Proud to add Genal Pratt and Nicole Whitehead from the MEDC to our Board of Directors! They will bring a unique perspective to our CRE mission and together we will continue to grow CPIX and our combined initiatives for Michigan as a statewide team!
#MEDC #CBOR #CREPros #CPIX #Michigan #CRE #commercialrealestate #team #economicdevelopment
CRE Happy Hour May 19th, 2022
A networking event for all commercial real estate professionals.
Join us for hors d’oeuvres and a cash bar.
Zerbo’s Market & Bistro
3000 E West Maple Rd, Commerce Township, 48390
If you plan on joining us please RSVP – CPIX EVENTS
Interested in sponsoring this event?
Contact Us
National Association of REALTORS® February Commercial Market Insights
The National Association of REALTORS® has published their quarterly commercial digest including the commercial market insights for the first quarter of 2022. Continue reading below and visit the NAR site here to view the entire commercial digest.
The recovery in the commercial real estate market that started in the second half of 2021 is
continuing into the first quarter of 2022. All core commercial sectors ―multifamily, office,
industrial, and retail ―experienced net positive absorption during the last three months
through February. As such, rents and property valuations continue to increase across the
four core property markets.
In the multifamily market, apartment demand is still outpacing supply, even as net
absorption has slowed to 575,857 units compared to the 12–month absorption of 700,000
units in 2021. However, net absorption (demand) is outpacing the number of net delivered
units (supply) of 417,000 units. Apartment vacancy rate remains low, with a vacancy rate of
5%, pushing up the average asking rent to 11.1% year-over-year in 390 markets tracked by
CoStar®.
Office occupancy continues to rise, with 4.9 million square feet absorbed in the three
months through February, bringing the total absorption to 24.1 million square feet since
2021 Q3. However, total occupied space is still 110 million square feet below the level of 2020
Q1 as New York, Chicago, Washington DC, and Los Angeles continued to shed office space.
Nationally, office asking rents rose 0.7% year-over-year, but this modest rent growth is
masking the strong rent growth in the South and West regions (Mountain states),
particularly in Florida which has eight of the 40 top metro areas with the fastest rent
growth of over 3%. Office rents are rising in 97% of 390 markets.
In the U.S. industrial sector, net absorption outpaced supply in 2021 and as of the past three
months ending February 28, with 92.6 million square feet absorbed in comparison to the
90.3 million square feet supplied. The average asking rent across 390 markets increased by
10.1% year-over-year as of February. Asking rents continue to face upward pressure amid
very tight industrial space conditions, with positive rent growth in all 390 covered metros.
In the U.S. retail sector, net absorption continues to outpace supply. Despite dampened
overall U.S. consumer spending and continued supply chain issues, retail is continuing to
power through these obstacles. As of the three months ending in February, 27.3 million
square feet has been absorbed while supply totaled just 11.5 million square feet, with the
retail vacancy rate declining to 4.5% while the overall asking rent rose 3.5% year-over-year.
While the hotel property market has improved compared to one year ago, the emergence
of the omicron variant in November stalled the recover of hotel property market. Hotel
occupancy was just at 52.2% in February, which is still below the occupancy of 56.9% prior to
the pandemic in February 2020.
Barring severe economic fallout arising from the Russia-Ukraine crisis, the outlook for the
commercial real estate market remains positive even amid rising interest rates. Rising
mortgage rates increase rental demand that will sustain the ongoing rent growth. Worker
re-entry, even if on a hybrid mode, will increase office absorption. Slower inflation that will
head towards 5% by the end of the year will encourage consumer spending. Markets with
rising population and migration such as the Sunbelt and Mountain states are better poised
to see sustained rent growth and rising commercial valuations. Market trends could take on
a different course depending on the economic impact of the Russia-Ukraine crisis and the
ensuing monetary response.
To view the full February Commercial Market Insights click here, or to view the full quarterly commercial digest visit the NAR site here.
Brownfield Update – ASTI Tech-Bits
Changes to Brownfield Incentives
Building on a brownfield site typically incurs additional costs (assessment, remediation, demolition, unstable soils, unanticipated conditions, delays for approvals, etc.) that can be off-set to some extent by local, state, and federal incentives. These incentives have been essential to successful redevelopment, and have been used by communities to attract redevelopment to challenging and urban sites.
The Michigan Brownfield Act (Act 381) has recently been amended to make it easier to apply for a Transformational Brownfield Plan (TBP). Developers will typically use a Brownfield Plan and 381 Work Plan to capture incremental real estate taxes, but a TBP can provide access to additional incremental tax revenue (such as income tax) and permit reimbursement of additional eligible costs when a project meets minimum investment thresholds based on municipal population. The five main updates are: (1) TBPs no longer require developments to be mixed use, (2) the demonstration of substantial benefit to the state has been removed, (3) the threshold requiring third party underwriting has been increased from $1.5 million to $10 million in tax capture per year, (4) other incentives, such as the Community Revitalization Program, can now be combined with a TBP, and (5) the legislation has been extended to 2027 (it was set to expire the end of this year).
Changes to Phase I ESAs – The New ASTM Standard
The American Society for Testing and Materials (ASTM) Committee on Environmental Assessment, Risk Management, and Corrective Action (Committee E-50) approved a new standard for conducting Phase I Environmental Site Assessments (ESAs) on November 1, 2021. This new standard is known as “E1527-21 – Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process.” ASTM E1527-21 provides significant updates to the current ASTM E1527-13, the standard that has been in place for the past eight years.
The updated standard, ASTM E1527-21, includes a new definition of “Recognized Environmental Condition” (REC). Another significant update is a requirement to use Standard Historical Sources. E1527-21 requires that, at a minimum, historical aerial photographs, historical city directories, historical topographic maps, and historical fire insurance (Sanborn) maps be reviewed in association with the subject property and adjoining properties. Guidance on emerging contaminants of concern, such as per- and polyfluoroalkyl substances (PFAS), is also included in ASTM E1527-21.
Please Visit the ASTI site, or Download this PDF for more information.
https://www.asti-env.com/techbits/2022/2/16/techbits-tbp-and-astm-e1527-updates