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Office Market Report 2016 CLIENT FOCUSED. RESULTS DRIVEN. 4105 84th St, Lubbock, TX 79423 • 806.794.3300 • www.westmarkcommercial.com Office Market Report 2016 Lubbock Office Map The Lubbock office market continues to expand to the South and Southwest. Downtown remains sluggish with cautious optimism taking over leading to more and more activity. The medical district remains stable with renovated product commanding a premium. New construction in the Southwest outer region continues with smaller garden offices leading the way. The overwelming trend is for small and smaller offices as users downsize across the market. North Tech/Medical West Southwest Inner CLASS B ASSET 8.0% - 9.5% POPULATION 3 2.7% Southeast Southwest Outer CLASS C ASSET 9.0% - 11.0% 2 4 OFFICE USE EMPLOYMENT 2 EDUCATION AND HEALTH SERVICES 22,000 (+6.4%) PROFESSIONAL AND BUSINESS SERVICES 10,800 (+10.2%) FINANCIAL SERVICES 7,600 (+1.3%) INFORMATION 3,700 (0.0%) GOVERNMENT 29,400 (+2.4%) Map Table - Rents (Full Service) 1 DOWNTOWN A - $12 - 16 per s.f. B - $9 - 12 per s.f. SOUTHWEST INNER A - $16 - 24 per s.f. B - $8 - 12 per s.f. Expense Growth 5 NORTH & WEST A - $15 - 18 per s.f. B - $6 - 9 per s.f. SOUTHEAST A - $13 - 15 per s.f. B - $10 - 12 per s.f. C - $6 - 9 per s.f. TECH/MEDICAL A - $18 - 24 per s.f. B - $8 - 15 per s.f. SOUTHWEST OUTER A - $17 - 25 per s.f. B - $10 - 15 per s.f. Source: 5 - Real Estate Research Corporation, HEATH Property Advisors POPULATION 3 309,923 % GROWTH (Average Annual Growth) TOTAL EMPLOYMENT 2 3.3% RANGE 0.0 - 3.0% AVERAGE 2.4% RANGE 2.0 - 3.0% AVERAGE 2.8% CAP RATE 5 CLASS A ASSET 7.5% - 8.5% TOTAL OFFICE SQUARE FEET 11,240,000 sf Downtown Source: Perryman Group Rent Growth 5 SNAPSHOT Total Employment 2 148,980 OFFICE EMPLOYMENT 56.9% Lubbock Growth Forecast Through 2020 Real GDP3.77% Real Personal Income4.79% Real Retail Sales4.84% Housing Permits (0.95%) Employment1.97% 2016 Statistics 1 Full Service Rents - Landlord pays all expences (real estate tax, property insurance, maintenance, janitorial and utilites) 4105 84th St, Lubbock, TX 79423 • 806.794.3300 • www.westmarkcommercial.com Sources: 2 - Bureau of Labor Statistics 3 - US Census Bureau 4 - WestMark Commercial Research 5 - Real Estate Research Corporation, HEATH Property Advisors Office Market Report 2016 Office User Employment Base Office Wages by Industry Government Government Other Services Leisure and Hospitality Education & Health Services Professional & Business Services Finacial Services Other Services Education & Health Services Professional & Business Services Information Trade, Transp. & Utilities State Employment Growth 1 - AUSTIN 4.7% 2 - DALLAS 4.5% 3 - LUBBOCK 3.3% 4 - EL PASO 3.2% 5 - SAN ANTONIO 2.9% 6 - AMARILLO 1.6% 7 - ABILENE 1.0% 8 - FORT WORTH 0.9% 9 - SAN ANGELO 0.8% 10 - HOUSTON 0.6% 11 - WICHITA FALLS 0.3% 12 - MIDLAND - 6.2% 13 - ODESSA - 8.3% 2 Financial Services Manufacturing Construction & Mining 0.0% Information 5.0% 10.0% 15.0% 20.0% 25.0% $ $50 $100 $150 $200 Source: Bureau of Labor Statistics $250 $300 $350 $400 Source: Bureau of Labor Statistics Rent Range Lubbock Metropolitan Population 320,000 Downtown 310,000 300,000 North & West A B 290,000 Tech/Medical 280,000 270,000 260,000 Southwest Inner 250,000 Southeast A B A B Southwest Outer 230,000 A B C 240,000 A B A B 220,000 2000 2005 2010 2015 Source: U.S. Census Bureau 4105 84th St, Lubbock, TX 79423 • 806.794.3300 • www.westmarkcommercial.com 0 5 10 15 20 25 30 Source: WestMark Commercial Research Office Market Report 2016 Percent Change in Real GDP by Metro-Area Southwest Region Lubbock economic growth continues to outpace the rest of the state and region with Real GDP growth at top levels. 2016 Regional Populations Lubbock is the largest metropolitan area within West Texas and is the center of economic activity for a population of roughly 700,000. Wichita Falls United States = 2.3 Southwest = 4.3 Percent 5.7 to 24.1 2.5 to 5.7 1.4 to 2.5 0.3 to 1.4 -2.8 to 0.3 Nonmetropolitan areas States outside region Source: US Census Bureau U.S. Bureau of Economic Analysis LUBBOCK - LEVELLAND Trade Area - 690,722 CSA - 336,134 ABILENE Trade Area - 334,921 CSA - 171,627 MIDLAND - ODESSA Trade Area - 496,040 CSA - 327,171 SAN ANGELO Trade Area - 160,427 CSA - 120,191 AMARILLO - BORGER Trade Area - 534,828 CSA - 287,572 WICHITA FALLS Trade Area - 287,114 CSA - 154,263 CSA - The combined statistical area of the U.S. Census Bureau consists of an adjacent metropolitan and a Micropolitan Stabilized Area (MSA) that demonstrate economic and social interaction and linkage. 4105 84th St, Lubbock, TX 79423 • 806.794.3300 • www.westmarkcommercial.com CLIENT FOCUSED. RESULTS DRIVEN. 2016 WestMark Commercial provides investors and owners with local market knowledge, property-specific and tailored marketing plans to help them achieve thier investment goals. Main Office: 4105 84th St. Lubbock, TX 79423 806.794.3300 WestMark Commercial 2016 www.westmarkcommercial.com Price: $150 The information contained in this report was obtained from sources deemed to be reliable. Every effort was made to obtain accurate and complete information; however, no representation, warranty or guarantee, express or implied, may be made as to the accuracy or reliability of the information contained herein.