Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.
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24 July | August | 2015 Commercial Investment Real Estate Southeastern Markets Other strong markets for land investment are Sun Belt areas in the southeastern U.S. Despite the recession, Georgia and North Carolina continue to be leading destinations for cor- porate locations. Whether for employment or temperate weather, as the overall economy strengthens, people previously unable to sell their homes up north are now able to sell and are moving south. According to Builderon- line.com, which broke down 2014's gross home building revenue by Census Bureau region, the South Atlantic region led the nation in revenue for the top 200 builders. Stratford is working with a number of these regional and national homebuilders, such as Ashton Woods, Taylor Morrison, Lennar, and Ryland Homes in its southeastern developments. T e Atlanta market, hit hard during the economic crash, is once again showing posi- tive signs of an improving economy and hous- ing market. Between April 2013 and April 2014, the 10-county Atlanta region added 52,700 new residents, the largest single-year growth since the Great Recession, according to the Atlanta Regional Commission. T at's an improvement over the 41,000 new residents added every year between 2010 and 2014. While still higher than pre-recession levels, unemployment in the Atlanta area is down, with a 6.7 percent rate in 2014 compared to 7.1 percent in 2013, according to the Bureau of Labor Statistics. Similar to Dallas, corporate relocations have led to employment gains. Mercedes-Benz recently announced the relocation of its U.S. headquarters to Atlanta, a major move that will create about 1,000 jobs. Additional expansions of corporate campuses for Porsche and NCR's U.S. headquarters continue to add to employment. Another market making a comeback af er struggling through the recession is Orlando, thanks to an improving tourism market, as well as an uptick in the number of buyers looking to purchase both primary and retirement homes. Monthly employment in Orlando increased to more than 41,400 jobs from January 2014 to January 2015, according to Florida Research and Economic Database. For a major market that is good news, but in a market the size of Orlando, that high-growth percentage translates to a very strong recovery. Stratford is seeing the growth in the market f rsthand at Hamlin, a 600-acre residential and commercial development in Orlando. Located just north of Disney World, Hamlin is experiencing strong sales due in large part to the opening of a new tollway that has provided a gateway into west Orange County for builders and developers. Markets are also improving in strong areas of North Carolina and South Carolina. In the Carolinas, much like other markets in the Sun Belt, interest from buyers looking for a second or retirement homes also is contributing to strong land investment opportunities. Stratford Land also sees this in increased activity at its developments near Hilton - 50 100 150 200 250 300 350 400 450 500 550 600 650 700 750 800 850 900 - 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00 2003.3 2004.1 2004.3 2005.1 2005.3 2006.1 2006.3 2007.1 2007.3 2008.1 2008.3 2009.1 2009.3 2010.1 2010.3 2011.1 2011.3 2012.1 2012.3 2013.1 2013.3 2014.1 2014.3 2015.1 2015.3 2016.1 2016.3 2017.1 2017.3 2018.1 Credit Availability Permits & Starts Mortgage Credit Availability Index (MCAI) Housing Starts (MMs) Head and Myrtle Beach. Although a good portion of the interest is related to active adult projects, af ordable home prices have pushed primary home stats upward. In the early 2000s, demand for retail was outpacing roof ops in numerous markets. Developers and end users are much more cau- tious today; however, as roof ops are built, the demand for retail and of ce strengthens. Charlotte, N.C., is an example of a market where land in almost every real estate investment category of ers compelling deals. Interest in the Charlotte market has grown with its improving economy and job growth. Unemployment fell to 5.5 percent in February 2015 compared to 6.9 percent in February 2014. T e Charlotte metro area's population is projected to grow by 47 percent between 2010 and 2030, and the greater Raleigh area is projected to grow by 50 percent during those two decades, according to a recent report by the Urban Land Institute. While some U.S. land markets are lagging in their recovery, the overall trend is for improvement. With good investment opportuni- ties, albeit with more competition than there has been in the recent past, activity is expected to continue to climb. Land investing in 2015 will be active for those who intend to begin construction on single-family residential or multifamily develop- ments. T e demand for these asset classes is strong in most markets, particularly those that exhibit clear signs of recovery, and with capital once again coming into the market, land investors should face fewer challenges in securing f nancing. David Moore, CCIM, is senior investment manager, Southeastern U.S. for Stratford Land, in Atlanta. Contact him at dmoore@stratfordland.com. Source: Moody's Analytics HOUSING STARTS AND MORTGAGE CREDIT