Property management firms are seeing new emerging trends in real estate around the state. In Tupelo, it’s an increased willingness by tenants to sign triple net leases. Jackson is experiencing an increase of multi-use developments. Commercial property selling prices are approaching $1 million per acre in Hattiesburg, and office condos are being built on the Coast.
Wilson Coleman of Gum Tree Property Management in Tupelo says the coming Toyota plant is the biggest thing going on in that area. “We’re anticipating it making a big difference,” he says. “There is a lot of building and investors from out of state are looking for commercial property for investments. The market has changed in Tupelo.”
Part of that change is that more renters are signing traditional triple net leases, meaning tenants are responsible for all maintenance, insurance costs and taxes. That’s definitely a good thing for property owners, Coleman says.
Jan and Andrew Mattiace, owners of The Mattiace Company in Jackson, point out the mixed-use developments, something becoming more common in cities around the country, coming to the Capital City.
“Mixed use refers to a development with more than one use, usually a combination of any or all, retail, office and restaurants,” Andrew Mattiace said. “A person can live, work and shop without ever leaving the neighborhood.”
Fondren Place, being developed in the renovated Duling School in the historic Fondren neighborhood, is one of Jackson’s most notable examples of mixed use. It will house shops, galleries and restaurants. The Mattiace Company, partnered with Peters Realty, is developing Fondren Place.
Other mixed-use developments include the 95-acre Township Colony Park, Flowood Town Center, The Pinnacle at Jackson Place and Renaissance at Colony Park. The Mattiace Company, along with the H.C. Bailey Company, is developing Renaissance.
In booming Hattiesburg, Andy Stetelman of the London & Stetelman Property Management firm is seeing an influx in commercial real estate and a lot of construction activity. Two growing universities and the continued post-Katrina spurt are fueling the city’s growth.
“Dirt has escalated in price and developers are having a hard time making the numbers work,” he says. “We see some properties approaching $1 million an acre. The mom-and-pop businesses and some national chains can’t do that. Retail is the priciest we have.”
Stetelman says that price increase is partly because the area has absorbed all of the first generation property on the U.S. 98 corridor. Some property demolition is now occurring there.
“This is the most activity I’ve ever seen and some of it is due to the GO Zone incentives,” he says. “It will be rampant till the end of 2008 when those incentives end here. Then it will wind down, but the growth will continue because the population and demand for space is continuing to grow.”
He feels development will continue in the Hattiesburg area because the clusters of population turn the heads of developers and get their attention.
Doug Molyneaux with Sawyer Real Estate in Gulfport says the Coast is seeing some office condos developed and will see more. This type of real estate is very popular in other parts of the country where the markets are good and land and other costs are high.
“They’re like residential condos. Maybe they have eight or 10 offices, all fully self-contained with outside entrances and common roofs,” he says. “Tenants own instead of rent. It’s a great alternative to the higher construction and insurance costs here.”
On the Coast, building a property may require spending $100,000 on land to be in a good location, and that’s added to prohibitive construction costs, Molyneaux says. In his 14th year in real estate, he says insurance is the biggest expense and issue property owners in the area have
Contact MBJ contributing writer Lynn Lofton at firstname.lastname@example.org.