Special Section: Southeast

When Chief Executive magazine this May released its tenth annual survey of best and worst states in which to do business—based on factors including skilled workforce, taxes and regulations, and the quality of the living environment—it was no surprise that Florida, the Carolinas, and Georgia were in the top ten.

Baker Barrios provided planning, architecture, landscape architecture, and interior design for the Alfond Inn, a $32.5 million 112-room Preferred Boutique Hotel in Winter Park, Florida. Owned by the nearby Rollins College, a private coeducational liberal arts college, the Alfond Inn was built with a $12.5 million grant from the Harold Alfond Foundation. (baker barrios)

Baker Barrios provided planning, architecture, landscape architecture, and interior design for the Alfond Inn, a $32.5 million 112-room Preferred Boutique Hotel in Winter Park, Florida. Owned by the nearby Rollins College, a private coeducational liberal arts college, the Alfond Inn was built with a $12.5 million grant from the Harold Alfond Foundation. (baker barrios)

Baker Barrios is the architect for Jefferson Apartment Group’s Artisan 420, a mixed-use, nine-story building containing 299 luxury units with 10,000 square feet (900 sq m) of planned retail space. The first units are expected to be delivered in October 2015.

Baker Barrios is the architect for Jefferson Apartment Group’s Artisan 420, a mixed-use, nine-story building containing 299 luxury units with 10,000 square feet (900 sq m) of planned retail space. The first units are expected to be delivered in October 2015.

When Chief Executive magazine released its tenth annual survey of best and worst states in which to do business—based on factors including skilled workforce, taxes and regulations, and the quality of the living environment—it was no surprise that Florida, the Carolinas, and Georgia were in the top ten.

“The Southeast is experiencing renewed economic vibrancy thanks to increasing employment, rising in-migration, and strong gains in industries such as tourism and manufacturing,” says Edward Friedman, a director at economic forecaster Moody’s Analytics in West Chester, Pennsylvania. “The business outlook for Florida, Georgia, and the Carolinas is very good, with increased population driving retail and housing and powering other sectors such as education and health care.”

A pro-business climate, favorable demographic trends, robust economic growth patterns, and strong foreign investment inflows are among the factors driving the long-term real estate prospects in the Southeast.

Florida is a business-friendly state that continually invests in infrastructure, notes Hugh Mathews, president and chief executive of Jacksonville-based engineering, planning, and landscape design firm England-Thims & Miller. “Governor Rick Scott’s focus on investing in job creation and streamlining the regulatory approval process has made Florida very responsive to business,” Mathews says. “The state’s infrastructure and educated workforce make it very attractive for businesses from other states.”

Baker Barrios is master architect for Orlando’s Creative Village, a public/private partnership between the city of Orlando and Creative Village Development. Development is expected to begin soon. When completed, this sustainable neighborhood development is expected to contain 1.2 million square feet (111,000 sq m) of office/creative space, up to 750,000 square feet (70,000 sq m) of higher education space, and 1,500 residential units. (baker barrios)

Baker Barrios is master architect for Orlando’s Creative Village, a public/private partnership between the city of Orlando and Creative Village Development. Development is expected to begin soon. When completed, this sustainable neighborhood development is expected to contain 1.2 million square feet (111,000 sq m) of office/creative space, up to 750,000 square feet (70,000 sq m) of higher education space, and 1,500 residential units. (baker barrios)

In South Carolina, growth is outpacing the national economy, says Austin F. Knapp, an associate at Greenville-based Homes Urban, a multifamily development firm specializing in urban and infill properties. “Since South Carolina is a heavy exporter, we expect strong growth in 2015,” Knapp continues. “As the world economy grows, manufacturing is expanding with investments in existing and new plants. The benefits from a strong services economy—linked to manufacturing—should continue.”

The economic and real estate sectors in North Carolina are improving daily, says Brian C. Jenest, managing partner at ColeJenest & Stone, a land planning, landscape architecture, civil engineering, and urban design firm in Charlotte. “As companies continue to relocate to North Carolina and retirees choose to move here, the state will continue to grow,” he says. “We have seen a steady increase in work and have increased our staff in Charlotte and Raleigh by over 50 percent in the last two years.”

Georgia also continues on an upward economic and real estate trajectory. “Activity in Georgia, to a large extent, is about the state capital since metropolitan Atlanta extends pretty far north,” says Friedman. “Atlanta is improving nicely with better-paying jobs; its recovery is somewhat more robust than the Carolinas or Florida because Atlanta has Hartsfield-Jackson International—the most trafficked airport in the country—as well as a lot of professional-services firms and corporate headquarters, which help the economy.”

Developer RMGA is building a 280-unit residential project near downtown Fort Lauderdale, expected to be completed in spring 2016. The project, designed by Herbert + Linhares Architects, will include townhouses and two- and three-bedroom rental units in a villagelike setting. (Herbert + Linhares Architects)

Developer RMGA is building a 280-unit residential project near downtown Fort Lauderdale, expected to be completed in spring 2016. The project, designed by Herbert + Linhares Architects, will include townhouses and two- and three-bedroom rental units in a villagelike setting. (Herbert + Linhares Architects)

The Southeast continues to attract the most domestic migrants of any U.S. region. Last year, the region accounted for five of the top eight states in net domestic migration—Florida, North Carolina, South Carolina, Georgia, and Tennessee. Between 2010 and 2013, 51 percent of the population increase in the 52 major U.S. metropolitan areas occurred in the South, according to the U.S. Census Bureau. That growth powers the region’s economy and attracts overseas investment, says David Herbert, founding partner and lead designer for Miami-based Herbert + Linhares Architects.

“Florida real estate is unique in that the money comes from other parts of the world,” Herbert continues. “This seems to be more so now than any time in the past, and it is increasing. Many of our overseas clients have bought and continue to buy second homes and other real estate here, as well as look for opportunities to develop real estate projects in the area.”

Florida

England-Thims & Miller of Jacksonville provides planning, engineering, and other development services for the Bartram Park development of regional impact (DRI) in Florida’s Duval and St. Johns counties. DRIs are large-scale developments that are likely to have regional effects beyond the local government jurisdiction. Bartram Park is home to approximately 3,000 residences and a retail village. (England-Thims & Miller)

England-Thims & Miller of Jacksonville provides planning, engineering, and other development services for the Bartram Park development of regional impact (DRI) in Florida’s Duval and St. Johns counties. DRIs are large-scale developments that are likely to have regional effects beyond the local government jurisdiction. Bartram Park is home to approximately 3,000 residences and a retail village. (England-Thims & Miller)

The influx of foreign capital is real and evident in Florida, says Darron Kattan, managing director at Franklin Street Real Estate Services, a real estate advisory firm in Tampa. “From the massive South Beach boom of foreign buyers all the way to every other corner of Florida, foreign capital is hungry,” he adds.

One of the biggest factors is the additional debt and equity entering the real estate sector. Currently, increasing debt is seeking a home in the Southeast, making borrowing rates and terms attractive to borrowers, Kattan says. Virtually every product in commercial real estate finance—recourse, nonrecourse, balance sheet, bridge—is expanding and offering more capacity to the market, fueling additional real estate development in Florida. “The Sunshine State’s real estate market is full steam ahead in the recovery and expansion mode,” Kattan says. “There seems to be no holding back the positive news.”

Most of the municipalities in Florida are pro-development and push to improve their communities, Kattan adds. “In Tampa, the Channelside Bay Plaza downtown/port development project is acting as a large canvas to reshape a major part of the city,” he says. “With an innovative and proactive hockey team owner like Tampa Bay Lightning owner Jeff Vinik, who now owns the 234,520-square-foot [21,788 sq m] retail and restaurant complex Channelside Bay Plaza, and a pro-developer government, we are seeing a major reshaping of a top-40 U.S. central business district.”

Also contributing to Florida’s economic revival are stronger residential, tourism, hospitality, and resorts sectors, says Chuck Bell, principal in the planning, architecture, and interior design firm Baker Barrios in Orlando. “Single and multifamily developments are robust, and large new communities in central Florida such as Lake Nona, Celebration, and Avalon Park are expanding,” he says. “We’re also seeing numerous assisted living developments underway, including memory care facilities.”

Herbert + Linhares Architects is designing Tuscany in Delray Beach, Florida, which is expected to begin construction during the first quarter of 2015. The site, which is being developed by GL Homes, lies less than a mile (1.6 km) from Delray Marketplace, a lifestyle shopping center site that recently opened.  (Herbert + Linhares Architects)

Herbert + Linhares Architects is designing Tuscany in Delray Beach, Florida, which is expected to begin construction during the first quarter of 2015. The site, which is being developed by GL Homes, lies less than a mile (1.6 km) from Delray Marketplace, a lifestyle shopping center site that recently opened. (Herbert + Linhares Architects)

Downtown Orlando is undergoing a $4.7 billion expansion and renovation, including the new $512 million Dr. Phillips Center for the Performing Arts, the $165 revamp of the Citrus Bowl, a $250 million renovation of the Orlando Magic entertainment complex, and a new $115 million major league soccer stadium, he says.

“Baker Barrios is involved in a number of projects, including the Center for the Performing Arts, the Orlando International Airport south terminal complex, and Aloft hotels in Orlando and Tampa,” says Bell.

In addition to private sector development, Florida is making major infrastructure enhancements. “Some $1 billion in transportation improvements are under construction or planned,” says Mathews. “This investment in transportation infrastructure is unprecedented and provides for connectivity between the residential growth areas of the region and the employment centers.”

In addition to new development, the state’s continuing population growth is driving revitalization of neighborhood shopping centers. “I see almost every strip center being updated architecturally and adding new tenants,” says Herbert. “Since competition is fierce in the retail market, smart developers are giving their centers an edge to attract better tenants. We have been involved in revitalizing an existing mall, including adding an outdoor restaurant, cinema, and shops component.”

Redevelopment of Jacksonville’s urban core is under way, with more than 50,000 square feet (4,600 sq m) of retail space and 600 multifamily units, anchored by 220 Riverside and Unity Plaza. England-Thims & Miller is providing the engineering design. (studio 9 architecture)

Redevelopment of Jacksonville’s urban core is under way, with more than 50,000 square feet (4,600 sq m) of retail space and 600 multifamily units, anchored by 220 Riverside and Unity Plaza. England-Thims & Miller is providing the engineering design. (studio 9 architecture)

England-Thims & Miller is working with a number of mixed-use, master-planned communities, including Nocatee in Ponte Vedra and SilverLeaf and Bartram Park in Jacksonville. “We’re involved in large lifestyle mixed-use retail developments, including Jacksonville’s St. Johns Town Center, Celebration Pointe in Gainesville, and the Brooklyn redevelopment near downtown Jacksonville,” says Mathews.

In south Florida, the private sector continues to lead the way with aggressive development initiatives that range from corporate campuses, large mixed-use facilities, and multifamily properties to the higher-end residential market that continues to manifest itself in high-rise condo and waterfront products, says Paul Weinberg, managing principal in the Fort Lauderdale office of landscape architecture and planning firm TBG Partners. “The public sector remains active in developing opportunities to frame development and ensure that [the] public realm is being designed with multimodal and complete-street initiatives at the forefront,” he adds.

Georgia

England-Thims & Miller designed Simon Property’s St. Johns Town Center development in Florida’s Duval County. The St. Johns Town Center is a mixed-use lifestyle retail village with approximately 400 acres (162 ha), over 3 million square feet (279,000 sq m) of retail space, and 1,000 multifamily units. (England-Thims & Miller)

England-Thims & Miller designed Simon Property’s St. Johns Town Center development in Florida’s Duval County. The St. Johns Town Center is a mixed-use lifestyle retail village with approximately 400 acres (162 ha), over 3 million square feet (279,000 sq m) of retail space, and 1,000 multifamily units. (England-Thims & Miller)

To the north, Georgia’s real estate market remains robust, particularly the multifamily sector, says Mark Lange, principal of housing and mixed use at architecture and design firm Lord Aeck Sargent in Atlanta.

“We’re seeing a lot of residential developer interest in Atlanta’s urban infill sites, both high-rise and wood-frame multifamily,” says Lange. “We are hoping that the momentum continues, particularly for mixed use. We want to see more urban living added to the various growth pockets around Atlanta.”

One of Lord Aeck Sargent’s projects this year was Crescent Terminus, a 355-unit luxury apartment community in Buckhead for developer Crescent Communities. The Terminus project was designed to energize an existing high-rise community of mixed-use buildings. “It fits into the heart of Terminus while maintaining pre-existing arterial street connections,” Lange says. “The wood-frame buildings enhance the sense of warmth while looking entirely comfortable with the stainless-steel-and-glass feel of the existing office and condo towers.”

England-Thims & Miller is providing engineering and planning services for the town of Nocatee, a 15,000-acre (6,000 ha) mixed-use development of regional impact. The community includes over 13,000 residential units,  4 million square feet (372,000 sq m) of office space, and 1 million square feet (93,000 sq m) of commercial space. (nocatee, ponte vedra)

England-Thims & Miller is providing engineering and planning services for the town of Nocatee, a 15,000-acre (6,000 ha) mixed-use development of regional impact. The community includes over 13,000 residential units,

Infill housing and multifamily building activity has been brisk in metro Atlanta and seems likely to remain so, says David Herrigel, a principal at Hyatt & Stubblefield, an Atlanta law firm specializing in the creation and operation of condominiums, planned communities, resorts, and mixed-use developments. “We also expect new condo development since reports suggest a shortage of for-sale condominium units,” he adds.

Still, Georgia’s golf home business is struggling, says Jo Anne Stubblefield, principal at Hyatt & Stubblefield.

“While buyers still see value in living on or near a golf course, fewer people are playing golf, and even golfers seem to be less interested in making long-term commitments to paying golf club membership fees,”

Stubblefield says. “Many golf clubs are moving away from membership programs with high entrance fees and a promise of refundability and instead [are] offering annual memberships and more affordable membership programs with nonrefundable initiation fees.”

South Carolina

LS3P designed this headquarters of Live Oak Bank, a privately held financial institution in Wilmington, North Carolina. In planning the structure, LS3P sought to preserve trees and natural features of the site while providing views from every office and workspace. (Mark Herboth Photography)

LS3P designed this headquarters of Live Oak Bank, a privately held financial institution in Wilmington, North Carolina. In planning the structure, LS3P sought to preserve trees and natural features of the site while providing views from every office and workspace. (Mark Herboth Photography)

Employment gains and population growth are driving new construction in the Palmetto State’s metropolitan markets, says Knapp. “We are also seeing an influx of people who want to move back to the urban core,” he says. “We believe multifamily development in South Carolina will remain strong in the coming year. There is a substantial number of new multifamily units under construction and in the development pipeline across the state.”

Among Homes Urban’s current projects is Kline City Center, a mixed-use development in downtown Columbia with 295 multifamily units, a hotel, and an office component. “Our plan focuses on creating smaller blocks and open spaces around which development will occur,” Knapp says. “We have designed a plan to accommodate parking without it becoming a visual presence within the development.”

LS3P designed 300 South Tryon in Charlotte, a 33-story tower that includes two levels of retail space at the base, 12 floors of offices, and 17 floors of condominiums. Construction on the project began in October and is expected to be completed by early 2017. Phase II of the project will include a hotel linked to the first tower by a sky bridge. (ls3p)

LS3P designed 300 South Tryon in Charlotte, a 33-story tower that includes two levels of retail space at the base, 12 floors of offices, and 17 floors of condominiums. Construction on the project began in October and is expected to be completed by early 2017. Phase II of the project will include a hotel linked to the first tower by a sky bridge. (ls3p)

Outside investment is steering real estate activity in South Carolina, particularly multifamily development, says Richard Gowe, partner in the architecture and design firm LS3P, which is based in Charleston and has six offices in the Carolinas.

“Large-market developers from New York City and Washington, D.C., are descending on the state’s small-market towns looking for projects,” he says. “We are seeing a major influx of large equity companies who want to get in on the action in South Carolina. Charleston is very hot right now with office, hotel, and restaurant, and even condo activity. Outside interests continue to make significant investments in the coastal region.”

North Carolina

Propelled by a population influx, cities in the Tar Heel State such as Raleigh are experiencing growth, says Michael C. Smith, president of Kane Realty, based in Raleigh. “This has stimulated urban and pedestrian-friendly development,” he says. “While the activity is being primarily driven by millennials, it is being embraced by all generations who crave a sense of community.”

The Raleigh area, which includes Cary, Durham, Chapel Hill, and Research Triangle Park, has a strong, diversified economy and is home to the University of North Carolina at Chapel Hill, North Carolina State University, and Duke University, along with thriving medical, pharmaceutical, software, and biotech companies. “North Hills, the center of midtown Raleigh, is experiencing increased real estate activity and has been transformed over the past decade with over $750 million in new urban-styled development,” says Smith.

ColeJenest & Stone is providing land planning, permitting, and civil engineering services for Cousins Properties’ planned mixed-use development 123 West Franklin in Chapel Hill. The development was expected to start construction by the end of 2014. (colejenest & stone)

ColeJenest & Stone is providing land planning, permitting, and civil engineering services for Cousins Properties’ planned mixed-use development 123 West Franklin in Chapel Hill. The development was expected to start construction by the end of 2014. (colejenest & stone)

In August, Kane Realty broke ground on Tower Two, an $82 million, 300,000-square-foot (28,000 sq m) office building in the North Hills area expected to be completed by spring 2016. The company also opened its 434-unit multifamily Allister at North Hills in February, and the 214-unit multifamily project Midtown Green, also in North Hills, in May. “We’re seeing a lot of new development activity,” Smith adds.

As is North Carolina’s largest city, Charlotte. Office, industrial, retail, multifamily, and single-family residential activity in the Queen City has improved markedly over the past several years, says Jenest.

“We are designing two office buildings at SouthPark in Charlotte for real estate firm Lincoln Harris, and we are planning an industrial park in Concord for Beacon Partners,” he says. “We are also designing several Publix Super Markets–anchored centers in Charlotte, Raleigh, Davidson, and Chapel Hill. The multifamily market is strong. We designed the Mint, an urban apartment project in uptown Charlotte, for Spectrum Properties and just completed a project for multifamily developer Northwood Ravin in Cary.”

Camden Southline in Charlotte, a $48 million project with 266 apartments, is expected to be completed in 2015. ColeJenest & Stone provided landscape architecture and civil engineering for the Camden Real Estate Investments development. (colejenest & stone)

Camden Southline in Charlotte, a $48 million project with 266 apartments, is expected to be completed in 2015. ColeJenest & Stone provided landscape architecture and civil engineering for the Camden Real Estate Investments development. (colejenest & stone)

Adding to the strength of the sector are firms in the Charlotte area that are either building new corporate headquarters or expanding existing campuses, says Gowe. “We are working on the research-and-development expansion to Electrolux’s North American headquarters,” he says. “MetLife built its retail division headquarters in Charlotte, and the LPL Financial eastern regional headquarters is planned as well.”

Analysts note that economic growth in the Southeast has outpaced that of the rest of the country for a number of years as businesses and individuals, attracted by lower costs and warmer weather, moved to Florida, Georgia, and the Carolinas. That in-migration—and the resulting economic activity—is expected to continue.

Mike Sheridan is a freelance writer in Parsippany, New Jersey.

Mike Sheridan is a freelance writer in Richmond, Virginia.
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