ATLANTA—New Jersey Governor Chris Christie did his level best to keep Mercedes-Benz USA (MBUSA) in his state. But despite the Republican governor's efforts the German car giant its moving its corporate headquarters to Atlanta. Of course, Atlanta is not the only Southeast city benefiting from the manufacturing boom, but it's getting its fair share as the industrial market continues to gain momentum in the state. caught up with Michael B. Dodds, senior managing director at Integra Realty Resources, to get his thoughts on the dominant commercial real estate trends and sectors in the Southeast in part one of this exclusive interview. Be sure to come back to this afternoon's Atlanta edition for part two, in which Dodds will discuss the strongest and weakest Southeast cities. What are the dominant commercial real estate trends? What's really happening in terms of emerging and growing trends?

Dodds: As the US commercial real estate market continues to recover from the recession, the southeastern region leads the way in many categories. Every research report or survey that I have seen indicates increased investor interest in southeastern US properties. What sectors are hottest and why?

Dodds: The preferred property types in the southeast pretty much mirror the national market, with multifamily and industrial product being the most sought after sectors. The manufacturing boom in the Southeast has increased the demand for industrial product, and has been fueled largely by auto manufacturers and their suppliers.

Automakers have built plants across the southeast in recent decades, attracted in part by non-union workforces. South Carolina, Tennessee, Georgia, Alabama, Mississippi, and Kentucky have all landed auto manufacturers and several southeastern states are in the running for the soon-to-be announced Volvo plant.

In addition to auto manufacturers, the southeast is attractive to some of the biggest names in aviation, including Boeing Co. in Charleston, SC, Airbus in Alabama, Gulfstream Aerospace Corp. in Georgia, and GE Aviation in North Carolina. The class A industrial vacancy rate in Charleston right now is roughly 2.7%.

The industrial sectors in coastal states are also gearing up for the April 2016 completion of the Panama Canal expansion. Southeastern states are expanding their ports in an effort to serve the needs of the megaships that will be using the expanded Panama Canal. Both the Port of Charleston and PortMiami are in the middle of $1 billion expansions.


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