STABILIZING MANHATTAN OFFICE MARKET
For the first time in months, the rate of decline has begun to level off in Manhattan, according to first-quarter 2003 numbers from Cushman & Wakefield. The trend is attributed to several factors: the fact that space in many buildings is being offered at attractive prices and business incentives available to tenants who locate Downtown.
| Manhattan Overall | 1Q 2003 | 4Q 2002 | 1Q 2002 |
| Vacancy Rate | 12.3% | 12.0% | 10.4% |
| Rent/Sq. Ft. | $41.97 | $42.96 | $45.69 |
| Downtown Manhattan | 1Q 2003 | 4Q 2002 | 1Q 2002 |
| Vacancy Rate | 13.3% | 13.2% | 11.9% |
| Rent/Sq. Ft. | $38.24 | $39.17 | $40.55 |
| Midtown South | 1Q 2003 | 4Q 2002 | 1Q 2002 |
| Vacancy Rate | 13.9% | 13.5% | 12.1% |
| Rent/Sq. Ft. | $31.43 | $33.23 | $36.71 |
| Midtown Manhattan | 1Q 2003 | 4Q 2002 | 1Q 2002 |
| Vacancy Rate | 11.5% | 11.1% | 9.3% |
| Rent/Sq. Ft. | $47.30 | $48.15 | $51.68 |
| Source: Cushman & Wakefield | |||
THE BIG 3 IN MULTIFAMILY REITS
More than half of the equity market cap of the publicly traded multifamily REITs is made up by the top three companies: Equity Residential (24.70%), Archstone-Smith (15.09%) and Apartment Investment & Management Co. (12.97%).
| Market Capitalization | ||||
|---|---|---|---|---|
| Rank | Company | Ticker Symbol | Billions of Dollars | Percent of Subsector |
| 1 | Equity Residential Properties Trust | EQR | $6.52 | 24.70% |
| 2 | Archstone-Smith Trust | ASN | $3.98 | 15.09% |
| 3 | Apartment Investment & Management Co. | AIV | $3.42 | 12.97% |
| 4 | AvalonBay Communities Inc. | AVB | $2.51 | 9.53% |
| 5 | United Dominion Realty Trust Inc. | UDR | $1.71 | 6.49% |
| Source: National Association of Real Estate Investment Trusts | ||||
TOP INDUSTRIAL INVESTMENT MARKETS
Jacksonville and Houston are two of the best places to buy industrial properties in the country, offering median yields of 10.95% and 10.6% respectively, according to real estate brokerage Sperry Van Ness. The study is based on the transaction yields of multi-million dollar sales on an all-cash basis and the price per foot paid for buildings in 2002.
| Rank | Region | Yield | Price per sq. ft. | |
|---|---|---|---|---|
| 1 | Jacksonville, Fla. | 10.95% | $33.91 | |
| 2 | Houston | 10.6% | $29.28 | |
| 3 | Boston | 10.43% | $53.33 | |
| 4 | Colorado Springs, Colo. | 10.32% | $41.35 | |
| 5 | Columbus, Ohio | 10.24% | $29.05 | |
| Source: Sperry Van Ness | ||||
NO BARGAIN FOR HOTEL FRANCHISEES
It's getting more expensive to own an economy-level hotel franchise. Research by HVS International reveals that the average franchise fee — measured as a percentage of room revenue — for economy brands (Days Inn, EconoLodge and Super 8) is now equal to that of mid-market brands (Best Western, Holiday Inn, Ramada). More than a decade ago, franchise fees for economy brands measured only 5.2% of room revenue, compared with mid-market fees of 5.7% and first-class fees of 9.6%.
RENT REPORT
Of the 105 million households in America, 36 million — or 34% — live in rented quarters, according to the 2000 Census. The average monthly rent for rented digs is $612.
| No-cash rent | 5% |
| Less than $200 | 4% |
| $200-$299 | 5% |
| $300-$499 | 22% |
| $500-$749 | 34% |
| $750-$999 | 18% |
| $1,000-$1,499 | 9% |
| $1,500 or more | 3% |
| Source: U.S. Census Bureau | |