Demand For Charlotte Apartments Keeping Up With Strong Supply
How many new, Class-A units are too many for the Charlotte market? The speakers at our 2016 Multifamily Surge event on June 23 said the market hasn't reached saturation yet. In fact, that might not be a problem for a number of years.
It's true that there's been a sizable influx of Class-A units into the market, our speakers noted, defining that kind of apartment as one less than 10 years old. By 2018, there will be as many as 46,000 Class-A units in metro Charlotte, by one estimate. That seems like a lot, but the total would be fewer than before the last recession.
Speakers included Cortland Partners director Lou Davis, Synco president Tim Hose, Walker & Dunlop VP Brett McGuire, Rivergate KW Residential president Marcie Williams and Tidwell Group office managing partner Joshua Northcutt, who moderated.
Fortunately for owners and developers, the influx of people into the market is also predicted to continue, so there will be renters for those units. Not only is Charlotte's population still growing, the number of well-paying jobs is increasing as companies expand and relocate here. Some submarkets might see temporary saturation as several projects come online at the same time, but those will be bumps in the road.
Also speaking were Cline Design Associates managing principal Gary Cline, Crescent Communities SVP Ben Collins, Northwood Ravin president David Ravin, Grubb Properties VP-development Rachel Russell and moderator JLL SVP Andrea Howard.
Demand isn't being driven just by Millennials, our speakers also pointed out. Empty nesters among the Baby Boom generation also want apartments in the Charlotte market, and are also willing to pay for Class-A space. Some of the earliest developments during this cycle focused more on younger renters, with a higher proportion of one-bedroom units, but discovered demand from renters "22 to 92," as one speaker put it. Newer developments include a healthy mix of larger units (because Baby Boomers tend to have more stuff).
On the other hand, Millennials and Baby Boomers actually want many of the same things in an apartment. They both want fitness centers, for instance, and they like gathering spaces. They want to be out and be seen, and they want amenities that accommodate their pets. Millennials might not cook as much, but they still want nice kitchens.
The submarkets that will prosper the most for future apartment development, the speakers predict, will be those with walkable urban features and access to transit. The key to the future of SouthPark, for instance, is urban walkability. Mixed-use developments are an essential part of that, and the city is coming around to recognizing that.