Raleigh February 2023 Key Take Aways
- Anna McLamb of Wyrick Robbins says work is steady on leases, transactions, condo closings and development. She hasn’t seen many loans or retail.
- Sanford Contractors’ Richard Oldham reports continuing supply chain issues; delivery accuracy and turnaround time has been problematic. NCDOT Competition is hot, and large projects (I-540, I-95) use most of their resources.
- Andrew Moriarty with Bohler Engineering says proposal activity remains robust, but spec warehouse has slowed. Experienced employees are still difficult to hire.
- Terracon’s Joe Starr echoes that slowdown depends on industry sector; he sees a shift to federal, healthcare, and solar work.
- Kirk Bradley of Lee-Moore Capital notes materials, supply, labor, and interest rates are challenging, yet we have unprecedented demand in the Triangle region despite a potential recession. The Triangle housing market has a supply and demand imbalance. Kirk says well-located hotels with 7-day per week demand have vastly improved, hotel performance hedges on location, flag, and age.
- Lee-Moore Capital’s Kevin Scanlon says there are potential tax credits in the 2022 Inflation Reduction Act plus programs available for EV charging stations.
- AdVenture Development’s Matt Phillips reports site work started for hotel at Eastfield Crossing at the US 70 and I-95 intersection in Johnson County. Supply chain issues cause construction delays.
- Jeff Benson of Investors Title says the firm had record year in 2022 on commercial side but are now slower in residential and commercial; 1031 exchanges are not at peak but still healthy.
- Olive Architecture’s Andy Lawrence says private commercial retail continues moving forward. He’s received RFPs in eastern NC; he’s working on a Cary hotel and Elizabeth City boutique hotel.
- CoStar’s Nick Leverett is working on the current relationship between jobs and office leasing; people coming into the office remains at 50%. He still sees new office, like Horseshoe at Hub RTP.
- Matt Martin of the Federal Reserve Bank of Richmond says the economy is doing relatively well; slowing is sector dependent. He’s more optimistic about the growth picture than in Nov 2022. Inflation is off-peak and trending lower but may not lower easily. Good labor is difficult to find.
- David Koehler of Wells Fargo says the bank reviews company year-end financials for trends and sees Q4 compression in profit margins. New construction demand has softened based on costs and timing. He sees companies pulling down inventory levels to manage interest rate cycle.
- First Horizon’s Spencer Wilson notes less banks are lending on spec industrial, and it’s impacting the industrial rate.
- Lee & Associates’ Marlene Spritzer says there’s 10M sq. ft. of life sciences space proposed and only 1.5M sq. ft. under construction; she’s uncertain it will be built. There’s 3M sq. ft. of office sublease in the Triangle; she questions what will happen in sector due to sublease plus direct vacancy space.
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