Atlanta Intown January 2021 – Key Takeaways

• Definitely seeing a slow-down in leasing activity; as leases renew, people are looking at downsizing space and how to make space more efficient; many deals are turning soft; 10% occupancy in Class A makes it difficult to determine how much space is needed going forward (Chamberlain Hrdlicka; CBRE)
• Common themes from many participants throughout the meeting:
  • multi-family and industrial is “white hot”.   Helped make 2020 a good/great year.
  • Cost of land, development and costs of materials sky-rocketing due to demand and also supply chain issues due to pandemic
  • A contributing factor to the increased construction costs is the rising costs of insurance; there was a 50% increase in re-insurance rates (Gallagher)
• State law drives environmental regulations, not  federal, so don’t anticipate seeing any environmental impact to real estate transactions (Kazmarek Mowrey)
• Starting to see foreclosures in hospitality – hotels
• Single tenant restaurants are all demanding drive-thrus; some national chains are developing drive-thru only sites (Knight Commercial Real Estate)
• Buyer looking for value add office in the Central Business District; also have buyer looking for distressed hotels nor of I-20 (Ackerman & Co.)
• 2020 saw $28 billion damage from natural disasters; 6 major hurricanes, but most of the damage was from other types of natural disasters (Gallagher)
• Self-storage market is still strong (Commercial Realty Services of W GA)
• 50k building in Dalton – available for lease or sale; 12.5 acres of land in Carrollton, centrally located available for sale (Commercial Realty Services of W Ga)
• Environmental work outlook is stable and steady for the next couple of years.  Have done significant projects with commercial/recreational properties, like RV Parks and Marinas.  Look to get new standards later this year or early next year for Phase I assessments (AKT Peerless)