Dave Smies and Stu Kingma were both given awards for Top Industrial Leasing Brokers, Bill Tyson was recognized as a Top Retail Leasing Broker, and Stan Wisinski and Mary Anne Wisinski-Rosely were both recognized as Top Sales Brokers.

In addition, NAI Global as a whole was well represented, bringing in 132 individual awards and 91 firm awards across the country.

Dave Smies

Stu Kingma

Bill Tyson

Stan Wisinski

Mary Anne Wisinski-Rosely

Lawrence Yun, NAR chief economist, said rental housing demand has been exceptionally strong.  “Rent increases have been higher in multifamily housing where supply is not matching strong demand, thereby allowing landlords to raise rents at faster rates,” he said.  “Overall commercial real estate leasing activity continued to grow in most markets during the closing months of 2012, which is modestly lowering vacancy rates in all of the commercial sectors early this year.”

National vacancy rates over the coming year are expected to decline 0.4 percentage point in the office market, 0.4 point in industrial, 0.3 point for retail and 0.1 point in multifamily, with that sector experiencing the tightest availability.

“Business spending is expected to rise faster in 2013 because of record high corporate profits.  Low interest rates also are permitting companies to improve their balance sheets,” Yun said.

NAR’s latest Commercial Real Estate Outlook¹ offers projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets.  Historic data for metro areas were provided by REIS, Inc.,² a source of commercial real estate performance information.

Office Markets

Vacancy rates in the office sector are forecast to fall from a projected 16.0 percent in the first quarter to 15.6 percent in the first quarter of 2014.

The markets with the lowest office vacancy rates presently (in the first quarter) are Washington, D.C., with a vacancy rate of 9.4 percent; New York City, at 9.6 percent; and Little Rock, Ark., 12.1 percent.

Office rents should increase 2.6 percent in 2013 and 2.8 percent next year, following a 2.0 percent gain in 2012.  Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is expected to total 34.0 million square feet this year and 42.3 million in 2014.

Industrial Markets

Industrial vacancy rates are likely to decline from 9.6 percent in the first quarter of this year to 9.2 percent in the first quarter of 2014.

The areas with the lowest industrial vacancy rates currently are Los Angeles and Orange County, Calif., each with a vacancy rate of 3.6 percent; Miami, 5.6 percent; and Seattle at 6.0 percent.

Annual industrial rents are projected to rise 2.3 percent this year and 2.6 percent in 2014, after increasing 1.7 percent last year.  Net absorption of industrial space nationally is likely to total 121.8 million square feet in 2013 and 103.5 million next year.

Retail Markets

Retail vacancy rates are forecast to slide from 10.7 percent in the first quarter of the year to 10.4 percent in the first quarter of 2014.

Presently, markets with the lowest retail vacancy rates include San Francisco, 3.5 percent; Fairfield County, Conn., at 4.2 percent; and Orange County, Calif., 5.2 percent.

Average retail rents will probably rise 1.5 percent in 2013 and 2.1 percent next year, following a 0.8 percent gain in 2012.  Net absorption of retail space is seen at 11.9 million square feet in 2013 and 16.4 million next year.

Multifamily Markets

The apartment rental market – multifamily housing – should see vacancy rates ease from 4.0 percent in the first quarter to 3.9 percent in the first quarter of 2014; vacancy rates below 5 percent generally are considered a landlord’s market with demand justifying higher rents.

Areas with the lowest multifamily vacancy rates currently are New Haven, Conn., at 2.0 percent; New York City, 2.1 percent; and Minneapolis and Syracuse, N.Y., each at 2.5 percent.

Average apartment rents are expected to increase 4.6 percent this year and 4.7 percent in 2014, after rising 4.1 percent in 2012.  Multifamily net absorption is projected at 270,600 units in 2013 and 253,200 next year.

The Commercial Real Estate Outlook is published by the NAR Research Division.  NAR’s Commercial Division, formed in 1990, provides targeted products and services to meet the needs of the commercial market and constituency within NAR.

The NAR commercial community includes commercial members; commercial real estate boards; commercial committees, subcommittees and forums; and the NAR commercial affiliate organizations – CCIM Institute, Institute of Real Estate Management, Realtors^® Land Institute, Society of Industrial and Office Realtors^®, and Counselors of Real Estate.

Approximately 78,000 NAR and institute affiliate members specialize in commercial brokerage and related services, and an additional 232,000 members offer commercial real estate services as a secondary business.

The National Association of Realtors^®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.  For additional commentary and consumer information, visit www.houselogic.com and http://retradio.com.

¹Additional analyses will be posted under Economists’ Outlook in the Research blog section of Realtor.org in coming days at: http://economistsoutlook.blogs.realtor.org/.

²Beginning in the third quarter of 2011, NAR commercial forecasts have been generated based on historical data provided by REIS, Inc., and do not correspond with prior historical information from previous forecasts.  This source permits coverage of more metro areas than were previously covered.

The next commercial real estate forecast and quarterly market report will be released on May 28 at 10:00 a.m. EDT.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the “News, Blogs and Videos” tab on the website. Other commercial information and reports are posted in the Commercial Research area of the “Research and Statistics” tab.

Grand Rapids, MI (September 19, 2012)

NAI Wisinski of West Michigan welcomes Bradley Hartwell, II as our newest Service Provider. He will be specializing in investment sales. Bradley brings with him five years of experience in commercial banking, property management and investment analysis. Previously, Bradley worked in Macatawa Bank’s commercial lending department as a Commercial Credit Analyst.  He then worked for Friedman Integrated Real Estate Solutions in Farmington Hills, MI where he managed the financial reporting, tenant relations, and physical maintenance of a portfolio consisting of 1.5 million square feet of office, industrial, & retail space.

Bradley has a business degree from Central Michigan University where he majored in Corporate Finance and Real Estate Development. During his time there he worked with GRL Properties where his work led to the acquisition of $3.5 million of industrial investment property.

Positive underlying fundamentals continue to support all of the major commercial real estate sectors, but a slowdown in job creation and ongoing tight loan availability has tempered growth in some areas, according to the National Association of Realtors® quarterly commercial real estate forecast.

Lawrence Yun, NAR chief economist, said there are mixed results among the commercial sectors. “Job creation in the second quarter was about half of what we saw in the first quarter, which is moderating demand in the office sector,” he said. “Industrial and warehouse space is holding on better because imports and exports have advanced. While exports to Europe generally are down, trade has been robust with India, China and other Asian nations, along with Brazil, Mexico and our strongest trading partner – Canada.”

Although still positive, dampened demand is slightly moderating rent growth with the exception of the multifamily market.  “Sharply higher demand for apartments is causing rents to rise at faster rates,” Yun said.  “A return to normal household formation will mean even lower vacancy rates and higher rents in the future.”

The current commercial real estate cycle has been driven by shifts in demand without an oversupply of new construction.  “The difficulty small businesses have in getting commercial real estate loans for leasing or purchase is keeping a lid on demand,” Yun explained.  “Multifamily is the only commercial sector with a notable growth in new space, with some lending provided through government loans.”

With the exception of multifamily, vacancy rates remain above historic averages seen since 1999. Over that time frame the typical vacancy rate has been 14.4 percent for the office market, 10.1 percent in industrial, 8.1 percent for retail and 5.8 percent in multifamily.

Vacancy rates are marginally declining and rents are modestly rising in all of the sectors, but significant changes in the outlook are unlikely before the end of the year. Many corporate decisions on spending and job hiring are on hold given uncertainty over the upcoming elections, whether Congress will effectively avoid a “fiscal cliff,” and unsettled issues such as health care and banking/financial regulations.

“Overall companies hold plentiful cash reserves, but they are hesitant to hire without clarity over how these outstanding issues will impact the bottom line,” Yun said.

“Commercial real estate gains could be thwarted if lending from small and community banks dry up from excessive regulatory compliance costs, and if international big-bank capital rules are applied to smaller lending institutions,” Yun added.

NAR’s latest Commercial Real Estate Outlook¹ offers projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets.  Historic data for metro areas were provided by REIS, Inc.,² a source of commercial real estate performance information.

Office Markets

Vacancy rates in the office sector are expected to fall from an estimated 16.1 percent in the third quarter to 15.6 percent in the third quarter of 2013.

The markets with the lowest office vacancy rates presently are Washington, D.C., with a vacancy rate of 9.4 percent; New York City, at 10.0 percent; and New Orleans, 12.8 percent.

Office rent is projected to increase 2.0 percent this year and 2.6 percent in 2013.  Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, should be 24.1 million square feet in 2012 and 47.8 million next year.

Industrial Markets

Industrial vacancy rates are forecast to decline from 10.7 percent in the third quarter of this year to 10.5 percent in the third quarter of 2013.

The areas with the lowest industrial vacancy rates currently are Orange County, Calif., with a vacancy rate of 4.6 percent; Los Angeles, 4.8 percent; and Miami at 6.8 percent.

Annual industrial rent is likely to rise 1.7 percent in 2012 and 2.4 percent next year.  Net absorption of industrial space nationally is seen at 59.8 million square feet this year and 67.2 million in 2013.

Retail Markets

Retail vacancy rates are projected to decline from 10.9 percent in the third quarter to 10.7 percent in the third quarter of 2013.

Presently, markets with the lowest retail vacancy rates include San Francisco, 3.8 percent; Fairfield County, Conn., 3.9 percent; and Long Island, N.Y., and Orange County, Calif., both at 5.3 percent.

Average retail rent is forecast to rise 0.8 percent this year and 1.3 percent in 2013. Net absorption of retail space should be 10.3 million square feet this year and 20.1 million in 2013.

Multifamily Markets

The apartment rental market – multifamily housing – is expected to see vacancy rates drop from 4.3 percent in the third quarter to 4.2 percent in the third quarter of 2013; vacancy rates below 5 percent generally are considered a landlord’s market with demand justifying higher rents.

Areas with the lowest multifamily vacancy rates currently are Portland, Ore., at 2.0 percent; New York City and Minneapolis, both at 2.2 percent; and New Haven, Conn., and San Jose, Calif., both at 2.4 percent.

Average apartment rent is likely to increase 4.1 percent in 2012 and another 4.4 percent next year.  Multifamily net absorption should be 219,300 units this year and 236,600 in 2013.

The Commercial Real Estate Outlook is published by the NAR Research Division for the commercial community.  NAR’s Commercial Division, formed in 1990, provides targeted products and services to meet the needs of the commercial market and constituency within NAR.

The NAR commercial components include commercial members; commercial committees, subcommittees and forums; commercial real estate boards and structures; and the NAR commercial affiliate organizations – CCIM Institute, Institute of Real Estate Management, Realtors® Land Institute, Society of Industrial and Office Realtors®, and Counselors of Real Estate.

Approximately 78,000 NAR and institute affiliate members specialize in commercial brokerage and related services, and an additional 232,000 members offer commercial real estate services as a secondary business.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

“Welcome to Moe’s!” will soon be heard throughout St. Joseph, Michigan, when Moe’s Southwest Grill opens at 3260 Niles Rd. on Thursday, August 16.

The new restaurant marks the first of 25 new locations that local restaurateur Joyce Lunsford, owner of Trigo Hospitality, will open throughout the Midwest. Moe’s Southwest Grill serves fresh made-to-order burritos and Southwestern fare in a fun and laidback environment.

All meals, including signature items like the Homewrecker burrito, Close Talker salad, and John Coctostan quesadilla, are served with free chips and unlimited salsa from Moe’s fresh salsa bar.

While Moe’s Southwest Grill is best known for its burritos packed with a choice of more than 20 fresh ingredients, the menu also features kids’, vegetarian, and low-calorie options.

At the same time, the menu boasts a wide variety of vegetarian and vegan offerings, many of which feature organic tofu. Moe’s also offers all-natural, cage-free chicken; grain-fed steroid-free pulled pork (both with no hormones added); and 100 percent grass-fed steak.

After eating at a Moe’s in Grand Rapids, Michigan, Lunsford and her team at Trigo Hospitality enjoyed the food so much that they wanted to be the first to bring Moe’s to St. Joe.

In January 2012, Lunsford signed an agreement that will bring 25 new restaurants—and hundreds of jobs—to Michigan, Indiana, and Ohio by 2020. She will operate the restaurants with business partner and local resident Greg Molter.

As part of the development agreement, new Moe’s Southwest Grill restaurants will also open throughout Michigan in Grand Rapids, Battle Creek, Holland, Kalamazoo, Muskegon, Midland, Mt. Pleasant, Saginaw, and Big Rapids.

Trigo Hospitality currently operates 32 Pizza Hut locations in Southwest Michigan and five Sonic Drive-In restaurants. Her franchise group recently sold the 22 Panera Bread restaurants it operated in Michigan and Ohio.

Dick Jasinski (left) and Tim Platt (right) by the NAI Wisinski booth at the ICSC Michigan Idea Exchange

During NAI Wisinski’s bi-weekly retail meeting on Tuesday, a few of the retail associates reported on the ICSC Michigan Idea Exchange which took place in Dearborn, MI last week. Doug Taatjes and Rod Alderink both felt a positive vibe buzzing around the conference. There was a feeling that optimism is high and the attendance, up 20% this year, backed that sense.

Rod went to the conference specifically to get a feel for how shopping centers would fare in the near future, particularly Class B & C centers. He reported that these types of centers, described as neighborhood centers built at least fifteen years ago, still have a tough road ahead. He didn’t see as much interest in these from retailers.

Part of this might be because of all the development going on. Doug noted a large focus on developments that seemed to be 10,000 SF or less. These smaller retail developments, Doug explained, all have one thing in common: food. There are a lot of entrepreneurs out there right now taking big risks to become franchisees of familiar chains. Just this week, he leased space in Goodwill’s new retail center at 2700 Kraft Ave SE to a first time franchisee of Biggby Coffee.

The next ICSC event is in Chicago in October. Stay tuned as NAI Wisinski will be reporting from that event as well.

The number of commercial sale transactions reported for the first quarter of 2012 has increased 23.8% compared to the first quarter of 2011.  Retail and office transactions reveal a large increase in activity, with increases of 45.8% and 40% compared to 2011.  The industrial sector, which showed huge growth in 2011, reported two fewer transactions in the first quarter of 2012, than in 2011.

Overall commercial real estate sales volume correlates directly with the  slow down in the industrial sector.  While office sales soared with a 109% increase over 2011, and retail showed steady growth at 7.2%, sales volume for industrial properties declined by 63.9%.

The slow down in the industrial sector is not necessarily indicative of a lack of demand for industrial property. “The industrial sector is experiencing something that hasn’t been seen for several years – the need for new construction of manufacturing and warehouse space.  The current inventory of larger footprint industrial space is extremely limited, ” stated 2012 CAR President Mary Anne Wisinski-Rosely, of NAI Wisinski West Michigan.  “The office and retail sectors increases in both the number of transactions and volume demonstrates the strength and viability of doing business in West Michigan.”

Photo Courtesy of John Eisenschenk

It was a little less than two decades ago that local business leaders could see what was unfolding in West Michigan. The industrial sector was steadily declining, and companies were either going out of business or moving away. It was evident that something had to be done.

That’s when two hometown heroes, Amway founders Richard DeVos and Jay Van Andel, proposed their vision to turn Grand Rapids into one of the top medical services cities in the world. Their leadership and philanthropic efforts spurred a series of events, forever changing the landscape, mentality and image of Grand Rapids.

One of the city’s first streets, Michigan Street, running parallel to I-196, was the initial site of their vision. In 1996, Jay and Betty Van Andel founded the Van Andel Institute. They broke ground in 1998, and the Van Andel Institute opened its doors in 2000. The institute is now home to scientific research that is focused primarily on cancer and Parkinson’s disease and has received more than $1 billion in research funding.

The original development was a $60 million facility. In 2010, the institute opened a second phase with an additional 242,000 square feet at a cost of $175 million.

Butterworth Hospital, now part of Spectrum Health, sits atop the hill on Michigan Street. In 1993, the Helen DeVos Women and Children’s Center moved to the site working as part of Spectrum Health.

In 2011, the Helen DeVos Children’s Hospital opened its doors to a 440,000-square-foot facility at a cost of $286 million, largely funded by the DeVos family. Spectrum Health combined with other local generous donors to found the Meijer Heart Center and the Lemmen-Holton Cancer Pavilion, costing about $137 million and $78 million, respectively.

The Medical Mile is host to Michigan State University’s (MSU) College of Human Medicine, Grand Valley State University’s (GVSU) Cook-DeVos Center for Health Sciences, Grand Rapids Community College’s Calkins Science Center, and Ferris State University’s pharmacy program.

MSU’s building is 180,000 square feet, and GVSU’s is 217,000 square feet, costing $90 million and $57 million respectively. In total, more than $1.2 billion has been invested in the Medical Mile and the surrounding area on world-class medical facilities.

The problem isn’t a lack of interest in the Medical Mile, but rather a lack of space. The corridor has barriers on all sides: the freeway to the north; the Grand River to the west; Heritage Hill, a historic part of Grand Rapids with 1,300 homes dating back as far as 1848 to the east and south; and the rest of downtown to the southwest.

The developers of Midtowne Village, a six-building complex that houses the 100,000-square-foot Women’s Health Center, had to get the zoning of their site changed as well as purchase and demolish 46 homes.

Other organizations are beginning to look for vacated buildings that can be occupied for their use. GVSU plans to cross the expressway to the north and develop another site for medical use, and MSU is in the process of acquiring the old Grand Rapids Press building that remains vacant with the presses still inside.

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