Two of the hottest trends in commercial real estate right now are investment property and use of the Gulf Opportunity Zone to build new projects. Out-of-state investors are also coming into some of the state’s key markets to invest. And, there’s optimism about projects in downtown Jackson.
Philip Holman with the Mattiace Company, a regional commercial property firm based in Jackson, is pleased with activity in the state.
“We’re seeing local buyers wanting income-producing property,” he said. “They prefer to lease space and to have a portion leased by a national or regional tenant. There’s also a demand for mom-and-pop strip mall centers composed of local tenants. It’s more common for local investors to purchase that type of property.”
Both Holman and Jackson commercial Realtor Nancy Lane note the increased attention from out-of-state investors.
“Outside investors see good value here compared to their areas and they see good capitalization rates,” Lane said. “We’re seeing a lot from California and New York. They want large properties with a single tenant and we don’t have many of those properties.”
Holman says technology has put Mississippi on a level playing field with other areas. “We can expose our properties favorably to other parts of the country,” he said, “and they see our area as a good market where property will generate higher returns. I used to sell only to Mississippians or Southerners but now I’m selling to people from everywhere.”
Lane, who covers the whole state, sees a lot of potential and growing areas where rents may increase for commercial property. “The good news is that we’re all very busy right now,” she said. “We’re also getting contracts signed and that’s encouraging. I see continued investment activity.”
She receives phone calls and e-mails every day from people looking for property to qualify for the GO Zone and multi-family locations. “There’s a lot of demand for that and a lot of activity in some areas, but cities are not rezoning a lot for that,” she said.
Holman said a number of new projects are being built because of GO Zone opportunities. “It has helped spur activity,” he said. “Investors want to take advantage of the increased accelerated loss of recovery.”
In addition to the Jackson metro area, Lane notes increased commercial activity in Hattiesburg, Tupelo, Southaven and on the Coast.
“What I’m hearing about the Coast is that there is a pent-up demand for commercial space,” she said. “But, land prices and the challenge of a lack of information about regulations are slowing the ability to meet the need.”
Lorraine Krohn with the Gulf Coast Association of Realtors said, “Roadblocks for the real estate market on the Coast right now include the lack of affordable housing, the high cost of insurance, the lack of funding to put in the needed infrastructure and the slow pace of the permitting process.”
In Hattiesburg, downtown seems to be booming. “The commercial market seems to be what’s hot now,” said Tracy Bounds, association executive with the Hattiesburg Association of Realtors. “New restaurants and businesses are constantly popping up and even the downtown area is flourishing with new businesses and those who have returned since Katrina.”
Natchez is also seeing increased commercial activity as a result of the 2005 hurricane. “Natchez has seen lots of commercial property for sale. All of this is a great sign for the city and surrounding area,” said Vicky Ratliff with the Natchez Board of Realtors.
One of the hottest commercial areas in the Jackson area is Colony Park in Ridgeland where the Mattiace Company is developing a large lifestyle center just off Interstate 55 at Old Agency Road.
Michelle Burford, president of the Mississippi Commercial Association of Realtors, says there’s nothing like it in the state. “Lifestyle centers are a big trend elsewhere in the country but it’s new in Mississippi,” she said. “It is 430 acres comprised of mixed-use development. There will be retail, office and residential space.”
Burford is involved with leasing office space at Colony Park that she says offers true class A space. “We’re seeing a lot of good activity,” she said. “It’s probably the highest priced in the state ranging from $23.50 to $27.00 per square foot.”
Holman and Lane point out other hot locations in the metro area, including Lake Harbor near Old Canton Road, the Old Fannin Road/Lakeland Drive area and behind Dogwood Promenade in Rankin County and Byram in Hinds County.
“What’s growing will continue to grow,” Lane said. “People are on the move and we’re seeing a growing demand in all sectors: retail, industrial and multi family.”
Both long-time commercial Realtors are excited about the activity in downtown Jackson, including the Old Capitol Green project, Telecom Center, Convention Center, new courthouse and the King Edward Hotel.
“Jackson has an opportunity to blossom,” Lane said.
Holman added that what’s going on downtown is good. “I would be remiss if I didn’t mention downtown,” he said. “Most of these projects are including a retail and residential element; those are catching on.”
Contact MBJ contributing Lynn Lofton at email@example.com.