September 29, 2008
Commercial Flourishing on Coast
By Jeter, Lynne
While residential construction on the Mississippi Gulf Coast continues to ebb, new commercial contracts are flowing - to the tune of $112 million in May alone for Gulfport, Biloxi and Pascagoula. Commercial projects in Pascagoula jumped from $2 million in May 2007 to $55 million the same month this year.
Even though the pace has picked up significantly, it wasn't easy after Hurricane Katrina devastated the area August 29, 2005. Ford and other Coast commercial Realtors had to adapt to an entirely different market.
"It's been strange," admitted Ford. "Everybody in real estate is doing business differently now. I had to find niches and become an expert in those niches, and promote them to rebuild business."
For example, there's a strong demand in the resort/condominium market, but at a different price point than before Katrina. "Between GO Zone benefits and market demand, we're looking at $150,000 to $220,000 units," said Ford. "Before, the market was $400 plus per square foot - on average."
There's been a big run on apartments, retail stores and fast food restaurants, said Ford, adding that "banks have bought up corners left and right."
Another example: Realtors are marketing the vacant Coast Medical Center for possible nursing home use. "Our medical community moved north after the storm, with so many practices wiped out and residents relocating," said Ford. "We're having to adapt."
Most businesses heavily damaged or destroyed by the storm have relocated along Interstate 10, including big box users such as Target (two are being built). An expansive shopping center is being built along the interstate in D'Iberville, Ford pointed out, "and with Margaritaville coming along, Peter Simon (with Simon Property Group) is looking at some innovative things in the area."
Simon Property Group, the nation's largest public real estate company with ownership or interest in more than 258 million square feet of retail real estate, has been recognized lately for its energy-conservation efforts. Audrey Thompson, manager of Northpark Mall, one of Simon's two Mississippi properties (the other is Ridgewood Court, also in metro Jackson), said the mall company's energy program, initiated in 2004, has spurred a "green" movement in retail.
"Some of the new building projects have 'green' features," said Ford, "though I don't know they're going as far as LEED certification. Everyone is definitely more aware of the long-term benefits of being environmentally responsible while also reducing energy costs."
Are commercial office users buying or leasing? "If it's any indication, of three office buildings I recently sold," said Ford; "two are owner-occupied and one is investor-owned."
Even though two souvenir outlets have opened - both Surf Style, first in Biloxi and then in Gulfport - not many investors are looking at the U.S. 90 coastline for property.
But restaurants are sprouting around docks. "We have some great little places that have opened up - lifestyle restaurants - with boaters pulling in to have a little something to eat and drink and enjoy a good time," said Ford. "That's very encouraging not only from a commercial real estate perspective, but also to see folks enjoying themselves again around here."
MULTI-MILLION DOLLAR COMMERCIAL PROJECTS
* Riviera Hills, a new 240-unit condo project geared to permanent residences. Located east of D'Iberville on the north Back Bay, it features marina and concrete floating docks.
* Bayview Casino, a $350-million resort project located on the south side t Biloxi's Back Bay near Boomtown Casino.
* Margaritaville Casino, a Jimmy Buffet/Harrah's project featuring an upscale hotel and casino.
* Expansion of the Mississippi Coast Coliseum and Convention Center, which is nearly completed.
* U.S. Coast Guard Station, a $4-million project almost finished at Gulfport Harbor.
* South Beach, a project developed by Ray Woodridge, former NBA Hornets owner, on both sides of U.S. 90 in Biloxi. The master plan includes a casino, condos, retail venues, apartments, townhouses and a hotel.
* Landmark D'Iberville Apartments, a 408-unit community being developed on 21 acres on Lamey Bridge Road at the intersection of Interstates 10 and 110.
SOURCE: Coldwell Banker Commercial
Copyright Mississippi Business Journal Aug 25, 2008
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