US SOUTHEAST REGION ON PAR WITH GLOBAL POWERS
POPULATION, ECONOMY AND GDP BOOST SOUTHEAST
Hollywood October 18, 2017
Combined, six states in the Southeast region of the United States would rank among the top six global economies, according to a ULI report. Take a look at the incredible GDP numbers each of these states posted in 2016:
That totals a mind-boggling 2.708 trillion – more than India, France or the United Kingdom. So, what’s driving the Southeast’s strong economy?
Population growth
Businesses are moving out of other regions and choosing the Southeast for a number of reasons. Where the jobs go, people follow, and according to National Real Estate Investor:
“Over the last three to four years the Southeast has also 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 a population decline in Chicago…
…Population migration south began 70 years ago and has continued since, intensifying since 2007…
Ratings firm Moody’s predicts that the demographic shift will intensify over the next few years, with the Southeast realizing the greatest population gains in the nation.”
Other cities showing rapid population growth include Las Vegas and Phoenix, leading economists to believe that warmer weather is one desirable factor for people migrating to a new city. As baby boomers retire, for example, many of them will seek warm climates with dynamic urban centers, and the Southeast’s cities fit that bill for many people. From our research, we also know that many of these baby boomers will choose to rent rather than buy.
Healthy industries
Experts project that Atlanta alone will add 68,000 jobs in the coming year as big-name companies, such as Comcast, Equifax and State Farm, expand their headquarters and operations there.
Throughout the region, a variety of industries continue to show strength and growth, which supports an overall strong economic picture. Some of the Southeast’s top industries include:
(Sources: Georgia, Florida, North Carolina)
From Fortune 500 headquarters to large manufacturing operations, the Southeast attracts companies in growth mode that want access to an educated workforce, a favorable tax climate, and access to natural resources and infrastructure that support their business.
In addition, individuals follow these companies to Southeast locations because of lifestyle and affordability, in addition to the availability of jobs. That creates a perfect storm for commercial real estate in which demand for multifamily, industrial, office and retail space remain steady.
According to NREI:
“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 Rust Belt to these Southeastern markets and a reflection of the region’s desirability.”
Geography and infrastructure
On a global scale, the Southeast’s geography is ideal for companies seeking a hub for conducting commerce both nationally and internationally. Southeast markets are readily accessible by land, water and air, and they are connected by intricate networks of infrastructure.
In fact, Area Development magazine ranked Georgia second in the country for its infrastructure and access to global markets. Atlanta’s airport is the world’s most traveled, and its seaport imports the most automobiles from global markets.
The State of Florida even offers companies access to infrastructure grants through its Economic Development Transportation Fund, “an incentive tool designed to alleviate transportation problems that adversely impact a specific company’s location or expansion decision.”
The ability to transport goods and people efficiently and cost effectively is a major factor in a company’s site location decision, and the Southeast region invests strategically to meet that need for its businesses.
Final thoughts
PointOne Holdings has invested heavily in the Southeast’s multifamily and office markets due to the region’s consistency and economic growth. Simply stated, this region has the perfect mix of factors to support commercial real estate investment. We have seen positive results across our portfolio, and we continue to seek out new properties with value-add potential. This region’s demand for CRE remains strong, and we are proud to offer both our tenants and investors a high-quality product that meets their needs.
To learn more about PointOne Holdings’ investment opportunities in commercial real estate, please visit www.pointoneholdings.com. As always, we welcome questions, so please feel free to contact us at any time.
