Experts Give Insight to Managing for the Rebound

Yesterday the construction practice group of Chamberlain Hrdlicka together with McDonough Bolyard Peck, Inc. and Sterling Risk Advisors hosted a seminar for real estate, design, engineering, and construction professionals called “Managing for the Rebound.”   The program included a public sector panel, private sector panel and the keynote speaker from Jacoby Development, Inc.  Click here for more detailed information about the panelists.

Here are some of the highlights addressed by the panelists:

Public Sector Panel

• Fort Benning is rapidly expanding and building due to the movement of troops and operations from Fort Knox in Tennessee

• Five years ago, annual construction at Fort Benning was consistently around $50 million per year

• In 2009-2011, spending for construction projects at the base will exceed $350 million per year

• As a result of the increased training mission at Fort Benning, it will have a higher priority for future congressional funding

• After the major expansion is complete, annual construction budgets for the base are expected to increase for operations and maintenance contracts

• The expansion of Fort Benning and the movement of troops to that area will bring additional construction projects in the form of county infrastructure improvements and schools and private development in residential, commercial and retail

• GSFIC currently has 10 major projects open for solicitation that listed on the Georgia Procurement Registry and total more than $110 million

• GSFIC recently had a bond sale in October which will fund just under $100 million in new construction projects

• GSFIC also has 40 “smaller” projects totaling more than $35 million in energy-related upgrades that range from $50,000 to $2.2 million per project

• Most new GSFIC projects will have some LEED requirements

• GSFIC is embracing BIM (Building Information Modeling) and will include BIM expectations in future solicitations

• General Services Administration (GSA) has active opportunities for the construction of courthouses in Mobile, AL; Savannah, GA; and Nashville, TN

• Funds have been designated by Congress for the design of courthouses in Charlotte, NC; Greenville, SC; and Anniston, AL

Private Sector Panel

• Experts believe that the Atlanta residential real estate market has bottomed out, but will not recover quickly

• Apartments and multi-family housing will likely be the first sector of real estate to see capital investments and the first sector of construction to see increased activity

• Panelists did not believe that the Atlanta commercial real estate market bottomed out

• Technology has permanently changed the need for office space

• Banks have liquidity and capital but are not lending due to the uncertainty of regulations and policies from the federal government

• Once there is certainty in banking regulations, banks will begin funding new projects again but credit will be harder to obtain

• Even during the recession, data shows that new companies are coming to Georgia and that existing companies are expanding

• Atlanta metropolitan area has experienced a net increase in population even during the recession

• Georgia is attracting companies in the biomedical, renewable energy, film producing and imaging industries

• Future growth for the Atlanta area will have to be focused on more density rather than growing “outward”

Key Note Speaker

• Jacoby Development purchased the former Ford Hapeville assembly plant to re-develop into a mixed-use development called “Aerotropolis” and has already completed demolition and cleaning of brownfields at the site

• The timeline for development of Aerotropolis has shortened as a result of interest from potential tenants and end-users

• The roof of the parking deck at Aerotropolis will be covered with solar panels capable of generating 10 MW of electricity that will be sold back to the grid (10 MW is roughly 1/3 of the electricity needs of Atlanta Hartsfield-Jackson Airport)

• Jacoby is working on solutions to connect Aerotropolis to the airport and Atlanta through fixed-rail systems or other transit systems

We want to thank our co-hosts, panelists, key note speaker, and attendees for making this such a successful event!   Please tell us what you think.

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Real Estate and Construction are Never Going Back to Brown

Last night I attended the annual fundraising event for Southern Polytechnic State University’s Construction Management Program.  This event was full of construction industry leaders, academics, and construction management students and alums.  The keynote speaker was Jim Jacoby of Jacoby Development.

I was happy to see that overall the mood in the room was upbeat and positive about the future of private development and construction in Georgia (and across the country).  Even though many construction companies are relying solely on public projects to keep them going right now, they are planning for the future and making sure that they are ready to be competitive when the rebound starts.

The other big “take away” message I had from speaking to individuals and from Jacoby’s presentation is that the next wave of private development of any kind is going to be green—in virtually all respects.

Jacoby is definitely known for his visionary thinking.  His company is famous for developing Atlantic Station in midtown Atlanta—which involved turning the site of an old steel mill with significant environmental issues into one of the largest mixed-use communities with residential, office, retail, and entertainment all within a few blocks.  But it’s clear from his presentation that the next wave of development we will see from in this country from the private sector is going to be “green” in virtually every capacity.

For example, one of the big projects Jacoby is working on right now involves the gasification of solid waste (garbage that would otherwise go to a landfill) into gas that creates enough electricity to power over 25,000 homes from one plant.  He also talked about re-developing former auto manufacturing plant sites into alternative energy production centers or more “smart growth” developments like Atlantic Station.  In fact, just about every prospective project that Jacoby discussed served the dual purposes of being good for the community and the environment.

It’s refreshing to see that future private projects will not only use green initiatives, but that alternative energy, reduced carbon footprints, and sustainability will be the key features of these developments.  This suggests to me that green projects and developments are now profitable and desirable.  There’s no looking back now.