The Houston office market has been struggling for several years now thanks in large part to a prolonged slump in oil prices causing companies to shrink their footprints. This lead to a glut of available sublease space and the energy hub's highest vacancy rates in 20 years. Houston continues to lead major Texas markets in its volume of sublease office space on the market, according to a report from Newmark Grubb Knight Frank. Houston ended 2016 with 11.5 million square feet of available sublease space. Dallas finished the year with 5 million square feet of sublease space, and Austin with a mere 1.6 million square feet, according to the report. That's despite the fact that Houston's overall Class A and Class B office inventory is smaller than Dallas' market. Excluding Class C office space, Houston's total office market is 188 million square feet, while Dallas' is 215 million square feet. Austin's office market is 53 million square feet.
As many shopping centers continue to suffer nationwide, conventional wisdom says that there is an over-supply of malls and the only way to survive is to cater to wealthy shoppers and/or reinvent the space completely. However, a small crowd of operators is dismissing this notion and believes there are plenty of revitalization opportunities in “small town America." While strategies vary and not every struggling mall is a good candidate for a refresh, these operators target distressed properties in places with no other enclosed shopping center within 50 to 100 miles. Such older properties have some inherent advantages. People still come to malls to participate in the social aspect of shopping—especially in suburban or exurban places with few large gathering places, and these older properties were often built as the surrounding community was sprouting and have ideal locations.
Apartment rents are growing most quickly in working-class, suburban submarkets that apartment developers have avoided. “With a handful of exceptions, the neighborhoods posting the strongest rent growth don’t have much ongoing construction,” says Greg Willett, chief economist for Real Page and MPF Research. The suburban areas are often working-class areas with older, less-expensive housing and limited supply.
In contrast, rents are growing much more slowly in the heavily-supplied urban, core markets where the rents are already high. “The high-income tenants in these areas can consider home ownership, and can play off the amply new product one against the other for the best deals,” says John Affleck, international economist for CoStar Group. Those cities – along with towns hurt by low energy prices—are now home to the submarkets with the slowest rent growth.“ The bottom performers are really concentrated in a handful of metros, in this case Houston, San Francisco and New York,” says Willett.
A Florida Senate committee has unanimously approved Senate Bill 90, which would implement Amendment 4 and eliminate property taxes on solar and other renewable energy devices installed at commercial and industrial facilities for 20 years. The same tax break already exists for residential property owners. Florida voters passed the Amendment 4 ballot initiative last summer with almost 75% of the vote. The legislation would go into effect in 2018, and would also exempt renewable energy devices from Florida’s tangible personal property tax, including storage tanks, rock beds, thermostats and control devices, and heat exchangers.
The oil and gas industry is projected to make a significant increase in property taxes payments to eastern Ohio counties over the next decade, according to two industry groups who are estimating an increase from $43 million to $250 million. The Ohio Oil and Gas Association and the industry-funded group Energy In Depth collected data on property tax revenue for the six counties home to the most drilling in the Utica shale play since 2011, when hydraulic fracturing and horizontal drilling brought a bevy of drilling and related activity to Appalachian Ohio.
Recent and long-term historic trends indicate Chicago's real estate market could remain healthy for years to come, JLL chief economist Ryan Severino said during JLL's Chicago 2025 event last week. According to Bisnow, Severino discussed three particular factors that will continue the city’s strong momentum through 2025: a diverse workforce, an abundance of degreed professionals, and limited concerns with higher interest rates.
The Delaware County Board of Assessment Appeals was court-ordered to conduct a countywide reassessment of all properties in Delaware County, Pennsylvania. The order follows a trial with a residential property owner appellant. The County Board was directed to submit a preliminary timetable by July 1, 2017 for completing the reassessment. The County is fighting the order and filed a motion for reconsideration, arguing that the Homebuilders of Delaware County are the “sponsors” of the appeal, and that they: (1) pursued and funded the litigation under a champertous agreement; (2) lack standing to maintain the action; and (3) presented an unreliable ratio study at trial. If mandated, the Delaware County reassessment will likely result in increases for most commercial properties.
Chicago was the third-busiest market for data center activity in 2016, thanks to Microsoft, Oracle and a host of financial firms absorbing large amounts of space across the city, according to the latest research from JLL. JLL reported that the Chicago data center market absorbed 56 megawatts last year. That’s a big number – JLL measures data center absorption in megawatts, not square footage – behind only to the Northern Virginia and Northern California markets and just ahead of Dallas-Fort Worth and the Pacific Northwest. It was a record year for Chicago from an absorption standpoint.