After five years of economic challenges, the Orlando industrial market — hit harder than any other industrial region in Florida — is rebounding. During the recession, central Florida experienced what amounted to a full stop in home construction, the failure of dozens of banks and almost no foreign investment. Vacancy rates for Orlando’s industrial warehouse market peaked in 2010 at nearly 15 percent and remained high until 2011. But now the economy is picking up. Payrolls expanded by 4,400 jobs year-over-year for the period ending in May and construction of multifamily residential has grown consistently. The improvements are part of a trend that could extend for years. Today, the industrial market that had the highest vacancy rates in the state is now experiencing the greatest absorption, with 1.1 million square feet leased in the second quarter of this year, for a six-month total of 2.4 million feet. That’s a 19.3 percent gain over the same period in 2011 and the third consecutive quarter of positive absorption. The overall vacancy rate has fallen to 10.7 percent, and that doesn’t tell the whole story. Outlying areas and Class C properties are lagging. In Class A and Class B properties in southwest Orlando …
Southeast Market Reports
The major headlines dominating the greater Baltimore region this summer involved the unexpected resurgence of our beloved professional baseball team following nearly two decades of performing at a level below .500, and the logistical challenges facing the organizers of the second annual Grand Prix racing event scheduled for the Labor Day weekend. Connecting this news to the regional retail environment, we see a tremendous amount of winning and successful projects emerging throughout the area, combined with a great deal of noise and fast-moving activity. Fasten your seatbelts for a quick lap around the Charm City marketplace. Downtown CBD As General Growth Properties slowly emerged from bankruptcy, the company renewed its focus on re-energizing its retail assets lining the retail magnet known as the Inner Harbor by attracting new merchants and restaurants and upgrading the physical plant. The arrival of Bubba Gump Shrimp Co. and Ripley’s Believe It or Not Museum were among the notable adds. There is still some work to do with regard to reinvigorating The Gallery at Harborplace, which has lost some luster due to the emergence of Harbor East, but the improvements have been noticeable and well received. In Baltimore, the waterfront rules. The Cordish Company rebounded …
Using the turtle and the hare metaphor, it is appropriate to associate Atlanta’s medical office market with the turtle and the metro area’s general office market with the hare. With a few exceptions, Atlanta’s medical office market has continued a slow and steady expansion during the last 30 years. While the size of the medical office market is substantially smaller than the general office market, it has not experienced the booms and busts that have plagued general office market over the same 30 year period. On-campus and Class A medical office buildings have consistently enjoyed 85 percent or greater occupancy. The primary difference in the stability of the two segments of office space is that the demand for general office is driven by the state of the overall economy, while demand for medical office is driven more by the health and size of the general population. Metro Atlanta’s population has increased by more than 51 percent since 1990. The last few years have seen slower growth in the medical office market primarily due to the unknowns of the Affordable Care Act law (Obama-care). Initially, there was uncertainty over whether the law would pass or not. After the law passed, then …
The Charlotte multifamily market continues its strong recovery and shows no signs of slowing down. All facets of the multifamily market are improving with tightening apartment fundamentals, increased transactional volume and the announcement of several high-profile development projects. According to RealPage MPF Research, the Charlotte market has experienced 6.8 percent rent growth during the past 12 months, which ranks third in the country behind only San Francisco and San José, California. The market has also absorbed more than 3,300 units in the same time period, lowering the overall market’s vacancy to approximately 6.5 percent — the lowest vacancy figure seen in Charlotte in more than a decade. Transaction volume in the Charlotte metro, while only half of the activity level in the Triangle market, has been relatively strong with approximately $800 million in sales during the past 12 months. Capital sources continue to flock to the highest-grade assets, particularly infill locations, where historically low interest rates boost investor returns. A recent illustration of this trend was Atlanta-based Post Properties’ purchase of the 360-unit Circle at South End from Crescent Resources for $74 million or $205,556 per unit, a record per-unit price for a garden-style community in the Carolinas. On the …
During the last two quarters, vacancy rates for Class A and Class B office properties in Columbia have declined. So far in 2012, overall Class A vacancy rates have fallen from 12.2 percent to 11.4 percent, while Class B vacancy rates have fallen from 27.3 percent to 27.1 percent. However, as tenants have been taking advantage of the opportunity to upgrade their spaces, the overall vacancy rate has remained unchanged at 22.2 percent, as Class C vacancy rates have increased from 23.7 percent to 26 percent. The Cayce/West Columbia submarket saw the biggest statistical declines in vacancy during the last year. Class A vacancy declined from 27.6 percent to 17.3 percent. Class B vacancy rates declined from 25.7 percent to 13.8 percent. While the change demonstrates increased activity in the submarket, the submarket saw only 13,603 square feet of positive absorption for the year. Activity in the Central Business District has been muted. In 2012, vacancy rates have declined by 40 basis points. Tenants are upgrading to Class A spaces from Class B and C buildings. Vacancy rates for Class A buildings downtown declined 70 basis points to 11.8 percent. However, vacancies have increased in Class B spaces rising 40 …
The first half of 2012 has proven fairly stable for the Columbia industrial market. While the first quarter of 2012 experienced trickle over activity from the end of 2011, the second quarter tempered that with marked slowdown. Even though the vacancy rate remained relatively flat at 15.78 percent, average asking rates actually increased 5 cents to $3.53 per square foot. The Columbia industrial market has seen significant investment during the past 12 months, with manufacturing continuing to lead the pack with major investments from Amazon.com, Mars Petcare, Nephron Pharmaceuticals, Bridgestone, Michelin and Continental Tire. South Carolina — and the Central Midlands area, in particular — has experienced significant growth. Amazon.com delivered its 1.2 million-square-foot distribution center and Nephron is building its $313 million campus in Lexington County. Mars Petcare is constructing a 290,000-square-foot expansion in Richland County, in the Southeast corridor. South Carolina is fast becoming the North American capital for tire manufacturing, with most of those facilities located throughout the Midlands region. Bridgestone is expanding, adding 474,000 square feet to its current facility and the company is constructing a new 1.5 million-square-foot manufacturing facility in Aiken. Continental Tire continues construction on its $500 million plant in Sumter County and …
While the Savannah retail market has felt the impact of the recent economic downturn, the overall market has maintained its equilibrium, driven by key economic engines such as the Georgia Ports Authority/Port of Savannah, Fort Stewart, Hunter Army Airfield, the tourism industry and The Savannah College of Art and Design (SCAD). The Savannah Area Chamber and Visitors Center announced that June 2012 was a record-breaking month with 87 businesses joining the Chamber. Savannah also consistently makes top ten lists for best travel destinations. These constants have served as a steadying influence as various segments of the retail market have reacted and adapted to the evolving marketplace. Though downtown Savannah and the Historic District have seen property values decline during the last 36 months, the retail market has taken steps forward and backwards, and the general arc seems to be positive. Levy Jewelers, an upscale local jewelry store, has acquired a prime location at Broughton and Bull streets, the nexus of the main shopping district. Marc Jacobs Boutique and Urban Outfitters lead a list of national retailers that have set up shop in the downtown area. Whole Foods will mark its entry into the Savannah market with a 35,000-square-foot store at …
Savannah’s industrial market has a symbiotic relationship with the ships that navigate the city’s much-debated river channel. In the fiscal year of 2011, $54.1 billion in value and 8.7 percent of U.S. containerized cargo moved through the port of Savannah. This makes Savannah the fourth largest container port in the nation. The U.S. Army Corps of Engineers gave its final recommendation to deepen the channel to 47 feet and the president recently signed an executive order fast-tracking approvals by no later than November. This will keep the port competitive for larger Post-Panamax ships that will need to access the Savannah port after the Panama Canal is widened. The channel deepening project will not be completed prior to the completion of the Panama Canal widening, but Panama officials just announced the opening has been delayed by at least six months to April 2015. With port activity continuing to improve, so goes the area economy and warehouse occupancies. Market-wide, vacancy rates have ticked down to around 15 percent from highs in the low 20s just two years ago. There is a good supply of high-quality distribution space, thanks to the building boom started in 2005, which nearly doubled the inventory. There is …
“When the going gets tough, the tough get going.” The old adage is certainly taken to heart in Jonesboro. Amid the uncertainty of the recent recession, Jonesboro has become a beacon of resiliency and steadfast performance, resulting in much-deserved attention in nearly every aspect of commercial development. In fact, the Jonesboro MSA is one of only 54 U.S. metros that had gains in total employment between pre-recession November 2007 and post-recession November 2011. According to Garner Economics, a look at November 2011 employment shows that only 54 metros, or 15 percent, are at levels exceeding their November 2007 totals, which was one month before the recession officially started. Jonesboro has continued to increase its population, growing at a very respectable 2 to 2.5 percent per year for the past three decades and counting. This steady, consistent growth in population and tax base has made Jonesboro a huge attraction for expansion, particularly in the retail and healthcare segments of the market. 2011 saw just under 300 commercial building permits issued at a value of more than $250 million dollars, and nearly $40 million dollars worth of permits were issued in the first quarter of 2012. Investment in new infrastructure and facilities …
Limited multifamily rental development and additional hiring by local employers will sustain another strong year for the Louisville apartment sector during 2012. Despite a slight increase in vacancy during the first three months of the year, tight conditions prevail as many residents moved into apartments during the past two years. Local employers expanded payrolls during the past two years and more than half of the jobs lost in the metro during the recession have been recovered. The market continues to benefit from the revival of Ford, while the area’s logistics and transportation employers have added workers as more packages and freight move through Louisville en route to other markets. The reinvigorated drivers of apartment demand continue to benefit most locations around the metro, but none more than the submarkets encompassing suburban communities located beyond the inner beltway. Overall vacancy in this area, which contains about three-fourths of the market’s apartments, sits at less than 4 percent, with the Class A rate closer to 3 percent. A lack of new construction will keep rents and vacancies healthy in the Louisville metro area. The 35-unit Whiskey Row Lofts in the West Central submarket delivered in the first quarter, becoming the only market-rate …