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JACKSON: CROSSROADS
OF THE SOUTH
Nancy Lane
If you draw a line from Memphis to New Orleans, north to south,
and Atlanta and Dallas, east to west, the two lines would intersect
in Jackson, Mississippi. Jackson's location at the intersection
of Interstates 20 and 55 makes the city a true crossroad of
the south and a natural location for distribution and other
businesses. Metro Jackson, comprised of Hinds, Rankin and Madison
Counties, is listed as one of the top 100 places in the country
to do business, according to Forbes.
Aside from its strategic location and its Forbes ranking, Jackson
was recently named the most polite city by USA Today. "Southern
hospitality" shines in Jackson, making this city a desirable
place to do business and live. A rich art community provides
an excellent cultural foundation for the 430,000 population
base.
Office
Metro Jackson is quickly becoming known as a hub for the telecommunications
industry. As the home of WorldCom, Tritel Communications, Air2Lan,
SkyTel and CommuniGroup, it is natural that other telecommunication
industries would be attracted to this market. Continuing explosion
in the technological industries has helped fuel the demand for
call centers, equipment locations and other telecommunications
related businesses and absorbing the available office space
in the area.
Currently metro Jackson has over 6.4 million square feet of
office space in four major submarkets: the central business
district, I-55/County Line, Lakeland Drive and I-220/Highland
Colony Parkway. Several new Class A office buildings are either
under construction or on the drawing board. A traditionally
low overall vacancy rate continues to attract investors to the
market. For the last decade Jackson has been able to maintain
an occupancy rate of over 90 percent. According to the 2000
Jackson Office Market Guide, the vacancy rate stood at 8.4 percent
in July 2000.
Recently completed Highland Bluff Office Building, which is
located at Old Canton Road and I-55 North, is an 85,000-square-foot
office development. This four-story building is poised on a
hill overlooking I-55 in a high demand location. Occupancy is
99 percent, with lease rates at $23 to 24 per square foot, well
above the I-55/County Line submarket average of $17.33 in July
2000. Immediately north of this development is a new project
known as Highland Bluff North. Construction on this two-story,
65,000-square-foot building is projected to commence in April
with completion in April 2002. Pre-leasing is reported to be
in the process now with a rate of $24 per square foot, full
service.
Within several hundred yards of the Highland Bluff North development
is another newly announced office building. The 1300 Meadowbrook
Building located at Meadowbrook Road and I-55 will provide an
additional 20,000 square feet of Class A space.
Demand for office space in all of the submarkets should continue
to be strong. With new construction underway in the I-220 Highland
Colony Parkway and Lakeland Drive submarkets, there may be a
temporary rise in the vacancy rate to the low double digits
during 2001, but this should be short lived.
Industrial
Although industrial development has been strong in metro Jackson
over the past few years, it would be safe to say that you haven't
seen anything yet. Industrial development in Jackson just received
a tremendous shot in the arm with the November 2000 announcement
of a new $930 million Nissan plant to be located in the metro
Jackson area. The facility will be built on a 1,445-acre site
just north of the Jackson city limits in Madison County. The
plant, which will produce trucks and sports utility vehicles,
is expected to create 4,000 new jobs. As many as 41,400 additional
jobs are anticipated in supplier industries, construction and
spin off businesses as a result of Nissan's commitment. Construction
on the approximately 2.5 million-square-foot facility is slated
to begin this year. By 2002 employment should begin, with production
commencing in 2003.
The Mississippi Development Authority, formerly the Mississippi
Department of Economic and Community Development, expects the
location of this business in the metro Jackson area to firmly
secure Mississippi's place on the map as a center for automotive
excellence.
New industrial development will not be limited to the auto industry.
Another large development in the metro Jackson area involves
the construction of a new frozen meal processing facility by
Valley Innovative Services. The facility will package and deliver
individual meals.
Retail
A look around Jackson today does not resemble the retail picture
you would have seen five years ago. Jackson, long overlooked
by many national retailers, has been discovered as a viable
and desirable trade area over the last few years. New to the
market in the last year are Best Buy, Bed Bath & Beyond,
Jason's Deli and Chico's. Many of these retailers have been
focusing their attention on the County Line Road area, which
is still the hottest retail traffic area for metro Jackson.
However, this is beginning to change as a result of the congestion
in the County Line Road area and the growth that is evident
in Rankin County and other points around the city.
One of the newest retail developments taking shape is the Orleans
Centre, an upscale retail development located at I-20 and the
Crossgates Boulevard-Greenfield Road exit in Rankin County.
Rankin County has experienced a population and housing growth
over the last few years, building a sound basis for new retail
development in the area. Plans are that the total development
for Orleans Centre will cover 275 acres and contain retail,
restaurants, office and hotel space. Phase I, covering the first
54 acres, recently kicked off with the ground breaking for Home
Depot's third store in Jackson.
Another upscale retail development underway is Dogwood Festival
Market, to be located on 38.5 acres on Lakeland Drive (Highway
25), also in Rankin County. Dogwood Festival, consisting of
302,709 square feet of retail space, will be the area's first
lifestyle center, an open-air center that includes a tenant
mix of traditional shopping center tenants and those usually
reserved for mall locations only. McRae's Department Store will
anchor the development with a 115,000-square-foot, two-story
store. Tenants announced thus far include Old Navy, Chick-Fil-A,
Ann Taylor Loft, Secret, Limited Too, Lane Bryant, Kirkland's,
Merle Norman and Hallmark Cards. Linen 'N Things and Borders
Books & Music are also opening in the Dogwood Festival Market,
making their first appearance in Jackson. Other national clothing
chains and restaurants are rumored to have commitments to the
location and should be announced soon.
On a smaller scale, as Wal-Mart has opened SuperCenters in the
Jackson market, and small-unanchored strip centers have developed
around the SuperCenter locations. This trend continues and many
of the strip centers planned next to these Wal-Mart SuperCenters
are pre-leased 100 percent prior to construction.
Investment
Metro Jackson has always maintained a reputation for stable
investment properties. The economic ups and downs of the nation
do not seem to impact the economy in the metro Jackson area
as harshly as seen in larger markets. Speculative construction
of office buildings and retail centers continues at a slower
pace than last year, but nonetheless strong, particularly in
Madison and Rankin counties. The strongest retail growth is
in Rankin County.
There is also a strong demand for smaller income producing properties
as individuals take advantage of the benefits of 1031 Exchanges.
Many small investment properties are changing hands as these
investors look for $500,000 to $2 million properties in which
to reinvest.
In addition to the specific developments featured in this article,
information obtained from Metro Jackson Chamber of Commerce
indicates quite a few projects are currently being entertained.
These include an entertainment and sports center to house the
Jackson Bandits hockey league, a convention center, a telecommunications
center and a Southern Arts & Entertainment Center.
The metro Jackson market should remain strong in the foreseeable
future. Concern over rising interest rates may slow down some
of the speculative development for a short period of time, however,
with the development of the Nissan plant, and the growth that
project brings to the area, all sectors of commercial real estate
should benefit.
Nancy Lane, CCIM, Cook Commercial Properties
©2001 France Publications, Inc. Duplication
or reproduction of this article not permitted without authorization
from France Publications, Inc. For information on reprints of
this article contact Barbara
Sherer at (630) 554-6054.
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