Raleigh July 2021 – Key Take Aways
• TradeMark Properties’ Vijay Shah sees strong SE activity in Charlotte, Columbia and VA, signing 1-2 leases per month for past 4 months. Signed 4K SF Salon Lofts to downtown Durham location. Has Investor looking to purchase $30-$50M multi-family. ICSC Vegas conference is in December.
• Little’s Sharon Crawford works with developers looking at sites, on 30-40K SF Life Sciences interiors, and work with Drawbridge Realty. For lab space, looking at $120 – $175/SF for conversion.
• Lee & Associates’ Marlene Spritzer said to add $100/SF for cold, dark shell. Rents in low- to mid-30’s, triple-net, with TI packages varying.
• Terracon’s Joe Starr and Little’s Marcus Acheson discussed new construction technologies, like mass timber. Mass timber is prefabricated, modular product, creating a sustainable, lighter building.
• Joe Starr reported national chains continue to expand. Seeing older downtown properties being targeted for redevelopment. Terracon seeing uptick in logistics, mission critical and onshore wind.
• Bohler’s Andrew Moriarity noted materials are driving decision making, with structural steel and PVC pipe problematic. Residential, logistics, large box markets are strong, with retail perking up and grocery growth good. Staffing continues to be difficult.
• Wyrick Robbins’ Anna McLamb reports two new RE attorneys, Stephen Perry and Mike Baglino.
• Wells Fargo’s Rich Walters said David Koehler was promoted to Relationship Manager in the Commercial Banking Group.
• First Horizon’s Beth Harrelson sees an emergence of debt funds, privately pooled money to place on CRE, which previously targeted turnaround properties, but now pursue stabilized properties. 10-year treasury has dropped; multi-family rates are under 3%, with other products at 3-3.5%.
• AdVenture Development’s Sam O’Brien reported construction on 135K SF flex/industrial is underway and available in Johnston County, the first in 1.5M industrial space. Hosting a groundbreaking in 2-3 weeks and concrete tilt-up party in October.
• Professor Stuart Brodsky teaches Sustainability at the NYU Schack Institute of Real Estate discussed the topic of Environmental, Social, Governance (ESG) criteria. This is not a new concept; companies are at risk if they violate environmental business practices and social norms.
• Brodsky noted there is $17 trillion of professional managed assets stating they will manage through an ESG lens, which is 33% of all managed assets and a 42% increase since 2018. He sees an intersection of growth, ESG and the real estate world. Hedge funds are hiring ESG professionals to manage RE investment units, and debt rating agencies have established ESG criteria.
• Brodsky advises to re-position and promote existing practices in line with ESG; review companies’ ESG policies you aspire to mimic; create internal taskforce to drive ESG initiatives; and start with the environmental focus, which offers the most material returns, using free governmental programs.
• Eric Vernon mentioned the Triangle start-up BioMASON creates an alternative building technology.
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