The planned Expansion of the Savannah Harbor got a major shot in the arm late Wednesday when the Obama Administration announced it would expedite the project, with all federal reviews completed and a Record of Decision coming no later than November.

As part of his “We Can’t Wait” initiative, the president listed seven “nationally and regionally significant infrastructure projects” at five major ports, promising to put each on a fast track designed to save time and drive better outcomes for local communities.

The initiative is part of a Presidential Executive Order issued in March charging the Office of Management and Budget with overseeing a government-wide effort to make the permitting and review process for infrastructure projects more efficient and effective.

“President Obama is committed to improving federal permitting and reviews to ensure that smart infrastructure projects like the Port of Savannah can move as quickly as possible through the decision making process, boosting job growth and strengthening the economy,” Jeffrey Zients, acting director of the Office of Management and Budget, said Wednesday.

“By working more efficiently in a coordinated fashion across the federal government and putting in place aggressive schedules and accountability systems, we are committing to accelerate the final steps of this review for the Port of Savannah project.”

Every executive with whom we speak expresses utter confusion about the state of the global and U.S. economy and capital markets. As a result, they are in a muddle about their investment strategies. They closely monitor economic and capital market data for signs that “everything is all right,” yet even as the U.S. economy grows at a seemingly healthy rate, they remain extraordinarily ill at ease. Why?

Simply stated, this discomfort reflects the fact that even though U.S. real GDP and employment are growing at moderately healthy paces, we remain in totally uncharted waters in terms of both the economy and our capital markets. And when private decision makers are in unfamiliar (and unrecognizable) landscapes, they act very cautiously. For example, we have not seen in our lifetime federal budget deficits as large as those which

currently exist. Not only is U.S. federal spending as a percent of GDP at a peace-time high, but federal revenues as a percent of GDP are well below their historic norm, resulting in unprecedented budget deficits. Compounding the problem of unprecedented U.S. budget deficits is…..

See the entire post here:

http://ublog.naiglobal.com/blog/2012/07/08/welcome-to-the-confused/

About the author

Dr. Peter Linneman is a Principal of Linneman Associates, KL Realty, and American Land Funds, and is the Albert Sussman Emeritus Professor of Real Estate, Finance, and Business Public Policy at the Wharton School of Business at the University of Pennsylvania. He was a member of Wharton’s faculty for 32 years, founding Wharton’s Real Estate Department and the Zell-Lurie Real Estate Center. He is the founding co-editor of The Wharton Real Estate Review and has published over 80 articles during his career. Dr. Linneman is widely recognized as a leading strategic thinker and investor, and has been cited as one of the 25 Most Influential People in Real Estate by Realtor Magazine, and one of the 100 Most Powerful People in New York Real Estate by the New York Observer.

About NAI Savannah:

NAI Savannah is a full service commercial real estate brokerage & property management company in Savannah, Georgia. Our Broker’s have over 30 years of experience in industrial warehouse (both Port related distribution and manufacturing), office, retail & investment sales & leasing.

With 7 straight quarters of growth since the end of the recession, our area has fared well with slow but steady growth. The port, tourism, industrial & manufacturing highlight this growth.  Steady growth is forecasted through the coming year with a pick up in economic activity in the 1st half of 2012. Read the entire report here:

Savannah Economic Update

Rex Benton is a Savannah Commercial Real Estate agent with NAI Savannah, the commercial division of Mopper-Stapen, Realtors and is a contributing columnist for “BiS-Business In Savannah” weekly business publication and is an active blogger. www.naisavannah.com 912-358-5600 Office Space, Retail Space, Industrial Space, Investment Real Estate Sales

SBA FINANCING

If ownership aligns with long term business plans and the tax implications are favorable, a stable business or a collateralized start-up can find favorable financing.   Conventional lenders are certainly out there lending money, but Small Business Administration (SBA) loans are coming back into favor for several reasons: 1. Conventional financing now requires more than a pulse to qualify.  2. The SBA has some aggressive programs with improved processes that have made them more user-friendly.  3. Lenders are specializing in SBA loans and know how to get through the process more efficiently. In some cases, they have pre-approval from the SBA to underwrite loans that saves time, so make sure you start this process with a SBA specialist.

The primary SBA loan programs applicable are 504 and 7(a), both of which have received recent tweaks in hopes of spurring growth out of the recession.   For as little as 10% down, you can purchase a building and roll in closing costs, all loan related fees, equipment costs, furniture, building improvements,  as well as business credit card debt and other existing lines of credit.  The loans can be used to buy a business or even refinancing an existing building or other debts.  Loan limits have been increased up to $5 Million and terms are usually fixed for 10 or 20 years, much longer than conventional loans.

CONSTRUCTION COSTS

With new construction at a standstill, contractors have had to trim down their profit margins significantly in order to win a job and keep their people working.  This can be also said for all the related industries – architects, engineers, etc.  Some materials costs may fluctuate, but overall now is an exceptional time to consider building new or making improvements to existing structure that will add value long after the current economic slowdown corrects.

PROPERTY VALUES

I hate having to tell my clients that want to sell this, but nationally values are down anywhere from 35 to 45 percent from their highs in 2007.  We are still bumping along the bottom, but in May we saw a 6.3% increase in the Moody’s/REAL Commercial Property Index (CPPI).  A plus, this was the first positive move in six months and the largest one-month increase since the index started.

One of the factors of the increase, distressed sales saw an increase of 4.8% and where 27.0% of repeat sales.   Property owners that have had tenants evaporate or bought at the height of the market are willing to, as well respected local developer told me, “forget about the cheese and just get out of the trap.”  There is just not enough demand to absorb the vacant space and will be this way for some time to come.

Given all these factors, even modestly positioned business owners have an incredible opportunity that we are likely not to see again for a very long time.

Rex Benton is a Savannah Commercial Real Estate agent with NAI Savannah, the commercial division of Mopper-Stapen, Realtors and is a contributing columnist for “BiS-Business In Savannah” weekly business publication and is an active blogger. www.naisavannah.com 912-358-5600 Office Space, Retail Space, Industrial Space, Investment Real Estate Sales

Though Savannah’s economy is projected to be a relatively flat in 2011, market activity and inquiries do hold promise for the future.  Savannah Economic Development Authority’s new President and CEO, Steven Weathers, stated during a recent presentation that they have a healthy number of sizeable site searches considering our area.

Nationally, the primary coastal markets (New York, Boston, DC, San Francisco, San Diego, etc.) have seen the majority of improvements in commercial real estate.  This has been caused by institutional buyers buying blue chip investment assets.  Per a recent National Real Estate Investor survey, low interest rates and a surge in investor confidence should result in private investors becoming more active in secondary and tertiary markets like Savannah in 2011.  Multi-family and hotel developments will garner the most attention nationally.

Rex Benton is Savannah Commercial Real Estate agent with NAI Savannah, the commercial division of Mopper-Stapen, Realtors and is a contributing columnist for “BiS-Business In Savannah” weekly business publication and is an active blogger.  www.naisavannah.com 912-358-5600 Office Space, Retail Space, Industrial Space, Investment Real Estate Sales

LEASING LEADS

The majority of actual deals being executed are leases, led by the industrial sector.  Office and retail leasing has seen an uptick of smaller tenants and start ups, neither of which absorb much space.  National retailers are starting to look again, but are only interested in prime locations like Abercorn or Pooler Parkway, not willing to take any risk.

The leading industrial real estate owner in our area, Duke Realty, recently signed a few distribution warehouse deals in the 100,000 square foot range.  Other industrial developers also report an increase in tenant inquiries.

Buyers are beginning to look again.  Sales however, continue to be soft in all product types.  Some activity is driven by users who believe it’s time to begin planning for future expansion.  Investors, believing the next 12 to 18 months are critical to capitalize on depressed values, are also kicking tires.  With several years of industrial space to absorb, our firm has toured more national developers recently.  Their target, properties that are underwater or have low occupancy with hopes of acquiring and repositioning them as the economy recovers.

Part 2.  Land Lags… to follow…

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Rex Benton is Savannah Commercial Real Estate agent with NAI Savannah, the commercial division of Mopper-Stapen, Realtors and is a contributing columnist for “BiS-Business In Savannah” weekly business publication and is an active blogger.  www.naisavannah.com 912-358-5600 Office Space, Retail Space, Industrial Space, Investment Real Estate Sales

Office: National vacancy rates hit a 17 year high, but the 4th quarter was the first time in 3 years more space was leased than vacated.  Locally, our office market continues to be soft and like the nation, vacancy rates will remain relatively flat.  Limited office leasing produced some moves but few net-new users of any significance.  GSA build-to-suits drove development, including Savannah’s first modern-day, Class-A building in the central business district. Slated to open in 2012, 70,000 SF will be constructed facing Ellis Square and house the U.S. Attorney’s office on four of its six floors. 

RETAIL:  US holiday sales were the best in 4 years. An increase in consumer buying power should lead to modest sales growth in 2011 with discount & grocery retailers benefiting the most. Oglethorpe Mall, nearly fully leased, reported 2010 store sales up slightly compared to a 3-4% decline in 2009.   Broughton Street saw mixed results: some store sales were up over last year, but several closings still indicate there is work to be done to invigorate the corridor. Steady tourism improvements also helped increases in tax receipts and hotel occupancies. 

Image courtesy of GPA.

Industrial: Vacancy rates peaked nationally around 14.1% & should finish 2011 around 13.1%. That’s far better than the near 20% vacancy rate in the Savannah area.  Most large deals, including Coastal Logistics Group’s build-to-suit 320,000SF building and JLA Home’s 689,000SF warehouse purchase, were in some way related to the port. No other speculative big-box development is expected with 12-18 months or more of supply. Several smaller user-warehouses traded hands with an abundance of smaller 1500-5000sf lease spaces sitting vacant. 

Multi-Family: Due to a slow economy and financing challenges in the single family housing market, the sector that showed real progress is 2010 was multi-family. US vacancy fell to a 2 year low of 6.6 % and rents rose .5%.  The sector does lead in foreclosures due to most loans being underwritten at the height of the market.  Locally, occupancy was steady if not grew with limited development activity in the Pooler area. Our multi-family developer clients are pursuing projects so, expect more development next year. 

Investment:   The target for most investment, top-tier markets have seen average asking prices increase.  As of 3^rd quarter 2010, Moody’s reported apartments led with a 16% increase from the year prior. Office increased 4.4% while Retail and Industrial fell 12% & 4.4% respectively.  Look for continued oversees investment as the US is by far the number one choice of foreign real estate investors.  Don’t expect that demand to translate into activity in our market except for very few institutional grade properties. 

What to expect: Until we start seeing repeated months of 300,000 new jobs a month nationally & strong improvements in the consumer confidence index, the economy has long way to get back to “normal.”  Savannah’s infrastructure and relatively low cost of living is ready and able to support all those retirees that want to move here but can’t sell their homes.  The commercial market should make some modest strides in 2011 thanks to the port and manufacturing announcements, but it will be slow and steady recovery into 2012. 

NAI Savannah Sponsors Economic Webinar: 

Today at 1pm EDT, NAI Global’s Chief Economist and Wharton School of Business professor, Dr. Peter Linneman, will give his quarterly Global Economic Outlook related to commercial real estate.  To register, send an email to: outlook@naisavannah.com. 

Rex Benton is a Savannah Commercial Real Estate agent with NAI Savannah, the commercial division of Mopper-Stapen, Realtors and is a contributing columnist for “BiS-Business In Savannah” weekly business publication and is an active CRE blogger.  www.naisavannah.com 912-358-5600 Office Space, Retail Space, Industrial Space, Investment Real Estate

Promoting several of NAI Savannah’s retail listings, our team found there was more activity on the tradeshow floor than last year.  Opinions of those we spoke with mirrored the slightly improved consumer confidence index (CCI) in October.  Though the CCI is still at very low levels, there was a very modest improvement in consumer’s belief that business conditions will get better over the next 6 months.   

Economy brand retailers (Dollar General, Dollar Tree, Big Lots, etc.) are actively looking at expansions as their market segment has been one of the few that has fared well during the recession.  Savannah based Citi Trends, a value family apparel retailer, has opened many stores around the US over the last few months.  Retailers such as Wal-Greens & CVS had a lot of activity at their booth, but like most, will not expand unless new sites are “main-and-main” locations with strong demographics and little risk of failure. 

Retailers that I get constantly asked about, Whole Foods & Trader Joe’s, are expanding only in primary markets for the same reasons.  Expanding a non-franchisee retailer to a smaller market like Savannah involves more risk and requires additional management resources, even though it may do very well.  Growing a brand in metro Atlanta for example, which allows for multiple locations within a close proximity, reduces distribution costs and manpower. This is especially important when margins are narrow.  Unless there is a unique story, Savannah will be pursued by retailers when the larger markets are more saturated.

In a panel discussion, several investment REITS said they are finally starting some retail acquisitions but are being very selective.  They did not see the large amounts of distressed properties as anticipated and need to start placing their funds.  Cap rates have already reduced in some sectors.

Landlords say they are actively signing leases versus last year when they were just waiting for 2011.  The economy is hopefully bottomed out with very few tenants asking for rent reductions compared to last year.  A good local sign, the new Pooler Publix shopping center recently opened 93% pre-leased.  They still have work to do to pre-lease Phase II of the project. In our overall market, new development has been almost absent.  The Oglethorpe mall, nearly fully occupied, shows individual store sales up this year compared to a 3 percent drop last year.

Locally, Christmas retail sales are projected to increase 2 to 3 percent.  Kiplinger projects 2010 national Christmas sales to increase by 3 percent.  2011 national retail sales are projected to be slightly under 3 percent versus the 3.5 percent projected for 2010.  Making the fourth straight monthly gain, national retail sales were up 1.2 percent in October mostly due to auto sales.

Rex Benton is Savannah Commercial Real Estate agent with NAI Savannah, the commercial division of Mopper-Stapen, Realtors and is a contributing columnist for “BiS-Business In Savannah” weekly business publication and is an active blogger: http://www.savannahcommercialrealestate.blogspot.com/  www.naisavannah.com 912-358-5600 Office Space, Retail Space, Industrial Space, Investment Real Estate