N.Y. real estate firm soon to be downtown L.A.’s biggest landlord

by KW Calabasas on General May 17th has no comments yet!

la-prominent-los-angeles-office-landlord-mpg-t-001One of the biggest players in Manhattan real estate is about to become the largest landlord in downtown Los Angeles, controlling five of the 10 tallest skyscrapers in the city.

In a blockbuster deal, Brookfield Office Properties Inc. is paying about $430 million for some of the most prominent buildings on the city skyline, including Gas Company Tower and Wells Fargo Tower.

The pending deal marks the end of one of Los Angeles’ most celebrated office developers, MPG Office Trust, the financially struggling firm that just last month agreed to sell U.S. Bank Tower, the tallest building in the West, to foreign investors.

Founded by Robert F. Maguire in the 1960s, MPG was the best-known builder of top-flight office space in Southern California during the construction boom of the 1980s and 1990s. Maguire left the company once known as Maguire Thomas Properties in 2008.

With MPG’s departure, Brookfield will become the dominant operator of prime office space in the city’s financial core and play a major role in setting rents in downtown Los Angeles.

Five tallest buildings in Los Angeles

Under terms of the deal that would still have to be approved by shareholders, holders of MPG’s common shares will receive $3.15 per share in cash at the closing of the merger. The per share price represents a 21% premium to MPG’s closing share price of $2.60 on Thursday.

A subsidiary of Brookfield offered to buy MPG’s outstanding preferred shares for $25 per share in cash. The company also has about $2 billion in debt that Brookfield’s newly formed subsidiary would assume.

“Following a lengthy and exhaustive search, we have found a strategic buyer who has the capital and the market presence to appreciate the potential long-term value of our assets,” said David Weinstein, chief executive of MPG.

The merger is expected to close in the third quarter of this year.

Los Angeles Times
By Roger Vincent

U.S. Commercial Real Estate Market Posts Record Gain

by KW Calabasas on General February 19th has no comments yet!

GLOBE NEWSWIRE — This month’s CoStar Commercial Repeat Sale Indices (CCRSI) provide the market’s first look at December 2012 commercial real estate pricing. Based on 1,593 repeat sales in December 2012 and more than 100,000 repeat sales since 1996, the CCRSI offers the broadest measure of commercial real estate repeat sales activity.

December 2012 CCRSI National Results Highlights

• COMMERCIAL REAL ESTATE SALES VOLUME SURGED IN 2012: While rising steadily over the last four years, sales volume reached nearly $64 billion in 2012, a 22% increase from 2011 and the highest annual total since 2004. Activity spiked significantly in December as investors rushed to close deals prior to year-end. In fact, at 1,593, the number of repeat sales in December reached an all-time high since CoStar started tracking the property sales used in the CCRSI. Both the investment grade and general commercial segments were heavily traded as improving market fundamentals and attractive yields relative to other asset classes drove strong investor interest in commercial real estate.

• VALUE-WEIGHTED INDEX PRICING EXPECTED TO MODERATE: Pricing gains in the value-weighted U.S. Composite Index began earlier in the recovery and have been consistently stronger than pricing gains in its equal-weighted counterpart throughout much of the recovery. This reflects the more rapid recovery at the high end of the market for larger, more expensive properties. It also mirrors the trend in the recent recovery of market fundamentals for commercial property, in which demand for Four-Star and Five-Star office buildings, luxury apartments and modern big-box warehouses has outpaced the broader market. However, pricing trends suggest this may be shifting.

• RECOVERY BROADENS TO LOWER END OF THE PRICING MARKET: Despite the recent dominance of larger, more-expensive properties in pricing gains, momentum appears to be shifting to the broader market dominated by smaller, less-expensive properties. This shift is apparent in the value-weighted U.S. Composite Index, which posted a 4.3% year-over-year gain in December 2012, slowing from its double-digit growth rate throughout 2011. At the same time, year-over-year growth in the equal-weighted U.S. Composite Index accelerated in the second half of 2012 and registered 8.1% for the year. Taken together, the two trends signify that investors are moving beyond core properties and driving up pricing at the lower end of the market.

• NEW MULTIFAMILY CONSTRUCTION RESPONDING TO PRICING GAINS: The multifamily property type index advanced by 11.2% in 2012, well ahead of the other major property types. Within the sector, pricing for the ten markets in the prime multifamily index has regained pre-recession peak levels, reflecting the strong investor interest in the segment of the market that has led the overall recovery in commercial real estate pricing. However, construction is now picking up steam in response to the rapid surge in prices. Twice as many multifamily units delivered in 2012 as in 2011 and construction in 2013 is on pace to rise even further. Meanwhile, modest levels of construction in the other property types indicate that further pricing gains are needed before supply ramps up significantly for property types other than multifamily properties and core markets.

• DISTRESS LEVELS DECLINING: Distressed sales made up only 11.5% of observed trades in December 2012, the lowest level witnessed since the end of 2008. This reduction in distressed deal volume has been driving higher, more consistent pricing.

Several charts accompanying this releas

USC study says Commercial real estate market is improving

by KW Calabasas on General January 3rd has no comments yet!

The office and industrial real estate sectors continue to improve for Southern California landlords, a report said, but high office vacancy will remain common for the foreseeable future as businesses put more workers into less space.
The regional economy has strengthened the past year and enabled some businesses to hire more workers, according to USC’s annual Casden office and industrial property forecast.
That has resulted in higher occupancy and rising rent for industrial buildings, while office landlords are seeing rising occupancy and smaller declines in the amount of rent they can charge.
“We predict office market rents to stabilize in as little as six months, but a sustained recovery could be many years off,” said Casden report author Tracey Seslen.
Office occupancy probably won’t return to pre-financial crisis levels until some of the region’s office buildings are taken out of commission or converted to other uses.
“A paradigm shift in the way tenant firms use office space will force landlords and developers to rethink their investment strategies even as the economy improves,” she said.

LA Times – Roger Vincent

Bold Vision for Downtown Los Angeles

by KW Calabasas on General December 6th has no comments yet!

LOS ANGELES — For more than a decade, civic leaders and developers here have envisioned a large-scale redevelopment of downtown Los Angeles’s main civic and cultural thoroughfare, Grand Avenue. This past summer, the first — and smallest — component of this vision finally opened to the public. But instead of a massive mixed-use edifice that would completely change the streetscape, it was a modest 12-acre space named Grand Park, which replaced an existing but unwelcoming civic center plaza.

The park was paid for by $50 million from Related Companies, the developer planning the nearby building projects.

Community leaders, real estate magnates and urban planners hope the Grand Avenue Development Project, which would add several million square feet of commercial and cultural space, will provide a center of gravity and excitement to an area of the city that has lacked both.

For now, Related’s plans for a mixed-use building modeled loosely on its Time Warner Center in New York, which houses a hotel, retail stores, offices, condominiums and a major jazz stage, have been delayed. But a $130 million modern art museum, housing the collection of and paid for by the philanthropist Eli Broad and designed by Diller Scofidio + Renfro, was under construction and planned for completion by early 2014. Related also recently broke ground on a 24-story, 271-unit luxury rental building adjacent to the Broad museum, with 20 percent of the units designated as affordable housing.

The park was supposed to be part of a later phase of development, said Bill Witte, president and chief executive of Related California. But that changed when the recession struck, undermining the condo sales market that was a bedrock of Related’s vision.

As a result, the fate of the mixed-use linchpin of the broad scheme is uncertain. Related has until February 2013 to come up with financing, which will almost certainly be prohibitively costly in the current market.

Related won the right to build the project in 2004. In theory, though, it could lose that right, and a new selection process could be started.

Gloria Molina, a Los Angeles County supervisor who is widely credited with pushing for redevelopment of the old civic center mall and for getting Related to pay for it, was doubtful that Related can move forward as planned. “I don’t see the economy shaping up that quickly,” she said.

Ms. Molina was, perhaps, looking for Related to alter its proposal.

“I’m hoping they will have something more realistic and attainable,” she said. “I’m not sure the original vision will be sustainable.”

Mr. Witte said that Related had applied for an extension on its February deadline from the city and county’s joint powers authority, but declined to comment other than to say “we are very committed to getting this done.”

Despite clusters of skyscrapers and civic buildings that house some half-million workers in downtown Los Angeles, the area contained fewer than 20,000 residents in the late 1990s, according to the Downtown Los Angeles Center Business Improvement District. New or renovated apartment buildings began to open early in the new decade, and today’s population is just under 50,000. Downtown also has the Staples Center, which anchors the LA Live entertainment district.

The proposed Related project is meant to dovetail with the Frank Gehry-designed Disney Concert Hall, which opened in 2003 at the summit of Grand Avenue. Farther down the avenue, the Music Center also welcomed the idea of an expanded consumer base.

At present, the park stands alone. It was designed by the Los Angeles-based landscape architects Rios Clementi Hale Studios, a firm that had already directed an expansion and renovation of the sidewalks and walkways that are part of the Music Center complex.
The Music Center has a pivotal role in the future of the park: event programming. Thor Steingraber, vice president for programming at the center, said he loved the flexibility afforded by the park for things like impromptu concerts. “You can have a family event at 11 a.m. and a serious concert at 7 p.m.,” he said.

To underscore the park’s special characteristics, the inaugural event featured Bandaloop, a professed vertical dance company of aerialists, performing against the backdrop of Los Angeles City Hall. The event drew 5,000 spectators, said Mr. Steingraber.

As most audiences are expected to do, this one gathered on the “Event Lawn,” one of several programmable spaces in the park, which drops about 90 feet in grade from its highest point along Grand Avenue to its lowest, three blocks away at Spring Street. Other spaces include a Performance Lawn, a Community Terrace and a Flag Garden.

Tony Paradowski, a designer on the project at Rios Clementi Hale Studios, said that the landscape had been divided into “24 floristic gardens” containing plants from around the globe, “based loosely on where Los Angeles’ population has come from,” he said. That intermingling was meant to embody the park’s role as a mixing point for downtown’s residents, workers and tourists. Much of the park’s design was generated through a series of community meetings, said Mr. Paradowski.

“They were some pretty simple things — a place to read a book, some shade, open space, get some food,” he said.

While there is a small dog run — requested by community members — there is no playground.

Ms. Molina said: “No, we don’t have monkey bars. It’s not that kind of a facility. The whole place is a playground.”

She said she saw significant possibilities for expansion, however.

The multiple entities behind the park — city, county, Music Center — have applied for an additional $11 million in grant financing. In addition, the county was negotiating to buy a state-owned land parcel adjacent to the park.

For the future, Ms. Molina has her eye on two hulking civic buildings also adjacent to the park that she says are “old and antiquated and need to be torn down. They are compromised in many ways and not useful in any way.”

Long-awaited $325-million condo tower opens near Beverly Hills

by KW Calabasas on General October 30th has no comments yet!

A long-awaited luxury condominium tower developed by giant United Arab Emirates real estate company Emaar Properties has opened near the Los Angeles Country Club.

Emaar Properties bought the 22-story Beverly West tower at Wilshire Boulevard and Comstock Avenue for $65 million in 2007 while it was under construction by a previous developer. The housing market crashed soon afterward in the economic downturn.

Mohamed Alabbar, chairman of Emaar, kept the property off the market until earlier this year, said Dario De Luca, president of the company’s Los Angeles operations. One of the Beverly West’s 35 units was sold in March for $5 million.

Prices for the remaining units range from $1.5 million to $22.4 million.

The building at 1200 Club View Drive was designed by Los Angeles architect Richard Keating, whose projects include the Gas Company Tower office building in downtown Los Angeles and numerous residential high-rises.

The Beverly West is intended to have a “timeless” look, Keating said.

“Our city is one of many images, architectural styles and periods, so it has been our desire to seek an architecture that remains quiet from a standpoint of form, and achieves its visual richness through detailing, materials and the play of light across the texture of the building,” he said.

Beverly West cost more than $325 million to build, Emaar Properties said. The company also developed the world’s tallest building, the 160-story Burj Khalifa in Dubai.

There is a small but potent demand for ultra-luxury condos in the region, said Stuart Gabriel, director of the Ziman Center for Real Estate at UCLA. Prospective owners are wealthy enough not to feel buffeted by the economy and often own multiple homes.

“Like New York, like Tokyo, like London, like Paris, Los Angeles is an international superstar city,” he said. “There will be a demand among buyers that come from all over the world for a very high-end project.”

Beverly Hills office building, fully leased, sells for $80 million

by KW Calabasas on General October 24th has no comments yet!

A Beverly Hills office building popular with entertainment industry tenants has sold for $80 million to New York real estate investment manager Clarion Partners. The property at 100 N. Crescent Drive is home to record industry giant Concord Music Group, movie maker Village Roadshow Pictures and RealD Inc., the world’s leading supplier of 3-D technology to cinemas.

The 120,000-square-foot, four-story building at the intersection of Crescent and Wilshire Boulevard is one of the first fully occupied offices to be sold in Beverly Hills since the economic downturn. Most other large office sales in recent years then have involved troubled or vacant properties, said real estate broker Drew Hild of Highmark Advisors Inc.

“There is no play here — this is not a flip,” said Hild, who helped broker the deal. “This is the first trade of a fully occupied building since the recession.”

The seller of the building was Clarity Partners, a private equity firm based in the building. Clarity bought the property in 2000 for about $37 million.

Report predicts more recovery for commercial real estate, though Cleveland still lags other major cities

by KW Calabasas on General October 17th has no comments yet!

CLEVELAND, Ohio — The commercial real estate business will continue its modest recovery in 2013, with apartments leading the way.

That’s the conclusion of a sweeping industry forecast released today by researchers at the nonprofit Urban Land Institute and PricewaterhouseCoopers, one of the Big Four audit firms.

The annual report, based on surveys with more than 900 real estate professionals, shows tempered enthusiasm about commercial real estate, and glimmers of hope for the long-troubled housing market.

“What these findings suggest is that, in general, the industry is moving forward bit by bit,” Stephen Blank, the Urban Land Institute’s senior resident fellow for real estate finance, said in a written statement. “Nothing indicates a quick turnaround for commercial real estate, but it is improving. Those who are patient and willing to rethink their expectations and adapt to market realities are expected to come out ahead this year.”

Among 51 markets evaluated in the survey, Cleveland continues to rank near the bottom. Only Sacramento, Calif.; Las Vegas; and Detroit fared worse, based on respondents’ views of prospects for investment, development and home construction.

But researchers expect more activity in secondary and tertiary cities — the category where Cleveland falls — as competition and real estate prices rise in the most bustling, coastal markets.

San Francisco topped the list of cities, followed by New York; Washington, D.C.; Boston; Seattle; and a handful of cities in California and Texas. Survey participants classified real estate opportunities as “generally poor” in many Midwestern markets.

Apartments remain the industry darling, buoyed by the the housing crisis, young renters, aging Baby Boomers and population shifts into more urban areas. Industrial properties followed, trailed by hotels, then offices, then retail.

On the residential side, investors and developers showed the most interest in urban properties, affordable housing and homes for students and the elderly. The outlook for condominiums, second homes and golf-course communities is poor.

With a better outlook for 2013, investors should put a “substantial” amount of money into commercial real estate, said Mitch Roschelle, a partner and U.S. real estate advisory practice leader at PwC.

“As yield in bonds and other financial instruments tighten in a still volatile market,” he said in a written statement, “commercial real estate’s income producing and total return attributes offer investors potentially attractive risk-adjusted returns.”

Land transformation about to occur in real estate

by KW Calabasas on General October 4th has no comments yet!

As California’s residential real estate industry leaders heard predictions for 1.3 percent growth in 2013 in Anaheim yesterday, a panel of commercial developers who gathered in Ontario told the local chapter of the Urban Land Institute that blueprints are being unfurled for major new home projects.
And predictions are the gains in e-commerce and multi-modal shipping from the ports of Long Beach and Los Angeles will boost development of mega-size logistics buildings in the Inland area.

John Shumway, of the Concord Group, said small incremental steps are being taken at this time to lay the foundation for a significant growth spurt in 2014 and 2015.
“The market has shifted,” said Iddo Benzeevi, president and chief executive of Highland Fairview Properties in Moreno Valley Valley. “With retailers getting larger, companies like Walmart doing more than $1 billion in sales a day, demand for large-scale buildings will be strong. You will see rents go up…and the strength of the logistics market should add to jobs, and multi-family housing.”
David Bartlett, vice president of land development for Brookfield Homes in Costa Mesa, and Randall Lewis, executive vice president and principal with Lewis Operating Corp. in Upland, said multi-family rental projects are coming on strong, but families haven’t abandoned the American dream to own their own home.
Lewis concurred that e-commerce is reshaping the retail landscape, and predicted that there may be a push to rezone land form retail or high-rise back to uses that bring about better housing or job-generating business and industrial parks.
“The housing market, I believe, whether its in 2014 or 2015 will boom again,” Lewis said. “Property prices will go up, and people who’ve been holding onto land will say, now’s the time” to build homes again.
Bartlett said Brookfield is already prepping for tomorrow.
“We’re selling lots to builders: The tide is rising here. There are certain pockets where we still have some of those inherent problems, but I think the fundamental of land are back in place…You’re going to see more developers putting money in the ground, and we’re going to start seeing home sales.”

Chunk of L.A. Skyline Could Be for Sale

by KW Calabasas on General September 19th has no comments yet!

After years of struggling with too much debt and too few tenants, the largest office landlord in downtown Los Angeles is considering selling itself to the highest bidder, according to real-estate executives with direct knowledge of the planning.
MPG Office Trust Inc., MPG 0.00% formerly known as Maguire Properties Inc., has tapped real-estate adviser Eastdil Secured to search for firms to buy the company or make a significant cash investment, those executives said. A company spokeswoman didn’t respond to requests for comment.
With the potential to pick up a large chunk of the downtown Los Angeles skyline in one fell swoop, real-estate-investment giants including Brookfield Office Properties Inc. BPO.T -1.32% and Colony Capital LLC are considering bids, as are midsize companies such as Piedmont Office Realty Trust Inc. PDM -0.22% and Thomas Properties Group Inc., TPGI -2.36% the executives said.
Still, a sale isn’t certain. MPG has previously sought so-called strategic alternatives without striking any deals. But if the company is sold, the move could reshuffle ownership of some of the most iconic office towers in the nation’s second-largest city.
MPG owns six towers in downtown Los Angeles, including the angled brown granite KPMG and Wells Fargo towers, as well as the 73-story U.S. Bank Tower, the tallest building west of the Mississippi River.
“The timing to raise equity or sell the company is very good,” said John Guinee, an analyst at Stifel, Nicolaus & Co. Because MPG has downsized significantly from its sprawling 2007 size—it has handed numerous buildings in the suburbs as well as downtown over to lenders—that makes the remaining buildings centered in the downtown more appealing to would-be buyers, he said.
MPG’s advisers have indicated to potential buyers that they want the company to sell above the share price. That price recently has hovered around $3 a share, down from more than $44 in early 2007, with a market capitalization near $160 million. In addition, any buyer would likely have to take on the heavy debt load tied to the downtown towers, which MPG earlier this month reported was nearly $2 billion.
Real-estate executives who have considered investing in the company say they expect any buyer would have to put significant money toward leasing costs and debt reduction. They expect a total investment including the purchase price would range from $400 million and $800 million, which doesn’t include the existing debt.
During the financial crisis, MPG became a high-profile example of what can happen to real-estate companies that are closely tied to one industry and relied heavily on debt to expand. Its founder and then-chief executive, longtime Los Angeles fixture Robert Maguire, had taken the company on an ill-timed buying spree in 2007 and many of its tenants were subprime lenders and other financial firms. Mr. Maguire was ousted as CEO but still owns a stake in the company. After the values of its properties declined in 2008, the company struggled to manage its huge debt load at a time when the financial industry was sharply contracting and rents were falling.
The company announced last month that one potential roadblock to a sale had been lifted. Under a prior agreement, the company would have needed to make significant payments to Mr. Maguire if it sold certain of its marquee properties. But Mr. Maguire’s stake in MPG was reduced recently after Wells Fargo WFC -0.54% & Co. collected on a personal loan, the company reported in recent weeks, freeing MPG of those penalties starting next June.
Any sale will be viewed as a proxy for investors’ views on the future of the downtown Los Angeles office market, a poorly performing district that has struggled to find tenants for its gleaming office towers. While entertainment and technology firms like Google Inc. are growing in areas like West Los Angeles, downtown is heavy on financial-services firms and law firms, which have been contracting.
“The tenants that are in downtown L.A. are not the types of industries that L.A. does well,” said Ryan McCullough, an economist at real-estate research firm CoStar Group Inc. “So far, we’ve seen no evidence that greater downtown is able to attract different types of tenants.”
The result is a game of musical chairs, as tenants hop from one downtown building to another, often taking less space. That has led to vacancy rates in top-quality buildings downtown increasing to 14.5% in the second quarter, the highest rate since 2005, according to CoStar, even while overall Los Angeles saw its vacancy rates stay flat for the past two years around 12.5%.
Still, there are some reasons for optimism. The residential population has been on the rise lately, spurring new apartment development, and there are plans for a new football stadium, among other developments, making for a changing character that owners hope will attract new office tenants to the area.
By ELIOT BROWN – Wall Street Journal

Commercial real estate’s slowed recovery

by KW Calabasas on General September 5th has no comments yet!

Commercial real estate’s recovery

According to the National Association of Realtors’ quarterly commercial real estate forecast, continued tight lending and a slowdown in job creation has tempered growth in some areas, despite “positive underlying fundamentals” supporting the sector.
Dr. Lawrence Yun, NAR’s chief economist, said that there are mixed results among the commercial sectors. “Job creation in the second quarter was about half of what we saw in the first quarter, which is moderating demand in the office sector.”
“Industrial and warehouse space is holding on better because imports and exports have advanced,” Dr. Yun added. “While exports to Europe generally are down, trade has been robust with India, China and other Asian nations, along with Brazil, Mexico and our strongest trading partner – Canada.”
Although still positive, dampened demand is slightly moderating rent growth with the exception of the multifamily market. “Sharply higher demand for apartments is causing rents to rise at faster rates,” Yun said. “A return to normal household formation will mean even lower vacancy rates and higher rents in the future.”
What lies ahead, and avoiding the “fiscal cliff”
NAR reports that the current commercial real estate cycle has been driven by shifts in demand without an oversupply of new construction. “The difficulty small businesses have in getting commercial real estate loans for leasing or purchase is keeping a lid on demand,” Dr. Yun explained. “Multifamily is the only commercial sector with a notable growth in new space, with some lending provided through government loans.”
Vacancy rates remain above historic averages (14.4 percent for the office market, 10.1 percent in industrial, 8.1 percent for retail) seen since 1999, with the exception of multifamily, but NAR notes that these vacancy rates are slowly dropping, and rents are slowly rising in all sectors, but in an election year, the Association forecasts no dramatic changes.
The trade group reports that “Many corporate decisions on spending and job hiring are on hold given uncertainty over the upcoming elections, whether Congress will effectively avoid a ‘fiscal cliff,’ and unsettled issues such as health care and banking/financial regulations.”
“Overall companies hold plentiful cash reserves, but they are hesitant to hire without clarity over how these outstanding issues will impact the bottom line,” Dr. Yun said. “Commercial real estate gains could be thwarted if lending from small and community banks dry up from excessive regulatory compliance costs, and if international big-bank capital rules are applied to smaller lending institutions.”
Projections for all four sectors
According to NAR, multifamily is expected to see vacancy rates drop slightly from 4.3 percent in the third quarter to 4.2 percent in the third quarter of 2013, justifying rising rents. Areas with the lowest multifamily vacancy rates currently are Portland, Ore., at 2.0 percent; New York City and Minneapolis, both at 2.2 percent; and New Haven, Conn., and San Jose, Calif., both at 2.4 percent. The average apartment rent is likely to increase 4.1 percent in 2012 and another 4.4 percent next year, says the Association. Multifamily net absorption should be 219,300 units this year and 236,600 in 2013.
Office markets are expected to see vacancy rates drop from 16.1 percent in the third quarter to 15.6 percent in the third quarter of 2013. The markets with the lowest office vacancy rates presently are Washington, D.C., with a vacancy rate of 9.4 percent; New York City, at 10.0 percent; and New Orleans, 12.8 percent. Office rent is projected to increase 2.0 percent this year and 2.6 percent in 2013. Net absorption of office space in the U.S. should be 24.1 million square feet in 2012 and 47.8 million next year.
NAR forecasts that industrial vacancies will drop from 10.7 percent in the third quarter of this year to 10.5 percent in the third quarter of 2013, and rents are expected to rise 1.7 percent in 2012, and 2.4 percent in 2013. The areas with the lowest industrial vacancy rates currently are Orange County, Calif., with a vacancy rate of 4.6 percent; Los Angeles, 4.8 percent; and Miami at 6.8 percent. Net absorption of industrial space nationally is seen at 59.8 million square feet this year and 67.2 million in 2013.
Vacancy rates for retail should drop from 10.9 percent in the third quarter to 10.7 percent in the third quarter of 2013, and average rents are forecast to rise 0.8 percent in 2012 and 1.3 percent in 2013. Presently, markets with the lowest retail vacancy rates include San Francisco, 3.8 percent; Fairfield County, Conn., 3.9 percent; and Long Island, N.Y., and Orange County, Calif., both at 5.3 percent. Net absorption of retail space should be 10.3 million square feet this year and 20.1 million in 2013.

by Tara Steele – www.agbeat.com