Jackson Corporate Real Estate is a private real estate investment and operating company focused on Atlanta. Scott Jackson, chief executive officer and chief investment officer of the company, sat down with REIT.com during REITWorld 2010: NAREIT's Annual Convention for All Things REIT in New York City in November to discuss fundamentals in Atlanta and what makes it such a desirable property market.
Jackson said there were three main drivers in deciding to focus his company's efforts on the Atlanta market. The first, Jackson said, was the city's population growth trends. He also looked at the cost basis and diversification.
"From 2000 to 2008 Atlanta welcomed over 1.1 million new residents to the city," Jackson said. "That has been the historic trend, about a million people a decade. And future projections look to be about the same, which benefits all property types."
Jackson said his firm looked at cost of replacement versus cost of acquisition when evaluating investment markets. He said Atlanta offered a chance to buy assets well below replacement costs. In addition, the city offered buying opportunities across several different asset classes and sub-markets.
These factors have also put Atlanta on the radar of foreign investors. Atlanta was listed as the ninth most popular U.S. city for real estate investment in the 2011 Association of Foreign Investors in Real Estate Investment Survey.
When it comes to rents, Atlanta's commercial property market did not see as precipitous a decline during the recession as many other metropolitan areas, Jackson said. From a development standpoint, land is becoming limited in Atlanta and cost of construction has risen during the most recent cycle, Jackson said.
There has been limited activity from a property acquisition standpoint in Atlanta, Jackson said. He said many owners are sitting on the income-producing property and enjoying the yield and anticipating a market rebound. There is belief that values will return and in the meantime banks are working with owners to extend loans when needed, he said.
Jackson's company also diversifies its holdings with REIT Investments, "Rather than try to buy direct into markets that we didn't have a competitive advantage in, we decided to buy into companies that were similar to Jackson. Companies with good management, good strategy, focus, good solid portfolio and yields, and a solid reputation in the marketplace," Jackson said.