Metropolitan Savannah Market-Second Quarter 2009

 

The Metropolitan Savannah region consists of three counties and approximately 329,329 residents as of 2007.  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.Despite the softness in the housing sectors and overall economy on a regional and national basis, the metropolitan Savannah area continues to experience fundamentally sound growth.  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 6,000,000 annual visitors to Savannah’s Historic District.  Additionally the I-95 corridor accommodates 13,000,000 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 286,476 jobs in the state per year and generate $14.9 billion in income, $55.8 billion in revenue and $2.8 billion in state and local taxes.  The Port of Savannah handled 2.6 million TEU’s or 20 foot containers in calendar year 2007, which represents a 20.6 % increase relative to 2006.  During fiscal year 2008, the GPA handled 2.6 million TEU’s and its terminal facilities surpassed 25 million tons.  The Georgia Ports Authority (GPA) projects that 6.5 million TEU’s will be handled annually by 2018.  The GPA has indicated that there will need to be a substantial increase in the inventory of large scale distribution warehouses to serve the port and there is currently over 15,000,000 square feet of warehouses recently completed, under construction and/or in the permitting process.

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 including Alta Towne Lake, Colonial Grand, Courtney Station, The Merritt and The Preserve with over 1,500 units.

Continued 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.

Towne Lake Park of Commerce is a new 10-acre office development planned for 75,000 square feet of medical office and executive suites.  The first of seven buildings is nearing completion.

The Mulberry is a 115-acre mixed-use project fronting I-95 immediately North of the Home Depot and Wal-Mart Supercenter.  Mulberry Realty Holdings, LLC completed the 54,000 square foot Class A Mulberry One office building in November of 2006 which is 80% leased.  BB&T has opened its West Chatham branch and the seven story Embassy Suites hotel with 250 rooms is under construction.

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 Dorel.

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.

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 recently 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 60% built-out with 5,000,000 square feet anchored by mammoth distribution facilities for a number of national retailers to include 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.  Publix has announced that it will develop a grocery store at Rice Hope’s main entrance on S.R. 21.

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.

To date, International Paper Realty has closed on five single-family residential tracts comprising 1,262 acres and 4,203 dwelling units which constitutes approximately one-third of the total project.  All four of the commercial tracts comprising a total of 155 acres have also sold.  The balance of the New Hampstead project is under contract to an institutional development/investment group with a closing slated for the end of the Second Quarter of 2009.

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.

Macro economic conditions in reaction to the subprime loan crises and overbuilding in the single family residential sector have had a sluggish effect on the economy over the last twelve to eighteen months.  Those impacts can be felt on a local, regional and national basis. However, the overall economy within the metropolitan Savannah region has been somewhat insulated as the port continues to grow, the military continues to expand and the visitor spending remains stable.