The Charlotte MSA has seen a tremendous amount of new retail development activity with more on the way as 2014 comes to an end. Market vacancy has steadily declined since 2010 as new supply of space has been overshadowed by demand. The drop in the unemployment rate in the past 12 months to 6.3 percent from 7.2 percent reflects the improving health of the market. One of the more exciting and significant retail developments to debut in Charlotte this year is the Charlotte Premium Outlets development at the I-485/Highway 160 interchange in southwest Charlotte. Tanger Development and Simon Property Group joined forces to deliver this 450,000-square-foot, open-air center, which opened to large crowds in late July at close to 100 percent occupancy. It is anchored by a 30,000-square-foot Saks Off Fifth, and includes a full complement of more upscale and moderate specialty retailers. Grocers Hungry for Market Share Grocery store activity has driven much of the new development and redevelopment in the Charlotte area, with Publix opening its first units in North Carolina. Publix premiered its Ballantyne store in the spring of the year and has since opened in other renovated locations it gained through its acquisition of a number …
The office market of the Greater New Orleans area is gaining strength alongside the economy of the region. Continued infrastructure investment in and around New Orleans and a surging entrepreneurial spirit throughout the city have contributed to several significant economic development successes, which have resulted in consistent and positive national press about the region and sense of optimism in the general market. The impact of this optimism on the office market differs by submarket but has had the most measurable positive impact in the New Orleans central business district (CBD) and Metairie submarkets, which have the highest concentration of Class A office space. The office market in the New Orleans CBD is stable. This market has not yet experienced the consistent new tenant demand or existing tenant growth that would result in significantly higher rates, so the overall CBD market remains largely tenant-oriented with aggressive lease deals for credit tenants. However, there have been several regional economic successes like the attraction of GE Capital and Gameloft to the New Orleans CBD, as well as the renewal of major office leases such as Shell Oil (approximately 650,000 square feet), Capital One (approximately 150,000 square feet), and Freeport McMoRan (approximately 210,000 square …
At the end of June, the Memphis industrial market’s vacancy rate dropped to 10.8 percent, the lowest rate the market has experienced since 2000. The total vacancy rate had gotten as high as 13.5 percent in the first quarter of 2012. With more than 930,000 square feet of net absorption by mid-year, the Memphis MSA maintained strong leasing activity for the fourth consecutive quarter. The most active Memphis submarket continues to be Desoto County, Mississippi. The Desoto submarket has net absorption of 605,314 square feet and a total vacancy rate of only 4.2 percent as of mid-year 2014. Due to its growing service center economy, the second most active market is the Northeast submarket with 158,856 square feet of net absorption year to date. Memphis’ most established submarket, the Southeast submarket, is home to approximately 44 percent of the total floor space in the region and closed the second quarter with a total vacancy rate of 12.5 percent and 2014 net absorption of 123,416 square feet. This trend will more than likely continue as there is a limited supply of larger, developable tracts of land in Shelby County, Tennessee, in addition to more aggressive tax abatements and a less cumbersome …
This word problem title easily portrays the current state of the New Orleans metropolitan multifamily market. The past decade can be recorded as positive in asset appreciation, sales, rent and occupancy growth. Unlike the majority of multifamily markets in other cities, metro New Orleans has numerous barriers to entry. The market has a trifecta of sorts in that we have an ever-rising demand with a restrained supply due to the city’s geography, socio-economic factors and neighborhood resistance. All of these factors are contributing to the stability and positive outlook for the multifamily market going forward. The proof is in the numbers; overall occupancy for the seven submarkets in the New Orleans Metro is a firm 94 percent, with the majority of these markets reporting 95 to 97 percent occupancy levels. In the past 12 months, the market has experienced 2 to 4 percent rent growth even in submarkets that have seen the introduction of new inventory. The barriers to entry in the market provide owners with a “franchise” of sorts in that the introduction of significant new inventory is highly unlikely. Average rents in metro New Orleans are $1.05 per square foot. Newer suburban developments are averaging rents in the …
As New Orleans-area residents and businesses can attest, The Big Easy is currently experiencing a dynamic period of growth and development. With projects coming out of the ground, fierce competition for limited commercial space downtown and a number of new retailers entering the market, there is more reason for optimism than at any time in recent history. New Orleans is a hot market right now — hotter than at any time in the past 25 years, which is a remarkable feat given the significant momentum shifts over the years. Retail activity is especially significant, with brokers observing that the last 24 months constitute an unprecedented level of activity. What is particularly noteworthy about the strength of the market is that the growth appears to be spread across all categories — from urban core development to suburban and peripheral activity, and from ground-up projects to redevelopments. Newcomers and Returnees The list of major national retailers that have either recently opened their first store in the market, or that have just now re-established a presence in New Orleans almost 10 years after Hurricane Katrina, is eye-catching and speaks to the market momentum that has been building over the last two years. Big …
Atlanta is the economic engine of the Southeast, which is the fastest growing region in the country. With a population of 5.5 million across the 28-county metro area, the city is the ninth-largest metro nationally and is projected to be the sixth most populated by 2020. Atlanta’s high quality of life and low cost of living make it an ideal destination for young and educated talent around the region, as well as growing companies. Atlanta is home to 16 Fortune 500 companies and the busiest airport in the world — the recipe for a business boom and hot office real estate sector. According to Georgia State University’s Economic Forecasting Center, Atlanta is projected to add 305,000 new jobs between 2010 and 2016, with a drop in the unemployment rate to 5.7 percent in the same timeframe from the current rate of 7.5. That is a 13.5 percent increase in job growth over six years. The technology, homebuilding and service sectors are returning to health, if not climbing to new heights. According to CBRE’s U.S. Tech-Twenty research report, tech employment in Atlanta rose nearly 11 percent between 2011 and 2013. CBRE Research also finds that Atlanta’s recovery is underpinned by an …
The trends in Louisville are typical of a market rebounding. According to CBRE Research, the Louisville market is experiencing rent growth, vacancy declines, construction increases and more speculative product hitting the city. Leasing volume is increasing steadily, and investment sales are peaking as well. The Louisville industrial market remains tight even with several recent construction completions. With more than 100 million square feet of industrial space in the area, Louisville is a major player in the Eastern United States distribution market. Despite several lease and sale transactions consummating in the second quarter of 2014, market vacancy increased slightly to 4 percent, which reflects the fact that several large speculative buildings came on line during the period offsetting otherwise net positive absorption. As expected, with existing industrial inventory levels at an all-time low and new building deliveries coming on line and more on the horizon, market vacancies rose to 3.9 percent in the first quarter of 2014, ending a streak of 13 consecutive quarters of declining vacancy. Louisville remains an extremely tight market, even considering the increase in the vacancy rate. In addition, compared to the percentage of total market size in neighboring cities like Columbus, Cincinnati, Indianapolis, Nashville and Memphis, …
The economic recovery has flipped Louisville’s office market. Historically, the central business district (CBD) has lower vacancy and higher leasing rates than the suburban office market, while new development and low barriers to entry generally kept vacancy higher in the suburbs. Now, suburban vacancy rates rest below the CBD’s, especially for Class A product. Even as speculative development returns to the suburbs, the submarket’s hot streak shows no signs of abating, and the downtown submarket has plenty of positive momentum as well. Suburban Class A vacancy was 8.4 percent at mid-year, with average asking rates in the $20 to $22 per square foot range, or higher in top-tier new office developments. The suburban office market has been quite active, but Class A and B vacancies haven’t materially changed this year due to a spate of renewals and net moves from one building to another. Still, we expect a noteworthy fourth quarter as demand is perhaps as strong as it’s ever been, and owners remain aggressive, in many cases offering three months free rent and turnkey tenant improvements with long-term deals. Lack of available large blocks of space could lead to build-to-suit activity, too. There are virtually no available blocks of …
Louisville is riding a wave of momentum after hosting its third PGA Championship at Valhalla Golf Club in August. In addition, the $2.5 billion Louisville-Southern Indiana Ohio River bridge projects are under construction and scheduled to open in 2016. This project adds two new bridges, an east end bridge connecting I-265 in Kentucky with I-265 in Indiana, and a second bridge located downtown as part of improvements to I-65. These significant infrastructure improvements are a game changer in the fact that they will improve accessibility to new retail trade areas such as southern Indiana and northeast Louisville. In anticipation of the Kentucky International Convention Center being dramatically expanded and remodeled, Louisville has five hotels under construction or planned for downtown. Omni Hotels & Resorts will build its first property in Kentucky in Louisville, a 600-room convention hotel at Third and Liberty streets. Estimated to open no later than 2017, the Omni will be adjacent to 200 apartments, a grocery store and retail shops. The project is a public-private partnership between Omni, Cordish Cos., metro government and the state of Kentucky. REI Real Estate Services and Poe Cos. are developing a 172-room Aloft Hotel located in the central business district at …
With a booming tourism industry driving economic expansion and a new owner/renter paradigm impacting apartment renter dynamics, Orlando is experiencing continued expansion in apartment development. Currently, development for more than 22 apartment communities totaling over 6,000 units is underway in just three hot submarkets. Demand has continued to keep up with this new supply, surging to a 10-year high in the second quarter of 2014, with market-wide occupancies topping 95 percent. Job Creation Metro Orlando is predicted to have an average annual growth rate of 4.1 percent from 2013 to 2020, putting it 13th for growth among American cities, according to a report from the U.S. Conference of Mayors. With an unemployment rate of 5.7 percent — well below both state and national unemployment averages — Orlando is outpacing much of the country in job creation and economic growth. Orlando’s $50 billion tourism industry has undeniably distinguished itself as the leader for growth in Central Florida, with the largest theme parks currently undergoing historic expansions. This will add thousands of jobs to Central Florida’s employment market over the next few years. For example, Disney World announced in early July that it is actively hiring for 1,000 new local jobs, and …