6/9/21 Atlanta Perimeter Mastermind Group Meeting

Atlanta Perimeter June 2021 – Key Take-Aways

• Things continue to be very busy; 2 new Letters of Intent from Jimmy Johns; have a sale of a property to go under contract soon; bunch of 1031 work. Pricing is up and people are chasing deals – hopefully we can get them to closing. (Menden Freiman)
• NEED: Water Barriers is looking for a new office location/property either to rent or purchase in the Acworth/Kennesaw/Marietta area; looking for an acre and need to store some materials outdoors.
• When considering a symptomatic roof – you need to go to the root cause of the problem. Most of the solutions and applicators out there don’t solve the problem – and there are many affordable options. (Water Barriers)
• Positive things are happening, but you have to work really hard to find land and buildings for industrial users. Leasing activity is still good and could lease more space if it was available. It’s so competitive – have to outbid and offer over asking price to get anything. (McWhirter Realty)
• Listings: Service First Bank branch in Kennesaw – 2 story with a couple of outparcels listed just north of McCollum Airport with good visibility on 41; could be converted to full office. 122 acres rural/recreational land in Cherokee/Ballground – beautiful property (McWhirter Realty)
• Bought an office building for the company, moving October 1 – near Braves Stadium. Also looking for property management opportunities. (McWhirter Realty)
• Great 6 months – 2 closings/small acquisitions; hard sale in Rome – sold for full price in 20 days. 2 buildings under contract on Cascade that Credit Union is buying. 3 condos launched off of Hembree w/2 under contract; about to launch 20k industrial building for lease in East Point w/11k sq. feet of warehouse space with small offices attached and an addition with 5k sq. ft. of office – will list as two separate properties. (ATL Commercial Real Estate)
• With low interest rates seeing small users are looking to buy a smaller building because it’s cheaper than renting. (ATL Commercial Real Estate)
• Important to be aware of city overlays and the approval process. (multiple)
• Savannah is incredibly busy in all aspects – now focusing on the corporate office market which has been Savannah’s weakest sector for the last 40 years. (Colliers)
• Land is really hard to find. The big Megasite of 2000 acres of the state and 4 development authorities is restricted for manufacturing. I-16 corridor is a land grab for industrial and Amazon is bringing 1000+ jobs to the area. Multi-family, student housing and canal district all kicking up in Savannah. Downtown – the City Council is changing and realizing growth and expansion is a good thing. (Colliers)
• Need: Looking for commercial kitchen space on the Westside of town. (Slutzky Realty Group)
• Exploring Multi-family or office opportunity in the Buckhead area. (John Buck Company)
• Nick Barwig, CBRE presentation take-aways:
o Industrial continues to be the strongest property type and seeing cap rates compress. Have an industrial deal now that will trade under 4 cap rate; building is a little over 200,000 sq. ft.
o Black Creek is buying back a portfolio that it sold 17 months ago.
o Growth of E-commerce will continue.
o Supply chain changes have moderated.
o Geo-political uncertainty also drives some changes; it’s all inter-connected and we try to support our opinions with market data.
o Expect industrial to see the quickest return on investment activity (already happening).
o Historically low interest rates have driven low cap rates on industrial side.
o Foreign buyers aren’t as active as they were in 2019 due to travel restrictions, etc.
o Lending/financing side – saw some pull back initially with the pandemic, but there are some lenders now that will only lend unless it’s industrial property.
o Shallow bay/flexspace is more challenging from a lending perspective – but one in Doraville/Norcross which is 30% office; 150-200,000 sq. feet for about $115/ft.
o NW/I-575 corridor has just about the same amount of space under construction as the NE/I-85 submarket. Never seen a number that high for NW corridor ever.
o Happy to provide comps/market data at no charge for various markets, if you ever need it.