Raleigh February 2022 – Key Take Aways
• Eric Vernon of Wyrick Robbins announced the RPN Networkwide Conference on May 10-11, 2022, at NC State University in Raleigh with a focus on the Southeast US; NC State’s Tom White added the event will be at the Institute for Emerging Issues and include a tour of Fitts-Woolard Hall and optional Lonnie Poole tee times.
• TradeMark Properties’ Vijay Shah has been active with retail, including outparcel pad users, and working with QSR restaurants, like Slim Chicken, Culvers and Sonic. Supply is difficult to find. Rents same, with property owners more willing to play with TI number than rent. Sandra Simpson has a 100-acre Fuquay Varina land deal at Old Stage Rd, Hwy 42, residential with small retail use.
• John Daly with Marcus & Millichap reports multi-family market remains strong but challenged by available inventory. With interest rates moving up, low cap rates could level off or go up. Envisions product demand continuing for 12 months, with 5-6% rent growth. Rent growth frothy because shortage of new product coming online.
• Wyrick Robins’ Anna McLamb reported she saw her first closing property transferred with a NFT, which represented membership interest of all members of LLC.
• Scott Hadley of Lee & Associates said land is hard to find and entitle, with some towns not supporting deals at the last minute. Scott and Hunter Stewart sold 500 acres near Raleigh Executive Jetport in Sanford; nearby 200 acres listed already has 4 offers for industrial, life sciences use.
• Little’s Sharon Crawford sees repurposing of existing inventory from Admiral Capital, who’s upgrading 6 buildings on Imperial’s campus, and Drawbridge Realty, updating the IQVIA tower. She’s also working on Duke Vaccines Institute at Parmer RTP and conference centers. Jerry Guerrier’s seeing strong activity in public works sector, making staffing an issue.
• Andrew Moriarty of Bohler said entitlements are difficult due to new staff; he also sees water and sewer issues. Johnson County only focusing on commercial on Hwy 42 corridor.
• First Horizon’s Spencer Wilson said rates are going up: the 10-year treasury is 192, 7-year is right behind it, and 5-year is 185. This may put damper on transaction activity.
• Matt Martin with the Federal Reserve Bank of Richmond added the January CPI came in above expectations at 7.5% YoY; core is at 6%. Markets now priced in 5 rate increases, 125 basis points of increase. Economists thinks this is the peak; Matt is more optimistic.
• Wells Fargo’s David Koehler reported in Q4, he was pricing fixed-rate, 7–10-year loans in 2.85 range; now a similar transaction is at 3.40%, probably 3.5% and up going forward. Seen pick-up on acquisition side for local-based investors, specifically retail, flex industrial and self-storage. Noted Raleigh MSA has 30% of what it needs for last-mile distribution. Anticipates 5+% inflation in 2-3 years due to more people leaving workforce (retirement) and less influx.
• Tom White of NC State shared 2 recent wins, Toyota at the Greensboro-Randolph megasite and Boom Supersonic at the PTI Airport. We lost 2 projects, Intel and Micron.
• Terracon’s Joe Starr noted Cherry Point is being overhauled to bring in F35; it needs to find offsite locations for FRCE, including 100-500K facilities, bringing 100’s of jobs. Joe also noted the EPA has more grant funds to clean-up brownfields; communities can secure $500-$600K for environmental due diligence. Terracon helps communities with the grant.
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