Archive for April, 2009
Hey…How’s the commercial market???
Apr 30th
That’s what everyone is asking… The short answer: deals are floating around but not many are willing to commit. I’ve got clients that are worried about the economy and they are in medicine!….a once thought recession-proof industry.
Locally, there are pockets of Savannah (retail on Hwy 17 , office & retail on Chatham & Pooler Parkways), Hinesville & Richmond Hill that, not stellar, are active. Credit, still tight, is preventing tenants from getting construction loans to build out space & slowing down deals. Less cargo crossing GPA docks has reduced port related business, contributing to lower small-bay industrial absorption. Big box absorption, driven by national firms needing a port city distribution center, has slowed as well.
Tenant allowances & incentives are plentiful. Tenants, especially retailers, have a good argument to request rate reductions or some type of deferral. We have done this successfully for a couple of clients. Lease rates are aggressive. Sale prices have dropped but, not precipitously because Savannah did not over build like other markets. In full disclosure, the 7000sf former Rite-Aid building above is back on the market…..tight financing strikes again.
The Macro picture….some CRE national prognosticators are concerned with looming CMBS defaults due to dropping values & an inability to refinancing maturing loans.(read more) A positive, Cap Rates are rising & we are suppose to see the economy level off 3rd-4th quarter this year. If you dont require an extreme amount of leverage, NOW is the time to buy!
Rex Benton is a Commercial Real Estate Advisor for Mopper-Stapen, Realtors. He can be reached at the downtown office of Mopper-Stapen, Realtors at 912-238-0874 or via email.
Savannah: Conde Nast Traveler ‘09 Hot List
Apr 29th
Honolulu, Miami & Palm Springs are all known for their swanky, high-end hotels. This year Savannah is cozy’d up with these cities on the Conde Nast Traveler 2009 Hotel
Hot List. The must-visit hotels in the US are highlighted & includes the recently opened 151 room boutique, AVIA. (SEE THE LIST)
Overlooking the fantastic redevelopment of Ellis Square & in the heart of the entertainment & historic district, I’ve been told they’ve had better than forcasted occupancy rates.
Wichita, Kansas based LodgeWorks, L.P., AVIA’s parent company, has plans for the brand in 3 other locations this year (Napa, The Woodlands & Long beach).(Avia Hotels)
Savannah is often on Conde Nast’s other lists, (2007 Top Ten, Reader’s Choice, 2009 Gold List, etc.)…Another in the long list of reasons for a prosperous future for commercial real estate in Savannah. In September ‘08, Smith Travel Research reported 24 hotels & 2600 rooms in some phase of construction or planning in the Savannah area.
Rex Benton is a Commercial Real Estate Advisor for NAI Savannah and commercial real estate columnist for BiS:Business in Savannah business journal. He can be reached at 912-238-0874 or via email. Office, Industrial, Retail & Investment properties. To learn more about Rex read his BIO.
Savannah Commercial Real Estate: Big Box Boom
Apr 25th
Demand at the Port of Savannah, thanks to its capacity and excellent efficiencies, has industrial developers from around the United States turning their sights on Savannah. This attention sparked a land grab over the last few years that, in 2007, resulted in the delivery of the first of several large distribution centers.
According to the latest Savannah Economic Development Authority (SEDA) data, 4,800,000sf of new space will have been delivered in Chatham County by 2nd Quarter ‘08. Between the I-16/I-95 interchange and the Savannah River, there is approximately 19,000,000sf (2,700 Acres) that has been locked up for industrial/distribution center development. That is amazing considering the existing space prior to this boom was approximately equal to that amount. These numbers do not include joint venture projects outside the immediate area.
National developer, IDI has rights to build 10,000,000sf at Tradeport East in Liberty County. Atlanta based, TPA Realty Services has rights to build 7,000,000sf at Interstate Centre II in Bryan County. Some bets have already paid off. Solution Property Group, LLC sold its 491,000sf shell building in Crossroads Business Park for $20,000,000. Oakmont Development sold a 1,000,000sf complex at Morgan Business Center in Bloomingdale for $50,000,000. IDI leased 112,000sf to Gulfstream Aerospace Corp. at Crossroads Business Center for 5 years.
Several deals have been done with State/County Authorities and local developers. Tire Rack and Target Corp (1,500,000SF) have DC’s at Tradeport East (Liberty County Development Authority). IKEA (700,000 SF w/ 1MM SF of expansion) and Target (2,300,000 SF) have DC’s at sites controlled by the Georgia Ports Authority (GPA). Oneida opened its 500,000sf facility in ‘07 at Bryan County Development Authority’s Interstate Centre I. Local developers building a somewhat similar product, but probably with lower land costs (read: they bought before the boom), have done projects for Wal-Mart and other nationals plus multiple 100,000sf to 400,000sf+ projects for local companies. Knowing this in 2006, Duke Realty strategically purchased 5,100,000sf of leased industrial buildings from local developers with the option to buy future projects. They recently purchased an additional 789,000sf at Northpoint II & III.
Photo: Courtesy of GA Ports Authority.
As impressive as all these deals may be, it will be interesting to see if we maintain our industrial vacancy rates of 8% as the spec projects come on line. National developers I work with that do not have stakes here, are watching closely while pursuing build-to-suit projects in our area. In the big picture, there are excellent opportunities to invest in future real estate projects in our region.Rex Benton is Savannah Commercial Real Estate agent with NAI Savannah a sister company of Mopper-Stapen Realtors and contributing columnist for BiS-Business In Savannah weekly business publication. 912.358-5600 Office Retail Industrial Investment Real Estate
Thanks to improvements to the Panama Canal, larger cargo ships and the proposed deepening of the Savannah River to support them, volume will continue to grow. GPA’s capacity is planned to triple by 2017. This, combined with the potential Jasper County Port and improved logistics infrastructure, will bode well for these developments in the long run. A strong military presence (with announced local troop increases) and continued gains in tourism, higher education and local Industry will drive retail, office & residential projects over time.
————————————————-
