6/10/21 Raleigh Mastermind Group Meeting

Raleigh June 2021 – Key Take Aways

 Guest Amanda Hoyle, Director of Land Acquisition for CA-based Tri Pointe Homes, said Tri Pointe builds single-family and town homes and will partner with multi-family or mixed-use developers.
 Guest Si Statham with Triangle Risk Advisors focuses on Raleigh clients’ total risk management.
 Guest Speaker Steve Wilson of Newmark reviewed the impact of COVID on retail, multi-family, office and industrial sectors. Raleigh-Durham is #5 for suburban office nationally for Q1 2021. Urban/suburban office was down 17% for 2020, but in Q1 2021, it’s above pre-COVID rates.
 For retail, national tenants are showing strong recovery; however, retail centers with “Mom and Pop” shops saw greatest negative impact. Retail activity declined in Q1 2021.
 Raleigh-Durham had a 95.5% collection rate for multi-family; Raleigh was #2 for total returns for multi-family, only behind Phoenix. Raleigh-Durham had .5% rent growth in recent period.
 Industrial vacancy rates decreased while market price per SF increased, with Raleigh-Durham having the 6th greatest rent growth. Inventory is up 4%; reduction of under construction is 34.5%; absorption increased by 216%; vacancy rate reduced to 2.8%; rents increased by 4.8%; and market sales price increased by 9.7%.
 Raleigh-Durham is ranked 4th in the Life Science properties market, with $100-$150/SF in tenant improvement announcements, an $1B investment volume in 2020, and an average price of $316/SF.
 Marlene Spritzer, Lee & Associates, commented on the biomanufacturing in Lee, Moore and Johnson Counties. This Triangle is the current #1 vaccine center. Lab rates are going up 10%, but still less than Boston or west coast.
 Kevin Scanlon, Lee-Moore Capital, said MOSAIC, a 750K SF mixed use center in Pittsboro, NC, will start new buildings. Current pricing for a 165-unit multifamily and 65K mixed use products are both 10% higher than in Jan 2021. UNC Health opens June 15; MOSAIC will have programming in October. LMCC’s industrial is hot, with CCEP in Sanford and Triangle Innovation Point (TIP) West, which is targeting 100K-300K SF users. Also involved in Siler City industrial land.
 Avi Grewal, SINGH Development, is opening its first multi-family in Cary; they have leases signed and raised rates. Avi had an in-person interview w/Town of Morrisville for a RFP project, a Morrisville Town Center off Town Center Drive, and his first in-person City Council meeting in Raleigh for a Lead Mine Rd Assisted Living project.
 John Daly, Marcus & Millichap, said multi-family remains strong, with off-market deals being done. He noted some uncertainty in the market due to potential impact of 1031’s tax legislation.