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Real Estate Bisnow
January 9, 2013 

Mad Hunt For
Carolina Apartments

This year will bring even more apartment buyers to our area. The fundamentals are right, and compared to East Coast markets with similar dynamics, prices are too. (Not that we need to compare ourselves to other cities to feel good. But have you seen what New Jersey is wearing?)

1) According to ARA principal Blake Okland, in the company’s Charlotte office, prices are up, but not to the stratosphere. That’s partly because the Carolinas have always been a less expensive market than the likes of Miami, Atlanta, or DC. Rents will continue to increase this year, but they can only rise so fast. “There’s no reason for rents to reverse their upward trajectory, but we may not maintain double-digit effective rent increases,” he says.

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2) Multifamily supply is also up, but there’s no concern yet about overbuilding, because both Charlotte and Raleigh are creating more jobs than the national average. The single-family housing market has recovered somewhat, but not to where it will dent demand for apartments. “The mindset has changed,” Blake notes. Even renters who can afford to buy aren’t jumping into the single-family home ownership market the way they would have 10 years ago. (Is it fair to assume Netflix is the real reason for this ethos?)
3) Among investors looking for multifamily properties, Charlotte may re-emerge in the near-term with a slight edge over Raleigh, Blake says. The banking industry has made a better-than-expected recovery, and Charlotte has also managed to diversify its economy. Also, investors still see a lot of value buys available. Pictured: the 216-unit Bainbridge in the Park in Raleigh. Blake, with colleagues Dean Smith, Sean Wood, and John Heimburger, recently repped the seller.
Investors are also looking for single-family housing in Charlotte, and not just a property here or there. Toronto-based Tricon Capital Group acquired a portfolio of 550 rental single-family homes in greater Charlotte just after the New Year. Such deals are more common nationwide as it becomes clear that there are people who want to live in single-family homes, just not own them. Tricon CEO David Berman explains that the Charlotte area’s population and employment growth will be solid, and that the company will be able to make improvements to the properties and increase rents.

Carolina Chicken Fingers for South Floridians

Who says burgers should get all the fast-food (or even fast-casual) glory? We’re happy to report that the expanding chicken tender specialist PDQ, which began as Tenders in Cornelius, NC, is opening its first location in South Florida, repped by the Ft Lauderdale-based Rotella Group.

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