2001 2Nd Quarter

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2001 2Nd Quarter Northeast U.S.—2Q 2001 Volume 64 Regional Review The National Real Estate Index extends its deepest sympathies and condolences to the victims of the World Trade Center, his QUARTERLY focuses on ten markets in the Pentagon and Pennsylvania tragedies and their families and Northeast along the Atlantic seaboard. Raleigh- friends. We would also like to extend our gratitude to the rescue Durham and Charlotte led the region in population T workers, medical personnel and other professionals and citizens growth with respective gains of 38.9% and 29% between who have come to the aid of those affected by the situation. 1990 and 2000. Job growth in nine of these markets sur- passed the 0.3% national average between the second quar- ters of 2000 and 2001. Washington, DC had the highest job gain (3.1%) and the lowest unemployment rate (2.8%). Central New Jersey’s proximity to New York contributed to Philadelphia, on the other hand, saw virtually no jobs added a 6.8% annual increase in rents for CBD office space. during the year. Baltimore and Northern New Jersey had the Boston also saw a significant rental gain at 5.7%. Boston highest unemployment rates at 4.8% each. topped the list for suburban office value gains (9.1%) fol- lowed by Northern New Jersey (6%). Conversely, Downtown Manhattan reaped the highest appreciation in CBD Philadelphia saw its suburban office space depreciate 4.4%. office values with a 13% uptake between June 2000 and June As for the industrial sector, no northeastern market regis- 2001. Sadly, this market was dealt a traumatic blow, in terms tered a price gain at or above the annual 4% benchmark. of lives and property, with September’s terrorist attack on the Central New Jersey had both the highest value increase World Trade Center. An estimated 12 million square feet of (3.3%) and rent gain (9.1%). office space was reduced to rubble in Downtown Manhattan. Current available space in greater Manhattan is sure to dimin- Retail prices depreciated in all northeastern markets with the ish as displaced tenants seek out alternative sites. The exception of Washington, DC and Central New Jersey. The lat- Washington, DC market recorded the next-highest 12-month ter also scored the largest increase in retail rents (3.6%). Prices uptake in CBD office space at 6.7%. The Pentagon was also for Class A apartments increased 5.2% during the year in attacked by terrorists. The extent to which these tragic events Baltimore; rents rose the most (3.5%) in Northern New Jersey. will impact the commercial market is currently unknown. You will find the specific market write-ups, including the Economic Overview and the Office, Warehouse, Retail, and Apartment analyses on the following pages, which you can advance to by clicking on the markets below. Baltimore . .3 Northern New Jersey . .63 Boston . .14 Philadelphia . .74 Central New Jersey . .26 Raleigh-Durham . .85 Charlotte . .35 Washington, DC . .93 Nassau-Suffolk . .44 Economic/Demographic Statistics . .107 New York . .53 Market Comparison . .109 Publisher: QMR N A T I O N A L FOCUS MARKETS REVIEW REAL ESTATE Each Quarterly Market Report analyzes a INDEX number of metropolitan markets in-depth. Appearing in this issue are key markets in the Northeast U.S. PUBLISHED BY CB RICHARD ELLIS VOL. 64 Property prices, rents, and cap rates in four sectors—office, warehouse, retail, and apart- PUBLISHER EDITORIAL/PRODUCTION ment—are reported. Please see Methodology CB RICHARD ELLIS Bridgett Novak Managing Editor Richard Wollack on page 110 for more details. Editor-in-Chief Janet Laurain Editor Daniel O’Connor Market Research Director Tamu Dawson Senior Production Editor Scott Steffens RESEARCH/ANALYSIS Production Editor Jack Doyle Vincent San Pedro Property Research Manager Shipping/Receiving Lance MacArthur Systems Analyst ACCOUNTING MARKET AREA DEFINITIONS Stephen Hurley Monique Northington Analyst Account Manager Bianka MacMillan Baltimore, MD (Baltimore MSA): Anne Arundel, Baltimore, Analyst Carroll, Harford, Howard, and Queen Anne’s Counties. Axenia Velitchev Analyst Boston, MA (Boston MSA): Suffolk County, and portions of Bristol, Essex, Middlesex, Norfolk, Plymouth, and Worcester Counties; and a portion of Rockingham County in New Hampshire. Central New Jersey (Middlesex-Somerset-Hunterdon and Trenton PMSAs): Hunterdon, Mercer, Middlesex, and Somerset Counties. Charlotte, NC (Charlotte-Gastonia-Rock Hill MSA): Cabarrus, Gaston, Lincoln, Mecklenburg, Rowan, and Union Counties in The NATIONAL REAL ESTATE INDEX is published by CB Richard Ellis, 505 Montgomery North Carolina; York County in South Carolina. Street, 6th Floor, San Francisco, CA 94111. Copyright ©2001 by National Real Estate Index. (Telephone: 415/733-5322). Nassau-Suffolk, NY (Nassau-Suffolk PMSA): Nassau and SUBSCRIPTION INFORMATION Suffolk Counties. INDEX Quarterly Market Report: An annual subscription to the Quarterly Market Report Newark-Northern New Jersey (Newark, Bergen-Passaic, and includes four quarterly issues. Jersey City PMSAs): Essex, Morris, Sussex, Union, Warren, Single Issue Rate: $295; One Year Subscription Rate: $625. Bergen, Passaic, and Hudson Counties. INDEX Full Service: A subscription to the INDEX Full Service includes the Quarterly Market New York, NY (New York PMSA): Bronx, Kings, New York, Report, Market Monitor, MarketScore, and North American Index publications. Putnam, Queens, Richmond, Rockland, and Westchester One Year Subscription Rate: $1,250. Counties. Important: The INDEX is sold with the understanding that the publisher is not engaged in rendering tax, accounting, or other professional advice through this publication. No Philadelphia, PA (Philadelphia PMSA): Bucks, Chester, statement in this issue is to be construed as a recommendation or as investment Delaware, Montgomery, and Philadelphia Counties in advice to buy or sell any securities or other investments. Real estate is generally a Pennsylvania; Burlington, Camden, Gloucester, and Salem long-term illiquid investment and requires careful consideration of financial objec- Counties in New Jersey. tives before investing. Raleigh-Durham, NC (Raleigh-Durham-Chapel Hill MSA): The underlying data and information used as a basis for presentation in this publication has Chatham, Durham, Franklin, Johnston, Orange, and Wake been obtained from third party sources considered to be reliable, but who are not required Counties. to make representations as to the accuracy of the data and information. Further, this and other information derived from independent market research is interpreted by INDEX staff Washington, DC (Washington MSA): District of Columbia; in order to draw certain conclusions and estimates regarding U.S. and individual market Calvert, Charles, Frederick, Montgomery, and Prince George’s trends and conditions. Because the number of transactions that occur and are compiled Counties in Maryland; Arlington, Clarke, Culpepper, Fairfax, varies from period to period, the sample size for the benchmark price and rent comparisons Fauquier, King George, Loudoun, Prince William, Spotsylvania, varies over time. Therefore, the INDEX does not guarantee the accuracy of the information. Stafford, and Warren Counties, and Alexandria, Fairfax, Falls Reproduction, photocopying or incorporation into any information retrieval system Church, Fredericksburg, Manassas, and Manassas Park cities in for external or internal use, regardless of whether the National Real Estate Index is Virginia; Berkeley and Jefferson Counties in West Virginia. cited as a source, is prohibited unless written permission is obtained beforehand from the publisher for each article. The subscription fee entitles the subscriber to one original only. 2 Baltimore—2Q 2001 QMR share (5.9%) is very close to its national share (5.8%). Baltimore Construction’s local figure (5.7%) is slightly higher than its national norm (5.3%). Wholesale trade employs the same number here as nationwide—5.3%. Transportation Economic Overview is the smallest local sector, employing 5.1% here, just short of its national average of 5.4%. Johns Hopkins Institutions are Area’s Largest Baltimore Posts Modest Growth Employers: Johns Hopkins University is greater The Baltimore metropolitan area created 11,900 new Baltimore’s largest private sector employer with 20,500 jobs during the 12-month period ending in June, 2,600 employees. Johns Hopkins Health System (the parent more than were created during the same period one corporation for the Johns Hopkins hospital and separate year earlier. This tied with Charlotte as the fourth- from the university) employs 13,200. Northrop- smallest absolute gain of the ten northeastern markets Grumman’s Electronic Sensors and Systems Division analyzed in this issue of the QUARTERLY. Baltimore’s has 6,700 on its local payroll, followed by Allfirst modest growth translated into a proportional gain of (financial services) with 6,000 in its ranks. Verizon (for- less than one percent, one of four northeastern markets merly Bell Atlantic) employs 5,500, followed by to experience job growth of less than one percent Bethlehem Steel Corp. with 5,100 local workers. Bank (Central New Jersey, Northern New Jersey, and of America has a metropolitan roster of 4,100. Johns Philadelphia round out the group). The unemployment Hopkins Applied Physics Laboratory and General rate moved in the right direction—from 5.1% in June Motors Truck Group each employ 3,200. Other compa- 2000 to 4.8% one year later. nies employing more than 2,000 here include McCormick & Co., Sweetheart Cup Co., Southwest Services
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