Raleigh December 2021 – Key Take Aways
- Bohler’s Andrew Moriarity said ULI Conference economist warned interest rates would skyrocket next year, with inflation a concern.
- First Horizon’s Spencer Wilson noted the 10-year Treasury has been fluctuating, which is challenging, and possible movement into a higher rate environment.
- Rich Walters of Wells Fargo also noted inflation and the GDP are projected to go up 4%, so tune into current economic forecasts.
- Office activity was a hot topic. Spencer Wilson with First Horizon said office market transactions have been active, with Palisades, Regency trading high with new capital to the market. Lee & Associate’s Hunter Stewart saw activity in Class B Office acquisitions, possibly because of Class A construction costs. Office currently has a 13% vacancy rate, with 2M SF of sublease.
- Little’s Sharon Crawford said there’s 7M SF of life sciences under construction, with 7M SF in the pipeline; Marcus Acheson said spec labs are being built.
- Water and sewer were top of mind. CE Group’s Mark Ashness said there’s sewer limitations in many Triangle locations: some municipalities taking action, like Harnett and Johnston Counties, and some not so much. Scott Hadley of Lee & Associates warned members if pursuing land or industrial parks, review sewer allocations and if community is funded to improve. Lee Moore’s Kirk Bradley noted MOSAIC must add filtration in homes due to Pittsboro’s water quality.
- Economic development was celebrated, with the recent $1.3B Toyota battery plant at Greensboro-Randolph Megasite in Liberty. Mark spoke to the growth in Moncure, Chatham, Johnson and Harnett Counties. NC State’s Tom White spoke of Project Thunderbird, a potential $2B investment in aerospace engineering, and Project Autumn, a wafer fabrication possibility.
- Investor Title’s Ryan Wainio encouraged members to be mindful of the calendar if trying to close a deal before EOY. His firm’s busy underwriting, with residential leveling, but commercial strong.
- Members continue to face challenges; Mark warned of municipalities losing staff, resulting in more processing time. Richard Oldham of Sanford Contractors mentioned supply chain issues, talent shortages, and new equipment lead time. Little’s Jerry Guerrier and Marcus echoed the labor shortage issue.
- Sanford Contractors’ Jody Leidolf manages the site and vertical construction for MOSAIC and Northwood Landing.
- Marcus & Millichap’s John Daly said rent growth and low interest rates help the strong multifamily market; many institutional sales are done off market; there’s a shortage of B, C properties.
- Wells Fargo added Todd Phillips, who supports middle market bankers. David Koehler sees long-term RE holders considering sales. Rich noted port traffic has increased 15-20%.
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