Atlanta December 2022 – Key Takeaways
• Busiest year ever; four new deals in past week, all trying to close by end of the year; due diligence has gone out the window (Menden Freiman)
• Sometimes it’s better to be lucky than good: one deal that has morphed into a building for a Fortune 100 company; also have a site that we just learned a major battery plant is going to be built a block from (Knight Commercial Real Estate)
• Smaller banks have now stopped lending on commercial real estate; no one will give you a loan on a spec industrial building. If you don’t have a signed tenant for an industrial building, you are not going to get a loan. (Knight Commercial Real Estate)
• Contractors that were previously booked through 2023 now have time available; Many of the supply chain issues have disappeared overnight and seeing some material prices drop (Knight Commercial Real Estate)
• Word of caution – jobs are getting cancelled, but some materials are still difficult to get which can cause delays. (BA Barrett Construction)
• Construction costs have stabilized; permits are very difficult to get (BA Barrett Construction)
• Starting to see some leveling of numbers in self-storage space due to higher interest rates (Commercial Real Estate Services of West Georgia)
• Triple Net work has really slowed down and T&I costs are through the roof (Slutzky Realty Group)
• Small office leasing has slowed and starting to see “move outs”. (ATL Commercial Real Estate, Inc.)
• Investors with money to spend are being aggressive (ATL Commercial Real Estate, Inc.)
• Medical office leasing and sales is strong (Multiple)
• Office buildings are slower to sell these days; Cap rates are 150-200 basis points higher than they were in January of this year (Bull Realty, Inc.)
• Expecting a “pause” in Q1 with companies waiting to see what interest rates are going to do, etc. (Sheley, Hall & Williams, P.C)
• Retail continues to grow; people are craving experiential retail that they haven’t been able to do for past 2.5 years. (Sheley, Hall & Williams, PC)
• Expect to see a revitalization of co-working environments, but the working agreements will be different; they will be more like a profit sharing or revenue sharing agreement v. a 5-year lease deal. The arrangements will be similar to how a landlord manages a fitness center in the space. (Sheley, Hall & Williams, P.C.)
• Medical is no longer office, it’s retail and it’s really exploded over past 1.5 years (Sheley, Hall & Williams, P.C.)
• Industrial space activity for the last 4 quarters is the third highest it’s ever been. Doing fewer industrial deals, but the value of each deal is greater (King Industrial Realty, Inc.)
• We continue to absorb what we’re building on the industrial side; but tending to build bigger. (King Industrial Realty, Inc.)
• E commerce will continue to do well. Amazon sales are equivalent to the sales of 120 regional malls (King Industrial Realty Inc.)
• Henry County and Macon are hot areas. The current mayor of Macon is very pro-development and re-zoning there is less difficult than in other areas (NAI Brannen Goddard)
• Institutions and equity sources put out so much money in the first part of year that they can sit back and wait but will have funds they need to spend in 2023, so should see things start to pick up later in first quarter. (AD Commercial Real Estate)
Amanda Rhein, Executive Director, Atlanta Land Trust:
• Atlanta Land Trust (ALT) is committed to creating and preserving housing in Atlanta that will remain affordable in perpetuity.
• ALT was created to maintain affordability in neighborhoods at risk of gentrification and displacement due, in part, to growth and development near the Atlanta BeltLine.
• Vision is to make Atlanta a livable, equitable and economically viable city where historically marginalized populations and communities of color can access and benefit from opportunities and prosper.
• Use a Community Land Trust model to achieve housing affordability and is rooted in racial equity through homeownership. ALT owns the land and leases it back to the homeowners.
• Goal is to provide 300 permanently affordable, energy efficient homes with a focus on home ownership by 2025.
• Several projects underway now providing townhomes, single family homes and condos: Oakland City and East Lake.
• They receive funding from grants, Foundations, and philanthropy.
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