News Feed Item
Competition Soars as Investors Seek to Dominate the Skyline
Investors From Around the World Are Gobbling Up America's Iconic Skyline; Vacancy Rates Are Falling and Rents Are Rising; Bottom Line: It's a Good Time to Be a Landlord
|By Marketwired .
|July 16, 2014 03:00 PM EDT
CHICAGO, IL -- (Marketwired) -- 07/16/14 -- JLL (NYSE: JLL) -- David Werner's pending $900 million+ purchase of the trophy Mobil building in New York. Sumitomo's acquisition of 203 North LaSalle in the Windy City. Panoramic Interests newly secured $50M in financing for 160-unit micro apartment complex in San Francisco.
It's "game on" in the intense competition for the U.S. skyline, as both local and international investors try to lock down the trophy skyscrapers that tower over American cities.
"Investors across the spectrum continue to narrow their focus to the skylines of markets -- bidding for the top-tier, trophy assets," said Steve Collins, international director at JLL.
Demand for these top-line office buildings is high and available space is scarce, but that's only part of the story. The surge in interest from capital-rich investors is propelling rents even more than the rising demand among tenants, according to JLL's U.S. Skyline Review.
More capital, higher demand and limited space puts landlords in the catbird seat, giving them confidence to raise rents and offer even fewer concessions. "Landlords are advising tenants, especially large users, to lock in leases now, rather than waiting for the tides to change," says Gregory Green, International Director at JLL and head of the firm's Agency Leasing. "Rents in the skyline will rise even higher over the next 24 months."
Overall, rents for skyline properties in 2013 broke the $40 per square foot mark for the first time, up $6 per square foot from the dark days of 2010, JLL found.
JLL tracked skyline investment in 43 city centers across the nation. Interest comes from so-called "high net worth investors" in local U.S. markets to global investment from international sovereign wealth funds. Canada and China lead the global investors, followed by Chile, Korea, Qatar and Norway. Foreign investment reached $5.2 billion last year, accounting for slightly more than half of all buying activity in the primary markets.
Last year's sales activity in those cities, such New York, Los Angeles and Chicago, is up 43 percent, on a square footage basis, over 2012. Investment in the Manhattan skyline hit 5.1 million square feet of transactions in 2013, including the sale of 350 Madison Avenue by JLL in March. In Los Angeles, Toronto-based Brookfield Office Properties acquired the 4.9 million square feet MPG Office Trust, whose properties include the gleaming 52-foot Gas Company Tower, the city's fourth largest building, and the distinctive reddish-brown Wells Fargo Center.
But the nation's biggest cities aren't the only beneficiaries of this surge in capital -- and competition. Investment activity in the secondary markets -- think Raleigh, Miami and Philadelphia -- was up 20 percent. And low vacancy rates in these cities are feeding price increases that exceed even those in the primary markets. Ten skyline markets examined by JLL had vacancy rates below 10 percent.
And there's more coming. Thanks to demographic shifts and urban re-migration, population growth in skyline centers is nearly triple the rate of cities overall. In the next three to five years, look to Downtown Atlanta, South Park Los Angeles and the Dallas Arts District, among others, to lead the way with new trophy office towers, residential housing and lively retail centers.
Inside the office, workplace strategies are evolving, as organizations move away from larger personal workspace to a more collaborative and open work environment. While companies continue to seek cost savings, planners are looking more toward retaining valued employees by improving workplace culture and environment.
Major Market Highlights
- New York: As stock market indices reached new highs in 2013, demand for top-tier office space in Manhattan's Trophy market drove both asking and taking rents to levels not approached since 2008.
- San Francisco: The San Francisco Skyline continues evolving with more than 1.6 million square feet planned in 2014 and 2015, further shifting the heart of the business district to the South Financial District (SFD) and reestablishing the relevance of the high-rise building among creative companies. View San Francisco's Skyline video.
- Washington, D.C.: Despite restrained levels of tenant demand in 2013, Trophy fundamentals remained solid and vacancy rates fell to 9.9 percent, the lowest level since 2010. That's due to tenants migrating from second-generation core to new and efficient product on the outer core. View Washington, D.C.'s video.
- Chicago: After remaining flat in 2012, the Chicago skyline asking rents increased by $0.47 to $36.94 per square foot in 2013 and surpassed the high-water mark set in 2008, a clear indicator that rents have recovered from the recession. View Chicago's video.
- Houston: Entering 2014, Houston's overall office market continues to benefit from the overall robust STEM-powered economy. Growth amongst energy and energy service companies combined with compressed vacancy rates pushed skyline owners rates upward by 5.0 percent year-over-year to their current average of $44.50 per square foot full service gross. View Houston's video.
Image Available: http://www2.marketwire.com/mw/frame_mw?attachid=2640579
Image Available: http://www2.marketwire.com/mw/frame_mw?attachid=2640582
The proper isolation of resources is essential for multi-tenant environments. The traditional approach to isolate resources is, however, rather heavyweight.
In his session at 18th Cloud Expo, Igor Drobiazko, co-founder of elastic.io, will draw upon their own experience with operating a Docker container-based infrastructure on a large scale and present a lightweight solution for resource isolation using microservices. He will also discuss the implementation of microservices in data and applicat...
Apr. 29, 2016 05:15 PM EDT Reads: 1,674
Join IBM June 8 at 18th Cloud Expo at the Javits Center in New York City, NY, and learn how to innovate like a startup and scale for the enterprise.
You need to deliver quality applications faster and cheaper, attract and retain customers with an engaging experience across devices, and seamlessly integrate your enterprise systems. And you can't take 12 months to do it.
Apr. 29, 2016 04:30 PM EDT Reads: 1,749
See storage differently! Storage performance problems have only gotten worse and harder to solve as applications have become largely virtualized and moved to a cloud-based infrastructure. Storage performance in a virtualized environment is not just about IOPS, it is about how well that potential performance is guaranteed to individual VMs for these apps as the number of VMs keep going up real time.
In his session at 18th Cloud Expo, Dhiraj Sehgal, in product and marketing at Tintri, will discu...
Apr. 29, 2016 04:30 PM EDT Reads: 594
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, will discuss how research has demonstrated the value of Machine Learning in delivering next generation analytics to im...
Apr. 29, 2016 03:45 PM EDT Reads: 1,587
This is not a small hotel event. It is also not a big vendor party where politicians and entertainers are more important than real content.
This is Cloud Expo, the world's longest-running conference and exhibition focused on Cloud Computing and all that it entails.
If you want serious presentations and valuable insight about Cloud Computing for three straight days, then register now for Cloud Expo.
Apr. 29, 2016 03:30 PM EDT Reads: 1,646
As you respond to increasing requests for new analytics, you need fast and flexible technology in your arsenal so that you can deploy the right workload to the right platform for the need at hand. Do you need self-service and fast time to value? Do you have data and application control and privacy needs, along with strict SLAs to meet? IBM dashDB™ is data warehouse technology powered by in-memory computing and in-database analytics that are designed for fast results, scalability and more.
Apr. 29, 2016 03:15 PM EDT Reads: 1,525
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data.
In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
Apr. 29, 2016 03:07 PM EDT Reads: 196
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York.
SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
Apr. 29, 2016 03:00 PM EDT Reads: 825
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls?
In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, will provide tips on how to be successful in large scale machine lear...
Apr. 29, 2016 02:45 PM EDT Reads: 802
Up until last year, enterprises that were looking into cloud services usually undertook a long-term pilot with one of the large cloud providers, running test and dev workloads in the cloud. With cloud’s transition to mainstream adoption in 2015, and with enterprises migrating more and more workloads into the cloud and in between public and private environments, the single-provider approach must be revisited.
In his session at 18th Cloud Expo, Yoav Mor, multi-cloud solution evangelist at Cloudy...
Apr. 29, 2016 02:30 PM EDT Reads: 1,390
IoT device adoption is growing at staggering rates, and with it comes opportunity for developers to meet consumer demand for an ever more connected world. Wireless communication is the key part of the encompassing components of any IoT device. Wireless connectivity enhances the device utility at the expense of ease of use and deployment challenges. Since connectivity is fundamental for IoT device development, engineers must understand how to overcome the hurdles inherent in incorporating multipl...
Apr. 29, 2016 02:30 PM EDT Reads: 1,395
We’ve worked with dozens of early adopters across numerous industries and will debunk common misperceptions, which starts with understanding that many of the connected products we’ll use over the next 5 years are already products, they’re just not yet connected. With an IoT product, time-in-market provides much more essential feedback than ever before. Innovation comes from what you do with the data that the connected product provides in order to enhance the customer experience and optimize busi...
Apr. 29, 2016 02:00 PM EDT Reads: 823
The IETF draft standard for M2M certificates is a security solution specifically designed for the demanding needs of IoT/M2M applications.
In his session at @ThingsExpo, Brian Romansky, VP of Strategic Technology at TrustPoint Innovation, will explain how M2M certificates can efficiently enable confidentiality, integrity, and authenticity on highly constrained devices.
Apr. 29, 2016 02:00 PM EDT Reads: 969
The paradigm has shifted. A Gartner survey shows that 43% of organizations are using or plan to implement the Internet of Things in 2016. However, not just a handful of companies are still using the old-style ad-hoc trial-and-error ways, unaware of the critical barriers, paint points, traps, and hidden roadblocks. How can you become a winner?
In his session at @ThingsExpo, Tony Shan will present a methodical approach to guide the holistic adoption and enablement of IoT implementations. This ov...
Apr. 29, 2016 02:00 PM EDT Reads: 1,530
In his session at 18th Cloud Expo, Sagi Brody, Chief Technology Officer at Webair Internet Development Inc., will focus on real world deployments of DDoS mitigation strategies in every layer of the network. He will give an overview of methods to prevent these attacks and best practices on how to provide protection in complex cloud platforms. He will also outline what we have found in our experience managing and running thousands of Linux and Unix managed service platforms and what specifically c...
Apr. 29, 2016 01:45 PM EDT Reads: 1,062