Raleigh December 2020 – Key Take Aways

• • At MOSAIC, leasing activity is picking up, and construction is progressing. Chatham and Lee Counties are experiencing high-level industrial recruitment activity, mostly in the life sciences. An exodus of people from urban areas are coming to North Carolina, putting pressure on residential demand.
  • AdVenture Development’s 475-acre OZ project in Selma in Johnston County is progressing, with plans to start main artery Providence Blvd in Jan 2021 and host Jan 22 groundbreaking. Project includes 1.25M sq. ft. industrial, 500K sq. ft. retail, 330-unit multi-family and 230 single-family lots.
  • Urban CBD environment saw drastic drop in market rent year over year in past months; suburban saw increase in market rent. Outside money continues to enter market.
  • Investors Title was doing $5, $10 and $20M commercial deals, but bigger deals are returning.
  • TradeMark Properties saw renewed interest from national brands and franchise concepts in Sept. They’re working with Maple Street, Nestle Toll House Café and have 1-acre for sale in Wake Forest.
  • Convenience, QSRs and fast food are active and can get funding. Vacancy in the industrial market is 3.5%; office is up to 10%, with an increasing number of subleases. Repositioning of assets is occurring; there are very few products that are lab ready or spec.
  • Cost Segregation Studies can be done on land improvements; 1031 final regulations came out to define real property.
• Wells Fargo noted M&A markets are heating up despite pandemic.  The bank is doing alternative reference rates for loans and lines of credit. WF bankers Tucker Andrews and Alpesh Karsalia will join RPN’s January meeting.
• Little is seeing action in adaptive use and working on 200K SF FL student housing project.  Their developer clients are bullish, but financing is not as aggressive. Medical office rolls forward.
• Permits are harder to get, and NC DOT is especially slow.  Terracon received first DOT order in a year.
• NC has the ecosystem for the design, production and distribution of COVID vaccines.