This article examines the current prices of the major categories of commercial property in the Hattiesburg MSA, including industrial warehouses, office space, retail stores, shopping centers and vacant land.
The total Hattiesburg market is 1.65 million square feet of space, with 701,317 square feet for lease (up 20% from one year ago) and 955,742 square feet for sale (up 25% from one year ago).
Has More Space Decreased Prices?
Additional supply only reduces price if demand is constant, which was not the case for the Hattiesburg market, causing the 25% additional square feet for sale to affect each sector differently. Demand was strong enough in most sectors to absorb the additional supply, except for the retail sector which experienced a 23% drop in sale prices.
Lease prices saw a different demand curve, with shopping center lease rates increasing 28%, retail rates increasing 9%, office space and land prices falling slightly and industrial lease rates about the same as one year ago.
There are 81 office properties for sale or lease, totaling 409,638 square feet, comprised of 60 spaces for lease totaling 199,084 square feet and 21 spaces for sale totaling 188,481 square feet. Lease rates are asking $14.42 per square foot but over the last 3 months 3 spaces were leased by negotiating down to actual rates of $7.94 per square foot. During October, 3 office properties were sold at $89 per square foot, but over the last 3 months the average sale asking price was $81 per square foot but the actual sale price was $66 per square foot.
The 73 properties for sale or lease, totaling 632,000 SF, averaging a rent rate of $8.44 per square foot and sale price of $73.92 per square foot. There are 42 properties for lease, with one property leased this past month at $17.70 per square foot, and one property sold at $66 per square foot, negotiated down from the $73 PSF list price. The average retail property has been on the market 343 days.
About the author: Robert Hand is the only commercial real estate broker in Louisiana and Mississippi with the CCIM and SIOR designation, an MBA and experience writing appraisals. He owns Mississippi Commercial Realty and Louisiana Commercial Realty with offices in Hattiesburg and New Orleans.