When we look at the various segments of commercial real estate in Alabama today, which ones are expected to do well in 2024 and why?

I believe the marketplace for commercial real estate development in the U.S. will remain cautious for 2024 due to the overall economy and the current high interest rate environment. While there are signs interest rates may be lower by the end of the year, other changes brought about during the pandemic, such as higher construction costs and a change in workplace habits, continue to be a weight on the market. 

But here in Alabama, we enjoy a few advantages that other states across the country may not, which seems to prevent our state from experiencing as much marketplace volatility as others. One of these advantages is the diversity of businesses in the four geographic sectors of the state that we intend to highlight at this year’s CityBuilders’ Symposium.

Another critical factor at work here is the massive migration of people, jobs and business expansion from northern states to the Sun Belt, and the Southeast in particular. It’s a very powerful shift in terms of population and demographics that’s driving our growth. 

It is crucial to understand that in commercial real estate, everything starts with jobs – development follows employment. So, job growth occurs and people move here to fill the need for employees at literally all levels. These folks need apartments or houses to live in and access to products and services once they arrive, with retail developments following right along with office buildings, distribution centers and warehouses. Everything follows jobs.

Given the current market, what should commercial real estate professionals in Alabama be thinking about during the coming nine months of 2024?

You're going to see this year – as was the case last year – that about half the presenters and panelists are real estate developers or acquirers of commercial real estate property. The other half are going to be users or drivers of the use of that real estate. We’re also featuring a C-suite capital markets panel, because nothing gets built without financing. Pat Henry, president of Daniel Corporation, will be moderating that panel, with Travis Pritchett, president & global head of real assets at the Harbert Management Corporation, one of the experts to pay particularly close attention to.

Drawing on the diversity of opportunities in Alabama across the four regions, it is important to note that there are different drivers at play in each area of the Alabama economy to take into account:

• Northern Alabama – Huntsville and surrounding cities – is primarily a technology, defense and aerospace market that is thriving, and that growth appears to be continuing unabated. James Lomax, vice president of asset management & leasing for COPT Defense Properties in Huntsville, is just one of the experts on that panel [that] I’m looking forward to hearing from.
• Central Alabama – Birmingham, Anniston and over to Tuscaloosa – is a huge medical industry market, with hospitals and medical centers a big player. There’s also a lot of distribution, hospitality and restaurants in that sector as well as the education sector with the University of Alabama. That combination generates a lot of stability in terms of future growth and development. Dan Lovell, senior vice president at Graham & Co., with be moderating a great panel of experts there.
• And then there’s what we are calling the I-85 corridor, which is basically the Georgia state line through Auburn to Montgomery. Again, there’s education, manufacturing and warehouse distribution, including a lot of automotive suppliers serving the Hyundai plant in Montgomery and the huge Kia plant across the border in West Point, Georgia. Steve Taylor, Auburn University’s own senior vice president of research & economic development, is one panelist with deep experience in what’s coming in that region and throughout the state.
• Finally, there’s Southern Alabama – Mobile, Fairhope and the area surrounding the Port of Mobile – where distribution and warehousing has been growing strong due to near-sourcing and shifts in traffic from West Coast ports through the widened Panama Canal. You're also talking about tourism, hospitality, and sprawling manufacturing operations for Airbus and their vast supply chain partners. Brian Harold, managing director at APM Terminals Mobile, and Casey Gay Williams, president & executive director of Eastern Shore Chamber of Commerce, are two panelists I’ll be listening closely to there.

How will CityBuilders 2024 help students in real estate development, commercial real estate professionals and government agencies across Alabama learn about the latest trends in the commercial real estate development market?

I think relationships are going to matter now more than ever. CityBuilders is focused on connecting the entire Auburn real estate family to provide all stakeholders greater access to the wisdom and knowledge we have in our academic and professional real estate community. Existing and newly formed relationships are the key ingredients necessary for projects to be financed and developed through successful project completion. 

If you're in commercial development, it's often all about meeting a need that might not be fully evident yet. Those are the developments that are really transformative. Attending events like CityBuilders where you can hear from people who have a track record of being able to see around corners, that's unique. And that’s exactly what you will find at this year’s CityBuilders.

As John said, relationships matter. And like Justin points out, access to seasoned professionals with a history of success during challenging times – times of change – is tremendously important for students and developers alike. I can’t think of a better qualified, more compelling collection of industry leaders to listen to and network with than the team we have assembled for CityBuilders 2024.