Construction spending during August 2015 was estimated at an annual rate of $1,086.2 billion according to the U.S. Department of Commerce. This figure is 13.7% above the August 2014 estimate. Construction spending in the first 8 months of 2015 totals $683.4 billion, 9.8% above the same period of time from 2014.
“New completions for each of the major property types changed relatively little versus last quarter, a sign that construction is firming, if not accelerating,” said Ryan Severino in a Q3 REIS report for Construction Activity.
Surprisingly, retail was the only property sector that experienced an increase in construction during the quarter. However, Severino points out that the increase was slight and that the level of activity for the sector remains “virtually non-existent.” Vacancy for neighborhood and community shopping centers and malls was also unchanged in the quarter.
Severino also said, “Any retail development, or even redevelopment, that is occurring is heavily focused on experiential shopping.
For the office sector, new construction stood at 7.674 million SF for Q3, a slight decline from Q2. Speculative new construction is “slowly returning to the market,” specifically in well-performing markets and in markets with “obsolete” existing inventory, but Severino notes that the mere existence of spec projects “provides another sign of the ongoing recovery.”
142,000 new jobs were added in September 2015 marking the “67th consecutive month of private-sector job growth,” according to the Bureau of Labor Statistics. The unemployment rate remained at 5.1% at the end of Q3.
Not only is the job market steadily improving, housing demand is expected to surge over the next 10 years. The Mortgage Bankers Association (MBA) expects between 13.9 million and 15.9 million additional households will be formed by 2024, reports CoStar. The MBA report found that demand for rental housing will be affected in the same way with 5.6 million additional renter-occupied households in 2024.
In metro Atlanta, the population is expected to hit 8 million by 2040. The Atlanta Regional Commission (ARC) issued a long-range forecast that the metro Atlanta region is expected to reach a population of 8 million by 2040, reports The Atlanta Business Chronicle
New developments are cropping up all over the city. In Chamblee, Parkview on Peachtree, a new mixed-use project is underway.
Doug Sams of The Atlanta Business Chronicle spoke with JR Connolly, president and CEO of Connolly Investment & Development, one of the developers behind the project, who said, “It’s a sign of the times. “Atlanta is going through one of the fastest urbanizations of any city in the world,” Connolly said. “For Millennials and empty-nesters, the big house in the suburbs is not as appealing as it once was. Today they want to be in walking or biking distance to their jobs, retailers, trails, and restaurants.”
Peachtree Crossing, a 107,160 SF Whole Foods-anchored power center also located in Chamblee, is expected to deliver in Q1 of 2017.. In Dunwoody, officials have proposed a $20 million Westside connector.
The Cobb County Board of Commissioners voted 4-0-1 on Sept. 15th to approve two senior living communities. One on the southeast side of Powder Springs Road and the other on East Piedmont Road, reports the AJC.
Redevelopment is also king in downtown Atlanta and beyond. In Dekalb County, the need for walkability associated with the Atlanta United training facility has led to plans for Avondale Park. The Atlanta Fulton County Recreation Authority has called for developer ideas. Bids for the site are due Nov. 20, reports Curbed Atlanta. Last but not least, Houston-based Weingarten Realty Investors is planning a nearly $300 million redevelopment of the Atlanta Civic Center.
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