Southeast CRE Sees Strong Push Toward This

MIAMI—There's a clear movement in the Southeast. Judd Bobilin, CEO of Chance Partners, sees is as plain as day.

At the same time, Bobilin sees some goings on in the capital markets that could change at least some of the landscape before the year's end. GlobeSt.com caught up with him to find out what's on his radar screen in part one of this exclusive interview. Be sure to come back to GlobeSt.com tomorrow morning to hear what Bobilin has to say about most over-looked commercial real estate markets in the Southeast.

GlobeSt.com: What's emerging trends are you seeing in Southeast commercial real estate? 

Bobilin: We are still seeing a strong interest in multifamily assets throughout the Southeast region. Anchored retail and hospitality has shown some strong gains in starts recently. 

We have heard that industrial has started to pick up, which we believe is a good indicator for the economy. Office looks to be still lagging considerably behind in most of the Southeast. Everything we are seeing and hearing is in-town urban focused with a strong push on walkability, except for industrial, of course.

GlobeSt.com: What sectors are hottest and what's driving the momentum? 

Bobilin: Multifamily is still quite hot. Some are worried about a bubble but we believe the trend has a way to go. 

Interest rates are still at historical lows and with Europe holding on to negative rates, we don't see a rise in the near future as it puts more pressure on the US bond market. Equity capital is plentiful and needs a home, debt markets have expanded to pre-recession levels with the strong comeback of commercial mortgage-backed security (CMBS). 

The only negatives in the financing markets, in the short term, are Fannie and Freddie are about to hit their limits for the year thereby limiting a source of funding and potentially allowing pension and insurance execs to raise rates. Also, with GE financial vacating the market, it could have an adverse impact on pricing and competition, meaning higher pricing and less competition. 

A recent research report has now shown that those leaving apartments to purchase a home has dropped almost 30 percent since 2003 through 2007 time period. That is a significant factor driving multifamily demand. PwC recently released its Emerging Trends in Real Estate report detailing the expansion of 18-hour cities, Millennials driving change and increased international investment volume for the US.