Data released in early 2013 brought further empirical evidence that the South’s commercial real estate markets and overall economy are continuing to gather momentum, however slowly. They may not be improving at the pace we would all wish for, but their long-term trajectories appear headed firmly in the right direction, as detailed in the infographics below.
For instance, the overall office vacancy rates for Atlanta and Orlando were modestly lower at the end of the fourth quarter than they were at the conclusion of first-quarter 2012. In both cities, the Class A market had the highest vacancy rate of the office property types at the end of last year, while the Class C market had the lowest. However, the Class C vacancy rate did rise in both markets through most of 2012.
Of course, the job market has a powerful effect on the U.S. office sector, and here again the long-term trends appear positive. According to the most recent numbers available, Florida’s unemployment rate declined to 8 percent in December, its lowest mark since November 2008 and nearly two percentage points lower than one year earlier. Meanwhile, Georgia’s unemployment rate rose slightly in December to 8.6 percent, but that mark was still nearly one percentage point lower than December 2011. As you’ll see in the infographic below, initial unemployment insurance claims dropped noticeably in the two states in December as well.
Finally, it appears that the construction of new commercial properties is headed for a modest uptick in 2013, at least according to a poll of Southeast contractors conducted by the Federal Reserve Bank of Atlanta. Two-thirds of the respondents predicted commercial construction to increase “slightly” when compared with last year. Twenty percent predicted no change.