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June 4, 2014
Charlotte Submarket Boom
Charlotte-Mecklenburg is poised for more leasing and development, University City Partners exec director Darlene Heater tells us. Job growth is back, driven especially by insurance and energy. (So if you picked up any IOUs at local poker games, start collectin'.)
The growing economy is lifting all Charlotte submarket boats, but some are better positioned than others to enjoy a boom. (As our 4th grade teacher used to say, "You're all wonderful, only some of you are more wonderful than others.") Darlene makes the case for University City: There's active developer interest as a result of the Blue Line Extension, and potential tenants like its access to UNC Charlotte's research assets and talent pipeline, and accessibility through I-85, I-485 and the light rail line.
University City Partners recently released its first Economic Development Report, which detailed that more than 60 construction and renovation projects currently underway, or in the works, in UC's Municipal Service District, and there have been 10 large property sales in the last 12 months. The LYNX Blue Line extension stands out as the major project, but other important deals have been HQ expansions at Electrolux and Rack Room. (Remember all that snow? Good riddance!)
Lincoln Harris is betting on SouthPark, where it closed a parcel on Congress Street for more than $13M last week. The company then started site work there for the first of two towers (which is spec, and the least interesting of the Lord of the Rings movies). South Park has had significantly more demand for office than supply in recent years, because it offers a good balance between places to work and places to live, which not all submarkets do, brokerage-development VP Tracy Dodson tells us. Recently Tracy joined Lincoln Harris from Cushman & Wakefield-Thalhimer and will be part of the leasing team on the new building, as well as other Lincoln Harris properties.
NoDa's getting a lot of attention as a popular arts-entertainment spot, but TriBridge Residential VP-acquisitions Yates Dunaway says that NoDa is also being noticed by larger regional developers and institutional owners. And investors such as Atlanta-based TriBridge, which recently acquired Highland Mills Lofts, a NoDa mixed-use property. Yates is snapped speaking to the most recent meeting YREP Carolinas last month at the Heist Brewery, which happens to be in Highland Mills Lofts.
Good Time to Sell
Investor interest in Charlotte's going to remain strong, HFF senior managing director Barry Brown tells us,because it's one of the fastest-growing regions in the country. That also means that now's a good time to sell properties repositioned from distressed states. Recently Barry and colleagues Jim Batjer and Richard Reid repped the sellers of the 305k SF EpiCentre complex in Uptown (snapped during the DNC, which looks a lot like Mardi Gras from this angle), Vision Ventures and Mount Vernon Asset Management, who did exactly that. They bought the building, which only dates from 2008, out of bankruptcy and stabilized the rent roll to 94% and implemented a highly successful outdoor media program, Barry says. LA-based CIM Group bought it for $130M.
YOU TELL US: A Microunit Revolution?
Tiny apartment units are popping up all over the US, already making waves in cities like San Francisco, Seattle, Vancouver, New York City, Boston, and DC. Developers say they're the perfect abode for Millennials and people who land in cities with a suitcase, laptop, iPhone, and not much else (your dreams don't need much space), and projects being built are getting gobbled up fast. But naysayers foresee a backlash against the small units, arguing the cost to custom-build a livable unit makes it not such an affordable proposition. We'd love to hear what you think: Are microunits the future of multifamily? Click our survey above to tell us your thoughts, and we'll publish results in a future issue. Also, check out our feature on microunits in our National Real Estate issue.
Come to the State of the Market
Want to hear more about Charlotte? Come to Bisnow'sFourth Annual Charlotte State of the Market at the Omni Charlotte on June 17. On hand to offer insight will be MPV's Jim Merrifield (on the right, snapped at a previous State of the Market), as well as Crescent Communities' Benjamin Collins, Aston Properties' George Dewey, Beco South's Chris Epstein, Lord Aeck Sargent's Mark Lange, and SilverCap Partners' Will Stevens. CohnReznick's Cristi Lewis is moderating. Sign up here.
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