With Atlanta’s economy more robust than ever, demand for multifamily housing remains high, driving rent growth and investor interest throughout the market. Since the last cycle — when a reliance on construction hit hard — the city has transformed its economy by building up its IT, healthcare and automotive sectors, among others. The results of strong job growth and the diversification of employment are evident market-wide. In particular, Buckhead and Midtown have seen a substantial increase in multifamily supply over the last three to five years, as spillover activity in East Atlanta and West Midtown will continue. And the rise of two multibillion-dollar sports stadiums (Mercedes-Benz Stadium and SunTrust Park) in the same year — a first for the city — continues to draw national and international attention to intown and metro submarkets. Urban Goes Suburban A seemingly insatiable demand for urban live-work-play settings has inspired developers to replicate the highly-amenitized and high-rent success in the suburbs. Alpharetta’s Avalon was a game changer, spurring destinations in John’s Creek, Gwinnett County’s Peachtree Corners and the mixed-use boon around SunTrust Park in Cobb County. So far, development activity has been steady in the northern submarkets, with little activity on Atlanta’s south side. …
Although so-called “creative office space” is for now a tiny slice of the overall supply in Atlanta, it represents the most significant change in the use of office space in generations. Tenants and landlords have only begun to use creative design principles to push rents past levels previously thought unreachable, while increasing worker productivity and satisfaction. Trends in this sector will define the American workplace for decades. The largest users of creative office space — also commonly referred to as loft office space — today are in the TAMI sector (tech, advertising, media and information), but law practices, engineering firms and others are also embracing the open office concept. In Atlanta, there is 3 million square feet of creative office space, which is only 1.2 percent of the metro area’s total inventory. But the vacancy rate for creative spaces is just 8.3 percent and the gross asking price is $29.90 per square foot, both considerably outperforming the traditional office arena. Since 2013 the asking rate for traditional office space in Atlanta has grown 17.2 percent. For creative space the asking rate has shot up 62.5 percent. The top end asking rate for creative spaces is more than $6.50 higher than …
A decade ago, the Atlanta retail market was a house of cards. It was clear to see this if you were in the industry at the time, and possibly even if you weren’t. Based on the intense overbuilding that had taken place, it wouldn’t have taken a worldwide economic meltdown to wreck it, though that didn’t help. Literally hundreds of unanchored retail centers had cropped up all over suburbia, fitting directly into everything that people consider to be negative about shopping centers. The formula for developers was to scrape every tree from a piece of land, cover it with asphalt and an inexpensively constructed building, then fill it with whatever tenants they could find. The result was largely a glut of properties with poor intrinsic values: mid-block sites, odd shaped layouts, challenging access, uninspired, non-credit tenants with high rents. This would, of course, turn out to be unsustainable. To be fair, not every property was developed in this fashion. Atlanta was and still is home to many excellent retail developers that know how to create amazing projects. But many look back to the 2000s in Atlanta as a time of cookie cutter development with inexperienced builders playing a game of …
Louisville has a lot going for it when it comes to logistics. In addition to its prime location on the Ohio River, the city benefits from three major interstates running through it: Interstates 64, 65 and 71. I-65 is considered a Tier 1 Corridor due to the high volume of trucks that travel over this route, connecting Chicago and Indianapolis through Louisville to the Southern states. Louisville’s location also allows companies to reach 60 percent of the country’s population within a 12-hour drive. Perhaps most importantly, Louisville is home to UPS Worldport, the largest automated package handling facility in the world, and the center point of UPS’s worldwide air network. More than 300 flights arrive and depart daily, and the hub processes roughly two million packages a day and more than 4 million during peak holiday shipping season. E-commerce lives here and UPS offers customers the ability to drop shipments at Worldport much later in the day, compared to other cities, while still providing next morning/day delivery. Louisville is not only a great logistics hub, it has a strong manufacturing base. Louisville is home to GE Appliance Park and two Ford Plants: Louisville Assembly Plant and Kentucky Truck Plant. Louisville …
Sometimes there are benefits to being late to the party. Louisville, having lagged behind larger surrounding cities in multifamily development post-recession, is now experiencing a boom in apartment construction, much of which is being supplied by out-of-state developers. For similar reasons, including Louisville’s sustained economic growth fueled by continued strength as an international distribution center alongside a stable manufacturing base, national investor demand for Louisville multifamily properties has intensified. Traditionally known for the Kentucky Derby and the bourbon industry, Louisville is now raising eyebrows with a growing population, robust job growth and balanced multifamily supply and demand. Big Business, Jobs At the heart of this burgeoning story is UPS Worldport, the primary global air hub for the world’s largest package delivery company. UPS, the largest private employer in Kentucky, continues to expand its presence in Louisville, having recently announced a $310 million expansion of its Centennial hub sorting facility. Ford Motor also recently announced that it is investing $900 million in its Kentucky Truck Plant, in addition to the $1.3 billion and 2,000 jobs created at that plant in late 2015 to build Ford Super Duty trucks. Additionally, Qingdao Haier Co., having acquired Louisville-based GE Appliances in June 2016, announced …
Louisville’s evolving retail market has presented a mix of new development and infill redevelopment opportunities that have created a substantial amount of activity in targeted areas. While rents and absorption activity have fluctuated, several of these new developments have proven that well-designed, experiential retail projects can still gain traction and create the buzz necessary for successful brick-and-mortar retail. No project in Louisville encapsulates this more than the Whiskey Row project that is taking place downtown in the central business district (CBD). It has been several years since retail development or retailers have ventured downtown, but this new project has created the level of excitement that has attracted national retailers. The driving force behind Whiskey Row is the tourism industry centered around Louisville’s well-known bourbon scene. The $30 million mixed-use project will be a redevelopment of former distilleries, with the developer preserving and restoring the historic facades, while building out world-class retail, restaurant and office space in the existing structures. The entire project will consist of 24,000 square feet of retail. With new distilleries and restaurants opening around the mixed-use development, retailers have been drawn by the foot traffic that will undoubtedly be delivered by tourists traveling to Louisville for the …
The Richmond retail market continues to be strong. Overall vacancy rates are slightly higher than usual, hovering around 7 percent with negative absorption, due to all types of new products coming online in the first half of 2017. The market is adding millennials at double the pace of any other generation and has been recently named in multiple media outlets as one of the top living destinations for millennials nationwide. With this influx, multifamily development in Richmond is robust, which in turn is attracting all types of urban retail and chef-driven restaurants. The most popular submarkets for new urban retail are the Central Business District, Shockoe Bottom and the white-hot Scott’s Addition, with many developers taking advantage of Richmond’s Historic Tax Credit program. Richmond’s famous grocery wars continue with major players jockeying for the best positions. Kroger has historically positioned themselves well in the market with 18 stores, many of which have gone through recent expansions to the Marketplace concept. It recently scrapped plans for the development of two new relocation positions in Mechanicsville and Colonial Heights. The most recent grocery news has been Martin’s Food Markets exiting and Publix entering the market. Martin’s peaked at 19 stores, most of …
Over the past 12 months, a surge in out-of-market activity has stabilized Richmond’s downtown office market, which had faced a seemingly insurmountable glut of space just last year. For years, Richmond’s Central Business District (CBD) struggled to retain tenants as many sought more affordable locations in the suburbs, while other tenants shed space as they optimized their footprints. However, with a steady flow of high-profile inbound operations into Richmond’s CBD, the momentum has since shifted and the re-urbanization trend, an established facet of many of the nation’s major markets, has now taken hold in Richmond. Out-of-Market Demand Swells After five consecutive quarters of securing a sizable new-to-market operation, the cumulative direct impact of this inflow climbed to over 300,000 square feet. This surge in inbound activity played a pivotal role in stabilizing the CBD, which captured 94 percent of these inbound operations. Much of this activity has been driven by the explosive 14.9 percent growth in Richmond’s millennial population from 2010 to 2015, per a recent study by the Urban Land Institute for Time magazine. According to the study, Richmond is the second fastest growing city for millennials in the country, only behind Hampton Roads. Similarly, Virginia shot up in …
At the mid-year mark, the Richmond industrial market has continued to strengthen, closing with an overall occupancy rate of 91 percent in the categories being tracked — Class A, B and C vacant and investor-owned product with a minimum of 40,000 square feet of total rentable building area (RBA). Class A occupancy decreased slightly from 96 percent at the end of the first quarter to 95 percent at the end of the second quarter, and Class B occupancy has remained steady at 92 percent. The year-to-date net absorption is in excess of 1.5 million square feet, in part due to lower reported vacancies in the Class C former tobacco storage complex located south of downtown Richmond. The inventory of quality, freestanding facilities available for owner/users to purchase remains in short supply, with central locations in even greater demand and experiencing a shorter shelf life. CoStar reports overall industrial occupancy at 95 percent for products 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. In addition to being the northernmost right-to-work state on the …
Orlando’s industrial market is coming into its own. As high-profile users such as Amazon, Samsung and Best Buy continue to enter the market, major brands are taking a fresh approach to Central Florida’s logistical advantages, and an increased number of national REITs are combing the area for any opportunity they can uncover. Despite an unprecedented boom of speculative industrial building, demand continues to outpace supply. In the industrial sphere, Orlando has become the juggernaut of Florida. This growth has been fueled by a number of overlapping factors. Tourism has always been a huge driver for Orlando’s industrial sector. Disney World remains North America’s most-visited theme park. The convention business is thriving and Port Canaveral is one of the top cruise industry ports in the world, attracting some of the largest ships. Now, the area’s tech industry is taking off as well. The $75 million, 100,000-square-foot manufacturing research center, BRIDG — just delivered in Osceola County — will be a catalyst for further growth in high-tech manufacturing and research. Add to this the second fastest rate of population growth in the nation, and the city once known primarily as Florida’s tourist mecca is primed for commercial expansion. On the national level, …