Commercial Investment Real Estate November/December 2018 | Page 24

TECH
HEADS
SOUTH
by Richard Sarkis
A
number of overlooked influencers — includ-
ing heavy technology company migration — are
fueling the bullish secondary real estate markets
of the southern U.S.
While residents have long grappled with extremely high
living costs in primary markets, they did so due to the qual-
ity of life, jobs, and wages available to them. With recently
booming economies in many secondary markets, however,
they now can enjoy the same quality of living at a much
more affordable cost.
For tech companies, the high quality of life in these mar-
kets creates a flow of new residents — and a pool of hungry
job seekers. Established industry talents are more willing to
accept roles and relocate to these areas, even if that means
leaving major markets.
With a dissipating concern over a lack of talent in non-
primary markets coupled with continuously rising interna-
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November | December 2018
tional outsourcing costs, tech companies are focusing more
on reducing operating costs by heavily targeting secondary
markets in which to start up, grow, and thrive. Second-
ary real estate markets in the South have had great success
over the last decade, and these often-overlooked influencers
seem to be playing a large part. For investors looking south,
it’s not a matter of if there is opportunity, but simply a mat-
ter of how much and where it lies.
Four economically booming southern U.S. markets —
Atlanta, Dallas, Orlando, Fla., and Nashville, Tenn. — are
leading the growth and potential growth market of multi-
family and office property sales trends in that region.
Atlanta
Since the recession of 2008, investors are all-in on the city,
and have been for quite some time. The number of sales
reached a low point in 2010, sitting at just 875 total com-
bined sales across multifamily and office properties.
Comparing 2017 to 2010 results, multifamily sales
grew by 161 percent, and office sales grew by 238 percent,
collectively increasing nearly threefold to 2,384 total sales
in 2017.
COMMERCIAL INVESTMENT REAL ESTATE
Booming secondary markets
in the South draw a tech crowd.