Raleigh April 2023 Key Take Aways
• Anna McLamb of Wyrick Robbins is working with Lee-Moore Capital’s Kirk Bradley on condominium closings at MOSAIC at Chatham Park. Taylor Emory is also assisting on MOSAIC and performing other condominium work.
• Wells Fargo’s David Koehler reports bank deposits are chasing higher yields. Banks now balance between paying up for deposits or transferring out to other instruments. This is a big factor in managing liquidity. For pricing, we are looking at lower end credit spreads from 250 to 350. Credit quality remains strong, with some industries seeing margin compression. Construction lending has been pulled back. Operations companies are investing in equipment and technologies for efficiency.
• Lee & Associates’ Hunter Stewart said single-family is pushing forward, but sewer is a challenge. Multifamily has cooled; industrial is still active but you need a build-to-suit in tow. Activity in downtown Cary is impressive; new park amenity has driven interest.
• Sandra Simpson with TradeMark Properties has nine acres of residential land on the beltline between North Hills and Five Points. She discussed the Missing Middle and striking a balance between having density and accommodating existing neighborhoods. CE Group’s Mark Ashness said this is happening now in Myers Park in Charlotte.
• GFD Management’s Stephanie Sparrow said she is seeking alternate sources to raise capital to lower loan cost on new development project. She is working on a $5M grant (RACP) for a Lycoming County PA redevelopment project, a 750K SF mostly vacant mall on 120 acres; she will do mix of uses on site.
• SINGH Development’s Avi Grewal said his firm is starting 1 assisted living and 2 multifamily deals this year, but bank terms are not what they are accustomed to. Avi mentioned his company may return to self-performing versus using third-party general contractors.
• Lee-Moore Capital’s Kirk Bradley discussed the expense of construction labor and his concern it will not lessen. He also stated vertical expenses went down, but site work cost went up, expenses like labor, fuel, ductile iron and concrete pipe.
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