Southeast Market Reports

Columbia’s Turbocharged Manufacturing Renaissance is Alive and Well in 2019

by Alex Tostado August 12, 2019

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 …

August 12, 2019

Florida Market Reports Retail Southeast Southeast Market Reports

Miami is Defying Nation’s Retail Woes With Thriving Malls, Shopping Centers

by Alex Tostado August 9, 2019

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 …

August 9, 2019

Florida Market Reports Office Southeast Southeast Market Reports

Farewell Boom-Bust Cycle: Miami Office Market Ascends as the City Matures

by Alex Tostado August 7, 2019

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 …

August 7, 2019

Florida Industrial Market Reports Southeast Southeast Market Reports

Distribution, Warehouse Demand Continues to Outpace Supply in South Florida

by Alex Tostado August 5, 2019

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 …

August 5, 2019

Florida Market Reports Multifamily Southeast Southeast Market Reports

Robust Population Growth Drives Apartment Construction in Downtown Miami

by Alex Tostado July 29, 2019

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 …

July 29, 2019

Georgia Market Reports Retail Southeast Southeast 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

Alabama Market Reports Retail Southeast Southeast Market Reports

Birmingham Retail Market Sees Strong Backfilling Activity, Infill Developments

by Alex Tostado July 1, 2019

Birmingham’s retail market continued to see positive growth in 2018, and it’s safe to argue this is largely due to a significant amount of retail space being backfilled with entertainment, discount, medical and first-to-market tenants that otherwise may not have been able to enter the market. Dave & Buster’s backfilling a Forever 21 space at the Riverchase Galleria, Urban Air leasing a former hhgregg box in Trussville, Ollie’s acquiring the former Toys ‘R’ Us box in Hoover and Floor & Décor backfilling the former Kmart in Homewood are just a few recent examples of this in Birmingham. Two additional noteworthy deals that have been recently announced include REI opening its first Birmingham location in a portion of the former Toys ‘R’ Us box at The Summit and the Dick’s Sporting Goods/Golf Galaxy combo store moving into the soon-to-be former Academy Sports + Outdoors space at Lee Branch. The new combo store will be Golf Galaxy’s first location in Alabama. These two deals alone all but confirm this backfilling trend is going to continue for some time. More often than not, you will find these new tenants are paying higher rents, driving larger traffic volumes and generating more sales tax income …

July 1, 2019

Alabama Market Reports Office Southeast Southeast Market Reports

Relocations, Expansions Push Birmingham Office Market to a Tipping Point

by Alex Tostado June 24, 2019

Birmingham is a unique market for Class A office space. Last year had its fair share of notable transactions (both sales and leases), but overall a few key transactions from previous years pushed absorption in the negative figures. The most significant deal that is still impacting our market was a tenant relocation into the Red Roofs Colonnade (Colonnade North and South) located at the interchange of Highway 280 and Interstate 459, the heart of the 280/459 office submarket. Southern Co. Services signed a 700,000-square-foot, long-term lease at the project, and as of Jan. 1, the Red Roofs are now fully occupied. This transaction left a sizable block of Class A office space along the 280/459 corridor. Soon after announcing the relocation, FIS backfilled about 112,500 square feet within Inverness Center North. The CBD is still recovering from Regions Financial giving back about 160,000 square feet at Regions/Harbert Plaza, but this building has seen a large amount of activity since this announcement. Our market is in the midst of absorbing these previous deals now and moving in the right direction. This year has gotten off to a quick start with two encouraging announcements. Shortly after Wells Fargo announced it will be …

June 24, 2019

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