2014 was an exceptional year for sales and leasing activity for the Raleigh-Durham industrial market. Velocity in investment sales boomed in 2014 — the strongest year since 2006, and second strongest in history. Developers are actively seeking land to build new parks as demand for Class A industrial space outweighs supply and rental rates begin to rise. Although, the Raleigh-Durham MSA is a smaller industrial market in the region, it’s been ranked No. 1 by Forbes as the Best Place for Business and No. 2 for the Fastest Growing Large U.S. City from 2010-2030 by the United Nations Population Division. Companies continue to announce corporate relocations and expansions and unemployment is lower than the national average at 4.5 percent in October. EDM America relocated its $150 million headquarters operation to Raleigh from Pennsylvania. Argos Therapeutics announced an expansion project in Durham — a $57 million bio-manufacturing plant. The area has also seen an influx of third-party logistics companies, moving companies and suppliers for the home building industry opening new locations and consolidating to larger blocks of space. As user demand continues, there is a strong desire by investors to become a part of our market or expand their current footprint. …
The overall snapshot is that Atlanta’s economy is on a growth tract in terms of employment and corporate growth, and has definitely rebounded from the recession and its previous overbuilding. Economic growth and the current lack of speculative development are driving the improvement in the retail market. Rental rates, occupancy levels, absorption, leasing momentum and pricing are increasing. In addition, new retailers are entering or looking to enter the market. However, the retail market’s improvement varies across the metro region. Vacancy and Rental Rates Due to positive absorption and leasing momentum in both vacant and sublease space, the overall occupancy rate and average rental rate for Atlanta’s retail inventory have been increasing. According to CoStar’s third quarter retail market update, the overall vacancy rate is now down to 8.8 percent and the average rental rate is $12.78 per square foot. However, when you break it down by submarket and property types, rental rate and occupancy gains vary significantly. Quality shopping centers in strong submarkets and locations have experienced very strong gains, yet Class B and C centers and those located in certain submarkets are still lagging the overall market. The Buckhead, Central Atlanta, Central Perimeter and Georgia 400 submarkets are …
The Southeast’s increasing relevance in the global marketplace is due in large part to the success of its ports. Internationally recognized companies like BMW, Boeing and Walmart have expanded in the Southeast to operate closer to the ports handling their imports and exports. According to JLL’s Port, Airport & Global Infrastructure research division, volume of twenty-foot equivalent units (TEUs) in 2013 at 13 seaports across the country was 3.3 percent higher than in 2007. TEU volume at West Coast seaports dipped by 6.8 percent in that period, while East Coast ports exceeded their 2007 volumes by 19.1 percent. The large spike of activity for East Coast ports in the past seven years has resulted in a windfall of industrial tenants expanding in and around the ports. Three of the largest Southeastern ports in terms of capacity are the Port of Charleston, PortMiami and the Port of Savannah. Each have been a boon to the industrial market in their respective state, and with the expansion and harbor deepening projects underway at each port, each should only escalate their importance in the coming years. In the Driver’s Seat The South Carolina Ports Authority (SCPA) is currently in a growth mode with container …
Jacksonville boasts the fourth-largest metro population and the largest city proper population in the state of Florida. It is the 14th most populous city in the United States, and with a breadth of approximately 841 square miles, it is the largest city in the contiguous United States by area. The county seat of Duval County, Jacksonville touts a population of approximately 900,000 people (2012 estimate) with a median household income of $50,701 and a median age of 31.4. The unemployment rate is presently on a downward trend decreasing 80 basis points from August to September 2014 to 5.8 percent, which was significantly lower than the previous year’s rate of 6.6 percent and Florida’s 6.1 percent. Jacksonville’s retail market remains strong despite the lack of available space in the mature Class A submarkets such as Town Center, Rivercity Marketplace, Mandarin, Orange Park, West Beaches and Beaches. National retailers and restaurants remain active seeking deals throughout Duval County, yet are still hesitant to consider Class B and C submarkets given their selective national site strategies. As most of the highly desirable spaces has been absorbed, there is more demand for new space than any time in recent memory. Although several redevelopments and …
The Charleston office sector is robust, with movement in virtually every aspect of the market. Tenants have flocked to the city, leaving only a small number of available spaces for those looking to move or expand, particularly into larger spaces. What Renters Want Low vacancy citywide — in the Central Business District (CBD), the vacancy rate is under 5 percent — is driving an uptick in rents, with current rents ranging from $17 to $28 per square foot, depending on the age and location of the space. Landlord concessions are also falling off as space becomes tighter. The shift toward more open workspaces continues as technology advances, meaning a decrease in the number of private offices and an increase in community/collaborative spaces. With smaller computers, storage in the cloud instead of filing cabinets and the use of off-site printers, most offices in the city are down to less than 200 square feet per employee. Since Charleston has one of the highest overhead rates in the Southeast, cutting down on square footage is a priority for most companies. Development Underway More than $1 billion of projects across all property types are currently under construction on the Charleston peninsula alone, and for …
Over the last four years, North Florida’s industrial market appears to have stabilized. While rental rates remain flat offering a variety of expansion opportunities for users and tenants, rental increases and new construction opportunities may be right around the corner. Consider the facts: the Jacksonville industrial vacancy rate now hovers around 8.5 percent, the lowest in the last five years and down from a high of 11.4 percent in 2010. Rental rates, now in the $3.98 per square foot range for the last two quarters, have stabilized from a high of $4.38 per square foot reported in the first quarter of 2010, according to CoStar. Because of a finite supply, with an increase in demand for Class B and Class C space, a rent increase may be in the forecast. Add with the lack of choices for large blocks of Class A space, expect more build-to-suit activity, or speculative construction. In 2014, two speculative industrial projects were announced in Jacksonville. In order to meet a contractual construction deadline within the city of Jacksonville’s master developer agreement, Hillwood Investment Properties launched a 510,000-square-foot cross-dock project at Alliance Florida. Hillwood was chosen as the master developer of Alliance Florida, formerly Cecil Commerce …
The Jacksonville multifamily market can lay claim to being the healthiest in Florida, not because of blockbuster demand or rapid construction, but because steady growth has kept it from overheating. The pace of construction and absorption should sustain the market for at least the next six months to a year. With an unemployment rate at 5.8 percent in September, it’s clear that the metro market has bounced back from the recession, boosting demand for housing. GE announced that same month they would be opening a new plant, adding 500 jobs. Additionally, Forbes ranks the city sixth nationally in its list of best cities for tech jobs, just ahead of Silicon Valley. Unlike other regions of the state that attract retirees and foreigners, Jacksonville is drawing young professionals and recent college graduates who are well-matched to small-scale multifamily projects. These single, well-educated and childless individuals tend to be renters. And because of their sophisticated tastes, they are driving the creation of live-work-play communities that resemble well-established submarkets like Brickell in Miami and along Magnolia Avenue in Orlando. Residents who want to be close to entertainment districts are moving into the Southside submarket, which is close to downtown and the St. John’s …
There was a time when retail in the District of Columbia was tired and unimaginative, but today things are changing. Today, D.C. competes with some of this country’s greatest retail cities. No longer do “food by the pound” cafes dominate fast casual lunch options, or tired steak houses fill the nights. A young generation of award winning chefs — the likes of Mike Isabella, Cedric Maupillier and Aaron Silverman — are driving a new culinary scene, which in turn is helping to boost retail growth across our city. Silverman’s Rose’s Luxury across from the Marine Barracks on Capitol Hill was just named 2014 best new restaurant in the country by Bon Appetit. With a population of less than 700,000, D.C. is still a relatively small city, but it doesn’t act like it. It is the focus of the nation’s — and the world’s — political eye. It is also blessed with a stable economy and the recent influx of a younger generation who seek to put their stamp on it. We are no longer just a government town. International corporations like Hilton, Marriott, Choice, and Host Hotels have chosen this market for their headquarters. Discovery and Travel channels have staked …
The Washington, D.C. metro multifamily housing sector has continued to demonstrate resiliency and recovery in the midst of the clamor in the media over the last year, which has caused many to believe otherwise. Multifamily has enjoyed declining rental vacancy levels the last three of four years ending in 2013, and only nominal increases during 2014, according to Reis. The eagerness of developers to capitalize on the absorption and flowing capital markets of the D.C. multifamily market has left some speculators concerned that the established strength of the fundamentals will be eroded by oversupply and ultimately lead to flat or negative rent growth and high vacancy rates. While 2014 has come with a stream of new developments hitting the D.C. metro, absorption remains steady and in some cases outperforming expectations. New product has been consumed as quickly as new developments are delivered. The D.C. metro market absorption is on track to exceed its record of units absorbed in a year, which was reached in 2010, already absorbing 4,904 out of the 6,516 units delivered year-to-date, according to Reis. This continued strength of the multifamily market is further evidenced by higher levels of demand for Class A luxury units, as shown …
The Washington, D.C. metropolitan area’s retail market is expected to continue to perform as well as or better than any other retail market in the nation. Ranked the seventh-largest Metropolitan Statistical Area (MSA) in the United States, Washington boasts a dizzying amount of retail growth in existing and emerging neighborhoods. Household incomes in the area grew by 42 percent from 2000 to 2013, compared to just 27 percent nationally. The highly educated and affluent population is driving urban mixed-use developments across the region. According to the National Association of Realtors, Washington led the nation in the Millennials’ share of the local population, at 15.7 percent. Millennials are demanding authentic experiences in residential living, shopping, restaurants and entertainment. Cranes can be seen everywhere with 30,000 apartment units under construction, many with prevailing urban feel above retail. This trend is common in the redevelopment on H Street, the corridor between Union Station and 17th Street Northeast that has been undergoing redevelopment in the last half dozen years. During this time both Giant Food and Walmart have opened stores under apartment buildings in this neighborhood, which Forbes lists as one of the “hippest” areas in the United States. Insight Property Group just broke …