 per square foot in the second quarter from $3.05 per square foot in the prior three-month period, the market’s first quarterly decrease in over two years. According to a Colliers International report, the office market saw a lower vacancy rate of 10.8 percent in the latest quarter, down from 11.5 percent in the first quarter. Leasing activity dropped slightly from the first quarter to 385,400 square feet in the second quarter in the Tri-Cities office market, which includes Burbank, Pasadena and Glendale, the report said.
Philadelphia
Some niches of the Philadelphia area’s housing market are outperforming most of the region, especially in the suburbs where new developments are hatching more moderate-sized homes in proximity to Philadelphia. At Huntingdon Valley’s Woodmont community, 17 homes sold in the first half of the year, at prices ranging from $500,000 to $900,000, the Philadelphia Inquirer reported. Athertyn, a 55-and-over community in Haverford, sold 16 units through May, with prices of up to $1.3 million. Real estate data firm Hanley Wood Market Intelligence reported that townhouse and condo sales accounted for 47.2 percent of the suburbs’ new-home sales by mid-year 2008, up from 32.5 percent three years ago.
Phoenix
Leasing activity in the Phoenix industrial market was down in the second quarter with a negative absorption of more than 1.33 million square feet, compared to 312,000 square feet of negative absorption in the first quarter. The Northwest submarket fared the worst from April through June, with a net absorption of negative 940,421 square feet, according to Colliers International. The Southwest submarket, on the other hand, posted a positive absorption of 131,390 square feet in the latest quarter, capped by a 604,678-square-foot warehouse leased by Amazon.com.
San Francisco
San Francisco’s office market rebounded in the second quarter with 303,542 square feet of positive absorption, a turnaround from the nearly 500,000 square feet of negative absorption posted in the first quarter, according to CB Richard Ellis. Though completed construction projects piled on nearly 450,000 square feet of vacant space to the Mission Bay submarket in early June, Barclay’s occupation of its 335,000-square-foot, build-to-suit headquarters at 400 Howard Street helped create positive absorption in the overall market.
Despite rising retail vacancy rates and flat asking rents in San Francisco’s Union Square shopping district, brokers claim that the market changes reflect natural cycles, the San Francisco Chronicle reported. Union Square’s retail vacancy rate increased to 9.35 percent in June from 5.75 percent at the end of 2007, while ground-floor asking rents remained flat year-over-year at $183 per square foot, according to local retail brokerage firm Terranomics. The Disney Store, CompUSA and Ann Taylor recently shuttered their Union Square outposts; Diesel, Morton’s the Steakhouse and CB2 are moving in.
Seattle
The median sales price for King County condos increased 5.3 percent in June to $295,000 from June 2007, according to the Northwest Multiple Listing Service. Condo sales, however, dropped 45 percent as listings climbed 40.5 percent in the same period. Meanwhile, the median sales price for detached houses in the county, including Seattle, fell 4.3 percent in June to $449,700 from a year ago. Sales of houses dropped 27 percent as inventory rose 25.4 percent in the year-over-year period, the Seattle Times reported.
Washington, D.C.
Demand for office space in Washington, D.C. may not be strong enough to absorb the 8.8 million square feet of new space coming online by 2010. Despite record asking rents of $50.22 per square foot for office space in the first half of the year, the vacancy rate increased to 7.7 percent in the second quarter from 7.3 percent in the first quarter, according to Cushman & Wakefield. New office leases through the first six months of the year fell to 3.3 million square feet from 3.8 million square feet in the year-ago period.