It is impossible to have a discussion about retail commercial real estate without considering the implications of shifting demographics. This is true both nationally and in the Columbia market. The unique demographic characteristics of the local market serve as an explanation for the current situation in retail real estate. The trends in retail real estate in Columbia echo those on that national level, although with the local market’s heavy concentration of Millennials (one of the highest in the Southeast), the opportunity for disproportionately high growth is significant. Those trends involve the sector being the last to emerge from the recession with low levels of retail development on a broad scale, but increasing activity and viability in urban and infill environments, especially for restaurants. Much of the retail activity in the market uniquely caters to that 20 to 34 age demographic. At this stage in their lives, the overwhelming majority of the younger demographic is focused on living in an active lifestyle, preferably in urban environments. This is making the prospect of infill retail, particularly as a component of mixed-use development, more feasible. This is resulting in increasing retail and multifamily development in Columbia’s downtown. For urban retail, there are three …
Miami’s four major office submarkets — Brickell, Downtown, Coral Gables, and Airport West Dade — are enjoying record growth in Class A asking rental rates, an emerging trend that is further strengthening the city’s positioning as a highly desirable market for local, national and foreign investors. In the city’s Brickell/Downtown business district, Class A office rents have skyrocketed more than an average of 14 percent per square foot during the past year — a significant difference from the historic average annual increases of 2 to 3 percent per square foot. In fact, the disparity in Class A and B rents in the urban core, where Class A rents range from 40 to 70 percent higher per square foot than Class B rents, is much greater than in submarkets, where Class A rents are approximately 24 percent higher than Class B rents. This creates further incentive for Class B buildings in the urban core to raise asking rental rates and stay apace with Class A, making it a strong business case for investors who are looking for a long-term play with maximum ROI. The rent growth is attributed to several factors. While we have seen strong net absorption by local companies …
Miami is coming into its own as an increasingly international city that continues to attract new residents, visitors and investment and development activity. The city’s urban core is flourishing, with residents gravitating toward a downtown area that allows them to live, work and play in the same neighborhood. The Miami retail market is experiencing a development surge to accommodate the city’s growth. Through the end of the first quarter of 2016, about 2.3 million square feet of retail space was under construction, according to CoStar. The developments are bringing a new class of retailers to the market. Major projects include Brickell City Centre, a 500,000-square-foot shopping center with a roster of tenants that includes Armani Collezioni, anchor tenant Saks Fifth Avenue and Valentino. North of downtown Miami, the $1.7 billion Miami Worldcenter project will introduce a high-street retail concept that is similar to the popular Lincoln Road open-air mall in Miami Beach. In Miami’s Design District, the $1 billion redevelopment of the neighborhood is attracting luxury retailers like Hermès, Louis Vuitton and Cartier. Downtown residents will have easy access to all of these retail destinations. Retail operating fundamentals remain strong in the Miami market. Vacancies closed the first quarter of …
Given a handful of macro-factors in the Miami industrial market including the Panama Canal expansion nearing completion, PortMiami expansion, strong American dollar, and improving relations with Cuba coupled with the country’s new mega-port project, it is a unique time to be an industrial real estate service provider. To succeed in this environment, it takes deep local knowledge and a global understanding of how Miami, the Caribbean and Latin American economies and infrastructure are intertwined into global commerce. The first macro-factor is the Panama Canal expansion, its first major renovation since the 1914 opening. The expansion is set to have a major impact on global trade; specifically, the way cargo will be handled and transported throughout the Western Hemisphere. The larger canal will accommodate the new line of Post-Panamax vessels — supertankers, container and passenger ships too large to previously pass through the canal. Miami is a prime location for these vessels and offers a tremendous expansion opportunity for the local industrial market provided the vessels have a port to dock. In response to the Panama Canal expansion, PortMiami completed a deep dredge project to allow the Post-Panamax vessels full access, which is the second macro-factor affecting Miami’s industrial market. The …
The Atlanta retail market continues to be robust, with vacancy tightening in key submarkets and rents trending upward. Overall vacancy fell slightly from 7.1 percent during the fourth quarter of 2015 to 7 percent in the first quarter of 2016, according to CoStar. However, the decline is greater in hot submarkets such as Buckhead and Central Perimeter that boasted vacancy rates as low as 2.8 percent and 3.2 percent, respectively, in the first quarter. Demand Up, Supply Tightens There is still a disconnect between supply and demand, especially in strong trade areas, and many retailers that wish to enter or expand in the market are finding it difficult to do so. Rents are escalating by 10 percent to 15 percent because of the increased competition for space and the high cost to build new developments is attributable to escalating land costs. During the first quarter, 21 buildings totaling 300,174 square feet were delivered, according to CoStar, and at the end of the first quarter, 1.73 million square feet of retail space was under development. As Atlanta can deliver more of the space that’s under construction and open up availability, rent is expected to continue to climb. Health and Fitness Food …
There has been a seismic shift in the way that companies throughout America make their relocation decisions, and it applies to Atlanta as well as its competitors. Companies are driven to locations that can provide a robust pipeline of talent and tight-knit innovative communities. This focus has created new demands on cities that want to build and sustain competitive economies. Companies have always taken talent into consideration but ultimately there was a belief that the talent would follow the company. This is no longer true. Millennials first choose where they want to live and then where they want to work. Today’s sought-after talent is closely tied to a city’s ability to provide a high quality of life. This means a connected transportation system, plenty of entertainment activities and accessible, affordable housing. All of this can be found in Atlanta. Companies that have recently chosen to call Atlanta home are a testament to this. From NCR (3,600 employees) to Kaiser Permanente (900 employees) to Worldpay (1,266 employees), all of these prestigious business newcomers have emphasized the critical role that access to highly qualified talent played in their decision to relocate here. Tight-knit, innovative communities do not just appear and cannot be …
It looks like 2016 is carrying on where 2015 left off. During 2014 and 2015, Atlanta set record after record for activity, positive net absorption and new construction; and the first quarter of 2016 didn’t disappoint. Activity during the first quarter of 2016 was over 13.5 million square feet, which contributed to a four-quarter total of 59.3 million square feet — the highest four-quarter total for activity ever seen in the Atlanta industrial market. We also witnessed the 16th consecutive quarter of positive net absorption with 3.1 million square feet of space absorbed during the quarter. Added to the last three quarters, net absorption totaled 16.5 million square feet of positive net absorption. Even with a large industrial inventory of 642 million square feet, that’s a significant achievement. Demand for warehouse and distribution space is fueled by Atlanta’s continued economic growth and employment. Unemployment in the Atlanta metro area is 6.1 percent and down from 6.3 percent that we reported last October (U.S. Bureau of Labor Statistics). Although construction slowed during the fourth quarter of 2015 with only 1.5 million square feet launched, it was only a short lull. New construction moved forward again for the first quarter of 2016 …
The real estate market in downtown Birmingham has followed the “chicken and egg” trend. Over the last few years, over a dozen multifamily projects have been announced, but the major hurdle is proving the demand as people moving downtown have wanted a downtown grocer. While some multifamily developers decided to proceed with construction, others waited on the sidelines hoping a grocer would announce a new downtown location. On the other hand, major grocers put off locating in downtown Birmingham due to the lack of people living in the general area. Problem solved when construction started last year on a new 30,000-square-foot Publix with a full-service pharmacy in downtown Birmingham. Developers Scott Bryant and Dick Schmalz announced that the Publix will anchor a new multi-story, mixed-used development. Publix considered a store in downtown Birmingham in 2007 and again in 2009 before finally deciding to bring a store downtown now. The development of the Parkside District with Railroad Park and Regions Field, along with existing and planned apartment projects in the area, contributed to the timing. With the addition of Publix, several other multifamily projects are well underway or completed, such as the 228-unit LIV Parkside, 332 total units next to Regions …
Pick up any Birmingham newspaper and the headlines will likely reveal plans for a historic building renovation, a new mixed-use development or a prominent Birmingham company expanding into the Central Business District (CBD). Birmingham has enjoyed a surge of development over the last few years, with nationally recognized projects such as Railroad Park and Regions Field, the renovations of prominent downtown buildings and the emergence of new districts throughout the city. With all the development going on, it’s no wonder that the Birmingham office market is thriving with investors taking an interest in many of the city’s best Class A properties. The years 2014 and 2015 marked a record number of Class A properties trading to prominent national investors, and the trend seems to be continuing into 2016. Over the past year, Hertz Investment Group expanded its Birmingham footprint to include Inverness Center (four buildings), the Wells Fargo Tower and the BB&T Bank Building, a total of more than 1 million square feet. The Matrix Group purchased the four-building portfolio Meadow Brook North, totaling more than 500,000 square feet. 2016 is off to a promising start with the sale of one of the Southern submarket’s most prominent buildings, the 211,335-square-foot …
Birmingham’s renaissance has been underway for several years now, but it has taken some time for the rest of the world to find out. This year they started paying attention. The opening of Railroad Park, Regions Field, the Iron City event venue and now the recently restored Lyric Theatre have made it clear that there are intriguing things going on in downtown Birmingham. Lonely Planet, the respected travel information source, included Birmingham in its “2016 Best in the U.S.” list, asking, “Could Birmingham be the coolest city in the South?” Food media giant Zagat named Birmingham “America’s No. 1 Next Hot Food City” and the Travel Channel chose Birmingham to its list of “11 Next Great Destinations.” Foodies and fashionistas are not the only groups showing interest in Birmingham. Multifamily investors have been building new developments and acquiring and repositioning existing properties over the past few years. This activity reflects national trends — investors looking for alternatives to top-tier markets and Millennials gravitating to an affordable urban core. Nonetheless, with its burgeoning downtown food and arts scene, Birmingham has earned a second look. Strong Year for Downtown Developers liked what they saw and acted accordingly. In 2014 and 2015, plans …