Southeast Market Reports

Miami-Dade County’s Office Market Fueled by Solid Local Economic Fundamentals

by John Nelson June 11, 2018

Driven by population and job growth, Miami-Dade County is one of the strongest and most sought-after commercial real estate markets in the Southeast. As of February 2018, the county’s unemployment rate stood at 4.7 percent, which, while only a 10-basis point decline from the rate in February 2017, represents continued positive movement. The metro’s economic stability and growing employment base are significant factors when analyzing the tightening office market. Miami-Dade County ended the first quarter with an overall office vacancy rate of 9.67 percent, a 106-basis point decline from the previous year. Also, net absorption was positive with suburban areas such as Airport/Doral, Coral Gables and South Gables/South Miami remaining primary contributors to the county’s growing office sector. The trend continued from 2017, as the year ended strong with nearly 1.5 million square feet of total net absorption countywide. As overall vacancy declines and rental rates rise, development in Miami-Dade remains active with 717,000 square feet under construction, 657,000 square feet of which is being developed within the top five most in-demand submarkets for corporate growth. Projects such as Two MiamiCentral, Giralda Place and Mary Street are redefining South Florida’s office landscape as mixed-use environments become more ubiquitous. Record-Low Vacancy …

June 11, 2018

Florida Market Reports Property Type Retail Southeast Southeast Market Reports

Retailers Get Creative as Miami is Hot, But Available Space is Not

by John Nelson June 4, 2018

The Miami retail market is healthy, expanding and not showing signs of a slowdown. At more than 2.8 million people with an average household income of nearly $70,000, demand for more retail continues throughout Miami-Dade County. The submarkets of Aventura, North Miami, Coconut Grove, Kendall and Pinecrest, as well as the urban core submarkets of Brickell, Midtown and Wynwood, reflect this with low vacancy rates and increasing rents. Most of the new construction projects underway or recently delivered are in the form of mixed-use projects, both within Miami’s urban core and in well-established submarkets such as Coral Gables, Doral and the Design District. The bad news? Miami is landlocked between the Atlantic Ocean and the Everglades, limiting space for traditional retail development and retailer footprints. But here’s where it gets interesting, and promising — instead of abandoning the market, developers and retailers in Miami-Dade County are simply getting creative with the limited dirt available. Building Density Because of the scarcity of land and its high price per-acre, density is the top priority, resulting in a surge of vertical, mixed-use developments with structured parking. For instance, Brickell City Centre demonstrates that if developers want critical mass, sometimes the only way to …

June 4, 2018

Florida Market Reports Office Property Type Southeast Southeast Market Reports

Tampa Bay’s Office Market is Evolving with New Spec Construction on the Horizon

by John Nelson May 28, 2018

Economic growth in Tampa Bay continues at an impressive pace, driven by strong population and employment growth over the past several years. The unemployment rate has steadily declined, dropping 110 basis points from December 2016 to a current 3.4 percent, and the strong pace of job growth continues with a rise in non-farm employment of 35,000 new jobs during the trailing 12-month period ending December 2017. As a result, leasing activity has increased, rental rates continue to show incremental growth and there is a strong likelihood of new speculative office construction in the coming year. Major corporations continue to reaffirm their confidence in Tampa with significant announcements of planned corporate expansions by MetLife, Pricewaterhouse Coopers (PwC), AAA and USAA during the second half of 2017. In fact, the Tampa Bay metropolitan area ranked as one of the top 20 “U.S. Markets to Watch” for overall real estate prospects in the Emerging Trends in Real Estate 2018 report published by PricewaterhouseCoopers and the Urban Land Institute. Investment Activity Many investors who in years past were seeking opportunities in gateway markets are now turning their attention to secondary markets like the Tampa Bay area in search of higher yields. There were several …

May 28, 2018

Market Reports Property Type Restaurant Retail Southeast Market Reports

Diverse Population, UAB Help Retail, Restaurants Expand in Birmingham

by John Nelson May 21, 2018

It wasn’t until the last five to seven years that college graduates started looking at Birmingham as a place to live and work. Cities like Nashville and Atlanta were getting too expensive and too congested. Upon discovering how progressive Birmingham has become with the revitalization of the downtown area, it became the new hot place to live, play and work. So what was once an untapped market has started to grow with new retailers and restaurants to meet the growing demand. The addition of Topgolf to downtown Birmingham, for example, would not have happened without the influx of new multifamily projects in the downtown/southside area. Birmingham has also seen a growth of new restaurants to the area because of the diversity of population. The number of medical and undergraduates students studying at the University of Alabama-Birmingham (UAB) Medical complex has contributed to the diversity. As such, restaurants and retailers that cater to this diversity have begun to open in the area. The Pizitz Food Hall is a prime example as it includes two restaurants and 12 food stalls serving cuisines from all over the world, including Italian, Israeli, Ethiopian, Japanese, Vietnamese, Indian and traditional Southern soul food like fried chicken …

May 21, 2018

Alabama Market Reports Multifamily Southeast Southeast Market Reports

Birmingham’s Multifamily Market Sees a Turnaround in Highway 280 Corridor

by John Nelson May 14, 2018

Birmingham’s multifamily market closed out 2017 with an average 7 percent vacancy rate and effective rents that flirted with the $900 per unit ceiling. On the investment side, multifamily assets in the market demonstrated some notable pricing trends through year-end 2017. The market outperformed the region and the nation in terms of value appreciation on a per unit basis. The average price per unit in Birmingham increased by more than 20 percent from fourth-quarter 2016 to fourth-quarter 2017. And, among these assets, garden-style properties stood out with a 36 percent increase in average price per unit. One explanation for this trend is the combination of value-add upgrades to garden-style properties in the market, as well as new construction that is lifting values in the market. To that end, Birmingham’s Highway 280 Corridor makes for a great case study. Stabilization of 280 Corridor What was a soft submarket in 2017, the Highway 280 Corridor in Birmingham has now rapidly tightened up in the first quarter of 2018. This one corridor spans various Birmingham submarkets ranging from urban Central City and Southside to Birmingham’s southeastern suburbs of Meadowbrook and Lake Purdy. According to Alabama Traffic Data (ATD), the average annual daily traffic …

May 14, 2018

Alabama Market Reports Property Type Retail Southeast Southeast Market Reports

Multifamily Projects, Experiences Redefining Birmingham’s Growing Retail Market

by John Nelson May 7, 2018

It’s no longer a secret that Birmingham and its surrounding communities are confidently moving forward, bursting with festivals, arts, concerts, parks, reimagined spaces and a red-hot local dining scene. These revitalized spaces represent opportunities to find affordable housing, a vibrant social life and a place where all can participate in the community’s ongoing progress. Tourism is also on the rise, with a 50 percent increase in expenditures over the past 10 years as visitors flock to the region to dine at the restaurants of culinary legends, cheer on Minor League Baseball teams in a downtown stadium, attend the Sidewalk Film Festival, watch IndyCar racing at the Barber Motorsports Park, visit the historic Civil Rights Museum and enjoy live music venues throughout the area. With all of its history, charm and new amenities, Birmingham is no longer a pass-through; it is the destination. The greater downtown Birmingham area experienced a 40 percent increase in its multifamily inventory in 2017, which is nearly three times the amount added in 2015. These spaces are filling up quickly as the submarket’s occupancy rate is currently at 92.5 percent and climbing. Everyone from millennials who are marrying later and waiting longer to buy homes to …

May 7, 2018

Industrial Market Reports Property Type South Carolina Southeast Southeast Market Reports

Advanced Manufacturing, Logistics Activity Accelerate Upstate’s Industrial Growth

by John Nelson April 30, 2018

The Greenville-Spartanburg economy has a long legacy of being fueled by industrial activity. Today, the whole Upstate market continues to experience record levels of growth as it evolves into advanced manufacturing, automotive and distribution related activities. South Carolina is the largest exporter of goods on a per capita basis in the Southeast and has one of the highest densities of foreign direct investment per capita in the United States. The Upstate is the manufacturing center of South Carolina, with approximately 55 percent of the market’s 177 million square feet of industrial space classified as manufacturing. Due to the strong fundamentals of the market, manufacturing is expected to continue to grow. The metro offers manufacturers a pro-business environment, with skilled and affordable labor, a critical mass of industry and a solid transportation infrastructure with access to high population bases. Strategic Location The region is also becoming increasingly crucial to supply chains serving the East Coast and Southeast. The Upstate can reach over 95 million people within a day’s truck drive. With the continued proliferation of e-commerce, the Greenville-Spartanburg market provides an opportunity to mitigate transportation costs by allowing companies to leverage Inland Port Greer, which provides overnight service to and from …

April 30, 2018

Market Reports Office Property Type Southeast Southeast Market Reports Tennessee

Memphis Office Market Grows Its Existing Inventory by Nearly 6 Percent

by John Nelson April 23, 2018

Memphis ended 2017 with an overall vacancy rate of 14.8 percent, which is up slightly from where the year started at 14.5 percent — the highest level in three years. As the saying goes, “don’t judge a book by its cover,” and this especially applies to the Memphis office market. In 2017, 600,000 square feet of office space was absorbed. Developers also started 2017 with more than 1.2 million square feet of new office space in the pipeline, with 800,000 square feet delivered last year and the other 400,000 square feet expected to be delivered by the end of the first quarter this year. So within just six months, nearly 6 percent of Memphis’ total office market size was added to the overall available space. That is more new product being delivered than the city has seen in over a decade. Of this 1.2 million square feet, nearly 80 percent will come from adaptive reuse projects, where previously non-functioning properties located in non-core submarkets have undergone significant repurposing. The Sears Crosstown building was erected in 1927 as a 1.5 million-square-foot, mail-order processing warehouse and Sears retail store. The project was the largest building in Memphis at the time of its …

April 23, 2018

Market Reports Multifamily Property Type Southeast Southeast Market Reports Tennessee

Stability Will Be Defining Characteristic of Memphis Multifamily Market in 2018

by John Nelson April 16, 2018

Consistency is key, and that’s exactly why investors find Memphis more attractive than ever: the Grind City’s financial and commercial real estate stability. The area has grown into a hub for both the distribution and transportation industries. As the largest economic driver in the state, Memphis International Airport alone injects over $20 billion a year into the region’s economy. Thanks in large part to FedEx, the airport has become the second-busiest cargo airport in the world. FedEx’s presence creates a secondary demand from all retailers as they want to have a large distribution presence in the market. Going High-Tech Marketable growth in the Memphis economy extends beyond the distribution and transportation industries. Sizable expansions at University of Tennessee’s Medical School, St. Jude Children’s Research Hospital, Methodist University Hospital and LeBonehur Children’s Medical Center, as well as the migration of medical device manufacturers such as Smith & Nephew and Medtronic, show how Memphis is not only the Home of the Blues and global shipping, but also a high-tech healthcare hub for the Mid-South region. All this growth has helped propel Memphis’ millennial population, especially 20- to 34-year-olds who make up a high percentage of the city’s workforce. Last year, Memphis marked …

April 16, 2018

Industrial Market Reports Property Type Southeast Southeast Market Reports Tennessee

Memphis Industrial Market Closes Out 2017 With Strong Wave of Absorption

by John Nelson April 9, 2018

The positive momentum for the Memphis industrial market continues. For the previous three years, the market has had positive absorption every quarter. This momentum continued through 2017, where we saw an annual net gain of 6.6 million square feet of positive absorption. Memphis has not seen this type of multi-year, record-breaking performance since the early 2000s. Achieving year-over-year absorption volume at this level proves Memphis can continue to attract both new developers and investors. Given ideal geographical positioning, Memphis is known as America’s Distribution Center, boasting unparalleled expertise in distribution and logistics. The Memphis International Airport houses the second-busiest cargo airport in the world. Companies recognize that the Memphis MSA offers reliable, cost-effective distribution, with the ability to reach 70 percent of the U.S. population within 24 hours. Moreover, Memphis is one of only three cities with five Class I Rail Systems, and has the fifth-largest inland port, as well as 10 major trucking companies utilizing Interstates 40 and 55. It’s no wonder that FedEx World Hub makes Memphis its home, and UPS chose it to house a major hub. Southeast Submarket The Memphis market continues to see nearly all of its growth to the southeast into Fayette County, Tennessee, …

April 9, 2018

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