Raleigh September 2023 Key Take Aways
• Matthew Martin of Federal Reserve Bank of Richmond reported lack of affordable single-family should push more into multi-family, but forecasters have rent growth turning off or negative; he asked if inflation remains high partially due to this trend.
• CoStar’s Nick Leverett said rent growth has turned slightly negative in Raleigh because new inventory online or under construction; it is forecasted to stay negative for a few quarters.
• Whiting-Turner’s James Larkin said the firm is re-engaging in educational market (K-12, Charter, Higher Ed); working with the Duke Hospital system in Cary; and working in pharmaceutical market.
• Vijay Shah of TradeMark Properties is working with Brass Tap Craft Beer, a full-service restaurant looking for 4+K SF urban locations with outdoor patio; with Homeward Kitchen, Golden Corral’s fast casual concept, with 4-5 corporate locations in NC, SC, GA, VA and then franchise; and with Slim Chickens in Knightdale and Jacksonville.
• GFD Management’s Stephanie Sparrow sees low vacancy, high interest, competitive rent rates, and minimal new retail due to construction costs. Her firm closed deal on old mall in Muncy, PA.
• Lee & Associates’ Marlene Spritzer said smaller office spaces (5-7K SF flex space) are leasing due to flight to quality and flexibility, with large blocks of office still on the market. She works with large healthcare / life sciences office users, 7-19K SF office users, and 10K SF lab tenants; she signed lease for 60K SF industrial in Oxford, NC.
• David Koehler of Wells Fargo said economists project 45% chance of rate increase before yearend. Ten-year treasury hit highest level since 2007. Currently, there are no cracks in portfolio of income-producing properties. He predicts industry headwinds will cause more consolidation.
• First Horizon’s Beth Harrelson is refinancing maturing loans. She’s seeing some life insurance companies come back into market; she’s quoting rates between 6 and 6.25.
• Steve Brown of Investors Title noted the tight residential market in Raleigh and surrounding areas.
• Marcus and Millichap’s John Daly reiterated the gap between buyer and seller expectations in multi-family sales.
• Tom White of NC State shared Chris Chung’s data: the area has reported 21K new jobs with $19B in capital investment. Pactiv Evergreen’s Canton paper mill closed, impacting 300 people in Waynesville and 900 in Canton. Global Advantage Forum occurs Nov 9, 11am – 2pm at RTI International.
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