Atlanta September 2023 – Key Takeaways
EV Charging business is going strong. Working with Invisible Urban Charging putting EV chargers in parking lots; also building convenient stores with high-speed EV chargers on rural county exits. Each deal is worth $3-4 million with a cash on return of 15-18% during first five years. (Rick Lackey)
Market is incredibly fragmented across the country. Midwest is bad; NE not quite as bad; SE still doing well (Rick Lackey)
Delivering a building for Pepsi’s sales and distribution center in Stonecrest in 2 weeks. Original delivery date was 12/31/2023, but we are ahead of schedule which has pleased the Pepsi folks. We have some upcoming deals with them in Texas. (Knight Commercial Real Estate)
Lending environment in CRE is difficult to say the least; many banks are not lending at all. If you don’t have an existing relationship with a bank, they won’t even talk to you. We were looking to get financing in Texas for some of our projects there. A fellow RPN member in Texas connected me with 6 bankers she knows personally – not one responded to my emails (Knight Commercial Real Estate)
Cap rates are up across all product types. 10-year T-bill is driving it, so a lot will depend on what Fed does with rates between now and the end of the year (Knight Commercial Real Estate)
Sales and leasing activity has been slow/dead during the summer but starting to see an uptick in activity since Labor Day. (Various)
Most RE transactions we are seeing now are through private lending clients or restaurant/retail spaces that are changing hands. Also seeing some restructuring of joint ventures (MendenFreiman)
Leasing activity seems to be active on the office side. Rates in Fulton Industrial area that were $3.75 are now going for $7/sq. ft. Still absorption going on and there will be shortages of big box stuff next year because everything got put on hold. (McWhirter Realty Partners)
Video shooting has been very active with various types of projects (Capitol Photography & Video)
Residential real estate professionals are more of a marketing person v. CRE professional because a house is a commodity. We have had an inventory issue for a very long time and the low inventory has led to the housing inflation boom with many offers and overpayment on home purchases. Traffic for new homes is off by 100%; mortgage applications are off by 40%; qualifiers for mortgages is down 30%; people are sitting on the sidelines. We are going to have to make adjustments; we share the numbers with our clients and provide them with alternatives. (Atlanta Fine Homes)
Looking for value ad multi-Family acquisitions between 50-250 units. Working with Alpharetta Development Authority for a property there and have bought first piece of land but sitting tight on it for now. (Smith Street Capital)
Currently have several properties under contract and am seeing a lot of cash out there: lot of investors – hard money lending. Things are loosening up and there’s been more activity since Labor Day (ATL Commercial Real Estate, Inc.)
Self-storage business has slowed because of higher interest rates; rents have dropped off, as well and the need for space has diminished because houses aren’t selling. Cap rates have depressed by about 500 basis points. 1031 buyers are about the only ones doing business right now. (Commercial Realty Services of West Georgia)
We now partner with Preqin which enables us to track over 14,000 funds; we can help point you in the direction of lenders and top buyers/sellers; those looking to acquire/dispose of properties. Seeing more people sitting on the sidelines, waiting to see what happens. We can our clients navigate through these times and mitigate risks (CoStar Group)
Vari is a commercial office furniture company, known for making desktop risers, etc., who is now in Atlanta. They are a fast-track furniture provider that has everything in stock all the time, so they can deliver anywhere in the US quickly. It is also a great alternative for staging office space for lease to enable clients to picture the space better. (Vari)
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