Southeast Market Reports

Jacksonville’s Apartment Market Experiencing Strong Rental Rate Growth

by John Nelson April 4, 2016

The Jacksonville multifamily market continues to enjoy strong fundamentals at levels not seen since before the recession. In fact, the last 18 to 24 months have seen a major record-setting environment. Jacksonville saw new records being set across the board from all asset classes in all submarkets. Class A and value-add assets continue to see cap rate compression and consequently we have new benchmarks for highest price per unit and price per square foot. In 2014, Jacksonville reached nearly $800 million in sales — accounting for more than 12,000 units (includes transactions exceeding $1 million). Based on the year-to-date transactional volume — $735 million with multiple large deals set to close by the end of the year — it’s safe to say that we will exceed last year’s amount. This is the highest sales volume for multifamily in Jacksonville in the last decade. The apartment market has experienced a steady improvement in fundamentals during the past 12 to 15 months. Effective rent increased 2.6 percent from $905 in the first quarter to $928 in the second quarter, which resulted in an annual growth rate of 5 percent. According to CBRE Econometric Advisors’ (CBRE EA) second quarter report, the forecast for …

April 4, 2016

Ameris Bank Riverplace Tower Downtown Jacksonville

Florida Market Reports Office Southeast Southeast Market Reports

Financial Services Sector is Driving the Growth of Jacksonville’s Office Market

by John Nelson March 28, 2016

With economic conditions improving across the country and business confidence significantly increasing, the Jacksonville office market is gaining momentum and seeing positive space absorption for the fifth consecutive quarter in a row. Jacksonville’s tax-friendly environment, competitive business relocation incentives and strong labor pool have historically been a magnet for Fortune 1000 companies looking to establish back-office locations, but over the last few years, the city has evolved into a regional hub for the headquarters of domestic and international financial services companies. Most recently, Georgia-based Ameris Bank announced that it would move its headquarters this January from Moultrie, Ga., to the 26th floor of Riverplace Tower in downtown Jacksonville. Among the reasons why Jacksonville was an attractive location for its headquarters is the ability to tap into the city’s growing skilled workforce and the opportunity to increase the bank’s footprint and brand exposure in this market. Jacksonville is also becoming a hotspot for global financial firms like German global banking and financial services company Deutsche Bank and Australia’s Macquarie Group. Deutsche Bank has been building its presence in Jacksonville since 2008, employing about 1,700 people, and continues to import jobs from the Northeast to Jacksonville as it grows its business operations. …

March 28, 2016

Market Reports Retail Southeast Southeast Market Reports Virginia

Hampton Roads Gains Attention From National Upscale Retailers

by John Nelson March 14, 2016

Millennials are the largest and fastest-growing retail consumer segment in the nation. In Hampton Roads, this demographic represents 30 percent of a total population in excess of 1.7 million people. This tech-savvy and largely transient group spends approximately $3.4 billion on retail and dining every year in the local economy. It is widely acknowledged that Millennials are changing the retail industry. Developers and retailers alike, faced with rapidly changing spending patterns, more than ever must focus on the shopping, living and working trends of these consumers in order to ensure that future developments meet the needs and expectations of this demographic. The well-established, nationwide trend of shoppers migrating to walkable, mixed-use environments has led to the proliferation of multi-faceted, pedestrian-friendly developments that feature specialty retail as an integral part of a live/work/play theme in a more or less urban setting. Hampton Roads is no exception to this movement. This explains the growth of lifestyle centers in Hampton Roads, as well as the successful repositioning of some traditional malls in the region. The combination of these upscale projects and the purchasing power of the large population base has finally caught the attention of many upscale national retailers that heretofore had considered …

March 14, 2016

Market Reports North Carolina Retail Southeast Southeast Market Reports

Grocer Expansions, High-Profile Projects Keep Charlotte’s Retail Market Humming

by John Nelson March 7, 2016

The Charlotte MSA continues to experience a high level of retail activity as we go into the last quarter of 2015. With a regional inventory of 62 million square feet of retail space, the MSA has seen more than 8 million square feet of new development proposed. Vacancy rates are holding steady in the 8 to 9 percent range, and average rents have remained stable. Grocers Setting the Pace Retail development activity in the Charlotte area remains driven by grocery store expansion. Publix has opened units in Ballantyne, Matthews, Southeast Charlotte and, most recently, South End, with several new stores approved and in various stages of development. Some of the Publix activity has resulted from conversions of units it acquired from Bi-Lo, while the Ballantyne, Fort Mill and South End stores were new construction projects. Publix will open five more stores in the market in the coming year, bringing its MSA store count to 16. This will include Publix’s first stores in the Cabarrus County and Gaston County markets. Perennial market leader Harris Teeter remains the dominant traditional grocer in Charlotte with a 20 percent market share, which places it, Walmart and Food Lion in close proximity. Harris Teeter, which …

March 7, 2016

District of Columbia Market Reports Multifamily Southeast Southeast Market Reports

D.C. Multifamily Market Absorbing Massive Amount of New Supply

by John Nelson February 29, 2016

Over the last year, metropolitan Washington, D.C.’s multifamily market has seen staggering amounts of new construction deliver, with net absorption levels that have surpassed all expectations. This is likely a result of similarly unexpected rates of job growth in the area and the remarkable resiliency of the metro D.C. economy as a whole. Among the major metropolitan markets around the country, metro D.C. — with the sense of permanence lent by the presence of the federal government — has historically been the most stable year to year, making it one of the safest bets for investors. Yet, given the massive amount of supply in the pipeline in recent years, the multifamily market has suffered a degree of hesitancy from investors fearing supply would outpace demand. However, this trend has reversed in the last 12 months, during which a record-setting 13,800 Class A multifamily units were absorbed. That figure jumps to 16,484 with Class B product in the mix. For all investment-grade apartments, stabilized vacancy has dropped 50 basis points to 3.7 percent. Class B units in particular have experienced excellent rent growth, rising 3 percent annually, while Class A maintains a growth rate of between 1 and 2 percent. Although …

February 29, 2016

District of Columbia Industrial Market Reports Southeast Southeast Market Reports

Leasing Demand Supports D.C. Industrial Market’s Measured New Construction

by John Nelson February 22, 2016

New industrial demand in the Washington, D.C., metropolitan region has come not only from its strong service economy, but also a rapidly growing consumer goods supply chain, e-commerce distribution seeking speed of delivery, data centers and even government contractors. Both occupiers and investors seek modern, state-of-the-art building design and features. The Washington metro industrial market (185 million square feet inclusive of flex space) was well into the single digits with a sub-9 percent vacancy rate as of the third quarter of 2015. New construction has returned with 2.7 million square feet poised for delivery. The overall market is fairly balanced between suburban Maryland and Northern Virginia comprising 88.3 million square feet and 87.3 million square feet, respectively. The remaining 9.3 million square feet is located in the District of Columbia. Vacancy has been on a downward trajectory for the region as a whole. The current 8.8 percent rate represents a drop of 100 basis points compared with the third quarter of 2014. The largest industrial market is found in Prince George’s County, Md., and totals 52 million square feet of industrial and flex space. Prince George’s County also anchors the south end of the Baltimore-Washington I-95 Corridor. If the adjacent …

February 22, 2016

Louisiana Market Reports Multifamily Southeast Southeast Market Reports

New Orleans’ Metro Multifamily Market is Humming an Upbeat Tune

by John Nelson February 15, 2016

There is a popular song from the HBO show Treme written and performed by Steve Earle titled “This City Won’t Wash Away”. Ten years ago the wind and water of Hurricane Katrina threatened to destroy almost a third of the multifamily market in metro New Orleans. After a decade of rebuilding, the multifamily market has emerged as one of the most dynamic and resilient markets in the country. For 10 straight years this world-class city has seen strong demand, increasing rents and stable occupancy. New Orleans is not only unique in its food, music and culture, but also its geography. The Crescent City is situated on the bend of the Mississippi River with Lake Pontchartrain to its north and wetlands to the east and west. The ability to increase inventory in Metro New Orleans is seriously impaired by a lack of land, as well as historic and demographic factors. Over the past 14 years the multifamily inventory in metro New Orleans has only increased by 10,500 units, an average of only 750 units per year. Included in that number is the rebuilding of existing inventory damaged by Hurricane Katrina. Fifty percent of the increase of inventory has been in downtown …

February 15, 2016

Louisiana Market Reports Office Southeast Southeast Market Reports

Following Massive Conversions, New Orleans’ Office Market is Taking Shape

by John Nelson February 8, 2016

The New Orleans office market remains dynamic. The city has obviously changed dramatically in the 10 years since Hurricane Katrina and is on a continued path of change going forward. Positive change. In the past 12 to 18 months, more than 1 million square feet of what used to be considered office space in downtown New Orleans has been converted to retail, hotel, residential or multifamily use. Projects such as 225 Baronne Street, the 1100 block of Tulane Avenue, 600 Carondelet Street, Factor’s Row redevelopment and approximately 130,000 square feet of space at 1250 Poydras Street (a 423,000-square-foot, Class A tower) are just a number of examples. More of this space was unoccupied than occupied at the time of the conversions. The most recent of these conversions, 600 Carondolet Street, resulted in the largest absorption of Class A office space in the market. Additionally, URS, now AECOM, leased approximately 70,000 square feet of space in 1515 Poydras, a 530,000-square-foot building located across from the Mercedes-Benz Superdome. In the central business district (CBD), Class A office occupancy is a healthy 90 percent and average rental rates have increased in the past 12 to 24 months to approximately $19 per square foot. …

February 8, 2016

Louisiana Market Reports Retail Southeast Southeast Market Reports

New Orleans’ Retail Market Continues to Thrive 10 Years After Hurricane Katrina

by John Nelson February 1, 2016

New Orleans recently celebrated a significant milestone: the 10-year anniversary of Hurricane Katrina making landfall. Those familiar with the area’s commercial real estate market agree that the city continues to thrive in and around the metro area. Despite a low vacancy rate and shortage of commercial opportunities in downtown proper, competition is fierce for quality properties, and new-to-market retailers have moved into the area. From the market downtown to the immediate suburbs and surrounding parishes, the Big Easy is well-positioned for continuous, steady growth. Sharing a border with New Orleans, Jefferson Parish is the most populous parish in the state. Veterans Memorial Boulevard is a six-lane thoroughfare in Jefferson Parish, which remains the primary retail development corridor in the market with the 120-store Lakeside Shopping Center. One of the most desirable spans of commercial real estate, the seven-mile stretch of highway runs from the airport to the intersection of Jefferson Parish and Orleans Parish. After scouring the market for several years, Trader Joe’s recently announced its first New Orleans metro area store in one of the last undeveloped tracts on Veterans Memorial Boulevard. Another grocery retailer, The Fresh Market, opened its first Jefferson Parish store in July. In addition, the …

February 1, 2016

Georgia Market Reports Retail Southeast Southeast Market Reports

Mixed-Use Projects with Grocery Anchors Top the Bill for Atlanta Retail Market

by John Nelson January 25, 2016

Economic indicators that support the retail market in Atlanta, like unemployment and the addition of non-farm payroll jobs, show positive signs that the sector has recovered from the economic downturn. Unemployment dropped to 6.1 percent in July 2015, compared with 7.6 percent a year earlier, and companies are showing no signs of slowing down on the hiring process. Non-farm payroll jobs in July reached 2.58 million, an increase of 85,000 jobs, or 3.4 percent, from a year ago. Atlanta’s vacancy rate continues to fall, dropping from 8.1 percent earlier this year to 7.9 percent in the second quarter, according to CoStar. While space is hard to come by, the good news is that some developments are popping up. In fact, during the second quarter, 12 buildings were completed totaling 208,524 square feet. Mixed-use projects featuring multifamily units are still active, particularly when a grocery store anchor is involved. Fuqua Development is building a six-acre project on Piedmont Road near Cheshire Bridge Road that will feature 300 apartment units, as well as 34,000 square feet of retail space. Sprouts Farmers Market will anchor the retail space with a 26,000-square-foot store. Fuqua Development also broke ground on Kennesaw Marketplace in June. Academy …

January 25, 2016

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