I am proud to represent Christian & Small as a member of the Leadership Council of the Alabama Center For Real Estate (ACRE), whose purpose is to provide resources to real estate professionals in the areas of research, education and outreach. As part of that mission, ACRE recently held a roundtable meeting for members of the Leadership Council and its annual Commercial Real Estate Conference and Expo at the Cahaba Grand Conference Center in Birmingham.
After several flat (at best) years of real estate in Alabama, I was pleased by the generally positive outlook on the industry by both the speakers at these events and the approximately 500 commercial real estate professionals who attended. The possibilities for the state and the surrounding regions over the next decade or so are so promising that it’s almost startling.
A few highlights locally and in the short term:
Tom Brander of OSWCO, LLC gave an excellent presentation summarizing his research and statistical analysis of the Alabama real estate markets – past, present and future. Generally speaking, trends are positive. In Brander’s experience and opinion, the strong fourth quarter in 2013 is highly indicative of a positive 2014. He expects 5% growth statewide, 8% growth in the Birmingham market and potentially very strong growth in Baldwin County, including the condominium market.
One persistent concern of Brander is the perception among real estate professionals that credit is still very tight, especially for smaller business owners and smaller builders. This, combined with the outstanding inventories, may result in residential building starts continuing to be slow in 2014, even as the real estate market, in general, improves.
A few highlights nationally, regionally and over the longer term:
Lawrence Yun, Chief Economist and Senior Vice President of Research for the National Association of Realtors, presented his outlook for commercial real estate in 2014. On the national scale, he echoed the trends and patterns discussed by Brander. Again, it was mostly positive with overall improvement predicted. Yun also expects residential building starts to continue to be slow as credit remains tight for smaller builders, resulting in shorter supply of new housing and increased rents over the next several years.
Most interesting was the presentation by Martin A. Mayer, President and CEO of Stirling Properties, a regional real estate firm offering services in development, brokerage and property management. Mayer is bullish on the southeast, and in particular, the nation’s “third coast,” which includes Louisiana, Mississippi, Alabama and the Florida panhandle.
Here are a few “factoids” from his presentation:
- There are more than 209 billion dollars in active industrial projects underway in the Gulf South.
- The corridor extending from the Florida Panhandle to Louisiana is the 4th largest aerospace corridor in the world.
- The Port of Mobile is currently the 9th largest port in the world and is soon to be the 6th largest upon the completion of current expansion.
- The energy sector has exploded in the Gulf South over the last several years.
- Alabama, Louisiana and Mississippi are now frequently ranked by various publications in the top 10 states for doing business.
- Mobile has been ranked #11 among for cities with the fastest growing income (New Orleans is #9).
- Florence, AL has been ranked #3 for small MSAs in the country for manufacturing employment; Mobile, AL has been ranked #1 for medium MSAs for manufacturing employment.
- Alabama has been ranked #3 in the country for workforce training.
In Mayer’s view, these and other economic drivers have the potential to push population growth in the Gulf South by more than 500,000 in the next decade or so. In his words, the rest of the country is taking notice of the previously “overlooked and looked over” Gulf South, and we may find ourselves in the midst of an economic boom in the years to come.
If Mayer’s predictions are right, Christian & Small’s clients in the Southeast and Gulf South may take part in unprecedented economic growth in the years to come. We hope to be a part of that growth as non-stop advocates helping our clients to plan, grow and solve problems along the way.