Southeast Market Reports

Two Proposed Port Container Projects Could Catapult NOLA’s Industrial Sector

by John Nelson December 28, 2021

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 …

December 28, 2021

Industrial Market Reports Southeast Market Reports

Four Reasons Why Louisville Industrial Market Shows No Signs of Slowing Down

by John Nelson December 27, 2021

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 …

December 27, 2021

Louisiana Market Reports Multifamily Southeast Southeast Market Reports

NOLA’s Apartment Market Remains Stable as Occupancy Gains Momentum

by John Nelson December 21, 2021

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 …

December 21, 2021

Multifamily Southeast Southeast Market Reports Tennessee

Chattanooga Multifamily Sales are Up 300 Percent From 2017 Levels

by John Nelson December 20, 2021

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 …

December 20, 2021

Industrial Office Southeast Southeast Market Reports Virginia

Richmond’s Trajectory is Still in the Early Innings

by John Nelson December 20, 2021

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 …

December 20, 2021

Kentucky Market Reports Office Southeast Southeast Market Reports

Derby City Office Market Now Entering Full-On Recovery Mode

by John Nelson December 20, 2021

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 …

December 20, 2021

Georgia Industrial Market Reports Southeast Southeast Market Reports

Just Like the Rest of the Country, Atlanta is Also Shattering Industrial Records

by John Nelson December 15, 2021

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 …

December 15, 2021

Hospitality Louisiana Market Reports Retail Southeast Southeast Market Reports

New Orleans Lays Ground Work for a Return to a ‘Wonderful World’

by John Nelson December 14, 2021

“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 …

December 14, 2021

Kentucky Market Reports Multifamily Southeast Southeast Market Reports

Booming Employment Continues to Drive Louisville’s Impressive Multifamily Market

by John Nelson December 13, 2021

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. …

December 13, 2021

District of Columbia Industrial Market Reports Southeast Southeast Market Reports

Mid-Atlantic is Where Labor, Ports and Transportation Infrastructure Intersect

by John Nelson November 15, 2021

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 …

November 15, 2021

Newer Posts

Older Posts