asheville, nc 28806
2 0 1 3 C o m m e r i c a l R e a l E s tat e T r e n d s Asheville, North Carolina
W hitney C ommerical Real Estate Services
828.665.9085 www .W hitney CRE. com
1100 R idgefield B lvd ., S uite 100 A sheville , NC 28806
Brokerage
Management
Construction
2013 Real Estate Trends
and
I n v e n t o ry - A s h e v i l l e , N o rt h C a ro l i n a
Executive Summary Nearly every statistic gathered relating to the 2013 Commercial Real Estate market in the Asheville MSA is positive. The market is nowhere near what we might define as heated, but all indications are that we have bounced off the bottom of this cycle and the market is once again moving in the right direction. More spaces are occupied than were last year at this time. We also have new projects completed and even more planned. Rents and sale prices are finally on the rise. We appear to be headed toward an upward swing in supply, demand and in prices.
Office Market
Industrial Market
Retail Market
Additional Information
Net Absorption (SF) Building by Class % Occupancy Asking Rates (Gross) Net Absorption (SF) Industrial Buildings Flex Buildings Owner Occupied (5,000+ SF) Owner & Tenant Occupied Asking Rates (Net) Net Absorption (SF) Building Survey Size Asking Rates (Average) About Asheville, NC Whitney Commercial Real Estate Services • Commercial Brokerage • Property Management • General Contracting
828.665.9085
c o n t a c t @ w h i t n e y cr e . c o m Brokerage Management Construction
2013 Real Estate Trends
and
I n v e n t o ry - A s h e v i l l e , N o rt h C a ro l i n a
2013 Office Market 2013 Office Net Absorption (SF)
Office Occupancy increased in 2013 by over 90,000 SF, with all quarters except the 3rd showing positive growth. 2013 Q1
2013 Q2
2013 Q3
2013 Q4
Total Net Absorption
46,025 SF
17,884 SF
( - 5,516 SF)
31,872 SF
90,265 SF
2013 Office Buildings By Class Of the office buildings over than 5,000 SF, 7% are class A, defined as the best in the market. The vast majority, just over 72%, fall into the respectable category of class B. The remaining 21% are considered the least desirable class C. Class A
Class B
Class C
Total SF Surveyed
Buildings Surveyed
Average SF Per Building
759,270 SF
7,821,630 SF
2,223,006 SF
10,803,906 SF
1,135
9,519 SF
2013 Office % Occupancy
Occupancy showed a positive trend, increasing by 0.5% in 2013 DEC 2012
DEC 2013
% Change
92.3 %
92.8 %
+ 0.5%
2013 Office Asking Rates (Gross)
Gross rents showed a positive trend as well, increasing at an annualized rate of 4.0% in the last quarter of the year. 2013 Q3
2013 Q4
Change
% Change
$16.56 / SF
$16.72 / SF
+ $0.16 / SF
+ 1.0 %
828.665.9085
c o n t a c t @ w h i t n e y cr e . c o m Brokerage Management Construction
2013 Real Estate Trends
and
I n v e n t o ry - A s h e v i l l e , N o rt h C a ro l i n a
2013 Industrial Market 2013 Industrial Net Absorption (SF)
The Industrial sector had an upward trend in 2013, occupying over 850,000 SF more than it did at the end of 2012. 2013 Q1
2013 Q2
2013 Q3
2013 Q4
Total Net Absorption
759,020 SF
29,420 SF
( - 22,314) SF
98,523 SF
864,649 SF
Industrial Buildings
The average size of the 487 Industrial Buildings surveyed (5,000+ SF or larger), is just over 40,000 SF
Flex Buildings
The average flex building (combination of office and warehouse) contains less than 15,000 SF
Industrial Sector SF
Buildings Surveyed
Average SF
FLEX Sector SF
Buildings Surveyed
Average SF
19,511,094 SF
487
40,063 SF
3,573,240 SF
246
14,525 SF
Owner Occupied (5,000+ SF)
Owner/Users occupy the largest Industrial buildings with an average size of over 130,000 SF. That is 3x the size of the average Industrial building in our market!
Owner & Tenant Occupied
For the previous 3 segments combined (Industrial, Flex, and Owner Occupied) the average size of the combined 764 buildings is just over 35,500 SF.
Owner Occupied SF
Buildings Surveyed
Average SF
Industrial Sector SF
Buildings Surveyed
Average SF
4,061,019 SF
31
131,001 SF
27,145,353 SF
764
35,530 SF
2013 Industrial Asking Rates (Net)
While 2013 enjoyed positive absorption in the Industrial sector, it did not come without a price; the last quarter experienced a drop in rates of 6.6%. 2013 Q3
2013 Q4
$ Change
% Change
$4.11 / SF
$3.84 / SF
( - $0.27 ) / SF
( - 6.6 ) %
828.665.9085
c o n t a c t @ w h i t n e y cr e . c o m Brokerage Management Construction
2013 Real Estate Trends
and
I n v e n t o ry - A s h e v i l l e , N o rt h C a ro l i n a
2 0 1 3 R e ta i l M a r k e t 2013 Retail Net Absorption (SF)
While for Retail the year got off to a slow start in Q1 and Q2, it ended on a very positive not with nearly 120,000 SF being absorbed in the last quarter of the year. 2013 Q1
2013 Q2
2013 Q3
2013 Q4
Total Net Absorption
( - 21,490 ) SF
( - 31,906 ) SF
30,740 SF
119,823 SF
97,167 SF
2013 Retail Building Survey Size The average size of all free-standing and in-line retail properties in the Asheville market is just over 12,000 SF. Total SF Surveyed
Buildings Surveyed
Centers Surveyed
Average SF Per Building
28,513,392 SF
2,176
183
12,087 SF
2013 Retail Asking Rates (Average)
Retail enjoyed a 5.1% increase in asking rates in 2013, the strongest of all market sectors! 2013 Q1
2013 Q4
$ Change
% Change
$12.71 / SF
$13.36 / SF
+ $0.65 / SF
+ 5.1 %
828.665.9085
c o n t a c t @ w h i t n e y cr e . c o m Brokerage Management Construction
2013 Real Estate Trends
and
I n v e n t o ry - A s h e v i l l e , N o rt h C a ro l i n a
About Asheville, NC About Asheville Asheville, North Carolina has grown from a small pioneering town into a flourishing metropolis
Asheville
known for its love of the arts and passion for the great outdoors. Nestled in the Blue Ridge Mountains of Buncombe County, Asheville enjoys a mild climate year-round, which, coupled with its beautiful natural surroundings, has made it one of the Southeast’s most popular destinations.
Demographics 5 Minute Drive
10 Minute Drive
20 Minute Drive
Total Population
11,533
63,337
189,375
Median Income Per Capita Income
$26,551 $44,852 $19,944
$35,243 $53,048 $23,755
$41,132 $58,914 $25,508
Median Home Value
$215,811
$194,562
$197,664
College Towns Old and Newcomers Social Security Set
Great Expectations Midlife Junction Old and Newcomers
Midlife Junction Midland Crowd Prosperous Empty Nesters
Average Income
DEmographic Segments
828.665.9085
c o n t a c t @ w h i t n e y cr e . c o m Brokerage Management Construction
2013 Real Estate Trends
and
I n v e n t o ry - A s h e v i l l e , N o rt h C a ro l i n a
C o m pa n y O v e r v i e w W h i t n e y C o m m e rci a l R e a l E s t a t e S e r v ic e s
Brokerage Management Construction
The roots of our firm date back to 1940 when Austin & Emma Whitney developed neighborhoods in Worcester, Massachusetts. In 1965 they entered third-party brokerage when they founded Whitney Realty on the island of Clearwater Beach, Florida. Our CEO, Richard Whitney, followed them into the business in 1974 at the age of 19 and has been in real estate for almost 40 years. Today we operate from the Ridgefield Business Center in Asheville, North Carolina. Whitney Commercial is the only firm in Western North Carolina offering the three in-house services of:
Individual memberships
• Commercial Brokerage • Property Management • General Contracting Whitney Commercial has earned the highest level of recognition from: • • • •
National Association of Realtor’s CCIM Institute Society of Industrial and Office Realtors (SIOR) Institute of Real Estate Management (IREM) Construction division (Whitney Construction & Development, Inc) is licensed as “Unlimited” by North Carolina Licensing Board for General Contractors*
828.665.9085
c o n t a c t @ w h i t n e y cr e . c o m Brokerage Management Construction
2013 Real Estate Trends
and
I n v e n t o ry - A s h e v i l l e , N o rt h C a ro l i n a
Commercial Brokerage Division W h i t n e y C o m m e rci a l R e a l E s t a t e S e r v ic e s We are well qualified to serve the best interests of buyers, sellers, investors, tenants and landlords through our use of: • Cutting edge software and technology • Internet portals with subscribers numbering in the millions • A proprietary database of buyers, sellers, tenants, landlords and brokers • The best marketing materials in the region • Relationships with affiliates of the CCIM Institute and the Society of Industrial and Office Realtors (SIOR) We consider brokers to be our best friends. Realizing that no one firm controls all the buyers, we: • Keep the brokerage community informed of our available properties • Cooperate with them • Minimize the red tape when doing business with our firm • As a result of our philosophy our co-brokered transactions are TWICE the national average! We keep brokers informed because more brokers mean more buyers, and more buyers mean more offer, and more offers mean higher prices. We keep brokers informed because we know that having more brokers informed about our properties means we have increased our chances of getting more offers on our properties and more money for them! For Sellers and Landlords, we: • Provide you with market research on recently completed transactions • Provide you with data on competing properties currently on the market • Help you to properly price your property • Prepare you for what to expect during the marketing cycle • Keep you informed as to the results of the actions taken to market your property • Proactively market your property • Negotiate and close under the best possible terms For Buyers and Tenants, we: • Present all the options available in the market • Provide comprehensive summary of current market prices and conditions • Identify the best matching property • Negotiate the best possible price Investors find that our brokers are: • Highly educated • Experienced • Hard working • Understanding of their business • Well qualified to assist to buy or sell investment properties
828.665.9085
c o n t a c t @ w h i t n e y cr e . c o m Brokerage Management Construction
2013 Real Estate Trends
and
I n v e n t o ry - A s h e v i l l e , N o rt h C a ro l i n a
Property Management Division W h i t n e y C o m m e rci a l R e a l E s t a t e S e r v ic e s We are one of just 550 firms worldwide to hold the Accredited Management Organization (AMO) designation awarded by the Institute of Real Estate Management (IREM), and the only accredited firm Western North Carolina. Our background in the management of office, retail, and industrial properties dates back to 1991. We assist clients with management of: • Office • Retail • Industrial • Commercial property owners’ associations • Residential homeowners’ owners associations Led a Certified Property Manager (CPM), our property management team will customize our services to meet your property’s unique needs. In addition to serving as the key contact between you and tenants, our duties include, but are not limited to: • Tenant service requests • Rent collection and deposits • Receiving, verifying, coding, and processing bills • Bank statement reconciliations • Tenant relations • Monthly financial statements • Routine on-site inspections • Emergency 24/7/365 on-call service • Building maintenance and renovations • Tenant and Vendor insurance forms • Calculation of operating expenses • Annual operating budget preparation Our goal is treat each property as if it were our own investment! Each property will be under the watchful eyes of real estate professionals who understand the value of preventative maintenance and building and grounds upkeep. We also help evaluate when and what capital improvements are warranted in order to keep an investment in its most marketable condition.
828.665.9085
c o n t a c t @ w h i t n e y cr e . c o m Brokerage Management Construction
2013 Real Estate Trends
and
I n v e n t o ry - A s h e v i l l e , N o rt h C a ro l i n a
General Contracting W h i t n e y C o m m e rci a l R e a l E s t a t e S e r v ic e s A few things to know about our sister company, Whitney Construction & Development, Inc.: • We are a cost-plus renovation specialist licensed as “Unlimited” by the NC Licensing Board for General Contractors • We us an open-book approach to managing construction projects • We invite clients to be a part of every aspect of their project, from design to final cleaning • We work with our clients to efficiently plan their projects • We collect, compare, & share multiple subcontract bids from each trade • We work to value- engineer the project and to develop a project budget • We prepare a detailed project timeline so that you will know • Who will be on the job site each day • Whey you will need to make key decisions • When the project will be complete • Copies of all invoices received are included with each monthly progress payment request • Clients are kept fully informed as to our actual cost for every service provided From Planning to Grand Opening - we complete projects on time and on budget.
828.665.9085
c o n t a c t @ w h i t n e y cr e . c o m Brokerage Management Construction
W hitney C ommerical Real Estate Services
828.665.9085 www .W hitney CRE. com
1100 R idgefield B lvd ., S uite 100 A sheville , NC 28806
Brokerage
Management
Construction
2013 Real Estate Trends
and
I n v e n t o ry - A s h e v i l l e , N o rt h C a ro l i n a
Executive Summary Nearly every statistic gathered relating to the 2013 Commercial Real Estate market in the Asheville MSA is positive. The market is nowhere near what we might define as heated, but all indications are that we have bounced off the bottom of this cycle and the market is once again moving in the right direction. More spaces are occupied than were last year at this time. We also have new projects completed and even more planned. Rents and sale prices are finally on the rise. We appear to be headed toward an upward swing in supply, demand and in prices.
Office Market
Industrial Market
Retail Market
Additional Information
Net Absorption (SF) Building by Class % Occupancy Asking Rates (Gross) Net Absorption (SF) Industrial Buildings Flex Buildings Owner Occupied (5,000+ SF) Owner & Tenant Occupied Asking Rates (Net) Net Absorption (SF) Building Survey Size Asking Rates (Average) About Asheville, NC Whitney Commercial Real Estate Services • Commercial Brokerage • Property Management • General Contracting
828.665.9085
c o n t a c t @ w h i t n e y cr e . c o m Brokerage Management Construction
2013 Real Estate Trends
and
I n v e n t o ry - A s h e v i l l e , N o rt h C a ro l i n a
2013 Office Market 2013 Office Net Absorption (SF)
Office Occupancy increased in 2013 by over 90,000 SF, with all quarters except the 3rd showing positive growth. 2013 Q1
2013 Q2
2013 Q3
2013 Q4
Total Net Absorption
46,025 SF
17,884 SF
( - 5,516 SF)
31,872 SF
90,265 SF
2013 Office Buildings By Class Of the office buildings over than 5,000 SF, 7% are class A, defined as the best in the market. The vast majority, just over 72%, fall into the respectable category of class B. The remaining 21% are considered the least desirable class C. Class A
Class B
Class C
Total SF Surveyed
Buildings Surveyed
Average SF Per Building
759,270 SF
7,821,630 SF
2,223,006 SF
10,803,906 SF
1,135
9,519 SF
2013 Office % Occupancy
Occupancy showed a positive trend, increasing by 0.5% in 2013 DEC 2012
DEC 2013
% Change
92.3 %
92.8 %
+ 0.5%
2013 Office Asking Rates (Gross)
Gross rents showed a positive trend as well, increasing at an annualized rate of 4.0% in the last quarter of the year. 2013 Q3
2013 Q4
Change
% Change
$16.56 / SF
$16.72 / SF
+ $0.16 / SF
+ 1.0 %
828.665.9085
c o n t a c t @ w h i t n e y cr e . c o m Brokerage Management Construction
2013 Real Estate Trends
and
I n v e n t o ry - A s h e v i l l e , N o rt h C a ro l i n a
2013 Industrial Market 2013 Industrial Net Absorption (SF)
The Industrial sector had an upward trend in 2013, occupying over 850,000 SF more than it did at the end of 2012. 2013 Q1
2013 Q2
2013 Q3
2013 Q4
Total Net Absorption
759,020 SF
29,420 SF
( - 22,314) SF
98,523 SF
864,649 SF
Industrial Buildings
The average size of the 487 Industrial Buildings surveyed (5,000+ SF or larger), is just over 40,000 SF
Flex Buildings
The average flex building (combination of office and warehouse) contains less than 15,000 SF
Industrial Sector SF
Buildings Surveyed
Average SF
FLEX Sector SF
Buildings Surveyed
Average SF
19,511,094 SF
487
40,063 SF
3,573,240 SF
246
14,525 SF
Owner Occupied (5,000+ SF)
Owner/Users occupy the largest Industrial buildings with an average size of over 130,000 SF. That is 3x the size of the average Industrial building in our market!
Owner & Tenant Occupied
For the previous 3 segments combined (Industrial, Flex, and Owner Occupied) the average size of the combined 764 buildings is just over 35,500 SF.
Owner Occupied SF
Buildings Surveyed
Average SF
Industrial Sector SF
Buildings Surveyed
Average SF
4,061,019 SF
31
131,001 SF
27,145,353 SF
764
35,530 SF
2013 Industrial Asking Rates (Net)
While 2013 enjoyed positive absorption in the Industrial sector, it did not come without a price; the last quarter experienced a drop in rates of 6.6%. 2013 Q3
2013 Q4
$ Change
% Change
$4.11 / SF
$3.84 / SF
( - $0.27 ) / SF
( - 6.6 ) %
828.665.9085
c o n t a c t @ w h i t n e y cr e . c o m Brokerage Management Construction
2013 Real Estate Trends
and
I n v e n t o ry - A s h e v i l l e , N o rt h C a ro l i n a
2 0 1 3 R e ta i l M a r k e t 2013 Retail Net Absorption (SF)
While for Retail the year got off to a slow start in Q1 and Q2, it ended on a very positive not with nearly 120,000 SF being absorbed in the last quarter of the year. 2013 Q1
2013 Q2
2013 Q3
2013 Q4
Total Net Absorption
( - 21,490 ) SF
( - 31,906 ) SF
30,740 SF
119,823 SF
97,167 SF
2013 Retail Building Survey Size The average size of all free-standing and in-line retail properties in the Asheville market is just over 12,000 SF. Total SF Surveyed
Buildings Surveyed
Centers Surveyed
Average SF Per Building
28,513,392 SF
2,176
183
12,087 SF
2013 Retail Asking Rates (Average)
Retail enjoyed a 5.1% increase in asking rates in 2013, the strongest of all market sectors! 2013 Q1
2013 Q4
$ Change
% Change
$12.71 / SF
$13.36 / SF
+ $0.65 / SF
+ 5.1 %
828.665.9085
c o n t a c t @ w h i t n e y cr e . c o m Brokerage Management Construction
2013 Real Estate Trends
and
I n v e n t o ry - A s h e v i l l e , N o rt h C a ro l i n a
About Asheville, NC About Asheville Asheville, North Carolina has grown from a small pioneering town into a flourishing metropolis
Asheville
known for its love of the arts and passion for the great outdoors. Nestled in the Blue Ridge Mountains of Buncombe County, Asheville enjoys a mild climate year-round, which, coupled with its beautiful natural surroundings, has made it one of the Southeast’s most popular destinations.
Demographics 5 Minute Drive
10 Minute Drive
20 Minute Drive
Total Population
11,533
63,337
189,375
Median Income Per Capita Income
$26,551 $44,852 $19,944
$35,243 $53,048 $23,755
$41,132 $58,914 $25,508
Median Home Value
$215,811
$194,562
$197,664
College Towns Old and Newcomers Social Security Set
Great Expectations Midlife Junction Old and Newcomers
Midlife Junction Midland Crowd Prosperous Empty Nesters
Average Income
DEmographic Segments
828.665.9085
c o n t a c t @ w h i t n e y cr e . c o m Brokerage Management Construction
2013 Real Estate Trends
and
I n v e n t o ry - A s h e v i l l e , N o rt h C a ro l i n a
C o m pa n y O v e r v i e w W h i t n e y C o m m e rci a l R e a l E s t a t e S e r v ic e s
Brokerage Management Construction
The roots of our firm date back to 1940 when Austin & Emma Whitney developed neighborhoods in Worcester, Massachusetts. In 1965 they entered third-party brokerage when they founded Whitney Realty on the island of Clearwater Beach, Florida. Our CEO, Richard Whitney, followed them into the business in 1974 at the age of 19 and has been in real estate for almost 40 years. Today we operate from the Ridgefield Business Center in Asheville, North Carolina. Whitney Commercial is the only firm in Western North Carolina offering the three in-house services of:
Individual memberships
• Commercial Brokerage • Property Management • General Contracting Whitney Commercial has earned the highest level of recognition from: • • • •
National Association of Realtor’s CCIM Institute Society of Industrial and Office Realtors (SIOR) Institute of Real Estate Management (IREM) Construction division (Whitney Construction & Development, Inc) is licensed as “Unlimited” by North Carolina Licensing Board for General Contractors*
828.665.9085
c o n t a c t @ w h i t n e y cr e . c o m Brokerage Management Construction
2013 Real Estate Trends
and
I n v e n t o ry - A s h e v i l l e , N o rt h C a ro l i n a
Commercial Brokerage Division W h i t n e y C o m m e rci a l R e a l E s t a t e S e r v ic e s We are well qualified to serve the best interests of buyers, sellers, investors, tenants and landlords through our use of: • Cutting edge software and technology • Internet portals with subscribers numbering in the millions • A proprietary database of buyers, sellers, tenants, landlords and brokers • The best marketing materials in the region • Relationships with affiliates of the CCIM Institute and the Society of Industrial and Office Realtors (SIOR) We consider brokers to be our best friends. Realizing that no one firm controls all the buyers, we: • Keep the brokerage community informed of our available properties • Cooperate with them • Minimize the red tape when doing business with our firm • As a result of our philosophy our co-brokered transactions are TWICE the national average! We keep brokers informed because more brokers mean more buyers, and more buyers mean more offer, and more offers mean higher prices. We keep brokers informed because we know that having more brokers informed about our properties means we have increased our chances of getting more offers on our properties and more money for them! For Sellers and Landlords, we: • Provide you with market research on recently completed transactions • Provide you with data on competing properties currently on the market • Help you to properly price your property • Prepare you for what to expect during the marketing cycle • Keep you informed as to the results of the actions taken to market your property • Proactively market your property • Negotiate and close under the best possible terms For Buyers and Tenants, we: • Present all the options available in the market • Provide comprehensive summary of current market prices and conditions • Identify the best matching property • Negotiate the best possible price Investors find that our brokers are: • Highly educated • Experienced • Hard working • Understanding of their business • Well qualified to assist to buy or sell investment properties
828.665.9085
c o n t a c t @ w h i t n e y cr e . c o m Brokerage Management Construction
2013 Real Estate Trends
and
I n v e n t o ry - A s h e v i l l e , N o rt h C a ro l i n a
Property Management Division W h i t n e y C o m m e rci a l R e a l E s t a t e S e r v ic e s We are one of just 550 firms worldwide to hold the Accredited Management Organization (AMO) designation awarded by the Institute of Real Estate Management (IREM), and the only accredited firm Western North Carolina. Our background in the management of office, retail, and industrial properties dates back to 1991. We assist clients with management of: • Office • Retail • Industrial • Commercial property owners’ associations • Residential homeowners’ owners associations Led a Certified Property Manager (CPM), our property management team will customize our services to meet your property’s unique needs. In addition to serving as the key contact between you and tenants, our duties include, but are not limited to: • Tenant service requests • Rent collection and deposits • Receiving, verifying, coding, and processing bills • Bank statement reconciliations • Tenant relations • Monthly financial statements • Routine on-site inspections • Emergency 24/7/365 on-call service • Building maintenance and renovations • Tenant and Vendor insurance forms • Calculation of operating expenses • Annual operating budget preparation Our goal is treat each property as if it were our own investment! Each property will be under the watchful eyes of real estate professionals who understand the value of preventative maintenance and building and grounds upkeep. We also help evaluate when and what capital improvements are warranted in order to keep an investment in its most marketable condition.
828.665.9085
c o n t a c t @ w h i t n e y cr e . c o m Brokerage Management Construction
2013 Real Estate Trends
and
I n v e n t o ry - A s h e v i l l e , N o rt h C a ro l i n a
General Contracting W h i t n e y C o m m e rci a l R e a l E s t a t e S e r v ic e s A few things to know about our sister company, Whitney Construction & Development, Inc.: • We are a cost-plus renovation specialist licensed as “Unlimited” by the NC Licensing Board for General Contractors • We us an open-book approach to managing construction projects • We invite clients to be a part of every aspect of their project, from design to final cleaning • We work with our clients to efficiently plan their projects • We collect, compare, & share multiple subcontract bids from each trade • We work to value- engineer the project and to develop a project budget • We prepare a detailed project timeline so that you will know • Who will be on the job site each day • Whey you will need to make key decisions • When the project will be complete • Copies of all invoices received are included with each monthly progress payment request • Clients are kept fully informed as to our actual cost for every service provided From Planning to Grand Opening - we complete projects on time and on budget.
828.665.9085
c o n t a c t @ w h i t n e y cr e . c o m Brokerage Management Construction
