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Multifamily Deals in Our Backyard

Multifamily Deals in Our Backyard
The  hunt for multifamily properties isn't just for institutional investors looking for assets on the coasts. Deep in the so-called secondary markets, such as, say, the Carolinas, regional players are hard at work looking for the right deals. (They've released the deal-sniffing hounds from their slumber.)
 
John Scott Trotter
Charlotte-based Blue Heron Capital partner John Scott Trotter, whose firm seeks out stabilized multifamily properties in the Carolinas and Virginia, tells us supply is slowly ticking up, but not nearly as fast in previous economic cycles. In other words, multifamily is going to continue to be a prized catch,  especially with homeownership rates stuck at their lowest in rate in 15 years.
 
Pine Winds
Blue Heron Capital recently ponied up $13.8M for the 216-unit Pine Winds in Raleigh. Other properties that the company purchased include the 110-unit Country Club Apartments in Mooresville and Lake Shore Village in Columbia, SC. "We continue to see opportunities like Pine Winds in the Carolinas, but asking prices have gone up as properties continue to perform better and interest rates have held at historic lows," John Scott  says. But he thinks the game's worth the candle, and the firm will continue to pursue other properties.
 
Reznick (Office) MCHAR
NC flag
According to a new report by TD Economics (part of TD Bank Group), favorable demographics and years of underinvestment have primed the South Atlantic states for sustained demand for multifamily. Along with Georgia and Florida, North Carolina will be in the  top-tier of states in the region in terms of household formation in the coming years. TD economist Alister Bentley, who wrote the report, calculates that North Carolina is going to see an increase in demand for multifamily housing of 1% each year  between 2012 and '16. Doesn't sound so impressive? Demand in New York and New Jersey both will be up only 0.1% each of those same years.
The Vue
You can do your homework, pound the pavement, and network all you want, but there are quicker ways to acquire a multifamily property in Charlotte. Such as show up  at the Mecklenburg County courthouse on June 12 and have a go at buying the Vue—or at least the unsold units in that  failed condo—which will be on the block that day. But bring some deep pockets. Any buyer's going to have to outbid NY-based Northwood Investors, which bought the debt on the Vue for $100M when the original developers couldn't keep current with it.