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“Investor confidence hits a high note. The economic recovery and greater access to capital are fueling property sales in 2012…”
Read the entire article in National Real Estate Investor
The Redstone Main Street hotel project was featured in the WCAX news story “New Development Plans in Burlington”.
“Vermont home prices declined more rapidly than most states as home prices nationwide saw some relief over the last month, but continued to decline. Vermont prices fell 3.8 percent in January compared to a loss of 3.1 percent nationally. CoreLogic (NYSE: CLGX), a leading provider of information, analytics and business services, today released its January Home Price Index (HPI) report, the most timely and comprehensive source of home prices available today. The report shows national home prices, including distressed sales, declined on a year-over-year basis by 3.1 percent in January 2012 and by 1.0 percent compared to December 2011, the sixth consecutive monthly decline….” Vermontbiz.com, March 7, 2012
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“The Vermont housing market was the only one in New England to experience a year-over-year decline in both number of transactions, down -2.4 percent, and median price, down -4.3 percent, according to RE/MAX. Vermont’s median home price is $180,900, down from $189,000. This still places Vermont third highest in the region, behind only Massachusetts ($260,000) and Connecticut ($232,500).”… vermontbiz.com, February 15, 2012
Ross Montgomery
When discussing market trends, forecasts, or just general conditions of the state, you will at some point hear a variation of the following: While Vermont doesn’t see the big booms other more populated (and volatile) markets do, it is also relatively insulated from the deep troughs they are inherently susceptible to. Simply put, while the highs aren’t as high, the lows aren’t as low, and while that is true in many regards, Vermont is not immune to dramatic levels of both, and recent market conditions have reflected just that.
So what have we seen? Like many areas, recent years have brought significant ‘doom and gloom’ forecasts, with developers and investors largely sidelined due to significant market uncertainty at best. With that said, Chittenden County is projecting growth in many markets in 2012. An example of this is an industrial market, one that showed negative growth in 2011 but is projecting 4.3% increase in inventory over the course 2012. Additionally, we are seeing rents stabilize in both the retail and office markets, with Class A office space and retail rates in and around Burlington’s Central Business District stabilizing as vacancy drops. New national retailers and restaurants are again successfully entering the Vermont market, with astounding response from locals known to be conservative in their approach to choosing national chains over local retailers, and hesitant to approve new development without considerable thought and public forum (See: South Burlington Interim Zoning proposal measures). Overall, CAP rates have stabilized; markets are strong in each sector, a once saturated inventory of primarily office space is being absorbed, and as a state, displaying positive trends heading into 2012.
RETAIL: Rents stabilizing with growth just below the historical average, retail is making a comeback. Vacancy was below the 10-year average at the end of 2011, with a similar 5.6% vacancy forecast for 2012. Rates are stable as well, even increasing in certain sectors. Chittenden County suburban markets, which have been slightly weakening, are expected to stabilize as well.
OFFICE: Class A vacancy is way down with rates stabilizing in the Chittenden County market, although Class B vacancy still high (80% of the overall 9.3% vacancy in the Class B market). This trend is reflected in the rental rates, with Class A strengthening, and Class B beginning to stabilize after sustained vacancy drove rates down. Chittenden County is also projected to add nearly 300,000 SF of new office inventory this year, the most since 2008 and the second highest it will have seen since 2000.
INDUSTRIAL: As mentioned, growth indicators are strong in this market in the Chittenden County sector. Overall vacancy at the end of 2011 topped out at just over 8%, a number influenced by a small number of individual properties experiencing turnover that have had a significant impact on the overall figure. This uptick in the industrial market suggests a positive growth projection for 2012, with new inventory set for completion this year at a rate of almost double the historical average of 2.3% annually.
MULTI-FAMILY: This market has predictably seen sustained growth and miniscule vacancy numbers in Chittenden County due in large part to battered (yet comparably strong) housing market, as well as demographic trends such as the large student population. Another important trend we are seeing is an increase in an already high demand from investors in a market low on supply, with many owners holding onto these strong performing assets.
RATES OF RETURN: Industrial, retail, and office are all currently stable, with industrial CAP rates averaging 8.7% and retail and office at 8.2%. Multi-family properties on the other hand averaged 6.7% in 2011 with rates stabilized. This is just above the 2006 low of 6.3% and down from 7.2% in 2007.
(Data provided by December 2011 Allen & Brooks Report.)
Including distressed sales, the 5 states with the highest appreciation were:
#1 Montana (+4.4 percent)
#2 Vermont (+4.0 percent)
#3 South Dakota (+3.1 percent)
#4 Nebraska (+2.5 percent)
#5 New York (+1.7 percent)
Read the entire article at December Home Price Index shows Vermont second in US - vermontbiz.com, Friday, February 3, 2012.
As a result, rental vacancy rates are dropping and rental rates are increasing. Read the entire article in today’s Burlington Free Press.
Looks like multi-family properties are where it’s at if you’re looking for a solid commercial property investment. Check out a few of Redstone’s Multi-Family property listings below:
457 St. Paul Street, Burlington
389 Riverside Avenue, Burlington
86 Pearl Street, Essex Junction
246-250 Main Street, St. Albans
“The Hinesburg Selectboard has adopted zoning regulations for the former Saputo cheese plant property. The new rules replace interim zoning that has regulated the site for nearly two years.
With a goal of enhancing the potential for business and residential uses by creating a mixed-use designation instead of strictly industrial, the interim zoning helped to enable development by Redstone, a Burlington-based commercial development and construction firm that completed purchase of the property in September 2010.”
Click on Burlington Free Press, Wednesday, October 19, 2011 to read the full article.
Vermont Business Magazine, Wednesday, September 21, 2011
In August 2011, New England posted an 8.9 percent increase in sales compared to August 2010, indicating that the housing market continues to recover. Vermont helped fuel the surge, with year-over-year home sales up 18.8 percent. However, it was also the only state in the region to post month-to-month declines in both units sold, -6.7 percent, and median price, -3.3 percent.
Connecticut was also the only state to experience month-to-month gains in both units sold, up 6.6%, and median price, up 1.7 percent. Maine also experienced New England’s largest increase in units sold, with month-to-month sales up 8.4 percent. However, the median price took a hit, dropping -6.6 percent. Month-to-month home sales in Massachusetts actually dropped -3.0 percent. However, when comparing August 2011 to August 2010, home sales were actually up 2.6 percent. New Hampshire’s 8.0 percent surge in month-to-month home sales was second only to Maine. Rhode Island helped fuel the surge, with year-over-year home sales up over 31% in the Ocean State. Month-to-month home sales were also up 7.6 percent.
“We’re pleased to see an increase in transactions in August without any artificial stimulus,” said Jay Hummer, Executive Vice President, RE/MAX of New England.“ Although the housing recovery will continue to hit bumps along the way, it is slowly returning despite tighter lending because of continued low interest rates.”
He said low interest rates continue to help the market rebound.