This report is a one-page summary of our expectations for the Southeast U.S. Office market looking forward from the end of 2018. It is one of a series of reports issued as a component of our Southeast U.S. Outlook Report (SEOR).
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Economy
"Every primary economic driver... tourism, technology, manufacturing and logistics; are all trending in a positive direction… strong demographic growth will help mitigate any downside"
Office
"...strong demographic growth… poised to do well... record rent growth, construction costs and the relative affordability of the region suggests that more may be on the horizon."
Industrial
"...tied to trends in global trade. Manufacturers and logistics operators are poised to see significant growth in the future, barring a major global trade disruption."
Retail
"Strong demographic growth will keep retail markets active… strong in-migration of talent... expect absorption to remain elevated…"
Multifamily
"...characteristics... attractive to new residents can be problematic for multifamily investors... limits the opportunities for rent growth."
Hotels
"Sustained economic growth nationally, coupled with rapid demographic growth in the region, should help keep the sector on solid footing."
Visit the Southeast Market Page
Economy
“Corporate expansion and relocation... fueled job and population growth for the last several years, and the good news keeps coming.”
Office
"...outlook… remains strong… rent increases shows no signs of slowing and moderate construction activity… will support solid fundamentals…"
Industrial
"...strong leasing activity suggests big-box demand will remain robust, the market will be tested as a swath of new product is introduced to the market…"
Retail
"...high demand... should keep fundamentals strong... constant change will keep investors and owners on their toes."
Multifamily
"...strong economy is creating jobs and renter demand at a pace to absorb cycle-peaking unit deliveries... should maintain a healthy occupancy balance…"
Hotels
"Super Bowl 53 will be hosted... anticipating a large increase in both rate and occupancy. As a result, RevPAR... expected to grow…"
Visit the Atlanta Market Page
Economy
"...a destination for employment opportunities... more attractive to… companies... tenant diversity is expected to help... economy… grow and develop"
Office
"...mild amount of activity in recent years… fundamentals are expected to remain relatively stable, with vacancy decreasing and rental rates increasing slightly over the next two years"
Industrial
"...market will continue to tighten... demand for construction is largely unprecedented... vacancy rates are expected to continue to decrease…"
Visit the Birmingham Market Page
Economy
"...experiencing a very positive change in its demographic composition... growth over the next two decades."
Office
"...shortage of office product supply due to lack of new developments has driven rents... to historic highs and vacancy rates to historic lows…"
Industrial
"Port Everglades... emerging as a major Broward industrial product driver. Rents have increased... vacancy rate has decreased... to gain strength…"
Retail
"...driven by very positive demographic and economic fundamentals... development has been muted over the past several years… room for new retail product development…"
Multifamily
"...strong local economic fundamentals along with favorable demographics have supported the market... biggest... issue will be affordable housing"
Hotels
"Despite... expected supply increase, RevPAR is forecast to continue growing at the second highest rate in the country... strong economic performance will continue to support..."
Visit the Broward County Market Page
Economy
“...one of the fastest growing markets in the Southeast U.S….employment growth remains strong… labor...tight as employers seek out better ways to attract and recruit… employment”
Office
"...tight office market… rapid population growth, have helped office assets attract a greater amount of interest… compressing cap rates… and attracting capital to the region"
Industrial
"Large amounts of speculative development are set to be completed... vacancy may increase… will remain low as industrial users… absorb available space on the market"
Retail
"Economic growth... is phenomenal and should minimize downside risk of the market. Diversification... will only improve the already bright outlook…"
Multifamily
"pricing... is among the highest in the region… rapid demographic growth… coupled with the large student population should help to sustain not just the absorption of new product…"
Hotels
"...will continue to benefit from increased travel and tourism interest helping to sustain increases in market growth and heightened demand... for the foreseeable future."
Visit the Charleston Market Page
Economy
"...a secondary market… greater amounts of capital investing in the market... a leading national business center... able to maintain a low cost of living, high quality of life…"
Office
"...dwindling supply… beginning to have an impact on leasing activity... high rates of job creation, population growth... will keep… fundamentals strong."
Industrial
"Record absorption... vacancy reaching historic lows... Rates to continue their ascent... expect vacancy… to decline... New supply is being absorbed immediately…"
Retail
"...vacancy and availability rates are projected to remain [low]... Cap rates for investment-grade retail product have come in-line with national averages..."
Multifamily
"Despite the new supply, rent growth has been rapid... expected to continue to be an attractive option for investors looking for a strong return…"
Hotels
"...demand, driven by a growing population and tech sector economy, will remain strong... the market is forecast to weather… supply growth and declining occupancy..."
Visit the Charlotte Market Page
Economy
"...one of the most affordable markets in the region… ranks among the more well-educated markets with a large number of young workers."
Office
"...expect to see vacancies continue to decline without new office product in the pipeline… The long-term outlook… is strong due to… a highly-educated and inexpensive workforce."
Industrial
"...solid signs of growth… despite little to no new construction in recent years... warehouse users as well as... manufacturers... have helped to diversify the market’s tenant-base…"
Retail
"...trends have mirrored those at the national level... modest suburban retail construction… increasing urban options…"
Multifamily
"...market should remain propped up by a stable level of student demand… traditional multifamily housing to new graduates may be an underserved need."
Hotels
"...supply will grow more quickly than its demand from 2019 until 2022. This will produce decreases to occupancy…"
Visit the Columbia Market Page
Economy
"...poised to prosper due to its quality of life, low cost of living, mild climate, business friendly environment and diverse economic base"
Office
"With continued growth and improvement in the office sector, the market should continue to post positive results."
Industrial
"Due to strong demand and new development coming on line, anticipate continued positive absorption numbers, and for vacancies to remain low."
Retail
"Due to the strong demand and new development product coming on line, anticipate continued positive absorption numbers and for vacancies to decrease."
Visit the Greensboro Winston-Salem Market Page
Economy
"...growth of the industrial sector... is driving the local economy... biggest challenge... will be responding to new labor demand... global trade patterns… high level of importance…"
Office
"...multiple large Class A vacancies... represent a unique opportunity... to attract users... Asking rates should climb… as new investors look to capitalize on... an underpriced market."
Industrial
"As speculative development is delivered and filled… vacancy rates to remain relatively flat... vulnerable to global trade shocks… market’s size of 1.2 million people may mitigate…"
Retail
"...series of potential givebacks on the horizon... historically the market has successfully backfilled vacancies recently vacated by big box retailers effectively…"
Multifamily
"...does not cater to a significant student population… growth trend is strong, investors need to be strategic when it comes to capital placement in this sector in this market."
Visit the Greenville-Spartanburg Market Page
Economy
"...healthcare and state government act as anchors… growth associated with the healthcare and automotive sectors provide promise of stronger economic growth in the future."
Office
"...market to remain stable with modest absorption... experiencing growth associated with medical-related billing and call centers."
Industrial
"...expectations... should be held in check, largely due to the market’s relatively small market size... easy to envision… benefits from… growing manufacturing and increasing logistics…"
Visit the Jackson Market Page
Economy
"...anticipated downturn... should have a dampening effect over all the property sectors. Contractions... should be minimal with some sectors… experiencing growth during this period"
Office
"Increases in office using employment is expected… but net absorption should lag supply during this period. This lag will pull rents down slightly and help push vacancy figures higher…"
Industrial
"An expanding port... concerted focus on growth... positioned... to be a large international industrial player… net absorption down… but rents… to continue their precipitous rise…"
Retail
"...growth in population and personal income… expect to see consistent new supply as the sector repositions and evolves for today’s consumer."
Multifamily
"...strong demographics... gains in personal income... coupled with employment and population increases. New deliveries… to push vacancy higher but... support effective rent growth…"
Hotels
"...one of the nation’s largest supply growth percentage... demand is expected to outpace supply... increased development in the coming years will inhibit RevPAR growth."
Visit the Jacksonville Market Page
Economy
"Considerable investments continue to flow to the industrial market, especially in the shipping and logistics sector... considered a secondary market… higher returns…"
Office
"vacancy… historically low... space… delivered in the coming year, with expectations to lease quickly... tenants leave [Class B] space for more attractive Class A office complexes."
Industrial
"...momentum is expected to slow slightly after record years... still be high... development interest is strong, and market conditions will continue to drive investment…"
Retail
"...urban core continues to be rebooted, downtown and midtown... become more active in the following years... sales and development trends are strengthening…"
Multifamily
"Demand will remain strong... rent growth is strong but beginning to slow... Vacancy is decreasing, and rents are expected to... remain affordable."
Hotels
"...performance is expected to decline sharply... supply growth peak will coincide with anticipated national economic slowdown in 2020, reducing occupancy and pricing power."
Visit the Memphis Market Page
Economy
"...long been an established gateway with strong international ties that brought not only visitors but also high levels of foreign investment… economy has expanded rapidly…"
Office
"Rapid development... left very little available developable land for office projects... severely restricted supply dynamics and will insulate the market…"
Industrial
"...sharp rent rate increases and historically low vacancy rates... e-commerce... last mile logistics... industrial real estate to gain strength..."
Retail
"...global city status and its strong economic growth will continue to support its retail as the retail sector goes through a transformation..."
Multifamily
"...fears that the market would be unable to absorb... recently completed rentable units... strong demographic and economic fundamentals... supported absorption of new… product…"
Hotels
"...the healthy supply and demand dynamics should keep the market on an upward trajectory in the medium term."
Visit the Miami Market Page
Economy
"...reliable location to place capital and the city continues to attract new residents… supply of labor becomes… more plentiful… setting the stage for future growth."
Office
"...net absorption will increase as the supply… and demand come to an equilibrium... vacancy will begin to tighten... positioned for a strong, active future..."
Industrial
"outlook… is strong. Vacancy rates are at a healthy level, rent is stable and construction activity is robust… an active industrial hub"
Retail
"...a consistent stream of new residents… record high tourism… top name brands are continuing to be attracted to the growth opportunities available…"
Multifamily
"...several tailwinds supporting... vibrant economy... soaring home prices... apartment dwellers are deterred from leaving their apartments to buy a home… positioned favorably…"
Hotels
"...one of the best performers... even in the midst of an anticipated national economic downturn... immensity of the supply pipeline will... weaken occupancy..."
Visit the Nashville Market Page
Economy
"...lead the charge out of the last recession... An abundance of developable land has supported growth... an anticipated downturn... should have a minimal dampening effect…"
Office
"... increase in vacancy should be expected... as many new projects come online... dampening effect on demand numbers but should remain positive… longer term."
Industrial
"...central location has made it a... market for transportation and logistics... speculative deliveries are expected to push up average asking rates… over the short-term…"
Retail
"…strong demographic growth… robust tourism growth… prompting solid market fundamentals… tied to national economy."
Multifamily
"Population, personal income and total employment... should prove to bolster... demand... Although a slowdown is expected… market continues to be a juggernaut…"
Hotels
"Gone… are the days of very low supply growth in the Orlando market… the high occupancy levels are expected to diminish starting... while new demand growth is expected to slow…"
Visit the Orlando Market Page
Economy
"...popular retirement and second home area... steady inflow… created a boost… expected to continue attracting new talent and companies to the area."
Office
"...limited amount of new office product supply is coming to market over the next five years… market will continue to experience favorable conditions..."
Industrial
"...fundamentals drove rents up... led to the vacancy rate... experiencing a dramatic reduction... future growth prospects are closely linked with the U.S. domestic economy."
Retail
"...ultra-high net worth individuals… Demographic and economic growth... led to increased retail spending... The outlook for this market is positive…"
Multifamily
"...market remains strong... with favorable demographics... Biggest… issue… will be construction costs and rate-of-return metrics remaining favorable for further… development…"
Hotels
"Although… forecasted economic fundamentals to be among the nation’s best in the period 2019 to 2021, product supply growth is expected to exceed demand…"
Visit the Palm Beach Market Page
Economy
"...diverse economic engine driven by technology, university systems, healthcare... combined with a relatively low cost of living… support economic expansion… fundamentals remain strong…"
Office
"...asking rates... expected to continue their ascent as vacancy decreases at a steady pace… expect new product in urban areas to attract companies... and push asking rates higher…"
Industrial
"...growing tech industry... to attract companies to... the market and leverage the supply of talent… expect development to remain active, vacancy to remain low and rates... to rise."
Retail
"...market will continue to see strong demand. Expect vacancy to remain low and investment and development to remain active, especially in urban locations."
Hotels
"...will weather the anticipated economic downturn... in part to a relatively measured supply forecast... Demand growth is forecast to sink... RevPAR growth should remain positive…"
Visit the Raleigh-Durham Market Page
Economy
"...growth of container traffic at the Port of Savannah... is fueling the local economy... direction is largely dictated by global trade patterns…"
Office
"...expected to see continued growth with modest absorption, decreasing vacancy, rising rents and positive job growth... small market size... increased perceived risk…"
Industrial
"...market is currently enjoying record levels of growth... some uncertainty... related to trade tariffs… outlook... could not be stronger..."
Hotels
"...current projects... well exceed the expected growth in demand for the coming future. Savannah currently sits at the bottom of the nation in terms of forecasted RevPAR…"
Visit the Savannah Market Page
Economy
"...several game-changing developments on the horizon... central location has prompted manufacturing and logistics companies to call the region home."
Office
"Employment growth... expected in the near-term which should continue to buoy fundamentals. Net absorption is forecasted to outpace supply… putting… pressure on average asking rates…"
Industrial
"Absorption is expected to outpace supply... keeping rates moving higher. The market’s central location… will support sustained market growth in the near-term."
Retail
"Tempered employment growth is expected… Personal income growth and population are expected to continue on an upward trajectory... supporting demand for retail product."
Multifamily
"Absorption is expected to lag supply... pushing vacancy higher and putting pressure on rents… expect to experience moderate rent growth and a steady supply of new product."
Hotels
"...near record levels, occupancy rates are forecast to flatten in the next year... Due to increasing supply, greater than demand growth, RevPAR will be diminished in the coming years."
Visit the Tampa Market Page
Back to the 2019 Southeast U.S. Outlook Report