The past decade has seen a number of events and natural disasters, including an oil spill, multiple hurricanes, and a nation-wide recession. As a result, the commercial real estate landscape in the 5 coastal states along the Gulf of Mexico and the I-10 Corridor has emerged with more opportunity than ever before. Explosive population growth, a strong labor force, and a sheer lack of supply in many markets throughout Texas, Louisiana, Mississippi, Alabama, and Florida have come together to create distinct pockets of interest for the right potential investors.
To help our clients be more informed in the decision-making process regarding real estate investment, we have put together a market overview of 7 major epicenters in the I-10 Corridor. From vacancy rates and trends to local economic factors at play, we reviewed everything in the following market regions: San Antonio, Beaumont/Southeast Texas, New Orleans, Baton Rouge, Pensacola, Tallahassee, and Jacksonville.
San Antonio, TX
San Antonio has a reputation for embracing new and expanding businesses – and for good reason. This embrace results in a steady flow of corporate expansions, solid population growth, and more. Further, San Antonio’s traffic is generally considered to be better than other cities’ of similar size, and the cost of living is relatively low.
“While still smaller than Houston, San Antonio is currently the 7th largest city in the United States, and Forbes reports it to be one of the fastest growing in the nation, racking up a growth rate of more than 15 percent between 2010 and 2017,” says Sheri Arnold of Coldwell Banker Commercial Arnold and Associates.
Fueling this growth are several industries that have been gaining strength in the market, including technology, cybersecurity, financial services, education, healthcare and more. Each of these industries plays a significant role in San Antonio’s economy and are attracting attention across the US.
To date, San Antonio’s commercial real estate market has yet to catch up to its tremendous growth, making it a prime market for investors. All of the communities around San Antonio are in a growth and expansion phase, including a number of adjacent, smaller cities. More housing is needed, and also more retail space and medical office buildings. And with a trend toward downtown living, there are a number of opportunities for multifamily housing and retail spaces. Prospective investors should move quickly, as this is a hot market with out of state and foreign investments escalating quickly.
Pensacola is part of the Northwest Florida economy that is heavily fueled by government, healthcare, tourism, and financial firms. Increasingly, the employment base is diversifying as aerospace, cybersecurity, and other technology companies are moving into and expanding in the area, and there are a number of additional industries that are trending in a positive direction in the area. In short, there is no shortage of growth in the market.
“There is a definite shortage of available general warehouse space in most of the communities throughout Northwest Florida, made worse by a lack of speculative building in the area since the recession. The selloff of distressed properties caused a false deflation of property prices for a while, but now low vacancy rates are pushing lease and sales rates up,” says Mike Mangrum, Broker/Regional Director for Coldwell Banker Commercial NRT. CRE developers or investors would be wise to offer “pad ready” or “build to suit” sites or speculate with a flexible, multi-tenant industrial offering.