The I-40/I-85 Corridor is an emerging distribution area with a remarkably strong tenant mix between national manufacturers and distribution users, making it one of the most fundamentally sound corridors in the Sun Belt. The I-40/I-85 Corridor, squarely centered between the Triad (Greensboro, Winston-Salem and High Point) and the Triangle (Raleigh, Durham, Chapel Hill), is home to companies such as Walmart, Lidl, Ford, Kidde, Amazon, Chick-Fil-A, UPS, Lenovo, FedEx, Coca-Cola, among others. This corridor is seeing rapid expansion and is poised to be an epicenter of industrial activity in the region as the logistical significance of the area is attracting larger users and a growing amount of institutional capital. Recently, this submarket has seen significant demand from larger users leading speculative developers to plan large, Class A industrial parks. Historically, the market has been dominated by older manufacturing buildings. The newer development in the area is making these properties more obsolete due to their lower efficiencies, a phenomenon marking a larger shift in the composition of the emerging submarket. The industrial inventory’s makeup is continuing to evolve over time, marking the transition from smaller manufacturing properties to distribution and significantly larger manufacturing operations. Buildings currently under construction are average a footprint …
The Raleigh-Durham region is experiencing increasing optimism despite the lingering impacts of COVID-19. While some reentry plans have been delayed and companies are still grappling with the way in which they will utilize office space moving forward, tenant demand is expected to rebound sharply in the first half of 2022. “We’ve seen an encouraging uptick in tenant activity since the second quarter of 2021, and we expect that trend to accelerate,” says Kathy Gigac, principal of Avison Young and a member of the firm’s Occupier Solutions Team. “Tenants seem ready to get back to some sense of normalcy.” Local economic fundamentals are sound, as reopening efforts and positive job growth have allowed Raleigh-Durham’s unemployment rate to recover from a pandemic high of 12 percent to 3.2 percent as of Sept. 2021. The region continues to witness major economic development wins with companies such as Google and Apple announcing plans to create thousands of new jobs. In its largest presence on the East Coast, Apple will invest $1 billion over a 10-year period to create a 3,000-job campus to eventually span 1 million square feet. In the most recent announcement from an office-using tenant, Fidelity Investments will add 1,500 jobs in …
The end of 2021 in Raleigh-Durham was marked by robust retail leasing and an increased level of investment sales in our suburbs and infill trade areas. Downtown Raleigh, Durham and Chapel Hill have lagged in activity, although each urban environment started to see a resurgence by mid-year, and notably Downtown Raleigh ended 2021 with record retail leasing activity. Population growth and major economic development announcements are driving these positive trends. Apple, Google, FujiFilm, several life sciences companies and most recently Toyota (just east of the Raleigh-Durham region) have highlighted economic expansion. Strong demand and a healthy retail construction pipeline have held retail vacancy to 7.1 percent despite headwinds from the COVID-19 pandemic. The healthy retail development pipeline includes several new mixed-use projects. Cary will see one of the largest active mixed-use projects in the Southeast deliver this year when Fenton opens in the spring. Hines and Columbia Development are currently finalizing the first phases of the project. Spread over 92 acres, Fenton will initially include retailers such as Pottery Barn, Williams-Sonoma and Superica, as well as apartments and office space. Over in Research Triangle Park (RTP), the Research Triangle Foundation and White Point Partners have announced Horseshoe at Hub RTP. …
When I recently looked into a prime site in Atlanta’s bustling West Midtown district on behalf of one of my restaurant clients, I quickly realized that several restaurants were eyeing the space. There were six other restaurant groups interested in leasing the space, creating a bidding war at rental rates far higher than my client wanted to pay. Heated competition for available restaurant spaces is by no means unusual in the Atlanta market these days, particularly for intown Atlanta, or the portion of the city located within the Interstate 285 loop and containing some of the city’s most urban, in-demand neighborhoods including Old Fourth Ward, EAV (East Atlanta Village) and Poncey-Highland. It’s been a rollercoaster stretch for the retail and restaurant sectors since the onset of the COVID-19 pandemic. Large decreases in sales at the outset were followed by a substantial recovery by early 2021, only to be followed by a setback in some markets over the summer caused by the more contagious Delta variant. Despite the challenging conditions, Davis said his clients have been forging ahead with their expansion plans. These clients have benefitted from their history of strong sales and the ability to adjust their service models (such …
The Washington, D.C., and Baltimore markets, when combined, represent the fourth-largest metropolitan region in the nation by population, and retailers are taking notice again. Grocery-anchored projects are the most prevalent in the headlines. For example, the first of nearly 20 Amazon Fresh locations has opened in the area. Additionally, Wegmans’ smaller format rollout plan is active with its first location in Stonebridge’s Carlyle Crossing in Alexandria opening spring 2022, along with Roadside Development’s City Ridge Project at the former Fanny Mae Headquarters in Northwest D.C. Former Shoppers Food Warehouse boxes also continue to get absorbed by new grocers. A less-covered sector of the grocery market is the international markets category, which remains very active in the region. There are 29 different banners across the region that exceed 10,000 square feet in size, with the newest entrant being Oh! Markets in Northern Virginia. Other international market newcomers, including 99Ranch and Enson Market, are also searching for space. With the immense ethnic diversity of the region, we expect investors to start taking notice of this sector with their acquisition appetite, just as they have in other regions like Texas and Florida. Publix, a customer favorite, is in the early stages of identifying …
Atlanta remains an incredibly active market for multifamily demand from both a renter and investor standpoint. The Atlanta metropolitan statistical area (MSA) boasts a population estimate by the U.S. Census Bureau of more than 6.1 million people, an increase of 14.3 percent over the past 10 years, and ranks consistently as one of the top recipients of in-migration in the country. The continued influx of new residents and rising home pricing have led to a vacancy rate of 4.9 percent, the lowest recorded in the MSA since 2000. In the third quarter, rents reached the highest average in Atlanta’s history of $1,561 per unit, an increase of 21.3 percent year-over-year. While on average apartment communities tend to see an average occupancy rate around 95 percent, eviction moratoriums have pushed occupancies at many to as high as 99 percent leased as property managers seek to make up for lost revenue. Residents are flocking toward urban infill projects in walkable parts of the city, such as in the micro-market along the Atlanta BeltLine Eastside Trail where effective rents reached $2,052 per unit, commanding a 31.5 percent premium over the metro Atlanta average. However, there has also been substantial rent growth recorded in …
The current state of the New Orleans industrial real estate market can best be described as “dichotomic.” On the one hand, New Orleans has the stability of a mature market featuring one of the largest and oldest ports in North America, traditionally serving heavy industry that continues to perform. On the other, you have two new proposed container port projects that could significantly alter the landscape of the industrial real estate market for the foreseeable future. Like so many other markets across the country, the New Orleans area is gaining its fair share of distribution facilities, with Amazon and the like scrambling for sites to service increased consumer and business-to-business demand. That said, the real game-changer for the distribution sector will ensue when at least one of the two announced container port projects in the New Orleans area comes on line. The Port of Plaquemines and the Port of New Orleans have both identified sites with access to rail, major roadways and water-based transport options that would fundamentally alter the opportunity for distribution emanating out of the New Orleans area. Either project would instantly create a great demand for warehousing and distribution space and further diversify the industrial asset class …
With the explosion of e-commerce over the past year and a half, it’s no surprise the industrial sector across the United States is posting significant gains. In fact, 2021’s national demand for industrial space is up by 22 percent year-over-year, and the market is showing no signs of retreating. This trend comes as a result of increased consumer demand for immediate, contactless deliveries, which has boosted demand for distribution centers that house e-commerce and logistics companies. The Louisville market, which features major attractors such as the UPS Worldport, two Ford plants, the GE Appliance Park and robust interstate connectivity, has experienced record success in 2021, with several key trends driving this sector’s growth. 1. Explosive leasing Louisville’s net absorption metrics are approaching historic highs. When COVID-19 hit, nearly all businesses took a 30-day pause to evaluate the implications the pandemic posed. The ensuing change in consumer purchasing patterns and product delivery pushed the national industrial market on a positive trajectory for both absorption and construction starts. Louisville is no exception. To date, 62 percent of industrial buildings in Louisville were leased prior to construction completion, compared to 25 percent in 2020. In addition, 85 percent of facilities delivered this year …
Like the rest of the country, metro New Orleans is slowly coming out of the COVID-19 fog. The uncertainty of these uncharted waters caused a lot of anxiety for multifamily owner and operators. Although there were some challenges, the market has survived the pandemic surprisingly well. The overall vacancy factor for the city is in the 5 to 6 percent range and should compress further given the modest pipeline of new inventory coming on line. The highest vacancy rates reported are in Algiers (15 percent) and East New Orleans (12 percent) where the majority of service and tourism workers lived and the most affected by COVID-19. It should be noted that we feel this downturn in occupancy is temporary and is showing signs of recovery as our tourism industry slowly rebounds. The Downtown/Warehouse district also experienced increased vacancies as residents fled the urban market for the suburbs with communities reporting vacancy rates as high as 15 percent. As the height of COVID-19 dissipated, the submarket rebounded strongly with many communities reporting 92 to 95 percent occupancy. Although previous years have seen a host of new developments enter the Downtown submarket, currently there are only two communities in the pipeline that …
The mountaintop of multifamily transactions was blown off in 2020 and 2021. Sales transactions are up 300 percent from 2017. Chattanooga’s hot market has gone from $150 million in transactions to nearly $500 million. Hungry investors have found prices lower than in many other desirable cities, the cap rates higher, attractive rental price increases and the locale unbeatable. Two-bedroom apartment rents are up over 17.6 percent in 2021 according to a recent local study yet still 19 percent below the average rate nationally. Residential price increases have outpaced the multifamily increases and made many single-family homes unaffordable for first-time homebuyers, further feeding the apartment demand. In addition to the volume of transactions increasing by some 300 percent, the sales price per door has risen significantly. In 2017 the average price per door for the market was $69,459 and in 2021 we are seeing $132,125 for a 90.2 percent increase. This statistic includes all product classifications. Class A prices per door have increased from $107,193 to $163,488. This is an increase of 52.5 percent. Class C product has risen from $46,176 to $93,308 per door. This indicates a 102 percent growth. Class C has outpaced all other classes in the last …