INDUSTRIAL VACANCIES HIT RECORD HIGHS

There's more bad news for industrial investors and developers: vacancy rates in some markets are still growing. In Raleigh, N.C., for example, vacancy rates grew 130 basis points to 23.5% between the third quarter of 2002 and the third quarter of 2003.

Markets Posting Record High Industrial Vacancy Rates
3Q 2003 3Q 2002 Basis Point Change
Raleigh, N.C. 23.5% 22.2% 130
Austin, Texas 19.7% 19.1% 60
San Jose 18.1% 14.8% 330
Stamford, Conn. 16.9% 13.8% 310
Atlanta 16.0% 15.3% 70
Detroit 15.6% 12.3% 330
Charlotte, N.C. 15.1% 13.3% 180
Sacramento 14.8% 13.6% 120
Source: Torto Wheaton Research


NET-LEASE LEADERS

As of the second quarter of 2003, the Northeast and Mid-Atlantic regions led the country in sales of single-tenant, net-lease office properties. The Southeast and the West experienced the highest volume of industrial net-lease transactions.

A WAREHOUSE OF REVENUE

The warehouse club/supercenter concept embraced by retailers such as Wal-Mart and Costco has become consumers' dominant source for general merchandise over the past decade, at the expense of conventional department stores, such as Macy's.

WHERE THE HOTEL DEALS ARE

Hotel buyers in search of bargains should look to North Central cities such as Chicago, Detroit and Minneapolis for attractive prices. The region averaged $42,545 per room, the lowest of any region, in the first half of 2003.

Hotel Real Estate Sales First Half 2003 Vs. First Half 2002
First Half 2003
Average
Number of Number Average Sale
Transactions of Rooms Price Per Room
New England and Middle Atlantic 8 54 $78,598
Mountain and Pacific 137 60 $60,774
South Central 18 139 $57,233
South Atlantic 58 77 $56,220
North Central 27 117 $42,545
First Half 2002
Average
Number of Number Average Sale
Transactions of Rooms Price Per Room
New England and Middle Atlantic 46 137 $128,637
Mountain and Pacific 150 85 $57,628
South Atlantic 115 81 $48,284
North Central 65 85 $26,103
South Central 41 108 $24,458
Source: The Hospitality Research Group, CoStar, Hotel Brokers Association


PACKED WITH APARTMENTS

Although the number of apartment units for rent in New York City actually declined by 21,000 over the last decade, the market's total apartment count still leads the nation by nearly 1 million units. The reduction in the number of units can be attributed in large part to relatively low population growth in older metropolitan areas.

Rental Housing Stock Estimates
Rental Apartment Units Difference
Metro Area 1990 2000 1990-2000
1.New York 1.91 million 1.89 million -21,052
2. Los Angeles 896,542 931,222 34,680
3. Chicago 606,642 616,690 10,048
4. Washington, D.C. 424,676 445,660 20,984
5. Houston 397,062 416,690 19,628
6. Dallas 345,538 377,226 31,688
7. Atlanta 276,542 323,320 46,778
8. San Diego 275,618 286,050 10,432
9. Detroit 281,760 255,267 -26,493
10. Miami 242,680 255,195 12,515
Source: Bob Sheehan, consulting economist to the National Apartment Association from U.S. Bureau of Census data.