Charlotte July 2022 – Key Take Aways
- Brian Schoeck – Johnston Allison Hord – Brian confirms multi-family is still going strong, with Real Estate and Building Industry Coalition (REBIC) in support of higher density product and diversity. City Council is pushing for housing opportunity vouchers to be accepted by landlords to address lower income housing shortages. He continues with the new Chick-Fil-A drive-thru proposed in Grier Heights that is ideally meant to help alleviate the Randolph Road location. The zoning committee reviewed and deferred the rezoning vote, on the basis that the language of the proposal does not promote UDO policy. UDO policy promotes sustainable and environmentally friendly development practices and land-use planning that encourages more walking and biking.
- Mark Fletcher – Bohler Engineering – Mark notes a change in the long-hold sites for the Charlotte/Statesville areas. The developers are attempting to flip 1/3 of the 300–400-acre sites because of the lack of builds they sought. Fortunately, the locations are conveniently located off I-77 and are ideal for cold storage and data centers. Demand for both is high and will only continue to grow. He sees cold storage at massive 400,000-750,000 SF and also at smaller and closer SF in the urban industrial sector. He claims multi-family will remain steady due to strong, affordable housing. NC has gained popularity due to its many opportunities, its politics, cost of living and talent. The main problem is infrastructure for rural areas which is 2-3 years behind. The problem is getting addressed now.
- Jane Barkley – Investors Title Company – Jane states residential is down by 17% due to buyer pull-out. However, commercial is booming with more titles written in 2022 than any other year in the history of the company. 65% of that are purchases. She heeds larger, commercial transactions will be trickier and more complex to underwrite since there will be much more people at the table to make happy.
- Russell Hughes – Hughes Realty Advisors – Russell has a current listing in Lowell, NC. It is a smaller, industrial space. He is curious to see if people shift from million SF projects to smaller infill projects, and what that would look like on the industrial side, since it would alleviate the headaches associated with the lack of large industrial sites that are ready to go and don’t have environmental hair on it. He notes the sublease side is expanding rapidly in the suburban market, citing a space his client leased two years ago yet chose to release on the sublease market only last week.
- Matthew Martin – Federal Reserve Bank of Richmond – Matthew starts by sharing that normal growth has returned on the business side. Labor is easier to find and supply chains are marginally better. However, interest-sensitive categories, such as housing, have a significant change in expectation. Cash buyers have stopped buying themselves and are choosing to wait it out instead. He claims interest rates aren’t in restricted territory, and whether they’re actually causing the economy to slow down has yet to come. Treasuries and mortgage-backed securities are no longer being bought, and instead, are rolling off balance sheets at a maximum level. He advises to wait for the data set to play out instead of depending on forecasts since muscle memory on inflation is not fresh.
- Joe Kinsey – CoStar Group – Joe states contracts are falling through. Interest rate changes have influenced what land developers and brokers build. He’s seeing more tenants take a pause as well. Office side softening with 91% of the sublet space vacant. Multi-family seems to have calmed down and stabilized. Joe describes retail as strong. The only major problem companies are facing is finding the right land to develop or building to rehab near their ideal demographic. Smaller boutiques and strip centers are quick to lease.
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