Chicago • Cincinnati • Cleveland • Columbus • Detroit • Indianapolis Kansas City • Milwaukee • Minneapolis • Omaha • St
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Midwest Region Chicago • Cincinnati • Cleveland • Columbus • Detroit • Indianapolis Kansas City • Milwaukee • Minneapolis • Omaha • St. Louis • Toledo MidwestRegionTransactionBreakdown n CCIM designees and candidates who responded to over the coming year, while 35 percent expect the Midwest RERC’s second quarter 2009 survey rated the Midwest economy to deteriorate. region’s economic performance at 3.5 on a scale of 1 to 10, with 10 being high. This rating is the second highest n The Midwest region posted mixed results for second quar- among the four regional economies. ter 2009. While sales volume declined across all property types, property sale prices and capitalization rates were n More than 55 percent of the survey respondents expect mixed. the Midwest economy to perform at about the same level Midwest Transaction Breakdown 12-Month Trailing Averages (07/01/08 - 06/30/09) Office Industrial Retail Apartment Hotel < $2 Million Volume (Mil) $250 $513 $530 $210 $24 Size Weighted Avg. ($ per sf/unit) $68 $32 $63 $28,541 $20,855 Price Weighted Avg. ($ per sf/unit) $95 $49 $104 $40,042 $24,773 Median ($ per sf/unit) $71 $41 $66 $34,549 $21,408 $2 - $5 Million Volume (Mil) $306 $609 $716 $291 $63 Size Weighted Avg. ($ per sf/unit) $82 $40 $111 $42,162 $28,035 Price Weighted Avg. ($ per sf/unit) $136 $63 $202 $55,545 $37,725 Median ($ per sf/unit) $115 $47 $161 $49,474 $29,524 > $5 Million Volume (Mil) $2,172 $1,308 $1,490 $1,692 $429 Size Weighted Avg. ($ per sf/unit) $141 $44 $115 $66,545 $97,106 Price Weighted Avg. ($ per sf/unit) $199 $77 $246 $110,495 $169,620 Median ($ per sf/unit) $122 $52 $186 $60,227 $72,629 All Transactions Volume (Mil) $2,728 $2,431 $2,736 $2,193 $516 Size Weighted Avg. ($ per sf/unit) $119 $40 $98 $55,258 $66,098 Price Weighted Avg. ($ per sf/unit) $182 $68 $207 $96,452 $146,843 Median ($ per sf/unit) $86 $43 $86 $41,304 $37,265 Capitalization Rates (All Transactions) Range (%) 4.6 - 9.7 7.0 - 10.3 6.2 - 11.8 5.6 - 10.5 – Weighted Avg. (%) 7.9 8.0 8.0 7.1 – Median (%) 7.6 8.0 7.6 7.1 – Source: RERC. Investment Trends Copyright© 2009 by Real Estate Research Corporation (RERC) and the CCIM Institute. 98 Quarterly MidwestRegionTransactionBreakdown Chicago – Indianapolis – St. Louis – Milwaukee – “The market is stagnant. “Commercial trends are “No sales are closing. Some “The trend is consolidation. There is no inventory priced static in most sectors, but are minor leasing is taking place, There are several property at market-clearing prices, and expected to slowly improve but not much.” types that remain over-built.” no sales except distressed real by late 2010.” estate owned by institutions.” Midwest Transaction Breakdown Current Quarter Rates (04/01/09 - 06/30/09) Office Industrial Retail Apartment Hotel < $2 Million Volume (Mil) $34 $77 $83 $40 $2 Size Weighted Avg. ($ per sf/unit) $54 $33 $57 $24,858 $26,531 Price Weighted Avg. ($ per sf/unit) $75 $45 $99 $36,125 $26,603 Median ($ per sf/unit) $59 $38 $61 $30,752 $26,902 $2 - $5 Million Volume (Mil) $25 $60 $70 $29 $2 Size Weighted Avg. ($ per sf/unit) $109 $37 $127 $40,065 $20,408 Price Weighted Avg. ($ per sf/unit) $149 $63 $192 $56,453 $20,408 Median ($ per sf/unit) $144 $46 $149 $65,000 – > $5 Million Volume (Mil) $198 $105 $135 $187 $83 Size Weighted Avg. ($ per sf/unit) $91 $36 $155 $51,930 $136,982 Price Weighted Avg. ($ per sf/unit) $123 $48 $363 $64,253 $213,055 Median ($ per sf/unit) $89 $36 $357 $41,022 $82,305 All Transactions Volume (Mil) $258 $242 $289 $256 $87 Size Weighted Avg. ($ per sf/unit) $84 $35 $100 $43,080 $110,932 Price Weighted Avg. ($ per sf/unit) $119 $51 $245 $58,930 $203,995 Median ($ per sf/unit) $73 $39 $79 $37,543 $34,792 Capitalization Rates (All Transactions) Range (%) – 8.5 - 10.3 6.2 - 9.0 7.0 - 8.5 – Weighted Avg. (%) – 9.3 8.4 7.1 – Median (%) – 9.4 8.2 7.3 – Source: RERC. Investment Trends Copyright© 2009 by Real Estate Research Corporation (RERC) and the CCIM Institute. 99 Quarterly Midwest OfficePropertySector n Twelve-month trailing transaction volume for the office n The 12-month trailing weighted average and median capi- sector declined by 50 percent in the Midwest region dur- talization rates for the office sector decreased by 20 and ing second quarter 2009. This was the largest decrease 30 basis points, respectively, during second quarter. among the property types. The price per square foot of office property also decreased from the past quarter. RERC Size-Weighted Avg. PPSF - 2Q 2009 RERC Price-Weighted Avg. PPSF - 2Q 2009 $200 $200 $400 $400 Midwest U.S. Total $350 $350 Size-Weighted Average PPSF $150 $150 Midwest $300 U.S. Total $300 Price-Weighted Average PPSF $250 $250 $100 $100 $200 $200 $150 $150 $50 $50 $100 $100 $0 $0 $50 $50 Detroit Toledo Detroit Toledo Chicago Cleveland Omaha St. Louis Chicago Omaha St. Louis Cincinnati Columbus IndianapolisKansas CityMilwaukeeMinneapolis Cincinnati Cleveland Columbus IndianapolisKansas CityMilwaukeeMinneapolis Midwest Office Transactions (07/01/08 - 06/30/09) Volume Size-weighted Price-weighted Median Average (millions) Average ($/sf) Average ($/sf) ($/sf) Cap Rate (%) Chicago $1,042 $180 $226 $113 8.0 Cincinnati $44 $90 $115 $69 – Cleveland $95 $84 $100 $72 – Columbus $132 $100 $124 $102 – Detroit $61 $83 $121 $104 – Indianapolis $45 $117 $196 $73 – Kansas City $205 $93 $115 $76 – Milwaukee $144 $112 $155 $78 – Minneapolis $212 $117 $169 $97 – Omaha $25 $82 $100 $69 – St. Louis $166 $92 $125 $94 – Toledo $20 $123 $153 $125 – Midwest Total $2,728 $119 $182 $86 7.9 U.S. Total $32,069 $196 $348 $128 6.5 Source: RERC. Investment Trends Copyright© 2009 by Real Estate Research Corporation (RERC) and the CCIM Institute. 100 Quarterly Midwest IndustrialPropertySector RERC Weighted Avg. Cap Rate - 2Q 2009 12% Midwest 12% U.S. Total Avg. Capitalization Rate 10% 10% n According to RERC’s second quarter 2009 transaction analysis, Midwest industrial sales volume decreased by 8% 8% nearly 30 percent as compared to the previous quarter. 6% 6% n Industrial property prices remained relatively stable in the Midwest region. The weighted average capitalization rate 4% 4% decreased by 10 basis points to 8.0 percent, while the me- dian capitalization rate remained unchanged at 8.0 per- 2% 2% cent. Chicago Indianapolis RERC Size-Weighted Avg. PPSF - 2Q 2009 RERC Price-Weighted Avg. PPSF - 2Q 2009 $80 Midwest $80 $120 $120 U.S. Total $70 Size-Weighted Average PPSF $70 $100 Midwest $100 $60 $60 U.S. Total Price-Weighted Average PPSF $80 $80 $50 $50 $40 $40 $60 $60 $30 $30 $40 $40 $20 $20 $20 $20 $10 $10 $0 $0 $0 $0 Detroit Omaha Toledo Chicago Cincinnati Cleveland St. Louis Chicago Detroit Omaha St. Louis Toledo Columbus IndianapolisKansas CityMilwaukeeMinneapolis Cincinnati Cleveland Columbus IndianapolisKansas CityMilwaukeeMinneapolis Midwest Industrial Transactions (07/01/08 - 06/30/09) Volume Size-weighted Price-weighted Median Average (millions) Average ($/sf) Average ($/sf) ($/sf) Cap Rate (%) Chicago $759 $44 $65 $59 7.3 Cincinnati $27 $35 $42 $40 – Cleveland $98 $38 $45 $41 – Columbus $79 $39 $56 $44 – Detroit $101 $36 $76 $43 – Indianapolis $123 $41 $45 $40 9.4 Kansas City $74 $37 $53 $45 – Milwaukee $111 $52 $66 $51 – Minneapolis $252 $63 $107 $55 – Omaha $55 $39 $47 $43 – St. Louis $186 $48 $87 $44 – Toledo $11 $28 $32 $27 – Midwest Total $2,431 $40 $68 $43 8.0 U.S. Total $17,457 $63 $108 $67 7.6 Source: RERC. Investment Trends Copyright© 2009 by Real Estate Research Corporation (RERC) and the CCIM Institute. 101 Quarterly Midwest RetailPropertySector RERC Weighted Avg. Cap Rate - 2Q 2009 12% Midwest 12% U.S. Total Avg. Capitalization Rate 10% 10% n The transaction volume of retail properties in the Midwest region continued to decline in second quarter 2009. The 8% 8% size-weighted average and median price per square foot declined slightly from the previous quarter, while the price- 6% 6% weighted average price per square foot increased. 4% 4% n The weighted average capitalization rate for the retail sec- tor increased by 20 basis points during second quarter, 2% 2% while the median capitalization rate increased by 10 basis points. Chicago Detroit Cleveland Columbus Kansas City Minneapolis RERC Size-Weighted Avg. PPSF - 2Q 2009 RERC Price-Weighted Avg. PPSF - 2Q 2009 $200 $200 $350 $350 Midwest Midwest U.S. Total U.S. Total $300 $300 Size-Weighted Average PPSF Price-Weighted Average PPSF $150 $150 $250 $250 $200 $200 $100 $100 $150 $150 $100 $100 $50 $50 $50 $50 $0 $0 $0 $0 Chicago Detroit Omaha Toledo Detroit Toledo Cincinnati Cleveland Columbus Milwaukee St. Louis Chicago Cleveland Omaha St. Louis IndianapolisKansas City Minneapolis Cincinnati Columbus IndianapolisKansas CityMilwaukeeMinneapolis Midwest Retail Transactions (07/01/08 - 06/30/09) Volume Size-weighted Price-weighted Median Average (millions) Average ($/sf) Average ($/sf) ($/sf) Cap Rate (%) Chicago $621 $174 $252 $151 7.6 Cincinnati $107 $48 $120 $81 – Cleveland $110 $74 $127 $73 7.9 Columbus $105 $154 $231 $135 7.4 Detroit $90 $74 $144 $110 9.5 Indianapolis $48 $140 $191 $191 – Kansas City $350 $77 $186 $61 8.4 Milwaukee $85 $92 $167 $65 – Minneapolis $180 $111 $159 $108 7.4 Omaha $86 $95 $141 $75 – St. Louis $108 $111 $199 $93 – Toledo $24 $192 $302 $87 – Midwest Total $2,736 $98 $207 $86 8.0 U.S. Total $19,648 $133 $240 $117 7.2 Source: RERC.