Blizzards on Eisenhower Drive

No, not weather resulting from Hurricane Sandy, but rather the construction of a new Dairy Queen at the southeast corner or Hodgson Memorial and Eisenhower Drives.

I am relieved that another prominent corner is not going to become another gas station / future brownfield. I believe this is the same group that owns local KFCs and Taco Bells.

A. Joseph Marshall
Coldwell Banker Commercial
Commercial Real Estate Advisor
Savannah, Ga

U.S. Federal Reserve Atlanta District Report 2012 2nd Quarter

The following is from the U.S. Federal Reserve Atlanta District Report.

Real Estate and Construction. District residential brokers indicated that home sales were flat to slightly up compared with year-ago levels. Reports indicated strong sales at the middle price points, while several brokers noted that declining inventories of foreclosed homes were limiting investor-driven sales. Brokers also reported that the decline in inventories has helped stabilize home prices in many areas. Most brokers reported that home prices were flat to slightly up compared with a year earlier. However, contacts continued to note some downward pressure on home prices resulting from low purchase offers and appraisals that were coming in well-below asking and offering prices. The sales outlook among brokers remained positive with most anticipating continued modest year-over-year home sales gains.

District homebuilders reported that new home sales and construction rose modestly compared with year-ago levels. The majority indicated that new home inventories declined further on a monthly and an annual basis. Most builders reported that new home prices were flat to slightly up compared with a year earlier. Price gains were strongest among Florida builders. Contacts noted that multi-family construction remained robust. In the near-term, homebuilders expect sales and construction to post modest gains compared with a year earlier.

Apartment sector gains drove improvements in the District’s commercial real estate markets as occupancies rose and rental rates increased. The region’s office and industrial sectors saw small improvements as vacancy rates moderated somewhat; however, reports on District retail real estate continued to be more mixed. The majority of commercial contractors said that construction activity was flat on a year-over-year basis. The majority of contacts anticipate a modest increase in private commercial construction activity through the remainder of the year, while public works projects are expected to decelerate.

A. Joseph Marshall
Coldwell Banker Commercial
Commercial Real Estate Advisor
Savannah, Ga

New 165-room hotel planned for River Street

Summary: Best Western is going to build a new 165 room hotel on the west end of River Street on the site of the soon to be demolished hotel annex.

Read the full article at New 165-room hotel planned for River Street.

A. Joseph Marshall
Coldwell Banker Commercial
Commercial Real Estate Advisor
Savannah, Ga

Mitsubishi Heavy plans Savannah, Ga., rotor plant

Dec. 14, 2011, 4:54 a.m. EST

By Mari Iwata

TOKYO (MarketWatch) -- Mitsubishi Heavy Industries Ltd. said Wednesday it will build a plant to produce rotors, a core component of gas turbines, at its facility near Savannah, Georgia, to take advantage of rising demand for gas-fired power plants in the U.S. and to dodge the impact of the strong yen. The company will begin construction of the new facility in the second quarter of 2012.

With the completion of the rotor production facility, slated for the third quarter of 2013, Mitsubishi Heavy will able to produce 12 units a year of gas turbine combined-cycle power generation systems at the Savannah plant without importing any major parts from Japan, a company spokesman said.

Mitsubishi Heavy expects rising demand for gas turbine combined-cycle power generation systems in the U.S. as a large number of coal-fired power plants are reaching the end of their operational lives, while advancements in extraction technology have lowered prices of natural gas to levels that can compete with coal.

Read the original article at Mitsubishi Heavy plans Savannah, Ga., rotor plant

A. Joseph Marshall
Coldwell Banker Commercial
Commercial Real Estate Advisor
Savannah, Ga

How the construction industry is affecting your neighborhood

(Originally published October 2010)

You might think the construction industry only affects your neighborhood when a new house or business is built nearby. Nothing could be further from the truth. Construction in any area affects the economy in terms of tax revenues, jobs and growth.

Currently, local new home and commercial construction costs are at record lows; 10%-15% less than they were 3-4 years ago. However, these costs will go up during the next 6-24 months, but builders won't be able to charge more for their work.

Builders are only guaranteeing their quotes for 30 days because materials prices are fluctuating.

When build costs increase that does not mean the price of the building will. Unfortunately, most of these costs will come out of the builder's profit margin and the consumer will make up the rest.

Financing for large projects is still very difficult to obtain. Federal regulators are tying banks up and private investment money is hard to come by. Therefore, smaller, local investors are really the only ones available to fund new construction.

The $8,000 buyer tax credit, which was great for Realtors like me, slammed home builders. For example, let's say a builder finished a house on April 30, 2010 and planned the closing in 30 days. Then the program deadline was extended another 90 days. Suddenly that builder is left paying loans on their construction for 120 days instead of 30, which significantly decreased their profit.

Construction is most hampered by foreclosures, which are still steadily coming on the market. A home buyer will go to the bank for a loan, and upon telling the banker she intends to buy a new home, the banker will say, "Why do you want to buy a new home when we've got all these great foreclosures at bargain basement prices?" Suddenly that new home is not sold.

It happens just like that every day.

The bottom line is the local construction industry is 60% off what it was 3 years ago and putting downward pressure on our economy. But, if you have the capital and want to build your business or dream home the timing is perfect.