Atlanta Intown February 2021 – Key Takeaways
- Activity and deals are starting to pick up: apartment complex closing in Chamblee; vet clinic in Athens being developed; representing seller with 1.5 acres in Midtown for student housing (Chamberlain Hrdlicka); deal working on for last 15 months scheduled to close tomorrow; several other properties under contract. (Oakhurst Realty)
- Private investment firm indicated that while office leasing and development may be “on hold” right now, not abandoning it completely because it offers a better cashflow model. (Chamberlain Hrdlicka)
- Starting to see the back side of COVID, out of 200 tenants, only lost one due to bankruptcy. (Crim & Associates)
- Starting to see some movement in office space market – cautiously optimistic. (Oakhurst Realty)
- Cousins states that over its entire portfolio they are 85-90% leased, but occupancy is at 20%. Social distancing requires more space per employee, so employers my require more space to protect employees. (Multiple)
- Needs: value add office properties and light industrial/mixed use retail/office in smaller downtowns (Tucker, Lawrenceville, Decatur, etc.); looking for tenants for a mixed use development in Avondale and 23,000 square feet in Decatur we’re marketing. (Oakhurst Realty)
- When doing your due diligence, particularly on multi-family projects, insurance costs are now running $400-$500/unit, about double what they used to be. Construction costs are also a factor when figuring your replacement costs for insurance. A blanket limit not tied to replacement costs may be best. (Gallagher)
- Lessons learned from Texas: $18-20 billion losses. Water damage Is huge factor and the deductibles for water damage are higher. Those that drained their pipes and sprinkler systems fared much better. (Gallagher)
- Building costs are extremely high now, not just lumber, but everything. (Knight Commercial Real Estate)
- Cap rates on QSRs, etc. are compressing due to fewer deals with lots of potential buyers. (Knight Commercial Real Estate)
- Drive-thrus are in hot demand and needed/wanted. Many QSRs are going to drive-thru only models; no inside dining. (Knight Commercial Real Estate)
- A recent research study done by Market Graphics Research shows a significant need for residential properties in and around Savannah over the next five years. (Colliers)
- New resident liability program that allows owners to build risk of liability into leases and helps control risks. (Gallagher)
- Owner needs to be aware and keep control over what tenants put on roofs (HVAC systems, DISH satellites, etc.) because it can lead to liability and insurance issues. (WaterBarriers, Gallagher)
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