Richmond continues to solidify its position as a high growth Mid-Atlantic market and one of the top secondary markets in the country for inbound corporate and real estate investment. The Richmond MSA, totaling nearly 1.4 million people, has been one of the true beneficiaries of the COVID-19 pandemic due to its historical performance during economic distress, in-bound millennial and corporate migration from larger peer markets, quality of life and affordability, diversified economy, educated workforce, pro-business environment and the city’s central East Coast location. With such broad and fundamentally important characteristics, Richmond will continue to attract both domestic and global corporations and capital alike. The continued growth of Richmond’s diverse economy and workforce, fueled by its core industries including healthcare, manufacturing, industrial and technology, and further supported by its federal (Federal Reserve Branch and 4th Circuit Court) and state capital underpinnings, has generated a bullish sentiment on the economic growth prospects for 2022. As of fourth-quarter 2021, Richmond’s unemployment currently sits at 4 percent, representing a consistent decrease since the start of 2021 and well below the national average of 5 percent. City’s Industrial Sector is Taking Off Richmond’s highly coveted Interstate 95 corridor location and $300 million Port of Richmond …
Louisville’s office market is certainly a representative example of a typical office market in a mid-sized city. As expected, Louisville experienced the impact of COVID-19 and the remote work trend. Downtown had to endure the social unrest during summer 2020 that created a perception of a lack of safety. Our community has work to do to get things back to “normal,” but things are slowly starting to move in the right direction. As has always been the case, the downtown and suburban markets face different trends. Typically, the suburban market has outperformed the central business district (CBD) with higher average rents and lower vacancy. Presently, the downtown Class A market has average rents in the $19.11 per square foot range and vacancy around 22 percent. The suburbs are seeing $22.16 per square foot in rent and 14.6 percent vacancy. Recently, the CBD posted 480 square feet of negative net absorption for the second quarter. After taking large hits throughout most of the pandemic, this looks to be a sign that downtown may finally be turning the corner. The suburban market took a big hit this past quarter due to vacancies and downsizing of two large companies. Even so, suburban markets …
The Atlanta industrial market has been hot and setting records for quite some time now, and the third-quarter numbers for 2021 show that this trend is continuing as we are once again setting all-time record highs for activity, positive net absorption and new construction. Activity for the Atlanta industrial market for the third quarter alone was over 24.6 million square feet, which beat the previous record for a single quarter by over 4.1 million square feet. Adding the third-quarter numbers for activity to the previous three quarters, Atlanta has posted a new record high for a four-quarter period with over 82.2 million square feet of activity. This breaks the previous four-quarter record for activity by over 6.4 million square feet. It would certainly be logical to conclude that the net absorption numbers would be robust and positive as well for the same time periods, and you would be right. Atlanta set another record for positive net absorption with over 12.1 million square feet, which was over 2.8 million square feet higher than the previous record. When you add the third quarter numbers to the previous three quarters, you will see again a new record high for a four-quarter period with …
“I see friends shaking hands, saying how do you do…” Like many urban city centers, New Orleans has faced unprecedented challenges from COVID-19 over the past 19 months. The metro area lost more than 85,000 jobs between second-quarter 2019 and second-quarter 2020. In an economy heavily reliant on tourism, Orleans Parish was the most impacted with over 41,000 jobs lost, predominantly in the hospitality sector. Retailers — and their employees — depend on the large boosts of economic activity provided by large-format gatherings such as conventions and festivals like Jazz Fest, French Quarter Fest, and Mardi Gras, all of which were cancelled for the past 24 months. Additionally, the very active hurricane seasons of 2020 and 2021 resulted in devastation from three major storms in economic centers along our coastal community. New Orleans is still navigating clean-up efforts following Hurricane Ida, which landed Aug. 29, while real estate developers, builders and tenants face even more pricing and timing challenges due to material and worker shortages that were further hindered by storm activity. However, we are marching in the right direction. Cruises are resuming from Port of New Orleans (Port NOLA). Business travelers are getting back on the road. Offices are …
Louisville’s multifamily market has long benefited from the city’s highly diversified employment base. With strongholds in distribution (boosted by the recent surge of e-commerce sales), manufacturing, healthcare and professional services, Louisville has rebounded from the pandemic-induced recession more quickly than much of the rest of the country. As of July 2021, the local unemployment rate was 4.5 percent, while the national rate was 5.4 percent. In addition to increased job growth, local employers are raising wages to attract top talent needed for expansion requirements. This wage growth, coupled with employment demand, has created a considerable advantage for multifamily property owners that have been able to push rental rates on an annual basis. Integra Realty Resources (IRR) reports that overall market vacancy is hovering at a low 4 percent. The combination of low vacancy rates and wage growth has allowed multifamily owners to increase rent structures. Landlords have seen high single-digit annual rent increases for the last four years in the Louisville MSA. Class A properties have been achieving rents approaching $2 per square foot for some unit types in luxury developments. IRR also reports that there are currently over 4,000 multifamily units planned or under construction in the Louisville MSA. …
Speaking at the Port of Baltimore on Nov. 10, President Joe Biden touted the now passed $1 trillion infrastructure bill as a “once-in-a-generation investment” designed to help us push past the COVID-19 pandemic. The $17 billion earmarked specifically for port improvements is welcome news as on Nov. 15, the day the bill was signed, 90 container ships carrying goods valued at $85 billion were still waiting to dock off the coast of California. Throughout the pandemic, the transportation infrastructure and labor supply for the East Coast and the Mid-Atlantic specifically have demonstrated efficiency and productivity. The two main ports — the Port of Virginia and Port of Baltimore — processed record container volumes of imports and exports through cargo ship, rail and barge at record “turn times” of under one hour, meeting and overcoming many of the challenges within the supply chain. Connecting the dots As we approach the 2021 gift-giving season and beyond, it is crucial to focus on the “why I should care” factor. The Port of Virginia for example, which by 2024 will be the only 55-foot-deep port on the East Coast, experiences cargo movements that occur 64 percent by truck, which is nearly double the next …
Mention “rising secondary multifamily markets in the Southeast” and what might come to mind are markets such as Charlotte, Raleigh, Nashville or Orlando. A less discussed candidate is Richmond, which has a case to be considered the multifamily sector’s best-kept secret. It’s a secondary market that’s moving forward full steam ahead for two primary reasons: supply and demand. More people = demand According to the 2020 Census, the population of the city of Richmond stood at 232,226, a 12.7 percent increase from the 204,375 reported in 2010. Richmond is the county seat of Henrico County, which had a population of 333,766 as of 2020. This is an 8.6 percent increase over the 2010 population count of 307,201. More residents are moving to Richmond, mainly for one reason: jobs. But the metro has other appealing factors as well, incuding its geographic location and low costs of living and doing business. In addition to being the site of growing employment centers, Richmond is proximate to major East Coast cities. New York City, Philadelphia and Washington, D.C., are easily accessible via train or airplane. But Richmond is relatively affordable, especially compared to other Mid-Atlantic markets and gateway cities on the East Coast. With …
“Infill, redevelopment and reuse” are the mantras in the city of Richmond and even in some suburbs, where new construction continues to follow residential growth in nearly all the surrounding counties, with Chesterfield and Henrico being the most active. The municipalities themselves play key roles as well. Costs for land and construction continue to escalate, so creativity is key no matter what avenue pursued in the retail world. And like most of the United States, Richmond’s developers and property owners are getting creative to keep their centers relevant. Short Pump Town Center, Richmond’s darling mall that is owned by a partnership of Brookfield Properties, QIC and local developer Pruitt Cos., is not immune to closures and felt the pain when Nordstrom announced it was not reopening after shuttering the store during the height of the COVID-19 pandemic. However, with the strength of the retail market in Short Pump, the mall and the surrounding market continue to perform. The Container Store and an expanded Arhaus backfilled a vacant hhgregg, and the mall has recently announced deals with Fabletics and Warby Parker. ShopCore Properties, which owns West Broad Village anchored by Whole Foods Market, REI and HomeGoods, struggled for years with vacancy …
At the mid-year mark, industrial occupancy in the greater Richmond area remains strong, closing with an overall occupancy rate of 93 percent in the categories we track (Class A, B select C vacant and investor-owned product with a minimum of 40,000 square feet total). Class A occupancy increased to 96 percent at the end of the second quarter, up from 93 percent at the end of the first quarter. Class B occupancy experienced a slight decrease to 91 percent, down from 92 percent at the end of the first quarter. CoStar Group reports overall industrial occupancy at 95 percent for product of all sizes, including investor-owned facilities, but excluding flex space (minimum 50 percent office). Richmond’s strategic Mid-Atlantic location along Interstate 95 provides access to 55 percent of the nation’s consumers within two days’ delivery by truck, and in addition to being the northernmost right to work state on the Eastern seaboard, Virginia has once again been named as the top state for business by CNBC. Business Facilities also ranked Richmond as one of the top locations for corporate headquarters. With 12 Fortune 1000 companies located in the region, Richmond is home to the most Fortune 1000 headquarters compared to …
As COVID-19 took hold in early 2020, the Orlando retail market only saw a modest dip in fundamentals where metro-wide rental rates fell by 5 percent and occupancy dropped 100 basis points during the second and third quarters. Beginning in the fourth quarter of 2020, rental and occupancy rates began an extraordinarily strong comeback, climbing 12 percent and 140 basis points, respectively, from the COVID-19 lows. According to data from CoStar Group, the metro’s average rental rate of $15.84 per square foot in the second quarter is more than 7 percent higher than the pre-pandemic peak. And occupancy rates are 40 basis point higher than the pre-COVID-19 peak, currently standing at 96.4 percent. With escalating land prices and shortages in raw materials and labor, we anticipate overall construction costs will continue to increase, stalling deliveries and further advancing rental and occupancy rates. Last year, some retail owners (sellers) and investors (buyers) focused on asset management within their portfolios and reevaluated the perceived investment risk due to the pandemic, which caused a sharp dropoff in 2020 investment activity, despite an abundance of capital available to invest. After a couple quarters of fundamentals bottoming out, owners and investors had confidence in their …