With rapid growth across markets in the Southeast, the region has emerged as a diverse, economic powerhouse, resulting in strong commercial real estate fundamentals for all property types. The Southeast’s rosy story is the result of a shift in both population and business growth from the Northeast and Midwest Rustbelt to Southeast markets, a reflection of the region’s desirability.
Collectively, the six states comprising the region—Alabama, Florida, Georgia, North Carolina, South Carolina and Tennessee—would form the sixth largest country in the world from a GDP standpoint. Over the last three to four years the Southeast has experienced the greatest population growth in the United States. The Atlanta population increased by 1.6 percent, Miami’s by 1.5 percent and the population of Raleigh, N.C. by 2.5 percent, compared to 0.5 percent population growth in Los Angeles and Boston during the same period, 0.25 percent in New York City and Philadelphia and negative population growth in Chicago.
Located on Florida’s Gulf Coast, the Tampa-St. Peterburg market, which includes Hernando, Hillsborough, Pasco and Pinellas counties, is home to Port Tampa Bay, which has helped to define the region as a logistics hub. It is Southwest Florida’s economic anchor, with active defense and security industries and a strong financial services sector. In fact, Tampa is home to 10 percent of the nation’s Fortune 50 shared-services operations.
Moody’s predicts that growth in the Tampa market will keep pace with the rest of nation, as the area reaches full employment. An average 2.1 percent annual growth in employment is already putting upward pressure on wages and resulting in economic acceleration.
The region’s biggest challenge in attracting business is the lack of a modern mass transportation system. The Tampa Bay Express, a program aimed at modernizing Tampa’s infrastructure and building a comprehensive regional transportation system, along with establishment of cross-bay ferry services, should help the market overcome this deficiency.
Demand for commercial properties here has accelerated in recent years, with sales volume reaching nearly $6.3 billion in 2015, but then slowing in 2016. While investors remain cautious, Tampa is a growing market with competitively priced assets and high-yield opportunities, noted a recent CBRE report.
To learn more about the Florida real estate market contact an expert member of the 9 Core Realty team.