Market Trends Shaping Commercial Real Estate in the Southeast

In a time of shifting capital flows, evolving tenant demands, and meaningful differences in how businesses get things done state to state, on May 6, 2026, the second annual Southeast Real Estate Expo brought together a sharp group of brokers and lenders who are on the front lines. No fluff, no press release talking points, just real insights from people doing deals every day across the commercial real estate markets of North Carolina, Georgia, and South Carolina.

Integrated Media Publishing Editor David Dykes moderated the discussion. The panelists were:

Micah Williams, senior associate, Lee Associates Commercial Real Estate

Brian Young, senior director and managing broker, Sojourner Properties

Josh Woodward, president and CEO, Lima One Capital

The conversation has been edited for brevity and clarity.

David Dykes, editor, Integrated Media Publishing: Micah is going to kick us off with a market pulse check — what's thawing, what's stalling, and where velocity is picking up. Brian is going to help us unpack the real state-by-state differences and how deals are getting done across North Carolina, South Carolina, and Georgia. And Josh is going to bring the lender perspective on capital deployment in secondary markets. We'll also be diving into how tenant behavior has shifted over the last two to three years, especially around flexibility, space requirements, and location strategy. 

This is your chance to get unfiltered perspectives from people who are actually moving money and closing transactions in these three very different yet connected markets. Micah, let's start with you on the market pulse. What are you seeing right now in terms of deal velocity across the Carolinas and Georgia? Things stalling, stalling, or resetting?

Micah Williams, senior associate, Lee Associates Commercial Real Estate: It's been interesting. I mean, this year's been off to a hot start on the industrial side of things. We've seen a lot of deals finally get across the goal line that have been in the works for six to 12 months in some cases. What I would say about deal velocity … (it) has been stable, consistent. Activity has been really high. Activity has been maybe at its peak since 2022 here in our market, which has been great. Lots of tenant velocity, lots of tenants moving around, more tours, more proposals than we've seen in a long time. But actual deal velocity, you want to talk about deals getting signed, that has taken some time. There's still a lot of challenges in our market. There's always something to be scared of. Whether it's tariffs, whether it's war, whether it's policy or an election year or whatever's going on, there's always something to blame. We've just seen tenants take their time to actually get deals across the goal line. But, the activity has been up here in 2026.

Dykes: Brian or Josh, anything to add?

Brian Young, senior director and managing broker, Sojourner Properties: On that note, I agree with everything Micah had just said. A lot of groups looking for space, but just some real headwinds out there. ... Interest rates are high, property taxes are high. Insurance is significantly higher than it was even two or three years ago. So, the costs of all the inputs for a real estate project are just high, and it's a lot of second-guessing.

Josh Woodward, president and CEO, Lima One Capital: We come in with a different perspective … what we have heard consistently from our clients over the last couple weeks and months is difficulty on the syndication side. So, anytime we're talking about a true investment deal, where they're going out and doing something more speculative in nature and they're trying to aggregate funds. … We've just seen so many equity deals fall apart, which probably is why there's a lot of "kicking of tires." Reading between the lines, what I think is happening a lot is (that) people are trying to arbitrage a bit. They're trying to get the deal locked and then raise the capital, because they're not really able to raise the capital unless they have the specific deal locked. It's just a lot of moving pieces that you're trying to get to occur at the same time, and converge, and coalesce. That's what we're seeing. It's definitely harder to get equity raised. The uncertainty in the market generally doesn't help that. But fortunately, it goes day by day, but it seems like over the last week or two we've seen a little bit of settling and a little bit more long-range confidence, which I think will really drive the deals even as much as the rates may be coming down. It's just (about) people actually being able to consistently raise equity for their projects.

Dykes: Let me ask about the state-by-state differences — North Carolina versus Georgia versus South Carolina. And Brian, I'll start with you. What's the one key difference in how deals get done in our state compared to our neighbors?

Young: Each state is very different. I know we worked on a project, this is a couple years ago, but they were looking at multiple states. Ultimately they chose North Carolina, but I remember seeing the spreadsheet breakdown between the cost savings from Georgia, South Carolina, North Carolina, and there was one other state, I think it was Tennessee. And South Carolina had this massive amount of cost savings. It was over $30 million for this particular distribution project. They ended up doing a 600,000-square-foot built-to-suit warehouse kind of north of Charlotte. We were showing, on paper, in South Carolina, $32 million in savings. In savings! Which is like, great, wow, that's a big number. I think North Carolina was like $3 or $4 million and Georgia was a little less, maybe $2 or $3 million.

It's like, wow, South Carolina really stands out, and we talk about that. But it was savings, it wasn't an investment in the deal. That meant that our number for taxes and all the costs the company was looking at was a big number, and we just took a big bite out of it. So, for a long time, South Carolina has not been as competitive as North Carolina, and candidly, as some of the rural areas in Georgia when it comes to their overall costs. Yes, they provide a lot of incentives, but there's a lot of underlying costs, and property taxes are one of the biggest ones. North Carolina property tax on manufacturing plants, 6 percent. In South Carolina, without any tax negotiations, 10.5 percent. So, right there out of the gate, your tax bill in South Carolina is almost 2X what it would be in North Carolina, and the same in Georgia. So, there are some challenges. There certainly are some differences. 

And one other comment I'll make, and this is more holistic, not as much industrial, but the big cities — Charlotte, Raleigh, Atlanta — of course, further out, like into Florida, Naples … those cities are also on fire. In particular, Charlotte, Raleigh, and Atlanta. They have a lot to offer. A lot of our kids that are graduating Clemson and Carolina and Furman, they're not all staying in Greenville and Charleston. They're going to the big cities where there's more opportunity. So as great as things are in Greenville and as great as things are, let's say in Charleston, there are still some really good world-class cities out there that we're having to compete with.

Dykes: What about the urban versus rural divide? Is that still a challenge?

Young: Candidly, I think so. … We talked about density earlier, that was on one of the panels. In Greenville, we don't want the density. And I'm not talking about maybe a mayor or a county councilman, I mean our people, we don't want density. We don't want to see the tall buildings, because we're afraid we'll look like Charlotte. But we need the tall buildings to create density, to create the opportunity for mass transit. The way mass transit works, for example, is you've got a group of people that live here that are commuting to there. Well, if you're all spread out all over this place with massive suburbs, that doesn't work. So then you just have more traffic and more sprawl. Some urban areas have kind of started to figure that out. Think about the light rail in Charlotte, and as that has developed, you've started to see pockets of retail and office and commercial and residential that grow along that corridor. Same kind of thing in Atlanta. We don't quite have anything like that here in Greenville, but that has been a differentiator for development in some of those regions.

Dykes: Micah, what about tenant behavior and demand shifts? How have tenant expectations changed in the last two to three years, especially around flexibility, space usage, and location?

Williams: I think one of the things that tenants' expectations have shifted in is … tenants expect, certainly in the industrial space, cheaper rates, because in our market, there's been a lot of industrial vacancy for the last couple years. So, when you're talking to tenants now, they say, "Well, this building's been sitting vacant for a couple years, why am I not getting a cheaper rate?" "Why is the landlord not coming down on his rate?" And if we were 12 or 14 months ago, you probably could get a discount, certainly. I think there was probably the last industrial discount just given out a month ago. But, no, now with the leasing activity that we've seen over the past last year, (we're) having to have that conversation with tenants and reshape their expectations to say, "Hey, not only are rates not coming down — rental rates, that is — rental rates are going to be going up because we've got a new wave of construction that's finally coming." We didn't break ground on construction for almost a year on anything spec here in the market, and now we've got several projects that are online and more that are coming.

As these new pieces of real estate come out of the ground, we're going to have rates that are just going to be higher. And it's happened. There's been different inflection points every four to five years in our market. At every inflection point, people thought, well, tenants just won't pay. And every time, tenants have. So, it's just an adjustment that the market has to go through. I think it is a challenge. It is something that will stall out deals in the short term. But for the long term, that's what tenants need to be expecting and how we need to be leading them and guiding them is to say, the next 12 to 14 months is going to be some rental rate hikes.

Dykes: Anybody have anything to add?

Woodward: I can come at it from more of a multifamily perspective. I know we're a little bit more focused on industrial, but one thing that we've seen a lot, especially in the Southeast, but even more pronounced in some other markets, is when that oversupply hits, the impact is orders of magnitude. … I don't know what the deliveries for apartments are in Greenville as of late, but, 20,000 deliveries of new apartments in Greenville or build-to-rent would absolutely destroy (the market value). It's like, there's not as much of a gap as people like to think about. Then again, this is residential leasing. Multifamily is a little bit different when we're talking about industrial side, but I think there's a bit of a false narrative as it relates to how much of a supply gap we really have until it's the classic, OK, rents are going up, we're going to build, the deliveries come, we think that the deliveries can get absorbed. And then, here we are, even in good markets like Greenville, where rents are basically flat, (even) down in a lot of places for apartments and single-family rentals.

You just got to be careful. ... But I would tell you that demand for rental properties, apartment complexes, has definitely waned substantially, and particularly if it's older vintage, it's kind of '80s and earlier. That stuff has really gotten hurt in the last five years in South Carolina, in North Carolina, beyond. It's really a nationwide deal, I would say, at this point.

Dykes: Is that because a lot of younger people who have been renting now want to move out into single-family homes and start their own families?

Woodward: I think it's just a little bit of an overappraisal of how much pent-up demand there really is. ... It's different state to state and city to city, town to town. But by and large, there aren't these overwhelming numbers of renters who want to buy a house. … They may want to buy a house, but they can't afford to buy a house. Let's just ... think about South Carolina. What would be considered affordable in South Carolina is a $300,000 house.

You know how hard it is to buy land and build a house and sell it at a profit for $300,000? You just can't. Even super efficient builders, you can't deliver for that. And so the point is, a new build anywhere where people would really want to live, that's not super rural or ex-urban, you're talking about $450, $500 grand. And when rates are 6-7 percent, they're definitely not affordable. Even when rates kind of get closer to the fives, you really didn't see that much of an uptick. That's why days to sell are going up. That's why you still got eight months plus of new housing inventory across the country. So, all that is to say, I think there's a little bit more of a view that the demand is there when South Carolina leads the states with population growth and it's like, 2 percent. So it's not that much of an impact if you just look at it in the grand scheme. I think we get a little bit too much fervor, we get out ahead of ourselves in terms of building and delivering units, and then there's just not enough people to absorb them regardless of interest rates, regardless of whatever other factors.

Dykes: Josh, let me follow up and ask, what can brokers do to make their deals more attractive to lenders before they ever hit your desk?

Woodward: Yeah, that's a great one. So one of the things that we really try to encourage brokers to do is be realistic in assumptions. I can't tell you how many pro formas … it's like, yeah, you're gonna get a 20 percent rent growth, you're gonna be able to keep taxes and expenses down. That's just the stuff that we spin a lot of wheels on because it's just not achievable. I mean, maybe in certain times, in '21 and '22, you might have got some of that growth, but we just haven't seen more than 5 or 6 percent growth in rents, and usually the expense growth outweighs that. I would say, be conservative, buy it right on your as-is assumptions. It's almost like the deal's got to make sense on the as-is assumptions because you're just not going to get a lot of lift on the after-repair or the as-completed or sort of the post-completion project. ... So that's the encouragement I would give.

Dykes: Did I sense a need for a reply here?

Young: No, I mean, he's right, because all of us brokers have had a deal that looked great, that we believed in, that we took to a lender, and then the lender's like, nah, this doesn't work. And maybe it's because our numbers were a little too lofty, maybe aspirational. What we do is not an exact science. It's more of an art. There's some science to it, but the art is in where we think things are going. And Micah made a great point on industrial, in that, we're looking at a double-edged sword, because we're always looking backwards at lease comps. So we see these lease comps today, Class A industrial space, predominantly in the sixes per square foot. To go forward to get the new buildings built, we're going to have to be probably in the sevens per square foot. So, you could tell a lender and a developer going forward it's going to have to be 7.25, that's what we're going to get in rent. And the lender's like, well, the lease comp says 6.50, what are you talking about?

And it's both. Both can be true. That's some conversations I'm having right now. I'm sure you are too. I'll touch just real quick on office. It's the same kind of thing. I have thought over years, as small as our vacancy is in class — like real Class A office space in Greenville, downtown Greenville and around the suburbs — there's just not a lot of Class A space. There's not a lot of office space, period. Have you noticed a lot of industrial spec? There's been some multifamily and residential spec. There's no office spec. And a big part of that's the exact same reason. It's incredibly expensive to build an office building. You're looking at at least $300, if not $400 a foot, depending upon what you build. I was looking recently at just a 1.5, maybe two-story office building under 7,000 feet, and it was probably $300, $325 a foot to build out in the suburbs. That's a lot of money. When you look at, what rent do I have to get to justify that build? We're in the mid-30s, $35, $36 a foot. The lease comps aren't there, and the competitive set doesn't suggest I can get that. So that's why we've not seen a lot of new office built.

Dykes: So are you saying that office is stabilizing, or do you see a long-term reset?

Young: That's an interesting thing; every city in the Southeast is a little bit different. Greenville never saw the major spike in vacancy like some of the big cities and some of the scary things we heard about out of Covid. Think about San Francisco, they were immediately like 35 or 40 percent vacant, and it's not come back in any big way. Greenville never saw that. In fact, a lot of our companies actually took down more space or expanded, even with some of the flex and hybrid work. We still made most of our tenants maintain their space, but it doesn't make sense to build new buildings, speculatively anyway. So, that's been a challenge.

Woodward: I just want to add a little bit of color to that, given that we just signed last year a lease for a 65,000 square foot office building in Greenville in downtown, and I can just tell you, there are no options for Class A space, and so it's to your point that Greenville's a little bit in a bubble in that way. … I think nationally, office vacancy is something like 20 percent, which seems crazy. But here, because there just hasn't been available supply, and some of that has to do with the urbanization and the density that you mentioned earlier. But if you want a nice office space in Greenville and you got more than 100 employees, you literally have about three options on the office side. And then, just from the perspective of … even if you're a believer, and you're playing contrarian, you're still saying, "Hey, we're gonna buy low, we're gonna do office development," which I think is a very viable investment thesis, you still got to remember that almost every lender lending on office got absolutely roasted over the last five years.

So whatever assumptions you may have, again, you got to back them down, because people are just still very wary. And lenders always take longer to catch up to the market. And at least with respect to office and the guys that I talk to, there's still a lot of trepidation. Everyone gets that things cycle, and eventually it'll come back. But lenders … I say we're lagging sometimes, or we just look at what happened in the past, and until that changes, we're just operating out of what happened in the past. And sometimes that helps you if things are going well, but sometimes you miss the turn a little bit.

Dykes: Micah, let me switch to industrial. It's been hot. Are you seeing signs of plateauing, or is there still runway?

Williams: Oh, there's always runway. Always. That I know of, we've got two deals that have just been done on Class A spec that are double-digit rents, that are 30,000 square feet and above. So, that's new for our market. That's not something that's been common. I would say there's reason to be excited. We've got folks talking about doing forward purchases on speculative construction for industrial. So I would say there's a lot of runway. We're just getting started when it comes to industrial here in Greenville. We're still a small market, about 260 million square feet, and there's still a good bit of land if you look at Anderson County. I'm excited about Pickens County. I don't know if a lot of people are talking about Pickens County, but I'm excited about it. It's good infrastructure, good power coming out of the county. I mean, there's just going to be good opportunities here in the Upstate, and I think industrial is on a good path.

Dykes: Let me ask Brian and Josh about pricing, rents, and valuations. Where are cap rates and lease rates headed in your markets over the next 12 to 24 months?

Young: By the way, on those double-digit rents, I remember having a client that needed space kind of in northeast Miami, West Palm, six or seven years ago. We did a deal, it was like $11. I was like, wow, we're still at like $3 here in Greenville. $11 feels great. And now I think we're there too. So, rents and cap rates, right Dave? Rents … I think we're about to see them escalate, certainly for new office product, which I think we need. Those rents are going to have to be $40-ish or more a foot, on gross, to get new product going. Industrial … I think we're about to see it go to the sevens, right? But I think we're about to see appreciation in rents. I think cap rates, as long as interest rates stay where they are, … Everyone talks about the Fed rate, Jerome Powell and the Fed rate, and that is an important number. (But) that's the overnight rate. That has so little to do with what we pay for our home mortgage or our car loan.

That's tied to so many other factors, and those factors aren't changing. In fact, if anything, they might be going the other way. You might see those long-term rates go up with everything going on right now. So I don't see cap rates lowering any. I don't see more cap rate compression going into later this year, in '27. I think for industrial, we're probably 6-ish, 6 percent roughly, cap rate. That'll be consistent. I think office space would probably be just a smidgen higher than that, maybe 6.75 percent to 7 percent, just a bit, with some OpEx things that are going on there. But for the next year or so, I don't see cap rates changing much.

Woodward: Yeah, I would agree with that. That's certainly going to be very tight. Treasuries, I would say in particular. So, for five-year right now, it's wrapped around 4 percent, and then … for any of these asset classes, you've got to add some risk premium to it. Almost regardless of what your view on treasuries is, or just general rates is, over the next six months, I actually wonder if maybe that sort of credit risk premium might change. I don't think it will, but certainly it's possible that people start to say, "Hey, is it really a good return to buy an office at 6.5 percent when I can just go to a safe haven asset and buy a 10-year Treasury at 4.2 percent or whatever?" That's a real conversation and a real sort of debate. And obviously there's any number of asset classes that you can invest in outside of buying an industrial park or an office or a multifamily building. However, with all that being said, I can point to some very specific cons.

So, the apartment side where there's been a lot of distress, we're literally seeing apartments trade, and these are definitely more Class B, Class C, but we're seeing a lot of talk around kind of 7.5 percent, 8 percent, but we're really only seeing stuff transact near 8 percent. You kind of back that up for some of the other asset classes, I would imagine, so like, office, you said 6.5 percent, which feels about right. I think that's sort of the perfect price, that's fair price, but the actual transactional price might actually be a little different just because … maybe I should, in a perfect world, buy it at 6.5, but I'm nervous, and there's other stuff going on. And maybe in my mind that risk premium has expanded a bit. All that's just to say, I think that, (for whatever) those headline cap rates are for these different asset classes, what actually gets deals done is, at least what we've seen, is about 25 wider, 50 in some cases. That's heuristic, but, there's certainly exceptions to that, and it's locally based, but that is what we've seen actually transact over the last couple of months.

Dykes: Micah, let me follow up and ask you, what creative deal structures are you using to bridge gaps in between buyers and sellers?

Williams: I've got three deals (currently) where the owner of the building doesn't want to sell right now but is willing to do a lease with a purchase option. We see that from time to time, not as common in our market, but for whatever reason right now, just my little niche of the market, I'm seeing three different clients have leases with purchase options. There's this gap sometimes in where the seller wants to be and where the buyer can make it work. And they say, you know what, if I get two years of rent from you, or five years of rent from you, then we can make this thing work. That's one small example of a way that we're trying to get creative. 

And speaking of lenders, I think being open and talking to all the folks that are here today and all the folks that are here in our market to try to find some creative lending opportunities as well, which we've had some good experiences even right here in Greenville with some great lenders that have been willing to get creative. … We just closed the deal two weeks ago, where they had toyed with the idea of doing an SBA loan, and then the bank came back and said, "Hey, we can actually help you in a similar way. You don't actually have to go through SBA." Whoever that you're willing to work with and who's willing to work with you to try to make something happen and close those gaps, because we're still seeing it. We're still seeing sellers not necessarily be unrealistic, but just … be proud of the asset that they have.

Dykes: Josh and Brian, let me ask you this about capital markets and investment trends. What deal sizes and asset types are getting financed most easily today?

Woodward: I'm going to give you a blunt direct on that one. Over $10 million, we see a lot of liquidity. Under $10 million, we don't see a lot of liquidity. On traditional Core 4 commercial asset classes, yeah, under $10 million, we barely see anything transact. If you're talking about, again, more residential product, you can finance that from a million, (with) local banks, national private lenders like ourselves. But, if you got a $3 million multifamily or a $6 million office ... we don't see everything, but we don't see a lot of demand from the capital market standpoint for those types of deals. A lot of those deals get purchased, those loans can get purchased ultimately from some debt fund. If you think about these debt funds, whether it's a REIT or whether it's just a private assemblage of funds, these guys really don't have operations, they really don't have deal sourcing. What they're trying to do is get somebody, whether it's brokers or whether it's other direct lenders, just to show them a bunch of deals, and they want to see 1,000 deals and pick 10.

And they kind of have the power right now, because there's not as many people lending on smaller asset classes. So, it's a narrower keyhole to fit through for a lot of those smaller deals. But, it is funny how much it inverts, because as soon as we go over 10, you got multiple bidders at (nearly) every loan or every property, whether it's to finance it or buy it, even on the equity side too. That's my sort of shorter answer to that question. $10 million plus, lots of liquidity. Less than that, challenging.

Young: I would agree with everything Josh just said. It's crazy. In the last, I'd say, six weeks, how many conversations I've had with mostly investors, less banks and lenders, but investors, where it's a $5 or $8 million deal, and it just … it wasn't big enough. They've got a much bigger treasure trove. They've got to deploy this, this year, for example, before a fund will sunset, or it's not good anymore and they got to reapply. They've got to get the money out the door. Spending $8 million 12 times to get to $100 million is way more painful than two $50 million deals or four $25 million deals. I don't want all the brand damage of the $5 million deals. Give me the $20 million deal and let's move on.

Woodward: I would agree with that. By the way, back to what we were saying earlier, the diligence threshold has gone up so much, where a deal that might have gotten done with a lot less work before (now) won't get done. So if you're lightly resourced, you just don't have the time. If you're lightly resourced and then you got to do more work to get the deal done, you're just … you got to be slow.

Dykes: Micah, you were nodding your head in agreement.

Williams: I've just seen it over and over. We talk about it even on our team, what we're going to choose to spend our time on in brokerage. You only have so much time, and so you have to pick and choose how you're going to deploy it. A lot of times the $20 million investment, in some cases, is smoother and easier on the diligence side than the $5 million. So, (it can be about) being able to pursue things that fit your bucket and accomplish your efficiencies in a much quicker way.

Dykes: All right, let me put the three of you on the spot. Where do you see interest rates and lending conditions headed over the next 12 to 24 months?

Williams: We're still high. I think it's going to stay relatively high. I don't think that we're about to go off the waterfall, certainly. I don't even know if we're going to go down a stepladder. I think it's going to be maybe a year before we see something really kind of start to change there and go down a little bit. But I think we're going to be held pretty high for now.

Young: I agree. … At least for the next year, 12 to 18 months, unless something geopolitical changes significantly, I don't see any changes.

Woodward: Yeah, who knows? But to put a finer point on it … I think we're really just learning about short-term rates for the moment. So, for when you're wrapped around like 3.7, 3.8, two-year treasuries generally sort of follow that … but maybe it caps out to four. That sort of seems like the worst case, because that's kind of where we were just a little while ago. But maybe 4.25? Here's the point I'm trying to make: it's a narrow band, maybe 50 basis points from where we're at, max, and by the time you add a little bit of extra spread on there. … It's kind of a boring forecast, but maybe sometimes that's the right one. It's pretty much where we're at. I guess I would worry a little bit about the equity side more than the debt side. It just seems like those valuations are pretty high, and, maybe you have a pullback in equity and flight to bonds, maybe that actually helps, but I don't see anything inflation-wise, economic-wise, in the housing sector. There's just nothing that points to … (well), unless there's an active Fed chairman, which we may get, the economic fundamentals and the geopolitical fundamentals certainly don't point to lower rates anytime soon. I would say, for the rest of this year, about the same. Maybe if we look out 12 months, we could see 25 to 50 basis points of change one way or the other.

Young: Everyone think about your own personal lives, just for a minute, your own stuff. Let's just assume for a minute that you've got a car payment, you've got a mortgage payment, and maybe you've got a couple credit cards. And then something happens, a surgery, a kid gets sick, car craps out on you, and now, you've got to write a $10,000 check. ... Whatever that number is ... let's say it's $10,000, you've got to have it right now. If you didn't have a resource somewhere, or credit card to use, or bank accounts to pull it from, or let's even say mom, that you could borrow it from. You got to get that money from somewhere. So, you're going to go to a probably high-risk creditor, where the interest rate's going to be higher than what maybe even is on your credit card. Fair? Just in your own mind, think about that for a minute.

Last week, there was an article in the Wall Street Journal that our debt to GDP is now 100 percent. So, what our annual GDP is, it's the same as our debt. In the same kind of way, think about this: the government is kind of in that same place. If there was some, I don't know, war in the Middle East, there's only two ways they can generate those funds. And so the cost of the government borrowing for, let's say, the war in Iran, they've got to continue to sell debt. Well, they're selling debt at a high level. And as long as they continue to sell debt at a high level ... if I can go buy a 10-year fairly secure government bond at 4.45 last week … yeah, it was coming in a little bit, so maybe, say, 4.25. If I can buy a government bond at 4.25, I know my money's safe. Why do I want to go buy that office building at 6.5 when it's risky and there's taxes and there's just stuff with it? So until those government costs and those bond funds start to come down, I don't see it changing. And in fact, I think it probably could even go up

Dykes: Let me turn to infrastructure growth and site selection, and I just got to ask, how much are infrastructure and traffic concerns influencing tenant decisions? Micah, start with you.

Williams: Very much so. I mean, power has been one of those that has dictated so much business over the past five years really. Manufacturers that are coming to our market … just, the need for heavy power (for) what they're doing. And then the strain on the grid that some of that has created in certain places. And you go to talk about other utilities, you go to some places in Anderson County and the water can be a challenge, the water pressure for sprinkler systems. We've got developers having to spend half a million dollars on tanks just to get the pressure where they need it to be for ESFR sprinkler systems. So, when you're having to factor into your development costs all these things that the tenant doesn't really feel like they benefit from, because it's a sprinkler system that they're expecting to get in any other building, and they go to Anderson County, which has got a lot of great opportunity, and there's been a lot of growth and I expect a lot more …there still are challenges. I mean, to be able to navigate the utilities … for a while, delivering 200, 400 amps in a given space for a tenant was plenty sufficient. You wouldn't really think twice about it. Now we've got spec developers coming in with 2,500 amps in some of their buildings just to be prepared for that manufacturer who's coming in and wants to get going. So I think the utilities, the infrastructure that we have across all the counties of our Upstate, are really dictating where tenants are able to go, especially the ones that are ready to construct a deal. Because then you look and you say, "Oh well, maybe there's 15 buildings in the market to choose from." There's really not. There's really maybe three that actually check all the boxes.

Young: I'll speak to roads for a minute. Certainly I think South Carolina's got their challenges. It's a really rural, poor state relative to Georgia and North Carolina. It's not that much smaller in geography, a little bit, but not that much. But it's like half the population, thus half the taxes and tax base, but, it's still got a lot of roads and a lot of heavy congestion. Personally, I think the road systems are better across the border in Georgia and North Carolina. And many of you that have traveled, you've noticed as you come back across into South Carolina, the road gets bumpy again. So, I think South Carolina's got some real headwind in getting their roads and infrastructure up to par with where our neighbors are.

Woodward: I don't have a ton to add there other than just to say I do believe that Atlanta, Charlotte, Raleigh have done such a better job in that regard. Now, they have issues as well, but in terms of setting up for longer-term growth, they've put the investment in those cities in particular. And I think that's why you are continuing to see expansion. I think Atlanta and Charlotte are two of the fastest-growing cities in the country. We obviously have less resources overall, to your point, as a state, but it's also about allocation of resources. And we've got essentially three big cities, depending on how you qualify, maybe Myrtle Beach or Rock Hill or whatever, but hopefully we can see continued investment in things like the Inland Port and things like roads and highways that drive that transportation infrastructure and will ultimately allow us to also bring power in and create better facilities and be more accommodative for these industrial developments.

Dykes: Let me close by asking each of you a two-pronged question. Micah, we'll start with you. What's the biggest risk in the Southeast CRE market that isn't getting enough attention? And then, on the flip side, where do you see the biggest opportunity over the next three to five years?

Williams: Biggest risk. I don't know the answer to that question. ... Seriously, the biggest opportunity here in the Southeast, I think we're just positioned well in the country because we have so many people who want to live here. We have so many people who want to do business here coming from states that maybe are not quite as business-friendly as some of the Southern states might be. And so I think the Southeast position right now, as we've seen in a lot of Southern states, just, growing … population growth, business growth, bringing lots of manufacturing this way, even bringing distribution this way as well. Some from the West Coast that have traditionally used the ports on the West Coast, we're seeing them come and use the ports over here. I would say the opportunity is in continued growth and continued expansion of our markets … like I said earlier, we're going to see more development. We're going to see if our Upstate market can do the work that we've just talked about, that you guys just talked about, of infrastructure. And I think that does mean a little bit of chicken and egg.

It does mean that we have to bring the infrastructure first. And I know that's a hard thing to do. But I think we've got to bring sewer, we got to extend it into further places in Anderson County. We've got to bring more water into other places up and down 123 and Pickens. We've got to do these things if we're going to be a player up against Georgia or up against North Carolina when we're bringing business here. So, I view that our biggest opportunity is that we're positioned in a great spot. A lot of people want to be here for a lot of different reasons.

Woodward: You're spot on with the opportunity. To me, it's like, we have the blueprint. We know what works and what's worked in very nearby cities. So, let's just follow that plan, generally speaking. We obviously got to prioritize where we concentrate our resources, but obviously the population dynamics are good, a bunch of people are moving in, a bunch of industry's moving in. Maybe if there's one opportunity that's a little bit more subtle, it's in Greenville in particular, I don't think we've got enough white-collar opportunities. I think we could drive more entrepreneurship, and there's some great organizations in town that are really trying to do that. Let's not just be the manufacturing corridor. That's great, let's pour into that too. But let's see if we can really diversify a bit, add a bit more around financial services. We've already got a pretty good base, present company excluded. But there's just a lot more that I think we can do to sort of diversify our industries here in Greenville and beyond, and particularly following that blueprint that some of these other nearby towns and cities have followed. 

I would just give a risk that I think's perhaps a little specific. ... If you're building, be careful on the residential side where you're building density. We're seeing a lot of challenges with highly dense communities that aren't near downtown, and even a derivative or two away from downtown. Specifically, townhome developments, B2R communities, build-to-rent communities. Some multifamily stuff that's, again, call it five, 10, 20 miles. You start getting out of that main corridor, (and) not only is stuff not leasing up, but it's not selling. It's taking a long time to sell. And you see some townhome prices 10, 20 percent down from where the developers and builders thought they would sell. So I would say, one of the benefits of density is that you're in proximity to the amenities and the things that downtown offers. So if you're getting away from that, you're losing that amenity, it really does damage the value proposition, at least what we've seen in terms of sellability of some of those more dense townhome condo kind of tightly bound residential developments.

Young: That's a great point. Two years ago, my family and I moved further out on some property and (we thought), "This is great, we'll live out here where there's fewer people, less traffic," and turns out that's what everybody's doing right now. So, our road infrastructure is not great to handle the people that are coming. Meanwhile, there's these massive communities that are being built or have been built, so the traffic's changing. It's like we're basically in the suburbs. I think Mike had touched on it. ... One of our biggest challenges is this migration of people and their ideas, and it worked up here where I'm from. I hear this all the time. I have the fortunate pleasure of being on a property owners association in Hilton Head, and so I get a lot of folks from up Northeast (saying) that, "Well, it worked here. Why can't it work in South Carolina?" I said, "Well, because it's different. It's a different state." And I think about some of our rules and regulations, and if you drive home today, most of the people … 85 percent of the people that are commuting home with you are by themselves in their pickup trucks.

So, to have these parking lots with tight spaces and tight parking garages and this demand for parking, well, that doesn't solve … we all drive big pickup trucks, and it doesn't encourage people then to walk or use some kind of a shuttle service. So, I think some of our zoning laws and some of the things that we do as a community, I think should probably start to shift, especially in Greenville. I think Charlotte, Atlanta, maybe even Nashville, the cities that have started to get some of these things right. But I think in Greenville, maybe Charleston, I think we should start shifting more towards better density and being smarter about the developments we have and understanding the people that live here, and who's coming in and out of our community.

Dykes: You've raised one final question. I'm gonna put each of you on the spot. If you had to place a bet, North Carolina and Georgia or South Carolina, who has the strongest commercial trajectory over the next decade?

Woodward: Mine is a simple sort of like, "buy-low," I mean, relatively between those three, I think South Carolina is still sort of the least developed with the most population growth, and therefore I would just sort of bet that they have the most room to grow. Yeah, that's a 10-year bet, probably not a two-year bet. But, I think South Carolina generally, if done right, invested right, really could be a meaningful upside return for most commercial asset classes over the next decade.

Young: I think all three will do well over the next decade. Personally, I think the bigger cities in those three states, like Atlanta, Savannah, Greenville, Charleston, Columbia, Charlotte, Raleigh, they will continue to do very well because of a lot of things we've talked about today. I continue to think the rural areas in all three states are going to continue to struggle until the big city closest to them envelops them. We're seeing that even in the Upstate. As good as the Upstate is, several of our counties in the Upstate are dwindling in population. … I don't know if dying is the right word, but they're dwindling. They desperately need Greenville to envelop them.

Williams: Should I say the word "data center"? I think it may depend who is hosting the data centers, potentially, because the amount of suppliers, the amount of things that follow the data center, from a commercial side of things, and the growth that would happen there for the communities, not to mention the tax revenue that will be brought into those communities, may be the best suited. So, I don't know what the answer is. We'll have to find out. I'm gonna say South Carolina because that's where I live.

Dykes: I'd like to thank each one of the panelists today. I'm grateful to each of you for participating.