Raleigh December 2022 Key Take Aways
• Wells Fargo’s David Koehler reported operating companies expect revenue drops; distributor and manufacturers make efforts to reduce inventory. In RE market, David sees softening of new product. Economists expect a small recession in 2023. NC benefits from continued relocation across tech and life sciences sectors.
• Matt Martin of the Federal Reserve Bank of Richmond said the open market committee will provide an update on their forecast in Dec. Meeting. Core inflation ended at 4.5% in Sept forecast; the last reading was 5%. Labor market is softening. Goods price inflation is down; services inflation is up.
• Beth Harrelson of First Horizon said banks pulled back significantly in second half of year. First Horizon should be back in the market in January. Life insurance companies are closing loans in their pipeline and reviewing 2023 production goals. Ten-year treasury has lowered in past month. All-in rates are 5.5% to 6%.
• First Horizon’s Spencer Wilson said the yield curve is problematic. It’s hard to borrow below 6% unless it’s multi-family. Shopping center has stayed robust; office is done; and industrial and MF still move forward. Pricing is good; cap rates haven’t changed.
• Chris Schultz of CoStar Group said CoStar has integrated CMBS loans into its platforms.
• CoStar’s Nick Leverett reported 25 – 40% declines in office values last year. For multi-family, YOY rent growth looks good, but daily rates are declining. He also sees this trend nationally.
• Lee-Moore Capital’s Kevin Scanlon has seen hotel distributions return for newer, downtown product. Self-storage occupancy and rates have held strong. MOSAIC will open The Guild, 165-unit apartment, in Feb 2023. Work has started on 312-unit garden-style apartment in Northwood Landing, in center anchored by Lowes Foods. Industrial is good; he has LOI for 117 spec building in Sanford and is investing money in Triangle Innovation Point (TIP) West.
• Jeff Benson of Investors Title said there’s a sharp decline in number of orders of title on residential side and in commercial escrow deposits on the commercial side.
• Zebulon Town Manager Joe Moore said Zebulon is growing and diversifying; he said good customer service and clear applications are essential to keep speed to market efficient.
• Wake Forest Mayor Vivian Jones said her team strives to provide good service to developers; their board works easily with planning staff and developers. Clear process is essential.
• Zebulon Mayor Glenn York said his challenge is finding a happy medium between maintaining historical persona of town while embracing growth.
• NC State’s Tom White shared Believer Meats’ job announcement of 100 jobs with $60K average salary and $123M capital investment in Wilson County. He also visited the new Pratt-Whitney plant, bringing 800 jobs to western NC.
• EDPNC’s Chris Chung said EDPNC is a nonprofit who serves state in Business Recruitment, Existing Industry Support, Export Assistance, Small Business Advisory and Tourism Promotion.
• NC has had 450 corporate locations and expansions, 70K+ new jobs, and $34B new capital investment since Jan 1 2022, including Apple, Toyota, Boom Supersonic, Pratt & Whitney, Fujifilm, VinFast, and Wolfspeed. Pipeline activity remains strong with 260 current projects.
• EDPNC is often first point of contacts for industrial deals: deals come with RE-specific, labor market, and transportation criteria. EDPNC recommendations viable locations.
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