Blog | Calco Commercial, Inc.

Aug

SF CRE News: Prop C / Affordable Housing Feasibility Study Findings

Earlier this year, residents of San Francisco passed Prop C–a measure increasing the on-site affordable unit count of new housing developments to 25% from 12% (on residential developments of 25 dwellings or larger). Click here for more details regarding Prop C: PROP C

SF Neighborhood

Last week, The San Francisco Business Times reported that a feasibility study, completed in conjunction with the Controller’s office, suggests that Prop C could hurt the housing stock by discouraging new residential developments–thereby decreasing the overall amount of available housing.

The The San Francisco Chronicle reported that a final submission of the feasibility study will be submitted by the Controller’s Office to the Board of Supervisors in September. Supervisors Jane Kim, Aaron Peskin originally supported the measure.

Aug

Bay Area BioTech News: $1 Billion Development coming to South San Francisco

As reported by The Registry on August 18, 2016, Greenland USA and the Ping An Trust have acquired The Landing at Oyster Point in South San Francisco for $171 Million. The partners, along with the Agile Group and Poly Sino Capital Limited are slated to invest $1 Billion into the project by developing a office complex geared towards R&D and the life science industry.

Link to article: Oyster Point

Oyster Point

San Francisco Business Times

CoStar

Aug

National Economic News: Fed May Raise Interest Rates in September

Source: Wall Street Journal
By: Jon Hilsenrath
Date Posted: August 17, 2016

WASHINGTON—Federal Reserve officials, playing a waiting game on the economy, sought to keep their options open at a July policy meeting as they tried to reconcile differences over whether it was time to raise short-term interest rates again.

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The Fed’s Wednesday release of minutes from its July 26-27 meeting suggested a rate increase is a possibility as early as September, but that the Fed won’t commit to moving until a stronger consensus can be reached about the outlook for growth, hiring and inflation.

Several officials, still not yet confident that inflation will rise to the Fed’s 2% objective after running below target for four years, weren’t prepared to consider a rate increase. Others, believing the U.S. is close to a fully recovered job market, thought a rate increase would soon be warranted, according to the minutes.

“Members judged it appropriate to continue to leave their policy options open and maintain the flexibility to adjust the stance of policy based on incoming information,” the minutes said.

The Fed raised its benchmark federal-funds interest rate from near zero in December, and began the year expecting to nudge rates up four more times in quarter-percentage-point increments in 2016. It hasn’t moved because of recurrent worries about growth, hiring and turbulence overseas.

Investors have doubts about the Fed’s willingness to move again. Futures traders place an 18% probability on a rate increase in September, 20% on a move by November and 50% on a move by December.

Stocks, bonds and the U.S. dollar could all be jolted when the Fed does actually push rates up again, since borrowing costs affect so much in the economy—including how much it takes to buy a home or car or finance a big corporate project.

The Fed next meets Sept. 20-21. Since its last meeting, economic data have been mixed. Jobs data for July were strong—payrolls rose 255,000—but retail sales and inflation indicators for the month were soft, leaving open the possibility of a prolonged Fed divide that could further delay the next rate move.

Despite the mixed economic backdrop, some notable officials this week have sought to remind investors that the time for another rate increase was drawing near.

“I think we’re getting closer to the day where we’re going to have to snug up interest rates a little bit. And that’s good news,” New York Fed President William Dudley, a close adviser to Chairwoman Janet Yellen, said on the Fox Business Network on Tuesday. Dennis Lockhart, a middle-of-the-road official whose views often reflect the committee consensus, said Tuesday he wouldn’t rule out a September move.

“Most of the fundamentals underpinning growth of consumption are pretty solid,” Mr. Lockhart said. “Early indications of third-quarter GDP growth suggest a rebound,” he added. “I don’t believe momentum has stalled.”

Some of the Fed’s worries have receded in recent weeks, including whether markets would convulse after Britain’s June decision to leave the European Union.

“Participants generally agreed that the prompt recovery of financial markets following the Brexit vote and the pickup in job gains in June had alleviated two key uncertainties about the outlook,” the minutes said.

Most Fed officials expect growth to pick up in the second half of the year, but several still harbor doubt, especially because inflation has run below the Fed’s target for so long. The Labor Department reported Tuesday that the Consumer Price Index was unchanged in July and up 0.9% from a year earlier. The previous three months it was up 1.1% from a year earlier.

The central bank divided into three camps at its July meeting, the minutes show: those who aren’t ready to move rates up, those who are ready, and those who say the moment is getting closer.

Several officials “preferred to defer another rate increase in the federal-funds rate until they were more confident that inflation was moving closer to 2 percent on a sustained basis,” the minutes said.

Others believed the U.S. was “at or close” to full employment, meaning a state where unemployment was low, fully recovered from recession and at a point where if it falls much more it could cause more inflation. These people believed a rate increase “was or would soon be warranted.”

“By far the most significant part of the minutes was the point, repeated at least twice, that (official) forecasts had changed little during the intermeeting period,” Roberto Perli, an analyst with Cornerstone Macro Advisers, said in a note to clients.

Back in June they all expected to raise rates this year. If none of them changed their forecast in a material way, it must mean they still see a rate hike this year as appropriate, he said. “A move by December was and remains a good base case,” he said.

Some Fed officials also worried that a prolonged period of very low rates could cause investors to misallocate investments or misprice risk, possibly leading to a destabilizing financial bubble and bust.

Link to article: Fed’s July Minutes

Aug

National CRE News: US Banks Tightening CRE Lending Standards

Source: CoStar News
By: Mark Heschmeyer
Dated Posted: August 10, 2016

Second quarter bank earnings results and early third quarter lending numbers clearly show U.S.-based banks have tightened their underwriting standards for CRE loans as they face increased scrutiny of their commercial real estate lending from bank examiners.

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In fact, loan officers at domestic banks reported that the current standards are tighter now than they have been on average since 2005, according to the latest Senior Loan Officer Opinion Survey from the Federal Reserve.

The tighter underwriting is showing up in shortened interest-only periods and lower loan-to-value (LTV) ratios as well.

However, underwriting standards are not being tightened for all CRE loans evenly. In particular, a significant number of bankers reported tightening standards for multifamily and construction and land development loans, but only a moderate number reported tightening standards for office, retail and industrial property loans (classified as nonfarm nonresidential properties.)

The return of tightened lending standards comes even as banks generally indicate that they experienced stronger demand for all major types of CRE loans during the second quarter on balance.

A modest number of bankers reported stronger demand for loans secured by multifamily properties, and moderate number reported stronger demand for construction and land development loans and loans secured by nonfarm nonresidential properties, according to the Federal Reserve.

US Banks Tighten Standards, Foreign Banks Far Less

While U.S. domestic banks uniformely reported tightening their CRE loan underwriting, foreign-based banks with U.S. branches reported leaving CRE lending standards basically unchanged. However, only a modest net fraction of these banks reported experiencing stronger demand for such loans.

Those underwriting differences are showing up in CRE loan growth numbers.

Foreign banks grew their CRE loan portfolios 7% from the end of June 2016 through July 27. The largest jump came in construction and land development loans up 8.5%; and office, retail and industrial property loans grew by 6.9%. Multifamily loans were up 3%.

U.S.-based banks on the other hand, grew their CRE loan portfolios by just 0.8% in the same period, according to the Federal Reserve.

Construction and land development loans were up 1.2%; multifamily up 1.1%; and loans for nonfarm nonresidential properties were up 0.6%. In general, small U.S. banks (those with less than $20 billion in assets) were more willing to lend for construction and development projects and on nonfarm nonresidential properties. Larger banks ($20 billion or more) grew their multifamily portfolios more than smaller banks.

CRE lending to small businesses reflected by loan amounts of less than $1 million was down slightly and has been falling steadily over the last year.

Domestic banks reported $1.836 trillion in CRE loans on their books at July 27. Foreign banks reported $61.2 billion.

Banks Responding to Federal Scrutiny

At the end of 2015, federal bank regulators became increasingly concerned that aggressive competition among banks for commercial real estate lending was rapidly eroding underwriting standards and raising the risk-exposure level for lenders. Regulators issued a warning that it would be looking more closely at CRE lending in examining banks’ books this year, and reiterated that stance again this summer.

As federal regulators noted, at the end of 2015 406 banks had grown their CRE loan portfolios by more than 50% in one yera than the prior three years. More than 180 of those banks had more than doubled their CRE portfolios during the past three years.

“We’re taking a look at what regulators are saying and we’re comparing it to what’s actually happening on the ground and we are most likely going to pull our foot off the gas pedal a little bit in the second half with regard to loan growth,” John Kanas, chairman, president and CEO BankUnited Inc., told shareholders in his second quarter’s earnings conference call.

Kanas added that he expected to see other banks react the same way over the next six months, some may pullback even more.

“Looking at the pace we were on in construction lending, and where that might take us in out-years, we just felt like it was prudent and certainly consistent with regulatory guidance to slow down the onboarding of new construction loans,” said Kessel Stelling, chairman and CEO of Synovus Financial.

High Valuations also Prompting Caution

Market dynamics too are also playing a part in the tighter underwriting, according to James Herbert, chairman and CEO of First Republic Bank.

“What happens is, as buildings are being purchased at higher prices, our lending rate, our advanced rates tend to look like they’re declining on loan-to-value. But in fact they are the same amount based on cash flow coverage, and so basically you’re getting an apparently increasingly conservative loan-to-value ratio,” Herbert said in his earnings call. “We actually underwrite pretty much entirely to cash flow coverage.”

First Republic said it continues to watch New York’s multifamily and luxury single-family market carefully.

“Our LTVs in New York are the lowest of anywhere in our marketplace,” he said. “The average LTV in New York is possibly — on multifamily — is possibly sub-55.”

This week, REIT and CMBS lending analysts at Morgan Stanley Research, noted in a report that banks will be justifiably more cautious with CRE lending over the next quarter or two as the industry adjusts to the increased regulatory scrutiny and peak CRE valuations.

“We aren’t necessarily positive with our outlook for 2017, but we see enough signs that lending conservatism may be coming back into the market,” wrote Ken Zerbe, lead author of the Morgan Stanley report on CRE lending.

On the positive side, prices have stabilized compared to earlier this year, Morgan Stanley analyst noted. This implies that the near-term risk of higher-credit losses is low.

Banks too are coming into this tightening credit cycle in a far better underwriting position than they were ahead of the 2007 financial crisis, which could meaningfully mitigate potential losses.

“Our expectation is that banks will be justifiably cautious with CRE lending over the next quarter or two as the industry adjusts to the increased regulatory scrutiny and peak CRE valuations,” the Morgan Stanley report noted. “BKU, for example, has cited ‘overzealous competition’ for why it plans to pull back on lending in 2H16. Yet with valuations having collapsed at several of the larger (and presumably more conservative) CRE lenders such as BKU, SBNY, and NYCB, each down 13% – 22% YTD, what is being priced into the shares seems to be a much more severe and prolonged downturn in the CRE market, which we do not necessarily expect — particularly if regulatory pressure ultimately drives smaller banks to pull back lending and allows the resurgence of the CMBS market as credit spreads increase and terms improve.”

As for their outlook for 2017, the Morgan Stanley analysts noted, “We remain concerned about the near-term outlook for commercial real estate lending given aggressive competition, yet property prices are stable and we are starting to see signs that rationality is creeping back into the market. We see enough signs that lending conservatism may be coming back into the market that we don’t think an outright negative view is warranted.”

Link to article: CRE Lending Standards Tighten

Aug

San Francisco Tech CRE News: Twitter to sublease 183K square feet of its HQ

Source: San Francisco Business Times
By: Rolandi Li
Date Posted: August 8, 2016

According to The San Francisco Business Times Twitter has listed over 183,000 square feet of its Headquarters at 1355 Market Street for sublease.

Wired reported in February of this year that Twitter’s value has decreased significantly from its peak in 2013 and is now valued less than other tech “unicorns.” Could the recent sublease by Twitter indicate more woes for the tech giant?

USA Today

San Francisco Chronicle

Jul

National CRE News: Q2 Office Sector Maintains Steady Leasing Activity

Even as rent growth slows and sales stall, office leasing sustains momentum

Source: CoStar News
By: Randyl Drummer
Dated Posted: July 27, 2016

he U.S. office market continued its steady momentum in the second quarter, recording 39.4 million square feet of net absorption in the first six months of 2016, nearly equaling the 40.2 million square feet absorbed during the record-setting first half of last year.

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The U.S. office vacancy rate ticked down another 15 basis points to 10.6% in the second quarter of 2016, well below the long-term historical vacancy rate of 11.3%. CoStar analysts expect the office vacancy rate to continue trending lower before bottoming out at around 10.2% in 2018, about the same as lowest point of the last real estate cycle.

“Basically, we expect to have two more years of occupancy recovery in the office market,” noted Walter Page, CoStar’s director of office research, who presented the Mid-Year 2016 Office Review and Forecast along with Hans Nordby, managing director for CoStar Portfolio Strategy and CoStar senior real estate economist Paul Leonard.

Several markets showed marked improvement at mid-year, including ones that were previously struggling, such as Phoenix, which posted positive absorption of 3.4 million square feet.

In Seattle, which has enjoyed a particularly strong run, Amazon’s ongoing expansion helped drive 3.1 million square feet in net absorption. Even Washington DC saw a welcome return of strength in the second quarter after several years of flat demand growth. The D.C. office market absorbed a respectable 2.3 million square feet over the last four quarters.

“Finally, we’re starting to see some momentum in the D.C. marketplace, which should allow the vacancy numbers to start inching downward,” said Page.

There were several notable exceptions. The energy sector slowdown and corporate relocations related to the completion of several pending build-to-suit projects played a role in Houston and Dallas, which recorded absorption declines of 2.4 million and 3.7 million square feet, respectively, since mid-year 2015. San Francisco, Raleigh, Boston and San Diego also logged declines due to a variety of factors.

But for the most part, the vast majority of office submarkets — 66% — saw their office vacancy decline in the second quarter, and more than half of all U.S. office submarkets have a lower vacancy rate than during the previous market peak in 2006-2007.

Demand for High Quality Space Resulting in Limited Supply

In a theme seen in many markets across the country, the supply of available space in newer, higher-quality office buildings is becoming increasingly limited. With relatively little new development in the pipeline based on historical levels, only about 81 million square feet of space is available today in buildings constructed over the last 10 years.

That total is less than half the 167 million square feet of vacant newer space that was available in 2007, according to CoStar’s analysis.

“While there are some exceptions where plenty of high quality, new office space remains available, such as Houston and Washington, DC, for the most part we’re really tight on nice, new space,” noted Page.

As evidence, Page noted that the vacancy rate for 4- and 5-Star office properties remained unchanged at 11.7%, despite the fact that 90% of the new office space added to the market falls into that category.

Suburban office markets also continued to see increasing activity as large blocks of high-quality space become harder to find — and more expensive — in most major markets, with the exception of Los Angeles, Seattle, Chicago and Atlanta, where large blocks of downtown space remain readily available.

“Part of the story is that it’s now the suburbs’ turn in the cycle, and part of it is that the CBDs were so successful earlier in the recovery cycle that there’s no place left to grow,” Nordby said.

As investors begin to focus on which markets are the most recession-resistant in the later innings of the recovery, certain niches such as medical office space stand out, Nordby said.

Demand growth is nearly twice as strong for medical office as for regular office, and over the long term, medical office has grown at about 1.3% annual rate compared to 0.7% for the broader office market, Page said. The medical office sector, which has never had negative demand growth, even during the two recessionary periods since 2000, had a midyear vacancy rate of 8% compared to the broader market’s 10.6%.

Office construction stayed flat in the second quarter at about 130 million square feet under way, due in part of a large decline in Houston. But building activity is still slightly above its long-term average of 125 million square feet, with increased construction in D.C. and Atlanta, among other metros.

Some Cautionary Yellow Flags

While leasing and absorption levels remain robust and construction still well below historic levels, the U.S. office market did see some cautionary flags in the second quarter, including a big slowdown in office sales activity and the beginning of a slowdown in rent growth.

CoStar is projecting office rent growth will likely finish the year at an average of 3.4% and decelerate to the low 3% range over the next year. As with all trends, there will likely be a few exceptions, including the Nashville, Atlanta and Florida markets, where lower rents earlier in the cycle have limited construction. Also, rent growth in CBDs is expected to continue to outpace suburban markets.

Meanwhile, reflecting declines across all the property types, the volume of office sales completed in the first half of 2016 declined compared to the same period one year earlier, according to preliminary CoStar data.

“It’s a worry,” Nordby said. “A decrease in transaction volume generally portends a decrease or at least a flattening in prices.”

And in another historical sign of softening demand, rising levels of surplus space placed on the sublease market by tenants, is rising in a few markets. In Houston, the contraction of large energy tenants has caused sublet space to balloon to more than 3.5% of total inventory. Companies such as Shell, ConocoPhillips, and BP have each put 500,000 square feet on the sublet market in recent quarters.

Jul

National CRE News: Demand for Warehouse Space Strongest since 2011

Source: CoStar News
By: Randyl Drummer
Date Posted: July 20, 2016

Prologis, the world’s largest developer and owner of industrial real estate, reported the first six months of 2016 were the strongest in its company’s history as moderate levels of new supply paired with a strong appetite by e-commerce and other companies created the tightest market for tenants since the first internet boom of the early 2000s.

Warehouse

The San Francisco company owns or has interests in 3,347 buildings totaling 666 million square feet of property in 20 countries, including nearly 380 million square feet in the US. As such, the publicly traded REIT serves as a bellwether stock for the global warehouse and logistics market.

The REIT’s same-store net operating income increased 6.1% in the second quarter, securing an average 17.8% rent increase at lease expirations while delivering $621 million in new projects. Prologis had more than $3.7 billion in cash liquidity, its highest on record.

“All in all, the last six months have been the best in our company’s history,” said Hamid Moghadam, chairman and CEO of San Francisco-based Prologis (NYSE:PLD). “E-commerce and supply chain reconfiguration continue as big drivers of demand for our product. The Class A market is where the action is.”

Building Fast, Leasing Faster

CoStar and other CRE services firms, including CBRE Group, Inc. and JLL, noted the increasingly limited availability of U.S. industrial space at midyear as online sellers, third-party logistics firms, food and beverage and consumer goods firms scoop up newly constructed bulk warehouses and other industrial buildings as fast as they are built.

Even though developers added 158 million square feet of new warehouse/distribution space over the past 12 months, the overall vacancy rate for industrial property continued to inch down to 5.5% as of June 30 of this year.

According to a preliminary analysis by CoStar of midyear logistics and industrial property leasing data, that’s nearly 2 percentage points lower than the 2004-2007 expansion cycle, and within a few basis points of the lowest vacancy rate for industrial property since the Internet-driven demand boom of the late 1990s and early 2000s.

CBRE said it expects the global economy will continue to sustain demand for industrial space.

“While we’ve had some shocks to the global economy, the U.S. economy still is moving along at a slow and steady space and that will sustain industrial demand,” said Jeffrey Havsy, CBRE chief economist for the Americas. “Retail sales have been above expectations, posting pretty strong gains in April and May. That will help both the retail and industrial sectors.”

More than 210.5 million square feet of industrial space was absorbed by tenants over the last year, according to CoStar. The nearly 46.9 million square feet of net absorption in the second quarter, while down just under 10% from a year earlier, remains consistent with the average pace of demand growth throughout the long expansion, said CoStar Senior Real Estate Economist Shaw Lupton, in a preview of the company’s midyear industrial market review and forecast webinar scheduled for July 28.

Link to article: Demand for Warehouse Space Skyrockets

Jul

San Francisco CRE News: SF Property Assessment over $200 Billion

Source: San Francisco Business Times
By: Riley McDermid
Date Posted: July 19, 2016

According to the San Francisco’s Office of the Assessor-Recorder and the San Francisco Business times, the entire value of all properties in San Francisco has broken historical records by exceeding $208 billion. The total property value has increased by 9% over last year’s assessment, and will also mark an increase in the city’s tax revenues and General Fund budget.

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Click here for the full article: SF Property Value

Jul

National CRE News: Will Brexit Boost U.S. Office Sales?

Source: CoStar News
By: Randyl Drummer
Date Posted: July 14, 2016

The U.S. office market continued to record strong demand as measured in both occupancy and rent growth at midyear, and analysts even found optimism in the slowing trend in investment sales activity seen year-to-date.

Office net absorption rebounded from a slow first quarter, matching year-earlier levels, and vacancies continue to fall to a cyclical low in the second quarter of 2016. Although easing slightly this year, office rent growth ended the quarter with a strong 4% increase, according to Walter Page, director of U.S. Research, Office for CoStar. First-half office sales were down 20% from the same period last year, largely reflecting the smaller pools of buyers for marketed properties and diminished investor appetite for higher-risk assets, Page said.

“While the 10-year Treasury rate has hit a record low, our view is that cap rates for real estate in general are likely to remain fairly flat,” said Page, who will elaborate on office market trends in CoStar’s Midyear 2016 Office Market Review and Forecast presentation on July 21.
The generally optimistic views of the U.S. office market were shared by others, including Colliers International Chief Economist Andrew Nelson, who said investment sales activity in the office sector remains at healthy levels relative to historical averages, and could see a further boost from the recent Brexit vote.

“U.S. property markets could benefit from potential capital flight out of Britain and Europe generally, in part as a response to last month’s Brexit from the European Community,” Nelson said.

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Evidence is beginning to emerge of an uptick in foreign buyers seeking the security and economic stability of U.S. office and other commercial property markets, including warehouse, as a result of the Brexit. And some of those international bidders and buyers are popping up in markets outside the DC/New York City/San Francisco triangle, such as downtown Chicago and Austin.

In one instance, a number of foreign bidders were reported to have put in offers for 1K Fulton, a 10-story, 531,190-square-foot Class A office building that serves as Google’s Midwest headquarters in Chicago. American Realty Advisors beat out others to buy the property from Sterling Bay for a reported $257 million.

Martha Shelley, senior portfolio manager for American Realty, said the deal is an example of defensive positioning of its portfolio by investing in core assets in major markets.

“We believe that this is the most effective approach at this point in the market cycle,” Shelley said. “We were attracted this asset because it has long-term leases with quality tenants such as Google.”

Foreign Capital Can Also Play Good Defense In US CRE

There is also mounting evidence that events in Europe and around the world are making U.S. property more appealing to investors interested in pursuing similar defensive strategies.

“Shortly after Brexit, I received several calls from international investors seeking more information about Texas commercial real estate,” says Jim Young, CCIM, a broker at Longbow Real Estate Group in Austin. “Several U.K. investors tell me that they see U.S. real estate as a safe haven. Given low interest rates on commercial real estate loans, and commercial rental rates in Central Texas that continue to rise, I expect there will be even more of an uptick in European and global investor activity,” Young added.

Capital flows into the office sector remains strong and interest in top-quality properties with stable tenancies and minimal lease rollover risk remains high, Marcus & Millichap reported in its midyear office outlook.

While institutional investors remain focused on core property in major markets, more risk-tolerant investors are targeting assets with re-leasing opportunities, according to William E. Hughes, senior vice president with Marcus & Millichap Capital Corp.

While a decrease in office sales was expected this year following 2015’s breakneck pace, steady debt and equity flows and improving asset performance have continued to generate steady sales activity, and investors continue to see upside potential in office properties, which are the only major property type that has yet to reach pre-recession peak pricing levels.

Broad-based employment gains among people who work in offices, with more job growth expected this year, should continue to push office performance. Marcus & MIllichap’s Hughes believes both urban and suburban office markets will likely continue to draw investor attention as yields in other property options have tightened significantly.

Average office pricing has risen nominally from a year ago, while the average cap rate was essentially unchanged in the low-7% range. Office investors saw a slight rise in first-year returns in primary markets, contributing to a narrower spread between cap rates in tertiary markets.

Tenant demand kept pace with new office construction despite a deceleration in the first half of the year linked to the growing economic uncertainty, noted Kevin Thorpe, chief economist with Cushman & Wakefield.

“U.S. businesses have had many curveballs thrown at them this year. Concerns over the health of China’s economy, equity market volatility, weak U.S. GDP growth, now Brexit – many reasons to at least tap the brakes on expansion plans,” Thorpe said. “But overall, the office leasing fundamentals are holding up extremely well, and the secondary markets are really starting to hit their stride.”

Link to article: Brexit

Jul

National CRE News: Q2 Office Market Ramps up from Q1

Source: Bisnow News
By: Champaign Williams
Date Posted: July 8, 2016

The office market climbed in Q2, and industry experts predict it will continue to work its way back from the traditional first-quarter dive to full performance by the middle of the year.

Office_Interior

US office vacancies dropped below 16% in Q1 and declined by 10 basis points, the lowest rates since the recession started seven years ago. The increased leasing for Q2 was mostly due to a 46% increase in tenant growth, such as corporate expansions and growth in certain industries like tech and finance, JLL notes in a recent report. Nationally, there is more than 100M SF of new construction underway, and rents increased by 1% in Q2 compared to the previous quarter, National Real Estate Investor reports.

“Large, name-brand firms are opening new offices in primary and secondary markets, trying to tap into new talent pools. In some places, the high-demand urban core is becoming too expensive, and tenants are looking for fringe areas,” JLL VP Julia Georgules says. [NREI]

Link to article: Q2 Office Climbs

Link to JLL Report: First Look at Office Q2 2016

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