Southeast Market Reports

Nashville’s Retail Growth Underscores the City’s Boomtown Status

by John Nelson March 6, 2023

Nashville’s economy experienced some of the healthiest growth in the nation in 2022, with an annual job growth rate of 5.8 percent, exceeding the U.S. growth rate of 4.1 percent, based on data from Oxford Economics. Nashville also received high marks from the Urban Land Institute and PricewaterhouseCoopers, ranking as the No. 1 Market to Watch in their 2023 Emerging Trends in Real Estate report. The report credited Nashville’s tremendous and sustained population growth, and its economic diversity. Referred to as a “Supernova,” Nashville grew by an average of 5 percent since 2019 — four times faster than the national rate — due to rapid net in-migration. These fundamentals have helped boost the retail market in Nashville over the last several years. Post-pandemic, market-wide retail vacancy decreased to 3.3 percent at the end of 2022, which is two percentage points less than the rate at year-end 2020, but in line with the 15-year record low mark set in 2018. While Nashville’s retail sector took a hit along with others across the nation, it continues to rebound and perform due to a rise in dense communities where developers and owners are being strategic and thoughtful in retail curation. As such, the …

March 6, 2023

Industrial Market Reports Southeast Southeast Market Reports Tennessee

Nashville’s Industrial Market Remains Active Despite Economic Uncertainty

by John Nelson February 27, 2023

Nashville’s industrial market continues to see strong demand going into 2023. In fact, more than 1.7 million square feet of leasing activity was recorded throughout fourth-quarter 2022, bringing the year-to-date transaction volume just shy of an impressive 8.8 million square feet. Even overall vacancy sat at 3 percent during the final quarter of 2022, and while that was a slight increase compared to the previous quarter, it still was 30 basis points below the national vacancy average. Despite a recessionary environment and uncertainty of what’s next in the commercial real estate sector, Nashville’s industrial market is uniquely positioned for the upcoming year. As Nashville’s industrial market still experiences growth, there are several macro-economic trends impacting it that are worth keeping an eye on, such as e-commerce and third-party logistics demand. Interest rates have also risen, making it very tricky to value property and cap rates due to the debt markets. This has triggered limited investment activity from buyers and sellers alike across all property types, including industrial. Industrial developers are also being more cautious as rising interest rates have increased construction costs. Many developers and investors have purchased land or have land under contract, for example, but are waiting for …

February 27, 2023

Development Market Reports Southeast Southeast Market Reports Tennessee

Tennessee’s Appeal Process Allows Nashville Taxpayers to Challenge Assessments for New Construction

by John Nelson February 21, 2023

Over the past decade, Nashville has enjoyed a baffling explosion of growth that sent cranes shooting up all over the city, festooned with developer names like Bell, Clark and Giarratana. Highrise towers of glass and steel rose out of the old rail yards like the emerging monolith in the opening scene of “2001: A Space Odyssey” multiplied in a funhouse mirror. The Metropolitan Government is eager to add new projects to its tax rolls, and its Assessor of Property decides when and how that happens. The assumptions made by the assessor’s office about a project’s cost and timing dictate how quickly and how much a new building is taxed. So, as always, taxpayers need to keep an eye on what the assessor is doing. The assessor’s difficult job has become even more complicated in the post-COVID quagmire of supply chain failures. Twelve-month projects have stretched into 24-month projects, and the assessor’s assumptions about completion times have been thrown out of whack. To make matters worse, Tennessee’s property tax statutes were not designed to give relief for construction delays or lengthy projects, and now the clock is ticking. Assessing new construction The last Davidson County reappraisal was in 2021, and the …

February 21, 2023

Market Reports Multifamily North Carolina Southeast Southeast Market Reports

Job, Population Growth Continue to Propel Raleigh-Durham’s Apartment Market

by John Nelson February 7, 2023

Raleigh-Durham’s multifamily market has solidified itself as a top performer in recent years. After a rapid economic recovery in 2021 and early 2022, occupancy rates and rent growth soared. Year-over-year effective rent growth reached 13 percent in third-quarter 2022, well above the national average, and totaled 15 percent in Class A product. The region continues to be nationally ranked for real estate prospects, competitive incentives and taxes, education and quality of life. The impressive list of job wins the Triangle has been awarded continues to grow, including major job announcements from Wolfspeed, Apple and VinFast, to name a few. The region’s status as one of the nation’s leading tech and life science hubs has also lured giants such as Grifols, Pfizer, IBM and Red Hat. Population growth is one of the Triangle’s strongest apartment market fundamentals and it continues to surge, as approximately 5,000 new residents move to the region each month. Raleigh and the surrounding metropolitan areas are expected to increase in population at the second-fastest rate in the country, behind only Austin. Municipalities outside of the Triangle’s metro areas are also some of the fastest-growing locations in the state. Johnston and Franklin counties, for example, are expected to …

February 7, 2023

Affordable Housing District of Columbia Market Reports Maryland Multifamily Southeast Southeast Market Reports Virginia

More Affordable Housing Options Needed in Greater D.C. Region, Says Fossi of Enterprise Community Development

by John Nelson February 1, 2023

WASHINGTON, D.C. — In 2019, the Metropolitan Washington Council of Governments issued a report stating that the D.C. region — comprising the city, Northern Virginia and suburban Maryland — needed to add 320,000 more housing units between 2020 and 2030, and that at least 75 percent of this new housing should be affordable to low- and medium-income households. Rob Fossi, senior vice president of real estate development at Enterprise Community Development, says the figure has only climbed in recent years due to macroeconomic and local challenges. “In the three years since that report was issued, this demand has only intensified while supply chain interruptions, interest rate spikes and competing resource challenges precipitated by the COVID-19 pandemic have all been challenges to maintain pace,” says Fossi. Enterprise Community Development, an affiliate of Enterprise Community Partners, is the top nonprofit owner and developer of affordable homes in the Mid-Atlantic with a portfolio spanning about 13,000 apartments that house more than 22,000 residents. The firm is actively developing and preserving affordable housing across the region in order to address the demand, which Fossi says shows no signs of abating anytime soon. “There is little doubt that the demand for quality affordable housing will …

February 1, 2023

Market Reports Mixed-Use North Carolina Restaurant Retail Southeast Southeast Market Reports

Triangle’s Retail Market Turns New Page Led by Openings of Mixed-Use Developments

by John Nelson January 31, 2023

The retail market across the Raleigh-Durham region, also known as the Triangle, soared to new heights in 2022 despite significant global economic headwinds. Spurred by population growth and major economic development announcements, 2022 was filled with the groundbreaking and opening of new retail and mixed-use projects across the region. For the second consecutive year, North Carolina witnessed record-breaking economic development activity. New and expanding companies announced more than 12,700 jobs and more than $11 billion in new investments in the Triangle region alone. While the urban sectors lagged through 2020 and 2021, they saw a resurgence in 2022 with major tenant announcements for Smoky Hollow (Kane Realty Corp.) such as Midwood Smokehouse, The Crunkleton, Madre, Dose and New Anthem Beer Project. Downtown Raleigh also featured the delivery of 301 Hillsborough at Raleigh Crossing (Barings), Tower Two of Bloc 83 (City Office REIT) and construction of Seaboard Station (Hoffman & Associates). Downtown Durham boasted major groundbreaking, retailer and restaurant announcements as well, including the groundbreaking of Novus (Austin Lawrence Partners), encompassing 23,000 square feet of ground-floor retail space and 27 floors of high-end residential. American Tobacco Campus reimagined its restaurant mix to announce Five Star, Press, Queen Burger and the soon-to-open …

January 31, 2023

Georgia Industrial Market Reports South Carolina Southeast Southeast Market Reports

Port Authorities in Charleston, Savannah are Pushing the Boundaries

by John Nelson January 30, 2023

As port authorities around the country invest billions of dollars in infrastructural improvements, industrial users are taking notice and looking for sites near all the action. In the Southeast, the elevated demand for new industrial space near the Port of Savannah and Port of Charleston is pushing the boundaries as far as what’s considered normal levels for property performance indicators such as new construction, rent growth and leasing activity. “It’s hard to say that anything is ‘normal’ right now — there are a lot of new phenomena out there,” says Robert Barrineau, senior vice president of CBRE’s Charleston office. “We are seeing nationally now that a tie to a seaport as being key for economic growth and for operational efficiencies for companies.” In one of the bigger announcements in 2022, Hyundai Motor Group chose a 3,000-acre site in Bryan County, which is close to both the Port of Savannah and Interstate 95, for its $5.5 billion manufacturing plant. Construction is already underway, and the facility should be operating at full capacity, which entails production of 300,000 units annually, by the first half of 2025. The South Korean automotive giant intends to use a combination of local labor and AI technology …

January 30, 2023

Market Reports North Carolina Office Southeast Southeast Market Reports

Raleigh-Durham Office Market is Facing Even Stronger Headwinds at Start of 2023

by John Nelson January 25, 2023

Talk to any commercial broker across the Raleigh-Durham market and you will hear much of the same feedback. In answer to the basic questions, one hears, “The in-office work week is now three days, primarily Tuesday through Thursday.” This trend, which was slowly becoming more evident over the last 20 years with the growth of the digital economy, was accelerated by the pandemic. And further aided by the wider availability of high-speed internet, the demands of the digital workforce are taking people out of their offices and, in some cases, around the world. Companies that value their digital workers are letting them make business decisions that affect the office building markets around the world. It is fascinating to watch. Recent data published by Kastle Systems (a keycard and security supplier for commercial buildings) shows that based on keycard swipes across the 10 largest cities in the United States, we are witnessing structural change in both the traditional work week and employee work hours, in degrees that are directly impacting the need for office space. As a result, employers are downsizing their leased footprints, opting for less square footage and/or shorter leases. Those companies with large numbers of digital workers are …

January 25, 2023

District of Columbia Market Reports Multifamily Southeast Southeast Market Reports

D.C. Multifamily Remains a Safe Haven for Investment Amid Economic Uncertainty

by John Nelson January 16, 2023

Across the country, investors are facing some difficult hurdles. Rising interest rates, impending economic recession and rising construction costs are making it increasingly difficult for proposed deals to penicl out for investors. These issues, coupled with a swath of non-performing loans that are nearing maturity, have been the first indications we have seen of a bear market in the real estate world, and there are no signs of improvement in the near future. In times of uncertainty, we often see investors adhere to a conservative approach to investment, which normally means increased focus on core markets and assets. One area of focus in which investors have remained bullish is Washington, D.C.’s multifamily market as it continues to thrive, despite turmoil in the larger U.S. economy. Developers broke ground on new multifamily product in excess of 4,000 units for the fourth consecutive quarter, a first for the D.C. market. Multifamily sales volume has not quite matched the bull market of 2021; however, sales in 2022 still outpace most years in the metro’s history. Whether it’s construction on ground-up development of multifamily product, or the purchase of existing multifamily product, the D.C market has not shown any signs of slowing down. For …

January 16, 2023

District of Columbia Industrial Market Reports Southeast Southeast Market Reports Virginia

Industrial, Warehouse Product Remains Tight Throughout Northern Virginia

by John Nelson January 9, 2023

Sustained leasing velocity for industrial/warehouse space in the Northern Virginia market, combined with the nearly insatiable demand for data center product, is contributing to developers repurposing existing business communities with this asset class to support demand, as well as companies expanding their geographic footprints into suburban Maryland and Central Virginia to secure space. This trend could be pivoting slightly due to the recent slowdown in leasing activity both locally and nationally as it relates to rising interest rates, the prospects for a looming recession and the possible end of a prolonged real estate cycle. The vacancy rate for industrial/warehouse space in the region currently stands at just over 2 percent. In the last quarter, the Northern Virginia industrial market experienced the largest pipeline in its history with more than 1 million square feet of space delivered, with nearly 5 million square feet of space in the development pipeline. The largest projects are contained within Stafford County as land in Loudoun and Fairfax counties has become unaffordable, or simply unattainable. Triple-net asking rents reached another all-time high of $12.45 per square foot in the third quarter, aided in part by these new deliveries. New space remains scarce and commands a premium, …

January 9, 2023

Newer Posts

Older Posts