While California boasts a prosperous economy, several states in the Southeastern part of the country have also been experiencing strong growth, largely due to the area’s industrial expansion and its rapid employment and population increases. As an economic powerhouse, the region has had a growth rate that, if it were a country, could surpass the top five largest countries in the world.
With strong export and import activity in seaports like Charleston, Miami and Savannah, solid international commercial real estate investments and an increase in manufacturing activity and employment, the Southeast has a record low of industrial vacancies. Moreover, educated work forces are flocking to cities such as Nashville, Tampa and Charlotte, and e-commerce users are attracted to the strategic locations of Memphis, Orlando and Atlanta.
With the increase of population and jobs, as well as robust market conditions, a boom in office construction is predicted to occur in the region. In fact, one third of the region’s office space was constructed in Nashville in 2015 and 2016, and office rent for every market in the area climbed to record highs of more than 10 percent. However, compared with other areas throughout the country, the Southeast region remains more affordable.
There has also been an increase in retail businesses in the Southeast, despite the fact that e-commerce remains strong. The markets with the highest number of future retail development are Tampa, Orlando and Florida; and Miami, Orlando and Florida are set to become the leading areas for the most hotel development in the region.
Investing in commercial property can be profitable, especially in regions where the economy is thriving and businesses are growing. However, because commercial real estate transactions are full of complexities, investors might benefit from the advice and direction of an experienced lawyer before making a commitment.
Source: National Real Estate Investor, “Southeastern U.S. Experiencing a Growth Spurt”, Dan Wagner, Feb. 10, 2017