8/13/20 Raleigh Mastermind Group Meeting

Key Take-Aways
• There have been 8 life science announcements in the past 11 months within in a 50-mile radius of the Triangle, with some in Research Triangle Park.
• NC Biotechnology Center, NC Dept. of Commerce and local universities (NC State, Duke, UNC-CH) are working in partnership to get a COVID vaccine made in NC.
• The NC Dept. of Commerce selected NC State to help with an offshore wind plant and hope to make apparatus for wind plant in eastern and rural NC.
• Lending environment is still conservative, cost of capital is higher, and spreads are compressed.
• CE Group, LMCC work on Triangle Innovation Point, breaking the Moncure megasite into parcels for 100-300,000 sq. ft. users; trying to duplicate Sanford’s public/private partnership in Central Carolina Enterprise Park. CCEP’s 2nd 117K sq. ft. spec building broke ground, will deliver Q1 2021. CCEP build-to-suit starts Sept 2020.
• NCDOT is finishing existing projects and pushing out other project 1-2 years.
• Whiting-Turner’s backlog is down, has larger clients slowing or stopping projects, sees small REITs struggle, and sees workforce/productivity as an issue, but no layoffs.
• For Eastfield Crossing in Selma, AdVenture Development is preparing site plan for 135K sq. ft. spec building in business park and has 7 LOIs progressing to leases, but no interest in food hall or hotel.
• MOSAIC has UNC Urgent Care and 1 other building underway, totaling 15K sq. ft. Will have 4 more buildings under construction by EOY. MOSAIC hotel developer of Hampton Inn is bullish.
• Hotel industry occupancy continues to lag. Multi-family remains active amid concern whether tenants can make payments. West coast/NE investor interest continues.
• Many restaurant deals have been lost over past 3 months; clients are looking for second-generation vs. first-generation locations. Office subleases have increased; terms have decreased to 1-2 years.
• SINGH Development plans to go vertical with its 212-unit project in Cary in mid-October.
• Unemployment peaked at 14.7% in April, down to 10.2% in July. GDP was down 9.5% in Q1 and Q2. The forecast for GDP Q4 2022 is it will be 4% lower than if there was no COVID. The year 2022 will end with unemployment close to 5%. Housing sales have rebounded.
• Unemployment claims are elevated, but employment is rebounding. NC’s industry structure helps. Larger NC metros’ unemployment rates are higher than state’s rate. Current unknowns include the impact of schools’ opening, possibility of additional fiscal stimulus, the election, consumer behavior and the availability of a vaccine.