The momentum of the Charlotte office market continued in the first quarter of 2019, as office rents rose for an eighth consecutive quarter and the city notched a major economic development win with the announcement that BB&T and SunTrust would merge, creating a new bank that will be headquartered in Charlotte. The news came on the heels of announcements late last year that Honeywell plans to relocate its corporate headquarters to the city and that LendingTree would expand its headquarters, creating 436 jobs over five years. The city’s economic strength has been fueled by a growing labor market that was led by the tech sector in 2018. Last fall, CompTIA’s 2018 Tech Town Index found that Charlotte is the No. 1 city for information technology workers when it comes to job opportunity and cost of living. At the time of the report, more than 44,000 IT jobs had been posted in Charlotte over the previous 12 months. That number is projected to grow by 11 percent over the next five years as Bank of America Corp., Wells Fargo & Co. and Ally Financial look to fill IT jobs at all levels. Office rental rates in Charlotte increased by 6.5 percent …
Charlotte has been in expansion mode for several years, due to population growth, excellent logistics infrastructure, low operating costs and low unionization rates. At the mid-point of 2019, the market continues to expand at a healthy rate and is growing outward into Cabarrus, York and Gaston counties. This expansion follows a strong 12-month period ending first-quarter 2019 when nearly 6 million square feet of new product was delivered. Now encompassing 322 million square feet of space, Charlotte is the second largest industrial market in the Southeast. Charlotte’s accessible location and low cost of doing business is attracting many e-commerce and logistics providers, as well as more traditional industrial businesses looking to expand or realign their space requirements. One common theme is consolidation of business units, which has been a significant benefit to the Charlotte market. Among the examples are J.J. Haines & Co. consolidating its Carolina warehousing operations from several Carolinas locations into a 500,000-square-foot distribution center in Cabarrus County and Staples consolidating from multiple Charlotte facilities into a 600,000-square-foot logistics center in south Charlotte. Driven by available land and access to key transportation routes, a look at the market’s growth patterns shows that development and leasing are extending up …
As job growth supports a healthy economy in Southwest Florida, the region is experiencing major population growth, causing a surge in new Class A multifamily construction. The number of new construction Class A units in Southwest Florida has increased by nearly 150 percent year-over-year. In first-quarter 2018, there were 257 Class A units completed, and in first-quarter 2019, that number rose to 622. With this increased supply of Class A properties, there is now more demand in Class B properties among renters, and ultimately from investors. Class B properties tend to have more affordable rental rates, and investors have now noticed the potential for higher investment returns. Illustrating this demand, in the first quarter of 2018 in Southwest Florida, there were 17 Class B properties sold that totaled nearly $39 million. In first-quarter 2019, the sale volume increased to $68 million with nine properties sold. Also, investors were willing to pay more for these assets if they had a value-add component With Class B vacancies being tight at 4.6 percent, investors are making interior and exterior improvements to properties and gradually raising rental rates to increase their returns. For example, a value-add Class B multifamily property in Fort Myers recently …
If you have visited Chattanooga in the past year, it should come as no surprise that you are in fine company. Mayors and Economic Development executives from across the nation have been flocking to the Scenic City. Envious of the Chattanooga success story, they have come to witness firsthand the ongoing transformation that has made Chattanooga one of the most livable, sensational and progressive mid-sized cities in America. The Chattanooga retail market is strong, chiefly due to the overall health and culture of the entire city. River City Co., a longtime successful, private nonprofit led by CEO Kim White, touts itself as the economic development engine for downtown. It reports the cost of living in vibrant downtown Chattanooga is 15.9 percent less than the national average. This has drawn everyone from millennials to retirees to the vibrancy and livability of the city. Tourism in a non-coastal Southern city with fewer than 180,000 residents may seem not even worth pursuing, but Chattanooga hosts more than 3 million annual visitors. Travelers are lured by destinations such as the Tennessee Aquarium, Children’s Discovery Museum and the IMAX. There are also events such as the Ironman; the Head of the Hooch, which is one …
There is a lot of buzz about the dominance of e-commerce and its effects on the industrial market. Columbia has its fair share of retailers with e-commerce distribution facilities as Amazon, The Home Depot and Target all have major distribution centers in the Midlands region of South Carolina. However, retail distribution is not the main driver of this industrial market. The heart and soul of the central South Carolina industrial market is manufacturing. Manufacturing properties make up approximately 35 percent of the 70 million square feet of industrial product in the Columbia metropolitan statistical area. While the balance of space is classified as warehouse/distribution, a large portion of that is used to service manufacturers, pushing the total amount of manufacturing-related space well above 50 percent. Since 2013, the pace of South Carolina’s manufacturing job growth has been four times faster than the national growth rate. This manufacturing renaissance has created demand for Class B multipurpose buildings that have manufacturing infrastructure, such as heavy electric services, cranes, HVAC and support facilities including locker rooms, restrooms, cafeteria and parking to handle larger employee requirements. In the 1970s and 1980s, industrial buildings constructed in central South Carolina were part manufacturing facility and part …
While there are mass retail closings around the country, in Miami, there is typically someone waiting on space to become available. Think about it: In Miami, there is actually a shortage of retail space. Uber luxury markets in Miami are performing extremely well with Bal Harbour Shops (owned by Whitman Family Development) being one of the top retail complexes in the country, followed closely by Dadeland Mall and Aventura Mall. These malls are continuously reinvented and expanded, adding various entertainment and diverse dining options to their multi-level retail outlets. The Dolphin Mall, a 1.4 million-square-foot mixed-used complex owned by Taubman Cos., continues to be its No. 1 performing mall in the country, with over 240 retail shops, dining and entertainment venues to choose from including Bass Pro Shops Outdoor World, Cobb Dolphin 19 Cinema, The Cheesecake Factory, Dave and Buster’s, Texas de Brazil, Bloomingdales The Outlet Store, Neiman Marcus Last Call and Saks Fifth Avenue OFF 5th. Miami is cruising There are several factors driving this phenomenon. First, Miami International Airport traffic is setting month-over-month and year-over-year records, according to the Greater Miami Convention and Visitors Bureau. Traffic in February 2019 was 5.7 percent higher compared to February 2018. Cruise …
For decades, the real estate market in Miami has been either boom or bust. Lately, the market has been on an impressive expansion cycle, with new office development following aggressive lease rate increases that in some areas have risen as much as 20 percent in total the past few years. As investors and users witness the growth in South Florida, the market has seen a significant amount of new development as rental rates continued to climb. The quick expansion, and arguably over-development, has left some investors wondering if a bust is inevitable with such a crowded market. In many metro areas, a bust would be a logical result. However, South Florida has become more mature as a corporate center, leading many industry leaders to see Miami’s future as a more consistent, stable market of growth rather than one with a constant pattern of boom and bust. As South Florida matures with a diverse range of investors and users, adapts to industry disruptors and addresses transportation issues, the office market is moving into a pattern of more stable growth, with no bust on the horizon. Leasing, sales activity In the first quarter of 2019, the office market saw 1.1 million square …
Miami-Dade continues to be propelled by persistent economic growth, bustling port activity, positive investor sentiment and strong leasing, creating a perfect recipe for industrial demand. Following its most successful year ever in 2018, PortMiami broke records yet again in first-quarter 2019, recording its highest ever monthly cargo activity amount in January with a total of 104,183 twenty-foot equivalents (TEUs) of containerized cargo, a 17 percent increase over January 2018. Meanwhile, a $437.5 million expansion project, the largest ever, is planned for Port Everglades in nearby Broward County. The positive fundamentals reverberate throughout the overall South Florida market. Despite the differing industrial inventories of each South Florida market with Miami-Dade County at 186.2 million square feet, Broward County at 96.9 million square feet and Palm Beach County at 39 million square feet, demand for space across the region has fueled unprecedented development activity. Logistics, e-commerce Net industrial absorption in Miami-Dade was impressive during the first quarter, posting positive 1.2 million square feet, a notable 45 percent increase from the net absorption recorded for first-quarter 2018. Several (mostly) preleased, speculative developments contributed to the spike in net absorption. Demand trends against development indicate healthy industrial markets in Broward and Palm Beach as …
The apartment construction boom continues in Miami as rapid demographic and employment growth foster rental demand. Employers expanded staffs by 25,900 personnel year over year in February, roughly 6,900 more than in the preceding annual period, which has kept the unemployment rate below 4 percent for 12 consecutive months. Hiring during this period was led by the professional and business services sector, due in part to a growing tech sector. The relatively higher salaries in this segment helped boost the median household income 6.8 percent year-over-year in March, among the top five growth rates in the nation. Available employment is helping draw new residents and produce population growth above the national pace. Over the past 12 months, the metro has gained nearly 28,000 residents, generating a strong need for additional housing options, and many are opting to rent. These factors are contributing to robust apartment demand and maintaining minimal rental availability in several submarkets, including Downtown and North Central Miami, despite the increase in deliveries over the past few years. The rise in household income is providing demand for apartments with luxury amenities in walkable urban neighborhoods. During the first quarter of 2019, apartment deliveries remained above the five-year average …
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’ …