Eric Meyer

Check out the Q2 land values update!

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Signs of Stabilization The total office availability rate in the downtown Chicago market decreased for a second consecutive quarter signaling a positive turn for the market. Over the last two quarters, total availability dropped by 70 basis points to 28.9%. The driver is sublease available space as it has decreased by just over 1.1 million square feet since the beginning of this year. This sharp decrease in available sublease space is an indicator that major tenants have finally right-sized their usable space and are offering less large blocks of sublease space to compete in the market. The power is expected to shift to owner’s hands to reset the market with the available direct space pricing.

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This is an interesting paper that looks at the impact of local government structure (zoning) on housing supply. I'd like to see an analysis of uni-gov cities (e.g. Indy, Louisville, Nashville, etc.), similar to what this paper describes for Toronto. https://lnkd.in/g5cCnvU8

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Strong #office leasing trends in Manhattan that we are also seeing in Central Iowa: - Customers seeking higher quality buildings, - Customers growing their office footprints, - Downsizing and subleasing declining

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A common trend: landlords buying up affordable housing only to turn around and raise rents, pricing out long-term residents. We must not only develop affordable housing, but preserve what we already have.

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More from me at the Federal Reserve Bank of Kansas City - a look under the hood at home prices. Anecdotally, I've often heard about the challenges in the market for starter homes (two-bedrooms in the chart below). Some anecdotes suggest that demand is strong for this type of home not only from first-time homebuyers, but from older people looking to downsize. Regardless of its source, demand continues to propel starter home prices upward even after interest rates began increasing in early 2022. More at the link! https://lnkd.in/gZ6Pri_q

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According to Zillow the average Indiana home value is $241,778, up 5.7% over the past year. To put this in perspective: In the 11-county Indianapolis metro area, for instance, the median sales price in August 2020 was $219,000, and with mortgage rates slightly below 3% at that point, the monthly payment at this price level was an estimated $1,126. By August 2023, the median sales price increased 40% to $305,000, but with mortgage rates now above 7%, the monthly payment on the median-priced home was $2,200—a near doubling of homeowner costs in just three years. Ask yourself how much a single person needs to be making to afford one of these homes. Got that number? How much are the people at the bottom of your company making? I bet it's no where close to that figure you have in your head. To turn a phrase: If you pay them, they will come. https://lnkd.in/gWHP2YqX

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A new development is in the works that could change Louisville’s skyline. Plans for a 27-story Downtown tower called One Forty West have appeared on New York City-based commercial real estate development firm Zyyo’s website. The skyscraper would sit on the corner of 2nd Street at 140, 138 and 136 West Market Street. The location is across the street from the future Canopy by Hilton hotel, which is another Zyyo development and is currently under construction. Nick Campisano, founder and CEO of Zyyo, confirmed to Business First that his firm, in partnership with Hawley, Minnesota-based TruVine Companies, are in the early planning stages to build the estimated $175 million tower, featuring a 300-room hotel. These two firms are also co-developing the Canopy by Hilton. A Downtown tower of this magnitude would be the first in Louisville since the 30-story Omni Louisville Hotel opened in 2018. Campisano said the success Zyyo and TruVine have had in constructing the Canopy by Hilton have given them the confidence to move forward with the One Forty West project, which he said has been in the works for two years. He said the two hotels will compliment each other, while capitalizing off of the growth of Bourbonism and the renovation of the Kentucky International Convention Center. While a hotel brand has yet to sign onto the tower, Campisano said he is in discussions with major brands to create a hotel experience not currently available in the Louisville market. Plans on Zyyo's website call for a hotel, with a restaurant on the ground floor and a bar on the rooftop. The third floor would feature a grand ballroom, meeting rooms and administrative space. The first four floors share the same footprint, rising up to a pool deck and bar, according to the plans. A narrow tower encompasses the remaining floors. The outside of the tower appears to have large glass windows, with a glass canopy covering the entry. #commercialrealestate #expansion #economicdevelopment #Louisvillerealestate #hotels

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#eventprofs - Looking to level up your career either inside or outside of your current org? Join us *this Thursday* July 25 on Zoom for practical advice from a panel who have had successful job changes this year. This is webinar is free to GMC members, students and those who are currently job seeking!

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Yikes, what a mess and with big such stakes! The State of Wisconsin just announced last week that they intend to purchase 22 and 30 W. Mifflin Street on the Capitol Square for $9.1 million and build a new Veterans Museum. 'Not so fast' says the landlord, who instead intends to redevelop the property into an apartment building. All office leases have a provision that defines what is and isn't a default. A late rent payment typically puts the tenant in default. In this case, however, a bureaucratic error in getting the rent check out one time may have caused the loss of the right to purchase the property. In my experience, most defaults are technical and can be cured easily with no permanent repercussions and tenants often negotiate a provision to prevent a default in case of a one-time payment glitch or other innocent mistake. I have represented landlords in numerous leases with the State of Wisconsin, and the state has its own form lease that it requires landlords to use. Thus it will be interesting to see how a judge interprets whether the state defaulted per the provisions of its own lease when (I presume) this goes to court. #madisonwi #sior #officeleasing https://lnkd.in/geqGy75B

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Greater Washington just posted another record high in home prices, supporting household wealth and vibrancy through the region. The Washington Post recently highlighted more granular home prices changes across zip codes. https://lnkd.in/eDiHJUXH The upward trend in home prices is one reason our proprietary REVIVE index increased last month. You can visit the index anytime here https://lnkd.in/eWQZr8Zd. On the other hand, affordability continues to be an issue for the region. Building permits for new housing in Greater Washington are recently trending roughly half of the peak in 2022, suggesting little relief on the horizon.

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This is insightful.

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What’s your opinion? Given the housing situation described in this article, do you think policy makers should support programs and promote policies specifically designed to increase owner occupier home ownership?

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This heat map shows demand trends by metro from local community developers buying on Auction.com so far in Q2 2024 -- a good indicator of where the retail housing markets in these metros are headed. I'll be sharing this heat map, along with 14 other charts and heat maps, in a June 27 webinar hosted by ATTOM with Jennifer von Pohlmann and MIke Simonsen from Altos Research. Here's a link to sign up for that free webinar: https://lnkd.in/enkYaMPb Heat map link: https://lnkd.in/eeTqSdtW Few observations: 1. While there is not a super-clear pattern (in my view) by region, generally speaking it looks like demand tends to be weakening in the west and sunbelt (Arizona, Florida, parts of Texas most prominently) while demand tends to be strengthening in the Midwest, rustbelt and Northeast). 2. A notable cluster of weakening demand in central and southwest Florida aligns with some of the weakening retail trends (spiking inventory) that is showing up in the Altos Research data. Also a cluster of weakening demand in California and all up the west coast. 3. A cluster of strengthening demand in the southeast (sans Florida) from Atlanta and Birmingham up through Tennessee, Kentucky, Ohio (sans Cincinnati), western Pennsylvania and even up into eastern Michigan.

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Extreme Weather Events are More Frequent and More Expensive in Iowa A compelling interactive tool from the National Centers for Environmental Information (NCEI) highlights the rising costs associated with extreme weather events that are particularly affecting Iowa. Here are some key insights based on the latest data: Disasters Are Multiplying in Iowa: The frequency of billion-dollar weather events has soared, with Iowa feeling the impact. In 2023 alone, the U.S. faced 28 such events, marking a fourfold increase compared to the average number in the 2000s. Iowa has witnessed its share of severe storms, flooding, and tornadoes, contributing to this alarming trend. Insurance Crisis on the Horizon As extreme weather events become more common, Iowans are facing rising insurance costs. Property insurance premiums are on the rise as insurers adjust to increased claims from severe storm damage. In other states, like Florida and California, similar trends have led to staggering increases in insurance costs and significant policy non-renewals, raising concerns about the sustainability of homeowners’ insurance in Iowa. No Safe Haven in Iowa: Since 2022, every state, including Iowa, has experienced at least one billion-dollar weather disaster. Iowans are not immune to devastating storms that can lead to widespread destruction, underscoring the reality that extreme weather can impact any region, regardless of geographic assumptions about safety. Rising Costs of Severe Weather: The average cost of severe weather events continues to climb, posing a serious threat to property owners in Iowa. Recent data shows that the financial burden of storms and natural disasters can cripple communities, affecting everything from local economies to household budgets. Prolonged Heat Waves Are Straining Resources: While not always classified as extreme weather events, prolonged heat waves have become increasingly frequent in Iowa, causing significant economic repercussions. The demand for energy rises dramatically during heat waves, leading to higher utility bills and increased pressure on the power grid. In many cases, a rise of 1°C (1.8°F) in average temperatures can result in a 4% increase in electricity demand, raising concerns over energy costs and the potential for outages during peak demand. 🔗 Explore the data:  https://lnkd.in/g4DJQBTx

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CRE Market Picks Up Momentum for 2025! 🚀 Despite recent challenges, U.S. commercial real estate activity is heating up! 🔥 In Q2 alone, transactions hit $60 billion, marking a 31% increase over Q1. 💼 Investors are shifting their focus to deploying capital, up by 11% from the last quarter—optimism is clearly on the rise! 📈 With new rate cuts underway, markets are gearing up for a strong 2025. Which property types will be the winners in 2025? Apartments 🏢 Industrial warehouses 🏭 are on top the list, but investors are also eyeing retail and storage. #ColumbusRealEstate #CRE #InvestSmart #EconomicGrowth #RealistCapital 👉 Read more: https://lnkd.in/gZ7X5whn

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As Q3 closes we’re seeing a curious trend: (& Columbus investors are really excited) → Development starts decreased by 55% → MF transaction volume is down 52% This is despite impressive growth metrics → 1.8% population growth → #7 city in job growth → 3% Rent growth We’re seeing this benefit one investor profile: → Private investors The private capital multifamily market is transactable & active. Curious about local inventory? DM “Columbus” & let’s talk.

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