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Just Released: IRR's Mid-Year 2022 Viewpoint Local Market Reports Sep 12, 2022

IRR Releases Mid-Year Viewpoint Commercial Real Estate Reports Packed Full of National, Regional and Local Market Stats
A National Summary Report, Along with More than 240 Local Market Reports that Explore CRE Values and Trends Across Four Key Property Sectors Now Available for Download

JUST RELEASED: LOCAL MARKET REPORTS


DENVER, CO — (Sept. 12, 2022) Integra Realty Resources (IRR), one of North America’s largest independent commercial real estate valuation and consulting firms, today announced the release of its highly anticipated mid-year, local market commercial real estate reports—a supplemental update to its flagship Viewpoint 2022 annual report released in January.

In total, 240 detailed reports covering 60 U.S. markets across four property types, including office, multifamily, retail, and industrial, have been released. Along with the local market reports, IRR has released a summary document that includes updated property summaries, market cycle charts, and market rents and vacancy rates comparison charts for each of the four property sectors.

The reports can be downloaded for free. To view the summary report, visit www.irr.com/research. To view local market reports, visit each office landing page and scroll down to the research section, for example, www.irr.com/Philadelphia

“We are proud to offer these insightful mid-year market reports to our valuable clients and partners who count on them to make informed real estate decisions,” said Anthony M. Graziano, MAI, CRE, CEO of Integra Realty Resources. “Through April 2022, Integra observed the commercial market showed few signs of restraint, however, the second quarter surely slowed deal-making. While performance of different asset classes vary depending on supply and demand dynamics in each local market, overall, we expect the back half of 2022 and most of 2023 to be turbulent. This will create opportunity for disciplined investors and normalize pricing to stay in balance with economic productivity and business activity following two years of aberrant government financial intervention.  A reset on real estate values is a necessary component of managing inflation since occupancy costs affect consumer spending and the production costs of goods and services. In other words, the quicker we take our medicine, the quicker we can return to stability.”

Below are a few highlights from IRR’s mid-year reporting:

  • Office:
    • IRR reports the capital markets’ tolerance for increased risk in the office sector made financing office buildings much more challenging by early May 2022. Office owners-investors are now re-trenching for a longer holding period as they continue to await a return-to-work beyond the 30 to 40 percent attendance in most urban markets.  
    • At the onset of 2022, only 3.4 percent of office markets reported to be ‘In Balance,’ that figure has now reached 11.6 percent in Q2 2022 (vs. 10.7 percent in 2021 and 43.5 percent in 2020). While the Central and East Regions don’t have any markets in the expansion phase, it’s a different story in the West and South Regions, which have 14 percent and 22 percent respectively.
    • Office rents increased across all regions, with Class-A property rents in the South Region increasing the most (up 1.52 percent)
    • Vacancy rates have increased across the board, except for Class-B office properties in the Central Region (down 53 bps)
    • IRR’s mid-year outlook calls for 43.3 percent of suburban Class-A office markets to experience cap rate increases (up from 15.3 percent in Q4’21). While 48.3 percent of markets expect cap rates to remain unchanged (down from 72.9 percent in Q4’21).
    • IRR’s outlook calls for 45.6 percent of CBD Class-A office markets to experience cap rate increases (up from 16.9 percent in Q4’21). While 49.1 percent of markets expect cap rates to remain unchanged (down from 67.8 percent in Q4’21).
       
  • Multifamily:
    • IRR reports multifamily assets traded at record highs as most U.S. residential markets rocketed through Q1. Recent activity suggests a dramatic cooling in single-family home volume and values, and this will surely affect forward rental rate forecasts negatively. 
    • IRR reports 80 percent of U.S. multifamily markets are in the expansion market cycle phase, up from 76 percent in Q4 2021.
    • Rents increased across all regions; Class-B property rents in the South Region increased the most (up 10 percent)
    • Nationally, vacancy rates have dropped for both Class-A and Class-B properties (down 5 bps and 48 bps respectively), however the only regions that saw increases in vacancies were Class-A properties in the East and Central regions (up 38 bps and 28 bps respectively)
    • Integra’s Viewpoint research indicates continued cap rate contraction. Urban Class-A cap rates are 4.73 percent (down 17 bps), urban Class-B cap rates are 5.41 percent (down 20 bps), suburban Class-A cap rates are 4.87 percent (down 21 bps), and suburban Class-B cap rates are 5.48 percent (down 25 bps).
       
  • Retail:
    • IRR reports retail remains on the rebound from COVID-lows, but consumer spending has yet to materially pull back, buoyed by seasonal summer recreation. Personal consumption declines should be expected in Q3-Q4 2022, particularly if layoffs become more widespread.  Consensus opinion is an increase in unemployment of 100 – 150 basis points by year-end. 
    • IRR reports 32.8 percent of national retail markets entered Q2 2022 in the expansion phase (up from 27.1 percent in Q4 2021).
    • The Central Region was the only region that saw rents decrease (down 8.27 percent for Community Retail and 9.42 percent for neighborhood retail assets). The Central Region also saw the largest increase in vacancies (up 143 bps for community retail properties and 78 bps for neighborhood retail assets)
    • The West Region saw the largest decreases in vacancies (down 250 bps for community retail properties and 324 bps for neighborhood retail assets)
    • Nationally, community retail cap rates in Q4’21 bucked the upward trend that started in 2017 with a YOY drop of 25 bps in 2021. In Q2’2022 they continued to drop by 3 bps with cap rates ending at 6.89 percent. Meanwhile, 39.3 percent of markets expect neighborhood retail cap rates to remain steady (down significantly from 72.9 percent in Q4 2021) and 33.3 percent of markets expect regional mall cap rates to remain steady (down significantly from 81.1 percent in Q4 2021).
       
  • Industrial:
    • IRR reports the big variable heading into late 2022 will be whether industrial assets will finally cool. With construction demand waning and a potential pull-back in consumer spending, the market may finally catch up to industrial. It hasn’t happened as of June 2022 in most U.S. markets, according to IRR.
    • IRR data shows 87 percent of industrial markets are in the expansion market cycle phase, heading into the second half of the year, slightly down from 90 percent in Q4 2021.
    • Huge swings in rents, depending on region, for example:
      • Central Region saw rents increase over 20 percent for both flex and industrial properties (up 22.57 percent and 25.23 percent respectively)
      • West Region saw rents decrease more than 25 percent for both flex and industrial properties (down 27.55 percent and 25.41 percent respectively)
    • Nationally, vacancy rates have dropped for both flex and industrial properties (down 182 bps and 243 bps respectively), with the Central Region experiencing the largest drop in vacancies (down 413 bps for flex and 242 bps for industrial properties)
    • The industrial warehouse and manufacturing property sector Q2 2022 cap rates stood at 5.78 percent nationally. After rising slightly in Q4 2018, cap rates have continued to compress, dropping 25 basis points since Q4 2021. Flex Industrial property cap rates stood at 6.39 percent nationally. Flex Industrial property cap rates, after rising slightly in Q4 2018, have continued to compress, dropping 27 basis points since Q4 2021.

For more information or to download IRR’s mid-year commercial real estate reports, or to access additional IRR research, please visit www.IRR.com/research  

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Each IRR office is led by an MAI-designated Senior Managing Director, industry leaders who have over 25 years, on average, of commercial real estate experience in their local markets.
Integra Offices Map Denver, CO Denver, CO 575 Union Blvd.
Suite 209
Lakewood, CO 80228
Phone: 720-833-5930
Fax: 303-951-1924
Boston, MA Boston, MA
Boston, MA 02210
Phone: 212-575-2935
Fax: 646-424-1869
Seattle, WA Seattle, WA 600 University Street
Suite 310
Seattle, WA 98101
Phone: 206-436-1179
Fax: 206-623-5731
Portland, OR Portland, OR
Portland, OR 97205
Phone: 212-575-2935
Fax: 646-424-1869
Boise, ID Boise, ID 1031 E. Park Boulevard
Boise, ID 83712
Phone: 208-342-2500
Fax: 208-342-2220
Salt Lake City, UT Salt Lake City, UT 5107 South 900 East
Suite 200
Salt Lake City, UT 84117
Phone: 801-263-9700
Fax: 801-263-9709
Las Vegas, NV Las Vegas, NV 8367 West Flamingo Road
Suite 200
Las Vegas, NV 89147
Phone: 702-869-0442
Fax: 702-869-0955
Phoenix, AZ Phoenix, AZ 2999 N. 44th Street
Suite 512
Phoenix, AZ 85018
Phone: 602-266-5599
Fax: 602-266-1515
Sacramento, CA Sacramento, CA 590 Menlo Drive
Suite 1
Rocklin, CA 95765
Phone: 916-435-3883
Fax: 916-435-4774
San Francisco, CA San Francisco, CA 555 Meridian Avenue
Suite C
San Jose, CA 95126
Phone: 408-299-0444
Fax: 408-299-0449
Los Angeles, CA Los Angeles, CA 16030 Ventura Boulevard
Suite 620
Encino, CA 91436-4473
Phone: 818-290-5400
Fax: 818-290-5401
Orange County, CA Orange County, CA 2151 Michelson Drive
Suite 205
Irvine, CA 92612
Phone: 949-591-8150
San Diego, CA San Diego, CA Cornerstone Professional Center
2775 Via De La Valle, Suite 206
Del Mar, CA 92014
Phone: 858-259-4900
Fax: 858-259-4910
Miami, FL Miami, FL 9155 S. Dadeland Boulevard
Suite 1208
Miami, FL 33156
Phone: 305-670-0001
Fax: 305-670-2276
Naples, FL Naples, FL 2770 Horseshoe Drive S
Suite 3
Naples, FL 34104
Phone: 239-643-6888
Fax: 239-643-6871
Tampa, FL Tampa, FL 550 North Reo Street
Suite 220
Tampa, FL 33609
Phone: 813-287-1000
Fax: 813-281-0681
Orlando, FL Orlando, FL 326 North Magnolia Avenue
Orlando, FL 32801-2431
Phone: 407-843-3377
Fax: 407-841-3823
Jacksonville, FL Jacksonville, FL
Jacksonville, FL 32217
Phone: 212-575-2935
Fax: 646-424-1869
Charleston, SC Charleston, SC 11-C Isabella Street
Charleston, SC 29403
Phone: 843-718-2125
Fax: 843-718-2058
Atlanta, GA Atlanta, GA 5256 Peachtree Road
Suite 115
Atlanta, GA 30341
Phone: 404-924-6247
Fax: 404-418-4357
Birmingham, AL Birmingham, AL 880 Montclair Road
Suite 275
Birmingham, AL 35213
Phone: 205-949-5995
Fax: 205-271-2389
Jackson, MS Jackson, MS 617 Renaissance Way
Suite 100
Ridgeland, MS 39157
Phone: 901-356-4934
Fax: 646-424-1869
Dallas, TX Dallas, TX 1100 Mira Vista Blvd.
Suite 300
Plano, TX 75093
Phone: 972-881-7191
Fax: 972-733-1403
Fort Worth, TX Fort Worth, TX 7080 Camp Bowie Boulevard
Fort Worth, TX 76116
Phone: 817-763-8000
Austin, TX Austin, TX 100 Congress Avenue
Suite 2000
Austin, TX 78701
Phone: 512-924-1345
Memphis, TN Memphis, TN
Memphis, TN 38120
Phone: 901-356-4934
Fax: 646-424-1869
Oklahoma City, OK Oklahoma City, OK 13913 Technology Drive
Suite A1
Oklahoma City, OK 73134
Phone: 405-422-0718
Kansas City, MO Kansas City, MO 104 West 9th Street
Suite 400B
Kansas City, MO 64101
Phone: 816-652-0222
Fax: 636-530-0046
Providence, RI Providence, RI 2 Charles Street
Suite B1
Providence, RI 02904
Phone: 401-273-7710
Fax: 401-273-7410
Syracuse, NY Syracuse, NY 812 State Fair Blvd.
Suite 1
Syracuse, NY 13209
Phone: 315-422-5577
Fax: 315-422-5295
Hartford, CT Hartford, CT 97 Broad Street
Middletown, CT 06457
Phone: 860-291-8997
Fax: 401-273-7410
New York, NY New York, NY
New York, NY 10036
Phone: 212-575-2935
Fax: 646-424-1869
Northern New Jersey Northern New Jersey 25A Vreeland Road
Suite 100
Florham Park, NJ 07932
Phone: 973-422-9800
Fax: 973-422-9797
Coastal New Jersey Coastal New Jersey 1415 Hooper Ave.
Suite 306
Toms River, NJ 08753
Phone: 732-244-7000
Fax: 732-505-9498
Philadelphia, PA Philadelphia, PA 1515 Market Street
Suite 800
Philadelphia, PA 19102
Phone: 610-238-0238
Wilmington, DE Wilmington, DE IRR-Corporate
Wilmington, DE 19805
Phone: 212-575-2935
Fax: 646-424-1869
Baltimore, MD Baltimore, MD
Washington, DC 20003
Phone: 212-575-2935
Fax: 646-424-1869
Washington, DC Washington, DC
Washington, DC 20003
Phone: 212-575-2935
Fax: 646-424-1869
Pittsburgh, PA Pittsburgh, PA 3535 Boulevard of the Allies
Pittsburgh, PA 15213
Phone: 412-683-2211
Fax: 412-683-2220
Cleveland, OH Cleveland, OH 850 Euclid Ave.
Suite 952
Cleveland, OH 44114
Phone: 330-659-3640
Fax: 330-659-3640
Columbus, OH Columbus, OH 6233 Riverside Drive
Suite 2N
Dublin, OH 43017
Phone: 614-764-8040
Fax: 614-764-8050
Saint Louis, MO Saint Louis, MO 16759 Main Street
Suite 209
St. Louis, MO 63040
Phone: 636-898-6533
Fax: 636-530-0046
Chicago, IL Chicago, IL 1 N Franklin St
Suite 3010
Chicago, IL 60606
Phone: 312-565-0977
Fax: 312-565-3436
Minneapolis, MN Minneapolis, MN 7301 Ohms Lane
Suite 190
Minneapolis, MN 55439
Phone: 612-339-7700
Fax: 612-339-7937
Nashville, TN Nashville, TN 1894 General George Patton Drive
Suite 300
Franklin, TN 37067
Phone: 615-628-8275
Fax: 615-628-8286
Richmond, VA Richmond, VA 1805 Chantilly Street
Richmond, VA 23230
Phone: 804-346-2600
Fax: 804-747-9140
Greensboro, NC Greensboro, NC 5411-A Friendly Avenue
Greensboro, NC 27410
Phone: 336-676-6033
Fax: 336-676-6025
Raleigh, NC Raleigh, NC 8382 Six Forks Road
Suite 200
Raleigh, NC 27615
Phone: 919-847-1717
Fax: 919-847-1714
Charlotte, NC Charlotte, NC 214 W. Tremont Ave.
Suite 200
Charlotte, NC 28203
Phone: 704-376-0295
Fax: 704-342-3704
Columbia, SC Columbia, SC 141 Riverchase Way
Lexington, SC 29072
Phone: 803-772-8282
Fax: 803-772-0087
Cincinnati/Dayton, OH Cincinnati/Dayton, OH 8241 Cornell Road
Suite 210
Cincinnati, OH 45249
Phone: 513-561-2305
Fax: 513-561-2881
Detroit, MI Detroit, MI 400 W. Maple Road
Suite 100
Birmingham, MI 48009
Phone: 248-540-0040
Fax: 248-540-8239
Indianapolis, IN Indianapolis, IN 4981 North Franklin Road
Indianapolis, IN 46226
Phone: 317-546-4720
Fax: 317-546-1407
Louisville, KY Louisville, KY 13000 Equity Place
Suite 105
Louisville, KY 40223-3976
Phone: 502-452-1543
Fax: 502-451-3657
Caribbean Caribbean Cayman Business Park #A5, P.O. Box 751
Grand Cayman, Cayman islands
Camana Bay, KY KY1-9006
Phone: 844-952-7304
Houston, TX Houston, TX 9225 Katy Freeway
Suite 206
Houston, TX 77024
Phone: 713-973-0212
Fax: 713-973-2028
San Antonio, TX San Antonio, TX 10010 San Pedro Avenue
Suite 220
San Antonio, TX 78216
Phone: 210-446-4444
Puerto Rico Puerto Rico Vig Tower 1225 Ave Ponce De Leon
Suite MZ-4
San Juan, PR 00907-3907
Phone: 844-952-7304
New Orleans, LA New Orleans, LA
New Orleans, LA 70130
Phone: 212-575-2935
Fax: 646-424-1869
Little Rock, AR Little Rock, AR
Little Rock, AR 72223
Phone: 212-575-2935
Fax: 646-424-1869
Grand Rapids, MI Grand Rapids, MI 1009 44th Street, SW
Suite 107
Grand Rapids, MI 49509
Phone: 616-261-5000
Fax: 616-261-5045
Lubbock, TX Lubbock, TX 6309 Indiana Avenue
Suite D
Lubbock, TX 79413
Phone: 806-368-8063
Rio Grande Valley Rio Grande Valley 1601 West Trenton
Suite L108
Edinburg, TX 78539
Phone: 956-878-3577
Northwest Arkansas Northwest Arkansas
Fayetteville, AR 72701
Phone: 212-575-2935
Fax: 646-424-1869