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 …
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. …
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 …
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 …
Atlanta’s office market offers key factors that are harder to come by in other top markets: stability and top universities. Because the city is so diverse, it is not reliant on any one type of business for survival. It’s less volatile, which is one factor that has allowed us to come back from the Great Recession, although slowly, in a more firm and healthy fashion. In line with the majority of the country, Atlanta is currently a landlord’s market. With continued occupancy gains and a shortage of new product, rents are increasing and will continue to do so until additional Class A product delivers and the price gap between existing buildings and new construction gets smaller. Overall office vacancy in Atlanta is as its lowest point in 14 years, with strong growth in rental rates. However, Atlanta still offers the best deal overall, as tenants, developers, owners and investors are able to take advantage of its low cost of living and operating costs, excellent quality of life and a rich local talent pool. Driving the Atlanta office market, we see the technology, advertising, media and information (TAMI) sector. CBRE recently released two tech-related reports that rank the top tech talent …
Atlanta’s industrial market is hotter than the proverbial pistol. Second-quarter activity set a single-quarter record with more than 18.2 million square feet leased or sold. When added to the activity from the previous three quarters, Atlanta strung together more than 59.6 million square feet of completed transactions. This represents the second highest activity level ever recorded for a four-quarter period. There was more than 6.3 million square feet of positive net absorption. Combined with the previous three quarters, Atlanta shows a total of more than 19.7 million square feet of positive net absorption for the last four quarters. For the second quarter, the availability rate dropped one-tenth of a percent to 14 percent — the lowest it has been since the fourth quarter of 2000. And just four to five years ago, the overall availability rate was above 20 percent. Development and construction are absolutely booming. With more than 7 million square feet of new construction recorded during the second quarter, the market also set a record for new construction in a single quarter. When looking at the four-quarter total, we see more than 18.8 million square feet of new construction — a level not seen since 1998. Of that …
The retail market for Louisville has continued to improve over the past year. New ground-up developments, which have been virtually nonexistent the past five years, are now open for business. Vacancy rates are falling, new tenants are entering the market, and retail investment sales continue to be in high demand. The $2.5 billion Louisville- Southern Indiana Ohio River bridges project is on track for a 2016 opening. New developments in downtown and northeast Louisville, as well as Southern Indiana, are looking to capitalize on the new infrastructure. GBT Realty is looking to expand its presence in the market with a proposed 220,000-square-foot joint venture project across the river in Jeffersonville, Ind. The site is located within in the 170-acre master-planned Jefferson Town Center on Veterans Parkway. Menards is opening a new 200,000-square-foot property this fall across the street from GBT’s proposed development. In addition to GBT Realty’s newly opened Middletown Commons and Jefferson Commons in Louisville, the three projects are from developments that were planned before the Great Recession and now have new life. The Outlet Shoppes of the Bluegrass, located in Simpsonville, Ky., has been a major success since opening in late 2014. After just six months, an expansion …
Louisville’s retail market continues to experience a shortage of space in high-demand markets in spite of several new developments opening over the past year. During this period, two major retail developments have been completed with several smaller projects under construction or in the planning stages. Second-generation big box vacancy is virtually non-existent and finding quality shop space is becoming equally challenging. As a result, rents have escalated to historic highs. The most notable additions to the Louisville market are two neighborhood centers developed by Brentwood, Tenn.-based GBT Realty Corp. Nestled amongst a rapidly expanding residential community and PGA’s notable Valhalla Golf Club in eastern Louisville, the 240,000-square-foot Middletown Commons is anchored by Hobby Lobby, Academy Sports + Outdoor, Ross Dress for Less and Liquor Barn. Jefferson Commons, located in south Louisville, is anchored by Academy Sports + Outdoor, Hancock Fabrics, HH Gregg, Michael’s, Liquor Barn and several fast-casual restaurant concepts. In western Louisville, BC Wood Properties added Hobby Lobby and Goody’s stores at the 350,000-square foot Dixie Manor Shopping Center. Southwest of the city’s central business district, the redevelopment of Dixie Valley Shopping Center expanded its footprint to include additional soft goods retailers such as Marshalls, Ross Dress for Less, …
The Louisville multifamily market has consistently demonstrated strong, favorable market fundamentals, which has drawn significant interest in this growing riverfront city. Since 2010, the market has seen 19.8 percent rent growth and continually posted occupancy gains. This momentum resulted in a record amount of multifamily transactions in 2014 and continues to fuel investor demand today. This momentum in the multifamily sector is happening not only in Louisville, but across the U.S., according to CBRE Research. Overall demand for rental housing continues to be driven by demographic-led household formation and a deepening preference for rental vs. owner tenure. Supply continues to grow briskly and rent and revenue growth are accelerating. Additionally, a recent CBRE multifamily study found that the national homeownership rate is 63.4 percent — its lowest level since 1967. The report also discovered that the national rent growth has reached its strongest year-over-year gain in nine years. And we don’t expect this trend to level off anytime soon. During the first half of 2015, the Louisville market demonstrated strong fundamentals with increasing rents and occupancy. Between 2014 and 2015, the annual market-wide rent growth was 3.4 percent, bringing the average rent to $786, or $0.86 per square foot. The …
Louisville’s industrial market continues to impress as it has successfully navigated recessionary times to the now current brisk market with solid activity. Even within those leaner times of 2009 and 2010, Louisville grew its occupied footprint by approximately 1.6 million square feet with perhaps a recipe that includes its beneficial geographic location and infrastructure, diverse manufacturing and logistics economy buffeted by UPS Worldport and Supply Chain Logistics, and aggressive state incentives provided by Kentucky and adjacent neighbor Indiana. The I-65 corridor is currently, and has been, white hot over the last 15 years. Louisville, like many similarly sized cities with populations over 1 million, has developed to its outer edges and industrial development is now spilling into smaller adjacent communities such as Shepherdsvillle, Ky., and Jeffersonville, Ind., both of which no longer resemble their former industrial selves. National and international developers like Prologis, USAA, Dermody, Exeter, DCT, Pinchal and Welsh, along with local developers such as Main Street Realty, Capstone, America Place and Crossdock, have found these communities and the I-65 corridor not only ripe with opportunity, but flush with tenants. On the Louisville side of the Ohio River, current speculative construction along the corridor includes more than 1.4 million …