Baltimore • Boston • Charlotte • Hartford • New York City • Norfolk Northern New Jersey • Philadelphia • Pittsburgh • Raleigh • Richmond • Washington, D.C
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East Region Baltimore • Boston • Charlotte • Hartford • New York City • Norfolk Northern New Jersey • Philadelphia • Pittsburgh • Raleigh • Richmond • Washington, D.C. EastRegionTransactionBreakdown n CCIM Institute designees and candidates rated the eco- n The total dollar volume of commercial real estate trans- nomic performance in the East region at 5.8 on a scale of actions in the East region decreased during first quarter 1 to 10, with 10 being high, for first quarter 2008. While this 2008 for all property types. is lower than last quarter’s rating of 6.5 for the East region, each of the four regions received similar ratings during first n The weighted average capitalization rate declined by 10 quarter 2008 with only minor variations. The majority of basis points in first quarter 2008 in the East regional in- survey respondents from the East region believe the East dustrial, retail, and apartment sectors. This rate remained regional economy will continue to perform at its current unchanged from the previous quarter for the office sector, level in the near term. and increased 50 basis points for the hotel sector. Regional Transaction Price Breakdown/Tiers East Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $2 Million “Vacancies have Volume (Mil) $616 $983 $1,230 $502 $21 increased slightly in Size Weighted Avg. ($ per sf/unit) $86 $48 $89 $58,268 $24,774 the commercial sectors, Price Weighted Avg. ($ per sf/unit) $120 $77 $128 $74,990 $29,028 and the delivery of new Median ($ per sf/unit) $88 $53 $88 $60,742 $27,767 construction continues $2 - $5 Million at too fast a pace.” Volume (Mil) $1,304 $1,819 $2,045 $1,992 $260 –Norfolk Size Weighted Avg. ($ per sf/unit) $117 $56 $145 $85,420 $33,503 Price Weighted Avg. ($ per sf/unit) $183 $102 $262 $133,911 $47,304 Median ($ per sf/unit) $145 $73 $229 $97,832 $34,091 > $5 Million “Apartment value Volume (Mil) $65,321 $11,264 $13,423 $23,910 $14,539 is expected to rise.” Size Weighted Avg. ($ per sf/unit) $327 $71 $175 $134,165 $178,485 –Northern New Jersey Price Weighted Avg. ($ per sf/unit) $534 $142 $300 $235,926 $284,906 Median ($ per sf/unit) $224 $78 $191 $116,182 $119,816 All Transactions Volume (Mil) $67,241 $14,065 $16,698 $26,404 $14,820 Size Weighted Avg. ($ per sf/unit) $309 $66 $160 $125,647 $164,534 “The hotel and Price Weighted Avg. ($ per sf/unit) $524 $132 $282 $225,173 $280,371 office sectors and Median ($ per sf/unit) $148 $64 $128 $97,222 $108,534 the heavy industrial Capitalization Rates (All Transactions) areas are presenting Range (%) 3.0 - 12.6 3.7 - 10.3 4.6 - 9.5 2.6 - 8.7 4.1 - 10.8 weak investment Weighted Avg. (%) 5.3 6.8 6.5 5.5 7.9 opportunities.” Median (%) 6.6 7.5 6.7 5.7 8.5 –Washington, D.C. Source: RERC. Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 34 Quarterly EastOfficePropertySector RERC Weighted Avg. Cap Rate - 1Q 2008 8.5% East U.S. Total Avg. Capitalization Rate 7.5% n The total dollar volume of office transactions in the East region during first quarter 2008 was about 40 percent less 6.5% than that for fourth quarter 2007. n 5.5% The first quarter 2008 size- and price-weighted average prices per square foot were up slightly for properties that sold in the less than $2 million and the $2 to $5 million vol- 4.5% ume categories, but were down slightly for the more than $5 million and all volume categories as compared to the Baltimore Boston Charlotte New York Northern NJ Philadelphia previous quarter. Washington, D.C. RERC Size-Weighted Avg. PPSF - 1Q 2008 RERC Price-Weighted Avg. PPSF - 1Q 2008 $600 $1000 East East U.S. Total U.S. Total $500 Size-Weighted Average PPSF $800 Price-Weighted Average PPSF $400 $600 $300 $400 $200 $200 $100 $0 $0 Boston Baltimore Boston Charlotte Hartford New York Norfolk Raleigh Baltimore Charlotte Hartford New York Norfolk Raleigh Northern NJPhiladelphiaPittsburgh Richmond Northern NJPhiladelphiaPittsburgh Richmond Washington, D.C. Washington, D.C. East Office Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/sf) Average ($/sf) ($/sf) Cap Rate (%) Baltimore $1,257 $191 $262 $145 6.5 Boston $6,888 $275 $394 $155 5.3 Charlotte $1,171 $168 $211 $136 7.8 Hartford $131 $117 $158 $87 – New York $33,781 $554 $719 $384 5.1 Norfolk $239 $153 $195 $139 – Northern NJ $1,746 $148 $195 $145 6.7 Philadelphia $2,206 $141 $168 $131 7.5 Pittsburgh $353 $82 $110 $62 – Raleigh $794 $144 $169 $134 – Richmond $374 $127 $164 $113 – Washington, D.C. $14,440 $365 $420 $312 5.5 East Total $67,241 $309 $524 $148 5.3 U.S. Total $165,414 $240 $396 $152 5.6 Source: RERC. Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 35 Quarterly EastIndustrialPropertySector RERC Weighted Avg. Cap Rate - 1Q 2008 8.5% East U.S. Total Avg. Capitalization Rate 7.5% n The size- and price- weighted average prices for industrial 6.5% properties in the East region increased slightly during first quarter 2008 over last quarter’s rates, while the average 5.5% capitalization rate declined slightly and the median capital- ization rate increased 30 basis points. 4.5% n Transaction volume for industrial properties in the East re- 3.5% gion was about 10 percent lower in first quarter 2008 when compared to fourth quarter 2007. Boston Charlotte Northern NJ RERC Size-Weighted Avg. PPSF - 1Q 2008 RERC Price-Weighted Avg. PPSF - 1Q 2008 $340 $200 East East U.S. Total $300 U.S. Total Price-Weighted Average PPSF $165 Size-Weighted Average PPSF $260 $220 $130 $180 $95 $140 $100 $60 $60 $25 $20 Boston Norfolk Raleigh Baltimore Boston Charlotte Hartford New York Norfolk Raleigh Baltimore Charlotte Hartford New York Pittsburgh Richmond Northern NJPhiladelphiaPittsburgh Richmond Northern NJPhiladelphia Washington, D.C. Washington, D.C. East Industrial Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/sf) Average ($/sf) ($/sf) Cap Rate (%) Baltimore $649 $65 $78 $69 – Boston $1,981 $90 $141 $83 4.8 Charlotte $533 $44 $68 $53 7.4 Hartford $229 $47 $59 $52 – New York $2,439 $177 $326 $139 – Norfolk $178 $64 $87 $64 – Northern NJ $1,076 $72 $98 $93 6.5 Philadelphia $675 $65 $89 $57 – Pittsburgh $157 $34 $46 $44 – Raleigh $406 $64 $75 $66 – Richmond $145 $40 $58 $41 – Washington, D.C. $652 $113 $142 $115 – East Total $14,065 $66 $132 $64 6.8 U.S. Total $51,426 $74 $126 $75 6.7 Source: RERC. Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 36 Quarterly EastRetailPropertySector RERC Weighted Avg. Cap Rate - 1Q 2008 7.5% East U.S. Total Avg. Capitalization Rate 7.0% n The size-weighted average price per square foot for retail space in the East region during first quarter 2008 com- 6.5% pared closely with the size-weighted average price for this sector on a national level. The weighted average capital- ization rate for the retail sector in the East region was simi- 6.0% lar to the national average. 5.5% n The dollar volume of retail property transactions in first quarter 2008 was significantly less than previous quarter Baltimore Boston Charlotte New York Norfolk Raleigh Northern NJ Philadelphia Pittsburgh volume. Washington, D.C. RERC Size-Weighted Avg. PPSF - 1Q 2008 RERC Price-Weighted Avg. PPSF - 1Q 2008 $350 $550 East East U.S. Total U.S. Total Size-Weighted Average PPSF $450 Price-Weighted Average PPSF $275 $350 $200 $250 $125 $150 $50 $50 Boston Hartford Norfolk Raleigh Baltimore Boston Charlotte Hartford New York Norfolk Raleigh Baltimore Charlotte New York Pittsburgh Richmond Northern NJPhiladelphiaPittsburgh Richmond Northern NJPhiladelphia Washington, D.C. Washington, D.C. East Retail Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/sf) Average ($/sf) ($/sf) Cap Rate (%) Baltimore $276 $132 $183 $112 6.2 Boston $1,495 $182 $277 $152 6.0 Charlotte $468 $121 $172 $103 6.9 Hartford $251 $104 $132 $75 – New York $4,192 $318 $520 $236 6.3 Norfolk $253 $166 $220 $134 6.3 Northern NJ $821 $218 $269 $181 6.7 Philadelphia $1,150 $156 $199 $114 6.6 Pittsburgh $156 $131 $230 $113 6.7 Raleigh $469 $154 $190 $158 6.9 Richmond $173 $104 $143 $92 – Washington, D.C. $1,112 $178 $300 $211 6.5 East Total $16,698 $160 $282 $128 6.5 U.S. Total $59,915 $159 $282 $135 6.4 Source: RERC. Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 37 Quarterly EastApartmentPropertySector RERC Weighted Avg. Cap Rate - 1Q 2008 6.5% East U.S. Total Avg. Capitalization Rate 5.5% n The dollar volume of apartment transactions on both a regional level and a national level decreased during first quarter 2008. However, as expected, the size- and price- 4.5% weighted average prices remain much higher in the East region than the nation as a whole. 3.5% n The first quarter 2008 weighted average and median apart- 2.5% ment capitalization rates in the East region were 30 basis points less than those for the national market. Charlotte New York Raleigh Philadelphia Washington, D.C. RERC Size-Weighted Avg.