Issue link: http://savannah.uberflip.com/i/629640
24 Real Estate The market for residential real estate improved considerably in 2015. Approximately 4,450 home sales are projected for Chatham County in 2015, a 20% increase from 2014. Chatham County's average home price was about $238,904, a slight increase from 2014, making the Savannah market very competitive in affordability with other port cities as well as other metropolitan areas around the country. The Savannah market is in the lower half of national housing markets in terms of the housing costs, ranking 1,515 of 2,722 markets according to Coldwell Banker. West Chatham County continues to hold the greatest promise for single and multi-family housing construction in 2016, although infill development continues elsewhere in the county. Vacancy rates in metro Savannah's office market increased slightly to 18% from 17% in the previous year. Overall in the region, office rental rates increased by about 1% from 2014, but surged 20% on the Westside and 8% in the central business district, reflecting strong demand in those areas. Rental rates were $22.60 per square foot in the downtown central business district in the second quarter of 2015. Increasing demand for office market condominium projects for the booming business/professional services sector is expected in 2016. Commercial development activity is fairly strong in the Savannah area as of early 2015. Major retail projects continue in the development stage at the Outlet Mall of Georgia in Pooler, while Ben Carter's vision for Broughton Street in downtown Savannah headline retail action. Numerous other smaller projects are underway in the downtown CBD, midtown, and southside markets. Hotel development is expected to continue strongly as $325 million in development projects for the west end of River Street work their way through the planning and approval process. The plans include hotelier Richard Kesler's Plant Riverside $230 million complex, Rockbridge Capital's adjacent $60 million 162 room hotel, and a $14 investment in streetscape and the river walk by the City of Savannah. Late in 2015, two new hotels in downtown Savannah were announced. One will be located between River and Bay streets, with six stories located on Bay Street and eight stories located on River Street. The second, Cambria Hotel, will be six stories and located at the intersection of Montgomery Street and West Harris. Further investment in hotels is expected for 2016. Conditions in the industrial market continue to show marked improvement. The vacancy rate in the warehousing and distribution market has dropped to 5.6% in late 2015 (below the historical average of about 8%) from rates as high as 20% in 2010. In response, increasing speculative development of relatively small scale projects has about 700,000 square feet in the pipeline. Continued growth in speculative development and on-demand space is expected in 2016 and some larger projects are likely given exceptional growth in cargo trade through the port.