Tuesday, June 30, 2015

South Mississippi Commercial Real Estate Market Update

South Mississippi Commercial Real Estate Market Update

Image courtesy of renjith krishnan at FreeDigitalPhotos.net

As you may or may not know from previous posts, our company serves as a landlord in Gulfport, Mississippi.  We have a couple of properties that we manage that contain several office buildings and office/warehouse buildings. 

From time to time we will post market updates of what we see in our area in South Mississippi.

Like commercial real estate brokers, our best gauge as to how the local economy is doing is by the types of phone calls we are getting (and whether phone calls turn into transactions).

However, unlike local brokers, we only operate on one side of the equation.  We do not offer any of our properties for sale so we only see the leasing side of the local market.

Of course, we discuss our market with local brokers and get a good feel from just being aware of what is going on.  After all, when there are construction cranes everywhere vs. a bunch of for sale signs in front of properties, it is easy to tell what kind of market we are in.

The broad (national) market had a very good year in 2014.  By contrast, 2014 was a bit of a slow year for our company and local economy.  We heard rumblings of expansion from some of our larger tenants (the types of tenants who have a national presence).  We even completed an expansion with one tenant.  Overall though, businesses were still struggling and several businesses were closing (not just in our business parks – throughout the local economy).

As we read reports of the national market doing so well, we wondered, "Was the commercial real estate boom going to miss South Mississippi?"

To shed some light on this question, let us relay what our local banker told us when meeting with our company a few years ago.  The bank this representative works for is a large, regional bank that has locations that span from Texas to Florida.  He told us that in their experience, the South Mississippi market lags behind the rest of the country (no real surprise there). 

Further, once the bank starts noticing activity on the Florida Panhandle, it slowly makes its way west, first hitting Alabama and ultimately, increased (or decreased) activity hits Mississippi.

Since we heard this, we have seen this concept in action.  

Last year, the articles we read around the country talked about commercial real estate’s resurgence and how times were really picking up.  Would our banker’s advice hold true for 2015?

Halfway through 2015...so far, so good!

In 2014, we were getting calls from people not quite ready to pull the trigger.  Since the beginning of 2015, we have had new businesses looking to open locations in our area, some in our business parks.  We have had existing tenants either talk or go through expansions already.  There have also been phone calls discussing expansion for new clients.

The signs are all here for an improving local economy.  Our business park is not unique in having lots of new business.  Strip centers are filling up again.  For sale signs are being removed from the fronts of buildings.  New signs are going up.  Things are exciting once again in the commercial real estate market on the Mississippi Gulf Coast.

We can only hope that if our market lags behind the broad national market, and 2015 has been a better year than 2014 nationally, 2016 will be even better for those of us in South Mississippi!

Please feel free to leave comments.  We promise to read them all.  You can also email us with any questions/comments at leasing@seawaybusinesspark.com.  As a reminder, we provide office space for rent and office/warehouse space for rent in Gulfport, Mississippi.  For more information, visit our website at www.seawaybusinesspark.com or call us at (228) 575-7731.