2007 Commercial Real Estate Report

Values
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Cedar Rapids | Iowa City / Coralville | Cedar Falls / Waterloo
Trends
2007 Commercial Real Estate Report
Opportunities
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Cedar Rapids
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Marion
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Hiawatha
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Statewide
Ninth Annual Commercial
Real Estate Report
NAI Iowa Realty Commercial is excited to present
our Ninth Annual Commercial Real Estate Report. This
report is an in-depth analysis of commercial real estate in
the Greater Cedar Rapids area. Surveys are distributed
annually for office, warehouse, retail and investment
properties. We gathered facts and figures on over 1,600
properties; our most comprehensive survey to date.
We then applied our own analysis to the data to more
accurately determine the area’s activity and better predict
future trends.
Data is an essential component of any facilities or
investment decision. At NAI Iowa Realty Commercial, we
believe that a comprehensive analysis is an important
aspect of advising our clients so they are able to make
wise, profitable choices.
Once again, we would like to extend a special thank
you to everyone who responded to our requests for
information this year. Our report would not be possible
without your contributions. Finally, thank you to Tim
Hackbarth, our summer intern and a marketing major at
Iowa State University.
Values
NAI Iowa Realty
Commercial
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• Site Selection
• Buyer, Seller, Landlord and Tenant Representation
• Land Development: Retail Centers, Industrial/Warehouse
and Office Property
Cedar Rapids
• Property and Lease Management
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• Project Management
Opportunities
Locally, our associates have over 350 combined years of
experience in:
NAI Iowa Realty Commercial has office locations
throughout the state of Iowa (Cedar Rapids, Waterloo,
Iowa City and Des Moines). Widely acknowledged as
the leader in Iowa commercial real state, our branches
are able to service Cedar Rapids, Marion, Hiawatha,
Waterloo/Cedar Falls, Iowa City/Coralville, North Liberty,
Muscatine, Dubuque, the Quad Cities and all surrounding
communities. In conjunction with a sister office in West
Des Moines, we also provide extensive coverage in central
Iowa.
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Our team features specialists in nearly every aspect
of commercial real estate, and we hold individual
accreditations with CCIM, SIOR, MCR, ALC and GRI. Our
affiliation with NAI gives us access to markets across the
world. With over 3,700 brokers in 270 offices worldwide, we
have vast resources at our fingertips; a global perspective
combined with local expertise.
We are Iowa’s largest and most experienced commercial
real estate company. Recently we were cited as the 46th
highest volume producing commercial real estate company
in the Midwest, and the only firm in the state that made the
list. From local investor to corporate America, we have the
market information, contacts, experience and insight to
meet diverse needs.
Trends
NAI Iowa Realty Commercial
• Mergers, Acquisitions and Divestitures
• Business Brokerage
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Cedar Rapids
Marion
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Bob Holland, CCIM,
Scott Byers, CCIM,
SIOR
SIOR
Darin Garman
Don Pfeiler, SIOR
Dave Drown, CCIM,
SIOR
Jason Rogers
Hiawatha
Kirk Hiland
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Joanne Stevens, CCIM Josh Seamans Larry D. Sharp, SIOR Tiffany Earl, Esq.
Iowa City / Coralville
Randy Miller
Peggy Slaughter
Todd Barker, MBA
Van Miller
Cedar Falls / Waterloo
Fred Miehe, CCIM
Mitzi Rekward
Matt Miehe
The information contained in this report is believed to be reliable, but not guaranteed. Reproduction of this publication, in whole or in part, is prohibited without permission of NAI Iowa Realty Commercial.
Statewide
Jim Lamb
Investment
Investment Recap
Investment Forecast
Despite a slight rise in the interest rates, Capitalization rates on
properties remained at low levels, due at least in part by intense
competition for quality real estate investments from the ever
growing pool of equity and investors.
That being said, investment property in the metro area
continues to be a good, steady investment. First and second
generation sales of investment property have shown good
rates of return for the seller over their hold period. Stabilized
properties offer solid returns to
the investor willing to be diligent in
the management and leasing. An
aggressive stance on property taxes
is absolutely vital for the investor to
maintain. Every upward movement
in taxes is potential erosion in rental
rates both now and for future leasing.
Investors can look toward capitalization
rates on properties between 7 and 9
percent, dependent on style, quality of
leases and tenants and size of project.
Each investment stands on its own, as
these rates have been as low as 6.25%
on major projects.
The metro area is now experiencing
strong interest and demand from
investors outside of Iowa that have
come to see the solid, relatively high
return (compared to their areas) of
local investment real estate. “Outside”
investors have made substantial
investments in office properties,
apartments and warehouses. Iowa’s
steady, solid economy, which has
not experienced super highs and
bubble bursts, has attracted Investors
from “Tenants in Common” or TIC
purchasers, as well as individuals and
investor groups with large 1031 Tax
Deferred money to place. Apparently the word is out that Iowa
has good, stabilized investments that fit well into the niche for
the long term investor.
Several recent sales also reflect the “new” concept that a longterm lease is no longer ten years, but more in the five to seven
year range. Investors are betting on lease extensions at new,
favorable rates and/or the growth of the market, enhancing
the value of the property in the relatively short term. Time will
tell on this, but these shorter lease lengths have not proved an
impediment to the sale of property, but rather, if anything, they
are reflected in a slight up tick in the capitalization rate.
Reminders:
• Be proactive on controlling property taxes.
• Be competitive in the market place to attain and retain
tenants.
• What’s in the future for Capital Gains rates?
• Cash flow is key, vacant space equals dollars never
recovered.
Boyson Square
2
Office
Central Business District Office Recap
The last 18 months witnessed both failure and success for
additional financial support within the downtown district.
Spring of 2007 brought Governor Culver’s veto of much of the
Vision Iowa funding approved by the legislature, particularly
grants available through Iowa’s Community Attraction and
Tourism Program. Meanwhile, the city has continued its focus
on a community planning initiative, with 15 various projects
scheduled for completion within five years, many focused on
downtown Cedar Rapids. The report card at the midway point
of “Fifteen in Five” can only be described as disappointing;
most of the projects were either too ambitious or too costly to
be realized within a five year time frame.
Success was celebrated when the 20 year SSMID (SelfSupporting Municipal Improvement District) tax was passed for
renewal, accompanied by a measure to expand the district to
include properties on the west side of the Cedar River. While
the district expansion was met with a less than enthusiastic
response from some property owners, it is indeed a very
positive sign for the future of the downtown district. Past funds
have been used for downtown beautification and improvements
to infrastructure. With most of this work complete, future funds
will be dedicated to continued economic development in the
area, which will be spearheaded by newly hired Downtown
District CEO/President Doug Neumann.
On the brick and mortar front, mid-2007 marked the completion
of a $4 million project led by developer Steve Emerson
to renovate the old Paramount Building into office suites,
some of which are being offered to the market as full-floor
condominiums. Not only is the building more practical, but the
renovation made the building more visually pleasing by adding
an improved brick exterior and a new atrium. The project was
met with high demand, and has become a model for creative
downtown re-purposing of which other developers and
property owners should
take note.
Construction is set
to commence for the
Intermodal Transportation
Facility in the downtown
area. The project, which
will include enough
Paramount Building
parking for 600 cars
as well as two floors of
office space, is tentatively expected to be completed in 2008,
though there has been recent discussion about some redesign possibilities which would allow the current bus staging
facility in the former APAC building to be relocated in or near
the Intermodal; a notion that is unanimously endorsed by the
development community. Regardless of the outcome of the
debate about relocating the bus operations, the new Intermodal
Transportation Facility will accommodate the increasing
demand for more parking spaces downtown and will also
include facilities such as a day care center and offices for the
city’s transit department.
An important benchmark was realized in 2006 as vacancy rates
in the CBD (Central Business District) saw a significant decline,
3
falling three percent from 2005 totals to 16 percent. Attributable
in large measure to organic growth in existing downtown
businesses, there were nevertheless some companies new to
the CBD that absorbed significant amounts of vacant space.
For example, Iowa Northern Railroad took a full floor of the
aforementioned Paramount Building; I’m On Communications
absorbed nearly 10,000 square feet of the Great America
Building. Examples of expanding businesses that enlarged
their footprint include RSM McGladrey who renewed and grew
their presence in the Towne Centre, and Dain Bosworth - also
a Towne Centre tenant who grew from 8,000 square feet to
13,500 square feet and will occupy the entire fifth floor. This is
testament to the work of those involved in CBD development
and realizes predictions made for several years that the CBD
was ready for a turnaround.
CBD Forecast
Major metropolitan markets continue to see vacancy rates
down and rent rates up, while mid-sized cities and Midwestern
CBD’s such as the Cedar Rapids downtown area seem to
have plateaued with vacancy rates between 15 to 20 percent
and slower rental rate growth. The balance of 2007 should see
slight increases or at least stabilization of rental rates locally
as property owners look to capitalize on lower vacancy. Office
space vacancies nationwide will be at their lowest rates in five
years and the Cedar Rapids Business District should see level
vacancy rates through the next year.
Creativity will be key while developing and renovating
buildings in the downtown area. By turning office buildings
and warehouse space into condominiums and other mixeduse spaces, the downtown area will become more attractive to
potential residents. Reasonable prices on real estate in the CBD
will also drive demand for apartments and urban dwellings.
A greater residential presence will fuel growth for the existing
retail and the new influx of bars and nightclubs. Projects such
as the Smulekoff’s warehouse conversion to condominiums,
the renovated Palmer building and the Paramount building are
examples of this trend.
If re-purposing continues to find other uses for downtown
facilities, office vacancies will trend downward and rates will
begin to climb back to previous highs. Cedar Rapids can take
a cue from the success of Des Moines’ downtown area, where
East Village growth has made Iowa’s capital one of the hottest
Midwestern cities for young professionals.
Significant Events CBD
• Four floors of the APAC building were sold and leased back
to APAC, keeping occupancy rates high and allowing APAC to
free up nearly $2 million in capital.
• RSM McGladrey renewed its lease in Towne Centre, adding
4,400 square feet of space to their existing 24,000 square foot
office.
• Verizon Wireless sold its 63,000 square foot building on the
corner of 3rd Street and 4th Avenue.
100,000 square feet; in sum, nearly one-quarter million square
feet absorbed by a single user – the formidable Rockwell
Collins.
St. Luke’s and Mercy continue to expand their facilities in the
area as well. Mercy Medical Center announced the Dennis and
Donna Oldorf Hospice House of Mercy facility, as well as a
new Family Practice Clinic in North Liberty. St. Luke’s recently
announced an expansion to their main campus. A grant from
the Hall-Perrine foundation allowed the hospital to expand
their rehabilitative services department. In coordination with
this expansion they also are renovating the ER, pharmacy and
several other aspects.
Large mixed use space was also put on the market when
Verizon placed three former MCI buildings for sale in 2006.
• Great America expanded its presence in the Great American
Building.
• Iowa Health Systems expanded in the former SCI building.
• Rockwell Collins renewed its lease in the Palmer building to
continue to fulfill the needs created by their continued rapid
growth.
Suburban Office Recap
Nationwide, suburban office growth was less explosive than
CBD growth in 2006. Locally, that trend is reversed and
suburban office led the way, as is common in most small to
mid-sized cities. Despite the improvement in CBD vacancy,
suburban office space continues to maintain lower vacancy
rates overall. The suburban office market has been mostly
devoid of speculative development, with a few exceptions
– namely The Edgewood Crossing property on Edgewood Road
and Highway 30, which is now fully leased (18,000 square feet).
Rockwell Collins has continued its tremendous growth. The
paint hardly had time to dry on a new 100,000 square foot
building on the main campus before they began looking again
for office space. They eventually settled on the former Hall
Home Furnishings 40,000 square foot property north of Collins
Road, which was re-developed by Ryan Companies US, Inc.
No sooner was that project complete, when plans were being
formalized for an additional on-campus facility in excess of
Edgewood Crossing
Totaling over 125,000 square feet, the facilities were purchased
as a block by local investor/developer Steve Dummermuth and
are currently being re-marketed “For Lease.” Not included was
the “MCI Tower” in the CBD.
Suburban Office Forecast
Investment in office space nationwide should continue to be
strong through the next year, piggybacking on strong market
fundamentals. Demand for office space should also continue
to be strong, so positive absorption will continue and vacancy
rates shouldn’t be negatively affected. Most new office
buildings will likely be developed as build-to-suit endeavors.
Locally, office space should continue to be much of the same.
Few speculative office properties will be developed, but office
rents should level off and absorption should continue to be
strong. Rockwell’s torrid growth will slow some as they fill into
the new spaces acquired or announced within the last year.
New construction will command rents in the $13.50 per square
foot range, with the tenants paying their pro-rata share of
additional costs for property taxes, maintenance and insurance,
as well as their own utility costs. Existing construction rents
will typically lag $2 to $5 below new, depending on the age,
location and condition of the property.
Significant Events Suburban Office
• Rockwell Collins completed a new 100,000 square foot facility
on the main campus.
• Verizon sold three former MCI buildings.
• Kirkwood is constructing a Continuing Education facility at
Kirkwood Boulevard and 76th Avenue.
• Hiawatha Bank & Trust opened their first Cedar Rapids office
on C Street Southwest.
office
4
Retail
Retail Recap
2006 finally brought the portended slowdown of retail across
the nation. Spending has slowed due to waning consumer
demand – dampened by a cold housing market, high gas
prices, and a conservative consumer outlook. Big box retailers
began to finally show chinks in their armor. K-Mart/Sears hasn’t
yet turned around their behemoth combination of two ailing
retailers. Even Wal-Mart saw a decrease in same-store sales in
2006. Vacancies in aging malls have led to higher retail vacancy
rates nationwide.
Locally, the story was a changing of the guard. Large retailer
K’s Merchandise sold off their inventory and closed up shop,
with local developer Hunter Companies
now in ownership. Econofoods also bid
River Market
adieu to the Cedar Rapids area with
the closing of its final local location
on Edgewood Road. Westdale has
continued on its bumpy ride, with a new
chapter written when the property was
offered up at a sheriff’s sale.
Things looked promising when General Growth Properties, the
nation’s largest mall owner/operator, had signed on to handle
management and leasing. But General Growth was dealt a
serious blow with the departure of Von Maur from the mall in
January, leaving Younkers, J.C. Penney’s and Steve & Barry’s
as anchors. The city of Cedar Rapids placed a moratorium on
the mall and surrounding properties to allow for a study to be
completed re-evaluating the potential for future development
and the adaptive reuse of existing buildings. Look for the
outcome of that study to conclude the mall is too large at its
present 850,000 square feet and it needs to be re-developed as
a mixed use retail and residential complex, featuring significant
green space and wholly re-designed pedestrian and vehicular
throughways. In the meantime, unless the city proves to be
overly restrictive in its requirements, area developers Gerry
Ambrose and Hunter Parks will begin a retail and restaurantthemed development on six acres north of the existing mall
building: a much needed tonic for this property.
Overall growth and development in the Cedar Rapids retail
market was strong in 2006. The combination lifestyle/power
center MarketPlace on 1st continued to fill out, bringing new
entities to the area including Guitar Center, Dress Barn and
Dick’s Sporting Goods. Personal care products superstore,
Ulta, is scheduled to be the next new entrant to the Cedar
Rapids market, also at Marketplace. Other new retail
developments include completion of various strip centers along
Edgewood Road and Williams Boulevard on the west side of
Cedar Rapids and the retail spots surrounding the Hy-Vee on
Edgewood Road in Northeast Cedar Rapids. Retail rents in the
Cedar Rapids area actually declined in most quadrants, albeit
only slightly, and the Southeast quadrant did see an increase
from $8.50 per square foot to $9.89 entering 2007.
This past year saw several national
restaurant franchises added to the
local menu. Starbucks decided to
enter the Cedar Rapids market in a real
way after failing to find our city in their
first 10,000 attempts. Sonic also came
to the area, as did Red Robin, Ruby
Tuesday’s, Coldstone Creamery and Jimmy John’s, among
others.
Retail Forecast
The newer entrants from Lowe’s and Hy-Vee will allow big box
expansion to finally take a break. This will give the market a
chance to catch up by finding other uses for the large buildings
left behind. In Cedar Rapids, this has already begun with the
continued expansion of the Stuff Etc. franchise in the area.
Several other buildings will require some creative thinking to
partition and reconfigure for small tenanting. The overall health
of the retail market will be dependent on the state of the local
economy - no news here - and new development will be sparse
locally. This should allow retail rents to stabilize and should lead
to positive absorption of existing space. Rents in the newer
projects that enjoy premium locations range as high as plus$20 per square foot, yet older neighborhood strip centers can
command only 35-50 percent of those amounts.
A brave retail investor may be interested in taking one last shot
at revitalizing Westdale. With great risk comes great reward; if
such a developer took lessons from the success of Old Capital
Mall in Iowa City they may very well succeed. This solution
could include leasing upper level retail spaces as affordable
office space and re-tenanting the remainder with a combination
of known national brands and local success stories. Any
prospective developer will also have to work closely with
the city of Cedar Rapids to ensure the Southwest retail area
doesn’t slide further.
Significant Events Retail
• Marketplace on 1st filled with varied national tenants.
• Allen Motors in Hiawatha sold to Oregon-based “mega
dealer.”
• Von Maur left the location in Westdale Mall it had occupied for
over 25 years.
• Lowes came to town with a location on Blairs Ferry Road.
• K’s Merchandise and Econofoods left the area.
5
Industrial
Industrial & Warehouse Recap
Industrial real estate saw solid growth in the last 12 to 16
months, with warehouse and general industrial properties being
particularly popular in tertiary markets such as Cedar Rapids.
to the Cedar Rapids market and the retention of many jobs
transferring from the Amana Division of Maytag.
Industrial & Warehouse Forecast
Just as ethanol provided the spark for industrial development
in the past year, so too will ethanol help decide the near future.
The focus will be placed on future federal investment in foreign
alternative fuel subsidies. In addition, the upcoming election
should also help shed light on the future of ethanol production.
Nationally, vacancy rates should continue to decline throughout
the industrial sector to around 9 percent. Trade will continue to
be a factor affecting the sector, as will rising prices. As real estate
prices and rent rates continue to increase in larger metropolitan
areas, businesses will be more likely to see Cedar Rapids and
other secondary markets as extremely attractive options.
Rental growth in Cedar Rapids should continue to increase.
In conjunction, speculation may be of interest to developers
in the area. Staubach Co. got the ball rolling in 2006 with the
Ethanol was a boon for the local industrial market, with multiple
expansion plans announced in 2006. Industrial vacancies
should continue to decrease throughout 2007, benefiting from
the rise of global trade with local presence. ADM announced
they are constructing a $348 million ethanol plant near the
existing ADM facilities on the Southwest side. The plant should
be up and running by fall of 2008.
Soon after the ADM announcement, Penford followed suit and
announced they would be modifying a portion of the existing
industrial starch manufacturing line to an ethanol production
line. After the addition of both Penford and ADM, Cedar Rapids
will be the largest producer of ethanol in the United States!
Procter and Gamble also announced an expansion of their
West Branch facility, creating 770,000 square feet of space
and 175 new jobs, and Nordstroms is adding 258,000 square
feet to their current 320,000 square feet. Not to be outdone,
local logistics giant Worley Warehousing has added 300,000
square feet to its portfolio to help service its accounts with area
food processors, not the least of which is Quaker Oats. The
company then promptly turned around and sold their holdings
to an out of state investor.
This points to the strong investment demand for good local
warehousing space. Once again, the proximity to major
food industries coupled with the good access to interstates
and 4 hour drives to major markets, makes Cedar Rapids
an outstanding hub for warehousing and distribution, and
consequently, a good bet for investors.
purchase of 160 acres on the Southwest side, with plans to
develop an industrial park on speculation. If this project is met
with initial success, others will surely follow.
Significant Events Industrial & Warehouse
• Whirlpool closed their Maytag plant in Newton but invested
$11 million in the Middle Amana refrigerator plant.
• PepsiCo (Quaker Oats) expanded into a $17 million, 300,000
square foot space.
• Proctor & Gamble expanded into 770,000 square feet of new
space.
• ADM announced a $348 million ethanol plant.
• Worley Warehousing sold their properties to an out of state
investor.
• Aga Commercial Products began construction of their new
AGA Commercial Properties, which purchased the commercial
100,000 square foot facility.
microwave division of
Amana, chose to remain
in the metro area and
began construction of a
new 100,000 square foot
manufacturing facility.
This facility represents a
AGA Commercial Products, Inc.
long-term commitment
6
Multi-Family
Multi-Family Recap
Multi-Family housing has shown a nation-wide resurgence
and the same can be said for the local market. For several
years, new multi family starts have been down in the Metro
area, particularly in the market rent category. While section 8
and other subsidized projects made up the majority of the new
construction, the starts in the market rent sector were stagnant.
Previously, low interest rates dried up much of the rental
market as prospective renters turned to home ownership. In
many cases, with the low interest and a variety of single family
mortgage products, prospective renters were finding that a
mortgage payment might be less than rent. However, in the
past eighteen months the rise in interest rates, the skyrocketing
of adjustable rate mortgages and the implosion of second and
third tier lending has forced many owners and prospective
owners back to the rental market.
it, do it now.” Obviously, this is a tremendous advantage to the
landlord, tenant or both.
National investors have found the Cedar Rapids area market.
The steady nature of the apartment market, compared to the
mountains and valleys of where the National’s usually play has
been a strong enticement for long-term investors wanting a
reasonable, steady return. Tenants in Common Investors, 1031
exchangers and/or a combination of the two have made or are
looking at several significant projects in the area.
The market for local investment in smaller projects 4 units on
up to management size, say 24 units, has always been strong
and will remain so. Reasonable returns, some tax shelter and
the anticipation of retirement income after the mortgage is paid
off keep these traditional investments in high demand.
The Central Business District of Cedar Rapids will be
College Park Apartments
7
Local vacancy rates are just below 10 percent and are steadily
improving. Demand is growing beyond supply growth, yielding
lower vacancies and higher rents. Employment growth in
the metro area has yielded new tenants and with positive
employment outlooks, should continue to do so.
experiencing a taste of new multi family living for the first time
in years. Several plans for apartments and condominiums are
in process (with one already finished) with strong support of
the City. This market is poised for growth, but will have a very
limited affect on the overall metro multi family market.
Many local apartment owners have taken advantage of Iowa’s
quirky property tax laws and converted their apartment
holdings to condominium regimes. This allows the owner
to take advantage of the residential roll back available in all
taxing districts of Iowa. A great advantage at this point, it can
be expected that the State will not allow this tax revenue to
bleed away much longer. The words would be,” If you can do
Significant Events Multi-Family
• Spring Park converted to The Point – eliminating Class B/C to
make way for Class A units.
• Kirkwood area complexes became a target of investors with
one 340 unit, 24 building complex selling for in excess of
$20,000,000.
Iowa City
North Liberty
The Iowa City/Coralville area had an active year featuring new
plans, new construction and tragically, a disastrous tornado.
The Marriot Hotel opened in Coralville’s Iowa River Landing
Development. A major convention destination, the hotel
anchors adjoining commercial/residential condos now under
construction and awaits final plans for the end user of the
balance of the land. This project, sponsored by the City of
Coralville, is expected to reap rewards in convention and
tourism business.
Also in Coralville, the 25-acre Coral North Development came
out of the ground with the new Corridor State Bank delivering
an imposing presence. Buffalo Wild Wings, Texas Roadhouse
and several as yet unnamed larger retailers will start to fill out
the project. A new Walgreens will go on an opposing corner
at Highway 965 and Holiday Road. New announcements are
expected here.
The Iowa City Downtown continues its growth with a new
285,350 square foot retail/office/condominium planned by
Hieronymus Square Development. An April tornado destroyed
and/or damaged many buildings edging downtown. These have
been steadily rebuilt.
A stumble in Iowa City development came when Wal-Mart
backed away from a super store adjoining the Iowa City Airport,
but Menards came out of the ground with their new store at
Highways 1 and 218. The re-use of their existing facility is still in
question; and this, along with the closing of Cub foods, leaves
some big boxes open on the south side of Iowa City.
The apartment market near campus in Iowa City remained
traditionally strong, but vacancy rates were edging up in the
periphery, especially in Coralville. North Liberty likewise is
experiencing an oversupply of multi-family, both in apartments
and condominiums.
The move by Heartland Express Trucking to a new mega facility
at the intersection of Interstate 380 and Penn Street in North
Liberty has opened up large acreage for expansion north of the
Wal-Mart in Coralville. Additionally, North Liberty’s commercial
area grew with new hospital affiliated medical space and a
number of small retail/office service buildings. Retail/service/
office space appears to be over-built in North Liberty, with
many buildings which would be considered in prime locations,
now sitting vacant for very extended periods.
Overall an active growth year in Johnson County.
Menard’s
8
Cedar Falls
Waterloo
Cedar Valley At A Glance
Population (2007)
Waterloo
Cedar Falls
Evansdale
69,761
36,678
4,593
Total 111,032
Unemployment Rate (March 2007)
Waterloo / Cedar Falls
3.5%
Commercial Property Rates*
The Cedar Valley market continues to grow with strong,
steady, sustained growth. The market is absorbing office,
industrial, and retail vacancies.
• Big Influences in the market are: LS Power proposed 600
megawatt plant. It will be $1.3B construction project with an
permanent professional staff of 100.
• Isle of Capri casino is scheduled for a June 1 opening. At
ground-breaking it was a $70 million project. Isle of Capri
has significantly improved the amenities and design making
it a $175 million project. Its opening is highly anticipated and
proves to be exciting!
• Target Distribution plans an expansion of 425,000 sq. ft.
refrigeration distribution facility. It is a $35 million project with
at least 100 new employees.
• New construction in the commercial/industrial section
continues at record pace. Waterloo and Cedar Falls both have
had record year after record year of building. The numbers
have exceeded $100M in the past two years.
• The University of Northern Iowa (14,000 students) and
Hawkeye Community College (5,800 students) are the
steady staples in the Cedar Valley. The area with combined
enrollment of just under 20,000 students puts us on par for
post high school enrollment with Ames and Iowa City for total
student enrollment.
• The Cedar Valleys medical community is worth noting with
Allen Memorial Hospital’s planned expansion, it’s most
expensive in history. They will invest $47M Cardiac Care and
Emergency Room. Covenant Medical Center has just opened
it’s Arrowhead Clinic serving Cedar Falls.
Property
Rent/SF/Low
Year High
Downtown Office (Prime)
$6.75
$13.95
Suburban Office (Prime)
$9.00
$16.25
Industrial Bulk Warehouse
$4.00
$6.75
$10.00
$20.00
Retail
Rental rates include estimated taxes, insurance and maintenance.
*
About NAI Global
NAI Global is one of the world’s leading providers of
commercial real estate services. We bring together people
and resources wherever needed to deliver outstanding
results for our clients.
NAI At A Glance
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116 Third Street SE
Cedar Rapids, Iowa 52401
tel 319-363-2337
fax 319-365-9833
220 Ridgeway Ave., Suite 100
Waterloo, Iowa 50701
tel 319-233-9999
fax 319-233-1521
327 Second Street, Suite 201
Coralville, Iowa 52241
tel 319-354-0989
fax 319-887-6565
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