CHICAGO, March 15, 2012 /PRNewswire/ -- Recent
economic and real estate factors indicate that most of the Sunbelt
geographies have already hit their cyclical lows and during the
next six to 12 months are likely to surpass national growth rates,
according to a special office report issued by Jones Lang
LaSalle.
(Photo:
http://photos.prnewswire.com/prnh/20120315/CL71061 )
Although nearly all areas of the U.S. were negatively impacted
by the recession, some of the hardest hit were the Sunbelt markets
of Fort Lauderdale, Jacksonville, Las
Vegas, Los Angeles,
Miami, Orange County, Orlando, Phoenix, San
Diego, Tampa and
West Palm Beach.
"The Sunbelt markets witnessed substantial drops in their
overall economies in 2007-2009 with relatively no recovery in
2010-2011. However, despite ongoing negative perceptions, most of
these markets are undergoing a resurgence and poised for dramatic
changes in 2012 and beyond," said John Sikaitis, Senior Vice
President of Research at Jones Lang LaSalle. "These economic
upswings bring much optimism for future office and employment
levels, as well as investor interest for the capital markets."
Sunbelt office recovery indicates future gains to
surpass national levels
Currently nearly all Sunbelt markets posted substantial
upticks in occupancy, experienced declines in vacancy and moved
closer to seeing office rents and concession levels hit bottom. In
2011, occupancy gains in these beaten-down housing economies
totaled nearly 6.0 million square feet and provided evidence that,
as we move forward in 2012, most of these geographies will start to
outpace the national recovery. This resurgence is due to
strengthening employment, migration and housing market shifts with
absorption rates in the 1.5 percent to 2.0 percent range across
most the Sunbelt geographies.
Sunbelt-wide employment gains outperforming national averages
of late and picking up speed month by month
Markets such as Jacksonville, Miami, Orange
County, San Diego,
Tampa and West Palm Beach have surpassed the national
average in total non-farm, private and professional and business
services (PBS) job growth. Floridian markets have dominated the
jobs recovery of late: Jacksonville's 5.9 percent annual increase in
PBS jobs is among the largest in the nation, while Tampa's 2.5+ percent annual growth in all
measures shows signs of revival and diversification. Miami also surpasses both national
expectations, increasing at around 1.9 percent overall
annually.
Sunbelt migration trends starting to turn positive
In terms of domestic migration, the majority of Sunbelt
cities display a common pattern: a net loss of residents in 2007,
shifting to an inflow of residents in 2008 or 2009 and then stable,
yet increasing, population growth in 2010 and through 2011. Nearly
75 percent of the Sunbelt markets are now, once again, showing
significant positive migration with Florida reporting the largest increase of at
least 20 percent. As the hub to Latin
America, Miami and
Fort Lauderdale are leading the
charge due to strong immigration trends from Latin America that drive population, business
and economic growth.
Sunbelt's housing crunch on the verge of stabilizing
Since their pre-recession peaks, housing markets within the
Sunbelt have experienced drastic reductions in price and sale
volume, far greater than any other region of the United States. In most cases, these
housing markets have yet to begin recovery. However, as a
result of positive office demand growth, employment and migration
indicators, there is a strong chance that most of these geographies
are hitting their market low and will soon begin to recover, if
this has not begun already. Since employment and other indicators
point to recovery while housing prices are only beginning to
stabilize or in some cases are still decreasing, continued
economic, employment and office sector growth will lead to gradual,
but steady, gains in the housing sector moving forward.
2007 levels far off but future gains are on the horizon
Vital to the continued improvement of most Sunbelt
geographies in 2012 will be consistent gains in employment across
multiple sectors with emphasis on diversifying economies. Since job
performance has remained either constant or accelerating in these
metropolitan areas not only among themselves, but also outpacing
national results, it is probable that most Sunbelt markets will
recover faster than the U.S. as a whole in 2012 and 2013.
They will see rebounds in their housing markets as well, driving
even further office demand from the housing-sectors (i.e.
homebuilding, mortgage companies, etc.)
Sikaitis added, "Whereas migratory patterns drove the Sunbelt to
unprecedented growth in the pre-recession years, those patterns
will now be reflective of recent strong office recovery in these
markets, being more economically sustainable and diverse than
before with the potential to surpass the rest of the country. Even
with these positive shifts, most of these geographies are two to
three years away from returning to pre-2007 levels; so, while we
are upbeat about the recovery for these markets, we remain
realistic and guarded in the fact that we are not yet back to 2006
territory and likely will not be until the 2014-2015
timeframe."
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About Jones Lang LaSalle
Jones Lang LaSalle (NYSE: JLL) is a financial and
professional services firm specializing in real estate. The firm
offers integrated services delivered by expert teams worldwide to
clients seeking increased value by owning, occupying or investing
in real estate. With 2011 global revenue of $3.6 billion, Jones Lang LaSalle serves clients
in 70 countries from more than 1,000 locations worldwide, including
200 corporate offices. The firm is an industry leader in
property and corporate facility management services, with a
portfolio of approximately 2.1 billion square feet worldwide.
LaSalle Investment Management, the company's investment management
business, is one of the world's largest and most diverse in real
estate with $47.7 billion of assets
under management. For further information, please visit our
website, www.joneslanglasalle.com.
SOURCE Jones Lang LaSalle