Market Reports

Main Street’s Retail Resurgence is Well Underway Across Metro Atlanta

by Alex Tostado July 22, 2019

Main Street is making a comeback, and this is not news by any means. This growing trend is not only affecting real estate in the greater Atlanta area, but also throughout the United States. Main Street’s demise began with the design of President Eisenhower’s interstate highway system. It allowed travelers to bypass once sustaining rural towns and divided urban cities in their hearts. In Atlanta, it’s easy to notice with the unconscionable prejudice that comes with the interstates that divide our city compounded by the inefficiency of MARTA. The fall of Main Street was further catalyzed by the rise of the service-based economy and exportation of U.S. manufacturing to low cost nations, allowing larger retailers to capitalize and increase their market share by selling low-cost goods. Increasing affordability, especially for consumer goods, is great for everyone -— no one wants to be digging out of their savings for daily necessities — especially in a time when almost half the country cannot afford a $400 medical bill. However, this increased our fascination with saving on discretionary spending and led to increased demand for the “big-box” store. Large retailers’ capitalization on this trend led to increased foot traffic to their centers. Developers’ …

July 22, 2019

Georgia Market Reports Office Southeast Southeast Market Reports

From Perimeter to Peachtree, Atlanta’s Office Market is Gaining Momentum

by Alex Tostado July 15, 2019

8West. Star Metals. Coda. These are the some of the names of Atlanta’s biggest office developments and the city’s largest undertakings. Measuring more than 1 million square feet of Class A office space between them, Midtown Atlanta’s skyscraper scene is about to be drastically altered. The gravity of these major mixed-use properties, along with the allure of top talent at nearby universities like Georgia Tech, gives the Midtown submarket an increase in both developer activity and price-per-square-foot rates. The Midtown/Perishing Point Class A office space average is $35 per square foot, higher than the Atlanta-area average of $29.79 per square foot. However, buildings like Star Metals and Coda are not designed with just any tenant in mind. Speculative developments in the Atlanta market have come to a standing halt as most offices in the region are now built to fit a specific company’s needs, rather than spaces built with the hope the right tenant will come along. Most larger new developments are either a build-to-suit for a specific tenant or are anchored by a tenant that is taking up the majority of the space. Additionally, with lower required returns from REITs and the private sector, finding capital is not nearly …

July 15, 2019

Georgia Industrial Market Reports Southeast Southeast Market Reports

Atlanta’s Industrial Market Reaches All-Time Low Vacancy, Despite Strong Pipeline

by Alex Tostado July 8, 2019

The industrial market in Atlanta continues to surge, benefitting not only from its role as a key regional distribution hub, but also from the rapid growth in the metropolitan area itself. Atlanta is the economic engine of the Southeast, which also happens to be the fastest growing region in the country. The Atlanta industrial market recorded just over 18 million square feet of net absorption in 2018, the second highest total on record following the 21 million square feet absorbed in 2017. The market has experienced 30 consecutive quarters of positive net absorption resulting in an all-time low vacancy rate of 5.7 percent, even though the market delivered more than 13.4 million square feet in 2018. The first quarter of 2019 recorded net absorption of slightly over 1 million square feet, not as impressive as prior quarters over the last several years. So has the market peaked or demand stopped in Atlanta? Not by a long shot. According to research from JLL, there are 5.7 million square feet of signed deals that have yet to commence and companies have yet to move into their new space. This absorption will be picked up throughout 2019. Further, JLL is tracking an additional …

July 8, 2019

Georgia Market Reports Multifamily Southeast Southeast Market Reports

Metro Atlanta’s Multifamily Market Poised for Growth Despite Construction Costs

by John Nelson January 7, 2019

Driven by continued job and population growth, metro Atlanta’s multifamily market remains strong. Rarely a week goes by without an announcement of another corporate relocation or expansion somewhere throughout the metro area. This, in addition to an increasing population seeking the region’s quality of life, relative affordability and dynamic economy, has sustained the current cycle of development in the multifamily market. Investors appear to share this conclusion and have made Atlanta a top destination for acquisitions over the past several years. Despite some potential challenges on the horizon, namely rising construction costs, metro Atlanta’s apartment market is poised to continue its expansion over the near term. Market Fundamentals While new supply has outpaced absorption, most data providers still show metro Atlanta’s overall occupancy rate above 94 percent. Many market observers estimate that the multifamily market is on the cusp of, or has just moved past, its short-term peak of deliveries. Spiraling land and construction costs, coupled with the current labor shortage being felt across the economy, are acting governors of future supply expansion. These increases in costs are also translating into much higher required rents, which are testing the size of the renter pool capable of affording them. Despite concerns …

January 7, 2019

Georgia Market Reports Office Property Type Southeast Southeast Market Reports

Office Redevelopments, Leasing Key to Downtown Atlanta’s Re-emergence

by John Nelson December 31, 2018

The vitality of Downtown Atlanta is exciting. In response to a wave of revitalization efforts and substantial investment from corporations, universities and the public sector, the submarket’s fundamentals are rapidly strengthening. As tenants have reprioritized their desires for office locations to include access to public transportation, walkable retail and proximity to cultural attractions and an educated workforce, Downtown has gained tremendous traction in demand and re-emerged as an affordable and authentic urban work setting. Model Project: 100 Peachtree While new development activity is primarily focused on housing, much of the bustle in Downtown Atlanta’s office market is focused on redevelopment, renovations and repositioning. For instance, our team is transforming 100 Peachtree, a 32-story office tower, into a modern, transportation-oriented workplace destination with upgraded amenities, enhanced connectivity with Woodruff Park and new community activations. 100 Peachtree’s timeless Meisian design functionality provides a workplace for tenants ranging from traditional corporate headquarters to tech startups. Changes at 100 Peachtree reflect a broader story about shifting expectations for workplace environments. Employees increasingly desire to work at a “go-to” office building with access to transit in an amenity-rich setting. Office amenities have evolved from providing convenience like a café or sundry shop to blurring the …

December 31, 2018

Georgia Market Reports Property Type Retail Southeast Southeast Market Reports

Retailers Attracted to Atlanta’s Mixed-Use Projects, Infill Locations

by John Nelson December 24, 2018

If we had to sum up the 2018 Atlanta retail environment with a single word, it would be “change.” Atlanta’s builders have turned away from the traditional suburban models in favor of modern mixed-use developments featuring high-end office and residential units on the upper floors, along with street-level retail shops. Many planners see such projects as a means of creating more walkable, safe and vibrant neighborhoods. Retailers are drawn to intown opportunities such as Modera by Mill Creek’s mixed-use apartment communities (existing locations in Midtown, Sandy Springs and Vinings, with Reynoldstown coming soon), or Revel, a planned $900 million, 118-acre mixed-use and entertainment destination being developed by North American Properties in Duluth in Gwinnett County. With a limited supply of real estate inventory for shops and restaurants and the continued demand from new concepts entering or growing in the Atlanta metro market, the competition for space has grown fierce. For example, Franklin Street’s client City Barbeque waited 18 months for a premier location to become available for its new eatery in Johns Creek. The restaurant group made a lease agreement offer within three days of the prior tenant going dark to secure the spot before other bidders could jump in. …

December 24, 2018

Georgia Industrial Market Reports Southeast Southeast Market Reports

Historically Low Vacancy, Port Growth Drive Savannah’s Industrial Development

by John Nelson December 17, 2018

Though Savannah by all standards is a small industrial market, you would never know it from the activity in the area. At 57 million square feet, the port city is poised to add an astounding 9.75 million square feet of inventory by mid-2019. The force behind all of this growth is attributed to one key factor: The Georgia Ports Authority (GPA). The GPA is an economic giant in Georgia supporting one of every 11 jobs in the state and accounting for 8 percent of its GDP. Home to the largest single-container terminal in North America, GPA moved more than 4.2 million TEUs (20-foot equivalent units) in fiscal year 2018, an 8 percent increase over 2017 and an all-time record for the port. With both CSX and Norfolk Southern on terminal, GPA also handled a record 435,000 rail lifts in FY 2018, which was a 16.1 percent increase over 2017. As the fastest growing port in the country, one might be concerned about congestion becoming an issue for the port, but reinvestment remains a top priority. The GPA recently opened its second inland port to move more containers toward population centers via CSX rail. It doesn’t hurt either that Savannah, geographically …

December 17, 2018

Georgia Market Reports Property Type Retail Southeast Southeast Market Reports

Tech, Film Industries Help Atlanta Sustain Retail Growth Intown and in Suburbs

by John Nelson July 16, 2018

“How long will Atlanta’s retail boom last?” That is the multibillion-dollar question everyone in the market is asking themselves. Nobody knows for sure, although there are many valid reasons to think that Atlanta will sustain its growth through 2018 and beyond. The state of Georgia has placed a strong emphasis on drawing technology companies to the state, and Atlanta’s tech boom has catapulted the city to the front of the race for Amazon’s $5 billion HQ2 project. The city already boasts the world’s busiest airport, which makes it easy for any company to relocate here because they can directly connect to anywhere in the world. Most recently, Facebook announced it will build a sprawling data center campus at Stanton Springs, about 40 miles east of Atlanta, and NCR Corp. recently opened its new headquarters campus in Midtown. The emerging tech community includes startup hubs such as Atlanta Tech Village, Switchyards Downtown Club, the upcoming Coda project at Tech Square and Advanced Technology Development Center, an affiliate of Georgia Tech. With elite local colleges like Georgia Tech, Emory University and the state’s flagship school, the University of Georgia, about 60 miles east in Athens rapidly producing new graduates, the city is …

July 16, 2018

Georgia Industrial Market Reports Property Type Southeast Southeast Market Reports

Booming Atlanta Industrial Market Continues Surge Thanks to E-Commerce

by John Nelson July 9, 2018

Atlanta is the logistics hub and economic engine of the Southeast, which is the fastest growing region in the country. Its 700 million square feet of industrial space makes it the fifth largest logistics market in the United States. Traditionally, population and job growth are key drivers of industrial demand, and Atlanta has had strong growth in each. The metro added 78,000 people in 2017, or nearly 214 new residents every day, which is reminiscent of the solid population growth of the 1990s when Atlanta averaged nearly 100,000 new residents every year. Additionally, Atlanta has had solid job growth, growing 2.5 percent last year, second only to Dallas/Fort Worth among the 12 largest metro areas in the U.S. E-commerce has caused a surge in demand for industrial space that has benefitted the Atlanta industrial market. Online retail sales now make up over 9 percent of total retail sales, according to the U.S. Census Bureau, up from 5 percent in 2012. A recent report from Cushman & Wakefield stated that while e-commerce accounted for just 5 percent of leases in 2013, it now commands over 20 percent of all warehouse leasing. As Amazon and others ramp up delivery times from two-day …

July 9, 2018

Georgia Market Reports Office Property Type Southeast Southeast Market Reports

KDC Underway on Phase II of Park Center Office Campus in Central Perimeter

by John Nelson July 2, 2018

Park Center is the largest ground-up corporate office project in metro Atlanta’s history. In early 2017, KDC broke ground on Park Center Phase II, which consists of two office towers totaling 1.1 million square feet, including approximately 40,000 square feet of retail space. The office towers will be leased by State Farm, which also leased the 21-story office tower in Phase I. Phase II of Park Center started with the implosion of the existing 240,000-square-foot, 10-story Hammond Exchange building on March 4, 2017. The remainder of 2017 was spent removing the debris from the implosion, blasting and removing over 300,000 cubic yards of rock, site grading, relocation and placement of utilities, and installation of tower cranes. In addition, construction started on the parking structure and building pad for Building 2. Several large culverts were constructed for a new road that will connect Perimeter Parkway in Dunwoody to Peachtree Dunwoody Road in Sandy Springs. Today, seven of the 11 parking levels of Building 2 have been poured, including the lobby level and vehicular-pedestrian plaza in front of it. Completion of the 660,000-square-foot, 22-story Building 2 is slated for the end of 2019. Work is also taking place on Building 3, including …

July 2, 2018

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