By: John Azar, EVP/Managing Member, MACC Venture PartnersSouthern Charm is the Darling of CRE
As we all contemplate the short and long-term future of multifamily real estate during the present squeeze we must look at the shifting fundamentals in populations, job growth and desirability of geographic areas. The South (or rather the Southeast) has emerged as the darling of the Eastern Seaboard in all the growth it has presented in the past 5 years. We believe there are a lot of runway left ahead for the Southeast.
The diversified economies of the Carolinas and Georgia as well as the robust development of Florida has presented a growth opportunity in many tier 1, tier 2 and even tier 3 locations that were previously overlooked by institutional buyers and investors. The growth potential has spread beyond the major metros into these 1st, 2nd and even 3rd tier areas. The gravitational pull for younger working adults and families have been strong due to both a balance with quality of life as well as cost of living. Areas such as Charlotte NC, Raleigh NC, Durham NC, Greenville SC, Charleston SC, Savannah GA and Asheville, NC have attracted a panoply of upstart restaurants, breweries, and top grocers like Wegman’s, Wholefoods and Publix. The municipal government in all these areas have also done a great job in attracting more businesses, big and small, through either community building grants, tax aid/discounts and business friendly ordinances.
All of this has translated well into commercial and residential real estate and boosted pricing as well as the growing desirability of the region.
“Collectively, the six states comprising the region—Alabama, Florida, Georgia, North Carolina, South Carolina and Tennessee—would form the sixth largest country in the world from a GDP standpoint, according to the Urban Land Institute (ULI).” notes Dan Wagner, Atlanta-based regional research manager with commercial real estate services firm CBRE.
In cities like Charlotte, NC and Atlanta GA the local government and business community have done a tremendous job in growing their commercial business districts (CBD) and have been attracting a bevy of technology, human resources, and advertising companies; steadily for the past 4 years. Charlotte and Atlanta both have a growing legion of startup entrepreneurs who have launched small and medium enterprises in Fintech, technology, and consumer goods. Areas like Greenville SC, Charleston SC, and Savanah GA have been attracting more industrial operators as they focus their effort on growing their port capacities and linking with global markets.
We predict that the demographic shift that has led to the growth of the Southeast will only continue to grow as employees and employers continue to seek more affordable and better quality of life havens, and business friendly markets. Baby boomers will also continue to prefer these warmer climate areas that offers low cost of living and a growing desirable urban core.
If you would like to capitalize on the CRE Renaissance in the Southeast, invest with us on our next multifamily acquisition. To partner with us click the image below:
This post was written by our EVP/Managing Member, John Azar. He can be reached at john@maccvp.com.
The photos at the beginning are from The Real Deal and Jarrett Jones