Should I invest in Mobile, AL
Member since 2019 · 16 posts · 3 votes
Any insights on economic development, population movement and jobs diversity for Mobile, AL will be much appreciated.
I have already used city-data for these markets, but the information is dated. Looking for current trends.
Also I know there is a flood situation in Mobile County, so which areas should I avoid.
Thank you
I’m actually in the Commercial Syndication space in real estate and have just recently wrote up a Detailed Market Analysis of Mobile, AL to better help my passive investors get a sense of what market they are getting into when investing with me and I’ll attach it here for you!
Top 5 Key Assets -
Detailed Market Analysis of Mobile, AL
1. Third Largest City in Alabama with an unemployment rate of 3.5%. (Compared with 3.9% for the U.S.)
2. Second largest metro area in Alabama with a population of over 500,000 when including Baldwin County, of which over 40,000 individuals commute from for work.
3. 7.5 miles from downtown is The University of South Alabama which employs more than five thousand people, and has over 15,000 students. With only 2,200 residing on campus, this creates a large, permanent class of renters in the area.
4. Only 45 minutes from the #1 best beach in Florida, Pensacola Beach.
5. Mobile is ranked 7th in the U.S. for least stressful city, and 25th as the best city in the U.S. for Millennials to live.
Employment Information -
- The top providing employers of Mobile are The University of South Alabama, Infirmary Health Systems, and Austal, who combined provide over 14,000 jobs.
- The Mobile Aeroplex brings in another big economic industry which is Aviation. The Mobile Aeroplex covers 1,650 acres, and is home to more than seventy companies bringing in almost 4,000 jobs.
- Mobile has the twelfth largest port in the U.S. which provides ample different job opportunities such as the Coast Guard, which has a base housed right on the bay, and provides over 1,000 jobs. The Coast Guard doesn’t normally keep their troops stationed in one area longer than 3-4 years which creates some demand for rentals in the area. Nearly 10% of U.S. Oil Refining Capacity transfers through the Port of Mobile, which ranks the port as 10th in the U.S. for imports and total foreign trade, with a $10 billion impact on the local economy.
- Walmart has just opened up a brand new distribution center consisting of 2.6 million square feet, and provides more than 750 new jobs.
Economic Information -
The City of Mobile has seen extensive revitalization and tremendous economic growth:
Business/Corporate Sector
- Construction of a new Airbus jet assembly line at the Mobile Aeroplex at Brookley should move forward rapidly during the coming year. In November, the company announced A220 aircraft assembly is planned to start in 2019, using a combination of the existing and expanded Airbus facilities at Brookley. Enabling the first A220 delivery from Mobile to take place in 2020.
- In 2020 the Navy plans to award a contract for 20 frigates called the FFG(X) class. Five designs are under consideration, including two that would be built on the Gulf Coast in Mobile.
Austal's candidate is closely based on the aluminum trimaran Littoral Combat Ship it builds on the Mobile waterfront. Advancement of the Navy's FFG(X) frigate program design selection process has huge implications for Austal and huge company expansion providing more jobs.
- In 2018, a $127 million Walmart distribution center was built West of Mobile. It draws heavily on the Port of Mobile, with executives there estimating that it will be bringing about 50,000 TEUs (Twenty-foot Equivalent Units) of containers traffic now that it’s operational. All by itself, that represents about 18% growth from 2016's record-setting volume of container traffic.
Retail Sector
- The opening of the, Meridian at the Port, apartment complex will bring hundreds of new residential units downtown. Scheduled to open in the summer of 2019, the $51 million, five- story, 267-unit development will be a large and distinctive presence on the east side of Water Street.
- In the past five years, Mobile has experienced a 33% increase in manufacturing jobs compared with about 8% nationally.
- McGowin Park developed a huge retail space in 2015 which consists of: 199,500- square-foot retail shopping center containing a future expansion area, five restaurant "pads" and 4.5 acres of outparcel development, and the west development consists of a 148,000-square-foot anchor store with an associated gas station, an 89,600-square-foot shopping center and 7.41 acres of outparcel area. Stores that have since moved-in to the space include Costco, HomeGoods, Petco, Hobby Lobby, Dick’s Sporting Goods, Field and Stream, Best Buy, and Ashley Furniture Home Store.
Transit Oriented/Mix-Use Developments
- Mobile Bay Bridge Project is said to begin in 2020, costing $2.1 billion and consisting of a six-lane cable stay bridge over the Mobile Bay connecting Mobile and Eastern Shore. The completed expansion is expected to reduce travel time from Mobile to the Eastern Shore, increasing reliability and accessibility to jobs, educational facilities, medical services and recreational activities. The project is anticipated to facilitate access to/from major industries and freight destinations in Mobile and provide hazardous material vehicles a direct route away from the downtown business district.
- The overall market has increased by 8.4% this year with the median apartment rent at $950. The ROI(Return on Investment) in Mobile has been proven to be better than anywhere else in the state with an average ROI at 4% higher than the rest of the state.
- The RSA Battle House Tower in downtown Mobile was constructed in 2007 costing $220 million, with 35 floors, and services office, hotel, and restaurant space.
Education Information -
Mobile is home to the University of South Alabama, Spring Hill College, The University of Mobile, Fortis, and Remington College. Which combined has over 20,000 students. The influx of students helps the student housing and rental market, and also builds on the employment talent pool.
Miscellaneous Information -
- Only 55% of residents own their home with no signs of any major increase in home purchases in the near future, leaving the rental market in significant demand.
- 74% of residents were born in Alabama, 37% of which are all at a higher level of education, with an associates degree or higher. Meaning the quality and retention level of renters is high and thereby increases demand for new rentals with the increasing population growth of 1% per year.
- Mobile is home of Mardi Gras which brings in a whopping quarter-of-a-billion dollars in revenue and sends hundreds of thousands of tourists to the city each year.
- Mobile has the only cancer research center along the upper gulf coast providing a wide array of medical jobs to the area.
- Mobile’s low cost of living and doing business provides a desired aspect to renters that can’t be achieved elsewhere, which provides a steady influx of renters thereby decreasing vacancy rates. Alabama ranks 8th in the country for low cost of living.
- No one particular industry takes over more than 18% of the job pool leaving plenty of diversification for a safer market to invest in.
I’m actually in the Commercial Syndication space in real estate and have just recently wrote up a Detailed Market Analysis of Mobile, AL to better help my passive investors get a sense of what market they are getting into when investing with me and I’ll attach it here for you!
Top 5 Key Assets -
Detailed Market Analysis of Mobile, AL
1. Third Largest City in Alabama with an unemployment rate of 3.5%. (Compared with 3.9% for the U.S.)
2. Second largest metro area in Alabama with a population of over 500,000 when including Baldwin County, of which over 40,000 individuals commute from for work.
3. 7.5 miles from downtown is The University of South Alabama which employs more than five thousand people, and has over 15,000 students. With only 2,200 residing on campus, this creates a large, permanent class of renters in the area.
4. Only 45 minutes from the #1 best beach in Florida, Pensacola Beach.
5. Mobile is ranked 7th in the U.S. for least stressful city, and 25th as the best city in the U.S. for Millennials to live.
Employment Information -
- The top providing employers of Mobile are The University of South Alabama, Infirmary Health Systems, and Austal, who combined provide over 14,000 jobs.
- The Mobile Aeroplex brings in another big economic industry which is Aviation. The Mobile Aeroplex covers 1,650 acres, and is home to more than seventy companies bringing in almost 4,000 jobs.
- Mobile has the twelfth largest port in the U.S. which provides ample different job opportunities such as the Coast Guard, which has a base housed right on the bay, and provides over 1,000 jobs. The Coast Guard doesn’t normally keep their troops stationed in one area longer than 3-4 years which creates some demand for rentals in the area. Nearly 10% of U.S. Oil Refining Capacity transfers through the Port of Mobile, which ranks the port as 10th in the U.S. for imports and total foreign trade, with a $10 billion impact on the local economy.
- Walmart has just opened up a brand new distribution center consisting of 2.6 million square feet, and provides more than 750 new jobs.
Economic Information -
The City of Mobile has seen extensive revitalization and tremendous economic growth:
Business/Corporate Sector
- Construction of a new Airbus jet assembly line at the Mobile Aeroplex at Brookley should move forward rapidly during the coming year. In November, the company announced A220 aircraft assembly is planned to start in 2019, using a combination of the existing and expanded Airbus facilities at Brookley. Enabling the first A220 delivery from Mobile to take place in 2020.
- In 2020 the Navy plans to award a contract for 20 frigates called the FFG(X) class. Five designs are under consideration, including two that would be built on the Gulf Coast in Mobile.
Austal's candidate is closely based on the aluminum trimaran Littoral Combat Ship it builds on the Mobile waterfront. Advancement of the Navy's FFG(X) frigate program design selection process has huge implications for Austal and huge company expansion providing more jobs.
- In 2018, a $127 million Walmart distribution center was built West of Mobile. It draws heavily on the Port of Mobile, with executives there estimating that it will be bringing about 50,000 TEUs (Twenty-foot Equivalent Units) of containers traffic now that it’s operational. All by itself, that represents about 18% growth from 2016's record-setting volume of container traffic.
Retail Sector
- The opening of the, Meridian at the Port, apartment complex will bring hundreds of new residential units downtown. Scheduled to open in the summer of 2019, the $51 million, five- story, 267-unit development will be a large and distinctive presence on the east side of Water Street.
- In the past five years, Mobile has experienced a 33% increase in manufacturing jobs compared with about 8% nationally.
- McGowin Park developed a huge retail space in 2015 which consists of: 199,500- square-foot retail shopping center containing a future expansion area, five restaurant "pads" and 4.5 acres of outparcel development, and the west development consists of a 148,000-square-foot anchor store with an associated gas station, an 89,600-square-foot shopping center and 7.41 acres of outparcel area. Stores that have since moved-in to the space include Costco, HomeGoods, Petco, Hobby Lobby, Dick’s Sporting Goods, Field and Stream, Best Buy, and Ashley Furniture Home Store.
Transit Oriented/Mix-Use Developments
- Mobile Bay Bridge Project is said to begin in 2020, costing $2.1 billion and consisting of a six-lane cable stay bridge over the Mobile Bay connecting Mobile and Eastern Shore. The completed expansion is expected to reduce travel time from Mobile to the Eastern Shore, increasing reliability and accessibility to jobs, educational facilities, medical services and recreational activities. The project is anticipated to facilitate access to/from major industries and freight destinations in Mobile and provide hazardous material vehicles a direct route away from the downtown business district.
- The overall market has increased by 8.4% this year with the median apartment rent at $950. The ROI(Return on Investment) in Mobile has been proven to be better than anywhere else in the state with an average ROI at 4% higher than the rest of the state.
- The RSA Battle House Tower in downtown Mobile was constructed in 2007 costing $220 million, with 35 floors, and services office, hotel, and restaurant space.
Education Information -
Mobile is home to the University of South Alabama, Spring Hill College, The University of Mobile, Fortis, and Remington College. Which combined has over 20,000 students. The influx of students helps the student housing and rental market, and also builds on the employment talent pool.
Miscellaneous Information -
- Only 55% of residents own their home with no signs of any major increase in home purchases in the near future, leaving the rental market in significant demand.
- 74% of residents were born in Alabama, 37% of which are all at a higher level of education, with an associates degree or higher. Meaning the quality and retention level of renters is high and thereby increases demand for new rentals with the increasing population growth of 1% per year.
- Mobile is home of Mardi Gras which brings in a whopping quarter-of-a-billion dollars in revenue and sends hundreds of thousands of tourists to the city each year.
- Mobile has the only cancer research center along the upper gulf coast providing a wide array of medical jobs to the area.
- Mobile’s low cost of living and doing business provides a desired aspect to renters that can’t be achieved elsewhere, which provides a steady influx of renters thereby decreasing vacancy rates. Alabama ranks 8th in the country for low cost of living.
- No one particular industry takes over more than 18% of the job pool leaving plenty of diversification for a safer market to invest in.
Joshua, awesome and thorough analysis! I moved to Mobile about a year and a half ago from New Orleans to follow work (I work at Austal as an engineer) and just recently got bit by the real estate investment bug. Trying to learn all I can.
Arnab, from what I can see, it seems like the rental game on the Mobile side of the bay is trending fairly laterally but certainly not dipping. I currently rent in Mid Town and enjoy the area. However, houses in Mobile aren't particularly expensive so anyone that plans on staying in the area for a while tends to purchase a house instead of rent. That's at least what I've seen from the people I know and talk with. I personally plan on purchasing a home within a year and start to house hack (depending on the FFG(X) contract that Joshua spoke about above). There is also a revitalization of the downtown area that seems to be bringing in young renters.
On the other side of the bay is Baldwin County. Baldwin County is considered the "safer side of the bay" by many and a consistent population growth on that side of the bay backs up that mentality. With that, the home prices are considerably higher than compared to Mobile County. In my opinion, Baldwin County is probably your best bet if you are looking for long term renters instead of yearly turnover. I don't really have any numbers to back it up but it does seem like the Baldwin County population is increasing more rapidly than Mobile County.
Speaking to the flooding situation, I've only seen the streets flood a couple of times and it drains fairly quickly. I don't know of any areas that homes are affected by flooding often. It may be that coming from New Orleans, where I waded through waist deep water about 10 times in two years to get home, it doesn't seem to be bad in any area that isn't directly on the water. I currently live by rail road tracks and the ground level is fairly built up near my house. The yard does not stay wet even after a hard down pour.
Thank you Joshua and Austin for your insights. I appreciate it.
@Arnab Sinha I would suggest talking with actual long term rental owners from Mobile. I just sold a condo in Mobile (Midtown area) that I owned for 12 years and rented out for the last 10 years. I lost +$35k on the sale (I did purchase it at the height of the housing bubble, i.e. 2007) and rents were stagnate for almost the entire time I owned the property (I was only able to raise the rent by $50 over 10 years ($550 in 2009 to $600 in 2019). I also had very long vacancies during unit turnover (2-3 months)
I think you will find that there is very little incentive to rent as there are plenty of nice apartment complexes that have amenities that a SFR or Duplex can't offer and the cheap house prices mean someone can buy a house instead of renting.
Even with cheap housing prices, I would be concerned that you can't even get 1% of the purchase price in monthly rent.
I personally like the town of Mobile, but would not invest in it.
Thanks Mike. I appreciate your input and experience there.
Thank you Joshua and Austin for your insights. I appreciate it.