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Sun, Jul 13, 2014

Commercial real estate rebounds

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Commercial real estate rebounds | Real Estate, Economy, Tennessee, Rutherford County

Richland Falls is a new multi-family residential development on Dill Lane, which will feature 14 three-story buildings of 260 upscale student apartments. (Photo by M. Hudgins)
Rutherford County rang in the New Year with a surge in commercial development.

Just before Christmas, Amazon.com finalized plans to open a 1.2 million square-foot facility on Murfreesboro’s Joe B. Jackson Parkway, which amounts to 1,300 jobs and a $135 million economic investment.

City officials approved a nearby trucking hub for Nissan-supplier NHK Seating – the third building on the company’s Joe B. Jackson campus.

“There is more optimism in the industry right now than I’ve seen in two or three years. It’s not all doom and gloom,” Murfreesboro Planning Director Joseph Aydelott said.

“We’re getting more visitors from out of town; it’s been picking up the last three months. Calls seem to be more from people who are really looking to build something, instead of people managing a diaster. We’re seeing people who are ready to building.”

Plans are also underway for new Subway restaurants and gas station/convenience markets, including one adjacent to the new Rutherford County Chamber of Commerce building along Medical Center Parkway.

Aydelott added the construction of multi-family units – apartments, town homes, etc. – comprise the strongest segment of development.

“It’s not the same as single-family (construction), but we are seeing several multifamily complexes that are either in site plan development or have recently been approved,” Aydelott continued.

City officials gave the OK in mid-December for The Pointe at Eastdale, which calls for 60 multi-family units along Bradyville Pike, along with 244-unit Aspen Height to be located on South Rutherford Boulevard and two four-family dwellings near Medora Court and Bentley Street.

Construction is currently underway on Dill Lane for 14 three-story buildings of 260 upscale student apartments.

Aydelott pointed out that all of this activity has taken place over the past several months, and plans for a couple other multi-family developments are current in the zoning process.

“Right now, they’re in the process of preparing to make an application,” he said, adding that those items will probably be on a meeting agenda this month with a public hearing next month.

“They’re fairly sophisticated, well-thought-out developments. One is student housing, but the rest are not.”

While activity is low in new single-family residential development, Aydelott said builders are looking to complete existing subdivisions that were left unfinished when the housing bubble burst.

He recently met with Puckett Creek developers to examine another segment of 15 lots.

“If (builders) already have one (project) under way, quite frankly, they wouldn’t start a new subdivision,” he continued.

Development dollars are being spent in Smyrna, as well. H & G Properties LLC purchased the Shoppes of Movie Row in Smyrna from IPM Partnership for $3.3 million, or about $204 per square foot.

Located at 900 Grammer Lane, the 16,275-square-foot retail center was constructed in 2008 on 1.69 acres in the Rutherford County Retail submarket. Tenants include CiCi’s Pizza and Urgent Care Walk in Clinic.

Joseph Massa of Marcus & Millichap represented both the seller, IPM (Murfreesboro Post investors Bobby Kirby and Jewell Hale), and the buyer, H&G PropertiesLLC, in the sale.

This local growth is reflective of construction activity taking place across the nation, according to data recently released by The Associated General Contractors of America.

Construction spending totaled $807 billion in November 2011 – the highest level since June 2010 – as homebuilding, private nonresidential construction and public construction all increased compared to October, the AGC reported last week in an analysis of new Census Bureau data.

“Several segments of construction appear to be climbing out of a hole,” the association’s chief economist Ken Simonson said. “The new year should reinforce recent year-over-year gains in apartment, power, manufacturing and private transportation construction.”

He added that November’s upturns in single-family homebuilding and public construction may not be sustainable.

More construction dollars spent equals more jobs – construction employment increased in December by 17,000, according to an AGC analysis of new federal employment data released Friday.

“Nonresidential construction is clearly driving last month’s employment gains,” Simonson said.

Nonresidential specialty trade contractors added 20,200 positions, while heavy and civil engineering construction firms – which perform the majority of publicly funded-construction work – shed 300 jobs. Additionally, nonresidential building contractors shed 2,700 jobs last month, residential construction lost 400 total jobs.

Comprising a majority of the surge in employment was the nonresidential construction sector, Simonson noted.

Association officials said the increase in construction jobs was welcome news, but added they were concerned that partisan fighting in Washington would undermine chances of enacting a number of long-overdue infrastructure investment programs and measures needed to boost the economy. Without those measure, construction employment was likely to suffer, the AGC stated in a news release.

“It is going to be hard to pass tax and investment measures to help boost private sector demand when congress and the president are at odds about everything from appointments to how to curb growing federal deficits,” the association’s CEO, Stephen E. Sandherr, said.

“When elected officials are more interested in scoring political points than addressing our critical infrastructure needs, everybody else – including unemployed construction workers and the economy – suffers.”
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