There are many things to be optimistic about in metropolitan Washington, D.C.’s multifamily market. Here are some facts to consider: — The D.C. metro multifamily vacancy averages 3.4 percent compared to the national average of 4.5 percent. — The D.C. region has seen $3.174 billion in multifamily sales activity year-to-date with an average cap rate of 5.2 percent. — Private investors are leading multifamily sales activity in the D.C. metro region and responsible for 64 percent of the deal flow. — Multifamily investment sales are up by 4.5 percent compared to the first half of 2015. — An influx of new workers to fill the 92,500 new jobs added in the last year has heightened demand for multifamily units despite an abundance of new supply. With a low unemployment rate of just 4.1 percent and job growth far exceeding the national average, and at its highest point since December 2000, the Nation’s Capital is humming with activity. Last year, D.C.’s multifamily market saw staggering amounts of new construction deliver with net absorption levels that surpassed all expectations. Many of the young workers are interested in an urban live-work-play environment ripe with amenities and relish the opportunity to decrease commute times …
The building height restriction — enacted in Washington, D.C. to preserve picturesque views of the United States Capitol Building and the Washington Monument — helps provide clear and exceedingly stunning views of the multitude of construction cranes that currently dot the vertical landscape of the District of Columbia. The majority of these yellow-steeled economic generators are being used to develop new residential and mixed-use projects, ranging from the NoMa district to the southeast Waterfront area and weaving through the neighboring suburbs, including Loudoun, Va., and Bethesda, Md. And, where new residential goes, supporting retail always follows, including the trendiest grocery store chains and hottest fast-casual and dine-in restaurant concepts. In addition, the area’s ever-expanding transportation network that provides a daily lifeline to D.C. and suburban workers is also paving the way for new retail opportunities as our Nation’s Capital continues to retain its reputation as among the most prolific retail locations in the country. Downtown Core Residential-only or mixed-use projects currently underway in the District are too numerous to mention, but here is a glimpse into the frenetic activity as there appears to be a bottomless appetite for new housing, particularly among Millennials. MRP Realty is developing the 1,600-unit Rhode …
The Washington, D.C., metropolitan industrial market, spreading from Frederick County, Maryland to the north, Prince William County, Virginia to the south and as far west as Loudoun County, Virginia is ideally situated between I-95 and I-81 — major transportation corridors that allow shipments to easily reach much of the country. The industrial market has improved more quickly than other sectors and fairly dramatically to the point where much of the region can be described as land-constrained and under-supplied. Certain industrial sub-segments, such as data centers, have impacted the availability of warehouse and distribution space in key locations for optimal supply chain design. As of the third quarter of 2016, the area’s industrial market totaled 190 million square feet (inclusive of flex space), divided almost equally between the markets of Suburban Maryland (90.6 million square feet) and Northern Virginia (90.2 million square feet). The District of Columbia comprised 9.2 million square feet, and 1.5 million square feet was under construction region-wide. Approximately 4.2 million square feet has been absorbed year-to-date, and vacancy was 7.9 percent — a 250-basis point decrease from 10.4 percent reported as recently as year-end 2013. In comparison, the office market has ranged from 14 to 14.9 percent …
New Orleans may be The Big Easy, but when it comes to understanding this unique Southern city’s commercial real estate marketplace, very little is easy or simple. The numbers, at least, are fairly straightforward. New Orleans currently has around 8.8 million square feet of Class A office space and 1.6 million square feet of Class B. Average rental rates are approximately $19.00 per square foot and $15.50 per square foot for Class A and Class B, respectively, with current occupancy rates at 89.5 percent for Class A and 71 percent for Class B. By way of comparison, the popular suburban Metairie market has around 2 million square feet of Class A and 1.5 million square feet of Class B office space, with occupancy rates at 93 percent and 88.2 percent, respectively (both down slightly from 2014 highs of 95 percent and 92 percent). Average rental rates are approximately $24.00 per square foot in Class A properties and $19.50 for Class B. The numbers in the suburban North Shore market are similarly healthy, with rates and occupancy numbers in the same general range as Metairie. Look beyond the surface numbers, however, and things get interesting, and a little more complicated. In …
The Atlanta office market has continued down a path of steady recovery and absorption, although the pace remains somewhat muted from prior recovery cycles. As outside investors have warmed up to the city of Atlanta, they have been comforted by a safe and positively boring period of growth. For the last couple of years, investors have been committed strongly to value-add opportunities throughout metropolitan Atlanta, including areas that have historically been out of favor like Alpharetta and Peachtree Corners. The fundamental improvements in the market rents and occupancy continue to support bullish forecasts for office space in Atlanta with significantly low vacancy and steady rent growth. Atlanta’s office market sits at 12.1 percent vacancy, 6 percent rent growth and 3.6 million square feet of positive net absorption after several years of consistent absorption and falling vacancy. With value-add being a buzz word throughout the Southeast, many investment sales brokers have taken core assets and found ways to present them as opportunities for value-add in an effort to reach a larger pool of investors. Investor appetite continues to be measured and very focused on downside risk versus upside potential. This has inflated the return expectations for very solid real estate, making …
To understand the state of retail in Atlanta in 2005, you first looked at where and what developers were building, then to where retailers were locating and lastly to how consumers were shopping. Simply put, if a developer built it and a retailer occupied it, the consumer was sure to shop there, but that’s no longer the case. To understand the state of retail in Atlanta today, you need to start with the Atlanta consumer. Go Big or Go Home From 2000 to 2010, the Atlanta Regional Commission reports metro Atlanta added over 1 million residents with an additional 2.5 million people projected to be added between 2015 and 2040. Further, according to a study by the University of Georgia, half the state’s population growth is concentrated in just three Atlanta metro counties — Fulton, Gwinnett and Forsyth. A big driver for the growth is jobs, especially those in high-paying sectors like information, professional services, science and technology. EMSI reports that two of the counties making up Atlanta’s metropolitan area, Forsyth and Coweta, are in the top eight of large counties for skilled job growth. Additionally, Forbes claims Atlanta is now growing its business service sector faster than New York, …
Commonly referred to as the River Region, Montgomery is the second largest city in Alabama and the state capital. The Montgomery metropolitan area consists of Autauga, Elmore, Lowndes and Montgomery counties. With a population approaching 374,000, the River Region’s diverse economy, skilled workforce, business-friendly climate and Southern charm continue to attract new residents and commercial development. Key industries in the Montgomery metro area include automotive, manufacturing, fabricated metals, plastics, warehousing/distribution and state/regional government. As of June 30, total unit count in the Montgomery market is 6,588 with an average year built of 1997. According to the Axiometrics second-quarter 2016 report for Montgomery, annual effective rent growth has averaged 1.2 percent since the fourth quarter of 1996 with annual effective rent growth forecast to be 0.1 percent for 2016, 1.7 percent in 2017 and an average of 2.6 percent from 2018 to 2020. The Axiometrics report also states the market’s occupancy rate has averaged 92.2 percent since the fourth quarter of 1995. Currently, occupancy in the Montgomery market is 89.6 percent as of second-quarter 2016, which is a slight decrease from 91.1 percent in the first quarter of 2016 and 90.7 percent in second-quarter 2015. Axiometrics projects the market’s occupancy rate …
Louisville is no longer simply a city known for horse races, bourbon and tobacco. It has become a city with a diverse and growing economy with heavy concentrations of medical employment, an international logistics hub and a stable manufacturing base. It has grown to become the dynamic northern edge of the Southeast, and investors from all over the nation are flocking to it. Louisville is an established riverfront city in the Southeast with a growing population, diversification of employment and an attractive multifamily supply/demand balance. The area is home to 12 Fortune 500 companies, three of which are headquartered in the city. The metro is a nationally recognized regional distribution and warehousing hub serving major operations such as Ford Motor Co., General Electric and many others. The city has seen steady job growth since the recession. In fact, the U.S. Bureau of Labor Statistics estimates that between July 2010 and July 2016, 80,000 new jobs were created. With a very successful series of major distribution facilities now open and future capital investments in distribution parks planned, Louisville continues to be a hotbed in the logistics industry. Leading this remarkable transformation to a logistics giant is the development and expansion of …
As one project finishes, another one is soon to begin. The $2.3 billion Ohio River Bridges Project its nearing its December 2016 completion, and Louisville commuters are yearning for a return to normalcy and enhanced transportation options. The East End Crossing will link Louisville’s fast-growing suburban markets to Southern Indiana’s burgeoning distribution hub at River Ridge. The new Abraham Lincoln Bridge parallels the John F. Kennedy Bridge downtown and carries I-65 across the Ohio River. After three years of disrupting traffic in metro Louisville, both projects are entering their final phase of construction. Just as the Bridges Project nears completion, two major projects in Louisville’s central business district (CBD) may have an impact on the office market. The Kentucky International Convention Center closed in August for a two-year, $200 million renovation project. Sections of 3rd and 4th streets will close during the construction, which could have a drag on downtown commuter traffic. In addition, Louisville will welcome a 600-room, $289 million Omni Hotel in 2018, but not before the major project squeezes Liberty Street and Muhammad Ali Street traffic. Both significant projects will bring dividends to Louisville’s CBD when completed, but the market will have to endure some disruption in …
Industrial activity in Louisville is growing at an exponential clip and doesn’t appear to be slowing anytime soon. As famously quoted in Field of Dreams, “If you build it, they will come.” And indeed they have. In Louisville and extending into southern Indiana, more than 3 million square feet of new construction has already been delivered this year. What’s more, the current pipeline of projects under construction — coupled with proposed construction — could deliver as much as 3 million square feet or more in the next nine to 12 months. The real estate landscape in Louisville is forever changed. Historically, institutional investors expressed interest in the region but were reluctant to take action. Now, with robust projects on the horizon, the pool of institutional owners making large-scale investments continues to grow. New players like The Opus Group, Dermody Properties Inc., Browning Investments LLC, Molto Properties LLC and VanTrust Real Estate LLC have all established projects in Louisville in the last two years. But why Louisville? Investors are setting sight on Kentucky for more than just new construction. Prime Locations Even during the economic downturn between 2008 and 2011, Louisville was never a victim of the extreme fallout experienced by …