Metropolitan Savannah Market – First Quarter 2018
The Metropolitan Savannah region, which consists of three counties, had approximately 347,611 residents as of 2010, an 18.6 percent increase from the 2000 population of 293,000. According to the Savannah Economic Development Authority, Savannah serves as the economic hub for an eleven county region with a population of over 650,000 and a labor pool exceeding 330,000. Over the next fifteen years, the population for the six counties in Coastal Georgia is forecast to exceed 1,000,000 people. The metropolitan Savannah area continues to experience fundamentally sound growth since the Region began to emerge from the Recession in 2013. This sustained and well balanced growth is a function of a diversified economy which is anchored by Savannah’s deep-water container port, the massive military infrastructure at Hunter Army Airfield and Fort Stewart and the over 6,500,000 annual visitors to Savannah’s Historic District. Additionally the I-95 corridor accommodates 16,000,000 vehicles per year through West Chatham County and ties into a state-of-the-art transportation system that has been largely funded by a Special Purpose Local Option Sales Tax.
According to the Georgia Ports Authority (GPA), Georgia’s deep water ports and inland barge terminals support more than 295,443 jobs in the state per year and generate $15.5 billion in income, $61.8 billion in revenue and $6.1 billion in state and local taxes. The Port of Savannah, which is owned and operated by the State of Georgia, is the nation’s 4th largest and the fastest growing container port with an 11.5% compound annual growth rate over the last ten years. It is the nation’s second largest export port in terms of containerized tonnage behind L.A; approximately 17% of the nations total exports move through the GPA facilities on an annual basis. The port is currently handling in excess of 4.0 million TEUs per annum as of December 2017 and is forecast to grow 6.5 million TEUs per annum over the next 10 to 15 years.
The Port of Savannah and the overall industrial market will benefit from the completion of the “Final Mile” of the Jimmy Deloach Parkway, which was completed in 4Q2016, as well as the construction of the Savannah Harbor Expansion project which commenced construction in 2016. Savannah’s overall industrial market, which now has over 57.5 million square feet of inventory, has more than doubled in size since 1998. After a peak vacancy rate of 19.9% in the 4th Quarter of 2009, the rate as of Year-end 2017 has dramatically decreased to 1.2%.
Savannah’s metro office market, which is comprised of 3.32 million square feet, had a 19% vacancy rate as of Year-end 2017. The Central Business District submarket, which comprises 37.2% of the total office market, is witnessing recent developments such as the 71,883 square foot Cay Building in Ellis Square. This landmark building was completed in 2012 and is anchored by the 45,000 square foot U.S. Attorney’s office with 20,000 square feet of speculative Class A office space and 7,000 square feet of ground floor retail space.
Gulfstream has completed a $500 million, seven year expansion at its campus at the Savannah/Hilton Head International Airport which added 1,000 high paying jobs. JCB also announced the addition of 200 jobs. Mitsubishi has completed its plant on the Mega-Site at the intersection of Interstates 16 and 95 which will be a $325 million facility that manufactures and services turbines used by power plants to generate electricity and has 500 employees at build-out. The Georgia Department of Economic Development and SEDA continue to market the balance of the Mega-Site and there are two or three major employers evaluating it. The Metropolitan Savannah area is strategically located near the epicenter of the I-95 corridor bordered by Wilmington, North Carolina on the North and Fort Lauderdale, Florida on the South. Over the next twenty years, millions of baby boomers are expected to pre-retire and retire along this stretch of I-95. This wave of new residents is fueled by the very desirable climate and quality of life, the relatively affordable life style and the “Boomerang” effect or “J Factor” of the Northeastern and Midwestern retirees first migrating to Florida and then relocating to the “Low Country.” Also, there is an ever increasing number of planned-unit-developments and/or retirement communities being developed that cater to these residents.
West Chatham County has experienced exponential growth which is centered along the Interstate 95 and Interstate 16 corridors. Godley Station, the 5,800-acre planned-unit-development by Branigar/Union Camp/International Paper, has rapidly evolved into one of Savannah’s preferred communities in which to “live, work and play.” Godley Station’s strategic location, strong regional draw and carefully executed Master Plan have spurred a number of successful end developments, including:
Mill Creek is an 83-acre regional retail center located in the Northwest and Southwest quadrants of the I-95/Pooler Parkway interchange that is anchored by Home Depot, Sam’s Wholesale Club and Wal-Mart Supercenter and includes a wide array of banks, restaurants, and free standing retail uses.
The development of multiple Class A apartment communities continues and now includes over 3,500 units within Alta Towne Lake, Colonial Grand, Courtney Station, The Merritt and The Preserve. There is ongoing absorption of single-family residences within Towne Lake Village and the Villages of Godley Station which are approaching build-out.
The Medical Campus at Godley Station, which is anchored by an urgent care facility, multi-tenant medical office building, pharmacy and number of individual doctor’s offices.
Godley Professional Park is a twenty acre office park slated for a total of 120,000 square feet which includes spaces for lease and for sale.
The Pooler Park of Commerce is mostly developed with several restaurants and retail strip centers, a veterinary’s office, numerous office buildings and a mini-storage facility.
The recreational components of Godley Station include a 100-acre park site dedicated to the Town of Pooler and a 48-acre YMCA facility which features over 5,300 members and an extensive day care center. Godley Station has benefited from the vision, financial commitment and execution of the master developer.
The Highlands consists of a 2,800-acre portion of the North Godley Tract which is located on the North side of Jimmy Deloach Parkway west of Interstate 95. In December of 2002, International Paper Realty sold this development parcel to a partnership comprised of Godley Station Ventures, LLC and The Foxfield Company.
The residential portion of The Highlands is planned and approved for 4,639 single family residences. The central road system is complete and the property has been subdivided into thirteen development parcels or sub-neighborhoods that are currently under development by a consortium of local and national homebuilders with a predominant price range of $150,000 to $350,000.
The mixed-use portion at The Highlands fronts Benton Boulevard and/or Highlands Boulevard to the north of Jimmy Deloach Parkway. A 120-acre parcel fronting Jimmy Deloach Parkway has been acquired by Alfa Properties of Montgomery, Alabama in anticipation of development of a regional retail center over the next five to seven years. The Beach Company has acquired a Class A apartment site and has no specific timeline for development. Development Associates, Inc. is marketing Highlands Business Park, a 120–acre development catering to business and service related uses and located at the intersection of Benton Boulevard and Highland Boulevard.
Godley Station and The Highlands have a very unique educational profile. The developers have donated elementary and middle school sites on Benton Boulevard to the Savannah/Chatham County Board of Education, (“BOE”). Chatham County voters passed the ESPLOST in September of 2006 which will provide funding for those two schools and a future high school to be located within the New Hampstead project. The BOE has broken ground on the kindergarten through eighth grade school on Benton Boulevard; one mile north of Jimmy Deloach Parkway. The successful implementation of this tri-level school system together with Georgia Tech’s Regional Engineering Program and Savannah Tech’s regional campus at Crossroads Business Center should serve as a catalyst for attracting corporate employers and high tech businesses into West Chatham County.
The Morgan Tract is comprised of a 1,300 acre planned-unit-development located on both sides of Pooler Parkway, approximately one mile North of the I-16/Pooler Parkway Interchange. Morgans Corner is a retail strip center that has been developed at the northeast corner of Pine Barren Road and Pooler Parkway. Beacon Builders is developing Oglethorpe Square, a residential condominium project just west of the Pooler elementary and middle schools.
Konter Homes is developing Morgan Pines, which consists of 221 residences in the $150,000 to $300,000 price range. AMB and Commonwealth Properties are developing approximately 400 acres of light industrial land slated for construction of 5,000,000 square feet of light industrial / distribution facilities. To date, over 1.3 million square feet of light industrial/distribution facilities have been built and are home to Tenants such as Hasbro and Matson Logistics.
Lowe’s has recently opened a home improvement center just south of the Morgan Tract and a second site has been acquired and permitted for future construction of a Wal-Mart Supercenter. St. Josephs/Candler Hospital also recently broker ground on a new Medical Center to serve West Chatham County.
Savannah Quarters is a 2,600 acre planned-unit-development of Medallist Developments located at the Southeastern and Southwestern quadrants of Interstate 16 and Quacco Road and slated for 4,500 dwelling units. Residential neighborhoods include Westbrook, which is a gated golf course community with houses in the $500,000 and above price range, along with Earthhaven and The Village. The Village Quarter is a pedestrian friendly shopping district.
Berwick Plantation is a 1,200-acre planned–unit-development of Branigar/Union Camp/International Paper located on the north side of US Highway 17 between Dean Forest Road and Quacco Road. This master development is zoned for 3,373 residential units and a maximum of 800,000 square feet of commercial, office and retail development. The master developer constructed Berwick Boulevard through the project to the adjacent Southbridge community and sold a series of residential pods to many of Savannah’s premier homebuilders, including Buoy Brothers, Genesis Designer Homes, Hallmark Homes, JC Wardlaw Construction and Southbridge Development. By establishing diversity in terms of the homebuilders, architectural styles, lot sizes and price points, with residences ranging from the $120,000’s to over $600,000, the developer of Berwick Plantation has established a record for Chatham County in terms of the absorption of development parcels and single-family residences within a planned-unit-development.
Berwick Market Place Shopping Center is anchored by a 74,000 square foot Kroger Store and features a wide array of outparcels and specialty tenants, including Fuddruckers, CVS, McDonald’s and Wachovia Bank. Olde Towne at Berwick Plantation is a 29,515 square foot retail center nearing completion and facing Berwick Boulevard. Fenwick Village Apartments opened at the entrance to Berwick Plantation.
Crossroads Business Center , the 1,873 acre development of the Savannah Economic Development Authority, is located just north of the Savannah/ Hilton Head International Airport. Crossroads is approximately 90% built-out with 9,000,000 square feet anchored by mammoth distribution facilities for a number of national retailers including Dollar Tree, Home Depot, Pier I Imports and Wal-Mart.
Rice Hope by Sivica Communities is a 750-acre master development located near the intersection of Interstate 95 and State Route 21. This traditional neighborhood development is planned for 4,500 dwelling units subdivided into six neighborhoods with an extensive amenity package consisting of a twenty-acre activity center, a twenty-seven acre lake and extensive trail system.
New Hampstead-International Paper Realty has commenced master development of this 4,050 acre tract located on both sides of Little Neck Road between Interstate 16 and State Route 204. New Hampstead, which constitutes the largest of the Branigar/Union Camp/International Paper Realty developments, is approved for 11,275 dwelling units with a projected 28,500 residents at its build-out after twenty years. New Hampstead will feature a wide array of single-family and multi-family residential product along with Class A apartments, neighborhood and regional retail as well as office and institutional components.
International Paper experienced a brisk sales pace of residential parcels to the preferred homebuilders in the Savannah area and sold all four commercial parcels to the local developers and investors. Over the last four years, home building has been postponed by overall economic conditions including the national housing slump. In November 2010, Rock Creek Capital acquired approximately 80% of the project from International Paper Realty.
We envision substantial growth in Savannah and West Chatham County attibutable to continued growth in the tourism sector and of the port, particularly when the deepening of the Savannah harbor is factored in.
West Chatham County is unusual for a third tier market in terms of the relatively large size and number of planned-unit-developments that have been fully vested. As of the Second Quarter of 2007, there were approximately fourteen single-family developments along the I-95 and I-16 corridors, approved for 32,637 dwelling units. Additionally, there were eight multi-family projects approved for 5,220 units. Based on industry standards of 1.6 residents per apartment and 1.9 residents per single family home, this equates to an estimated 94,774 residents at build-out over the next 20 years or so, versus an estimated 9,584 residences today, or a projected growth of 85,190 residents.
Over the next five to ten years, the most critical catalyst for continued development includes the aggressive marketing of the Mega-Site by GDED and SEDA and the completion of the transportation improvements and deepening of the harbor in order to ensure the continued growth of the Port.