Distressed Assets: Where to Look
By Walter Bialas, VP of Research
No region is immune from the downturn, but some markets are more vulnerable than others. Traditional measures of what regions may be troubled look simply at vacancy rates as a measure of distress. Yet there are other forces at work. Below is a list of 63 metropolitan markets ranked in order of how likely they are to produce distressed assets in the coming years. We measured and indexed the following factors:
-Velocity of vacancy rate deterioration
-Current vacancy rate
-Net absorption of new inventory
-New inventory in the pipeline
-Level of pre-leasing
Based on our indexing, the top 35 metropolitan markets are fertile ground for distressed assets. The remaining markets, although stressed, are less likely to break under the weight of recession. To better understand the process, I have also included a summary data table below the list.
Metropolitan Markets By Potential for Distressed Retail Real Estate Assets
1. Phoenix
2. Las Vegas
3. Kansas City
4. Atlanta
5. Birmingham
6. Indianapolis
7. Memphis
8. Detroit
9. Sacramento
10. Providence
11. Houston
12. Dayton
13. Dallas / Ft Worth
14. Chicago
15. Inland Empire
16. Tucson
17. Jacksonville
18. West Michigan
19. Broward County
20. Columbus
21. St. Louis
22. Denver
23. Southwest Florida
24. Cincinnati
25. San Antonio
26. Palm Beach County
27. Philadelphia
28. Tampa / St Petersburg
29. Orlando
30. Austin
31. Greensboro / Winston-Salem
32. Northern New Jersey
33. Hartford
34. Nashville
35. Pittsburgh
36. Tulsa
37. Madison
38. Richmond
39. Toledo
40. Cleveland
41. Greenville / Spartanburg
42. Westchester / So Connecticut
43. Hampton Roads / Norfolk
44. Charlotte
45. Raleigh / Durham
46. Oklahoma City
47. Milwaukee
48. Portland
49. Seattle / Puget Sound
50. Salt Lake City
51. Miami-Dade County
52. Los Angeles
53. Washington
54. Boston
55. Minneapolis
56. East Bay / Oakland
57. Baltimore
58. Orange County
59. South Bay/San Jose
60. San Diego
61. Long Island
62. San Francisco
63. New York City
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