10.8.26 Raleigh Chapter Meeting

Raleigh Chapter October Meeting!

• RPN Speaker and Member Matthew Martin of the Federal Reserve Bank of Richmond reported that demand has strengthened; there’s risk for consumers and signs of labor market weakness; manufacturers cannot find workers; cost pressures are real; and the ability to pass on costs varies.
• GDP growth was okay in Q2 and is expected to accelerate in Q3 and Q4. Bank of America says the K-shaped economy has closed although real income growth has stalled, so households are saving less. There’s stress in consumer loans portfolios.
• Job growth has averaged 65K over last six months; the Carolinas lead the 5^th District in job growth. Raleigh has highest payroll employment growth among all MSAs its district; labor force growth has stalled.
• New tenant rent growth suggests further decline in PCE while multi-family affordability will produce a preference shift from ownership to rental.
• Inflation is still too high; most committee members assume there’ll be another rate increase in Q4.
• The upward trend in the 10-year Treasury rate is notable; supply of bonds is significant in market. The demand side is less institutional and foreign national and more private sector. TIPS shows stable inflation expectations.
• RPN Guest Russ Schmitz of 347 Water does PFAS-oriented work, including industrial treatment, wastewater treatment and remediation projects; he works with public and private sectors.
• Wyrick Robbins’ Taylor Emory has closed some refis and is working on an acquisition.
• Anna McLamb of Wyrick Robbins is working on office leases.
• Richard Oldham of Sanford Contractors is seeing good activity, but not much residential. Lee County and Sanford had recent Caterpillar and Steris expansion announcements.
• LJA Engineering’s Rick Vino is new to LJA and serves as Group Manger, National Programs. He specializes in QSRs and outparcels and is accustomed to working with national brands.
• Mark Ashness of LJA Engineering says since the 1920s, power generation doubled every decade in U.S. but stopped in mid-1980s due to offshoring and losing the industrial base. NC had overcapacity, but with population growth, the oversupply is gone. Regardless of data centers, Duke Progress must increase power generation and update substations. LJA is surveying data center sites in Rockingham and Moncure.
• Olive Architecture’s Andy Lawrence has two projects in the “missing middle” housing market: compact, single-family infill homes and a small 30-unit apartment community in NE Raleigh. Hotel projects continue, but he’s seen less investment in restaurants in past 12 months.
• GFD Management’s Nate Cretalo reports that anchor and outparcel leasing is hot with limited supply; he has Five Below, an 8K SF tenant, trying to take out existing tenant. He sees some tenants struggling. Acquisition for shopping centers is aggressive. Nate’s seen anchor boxes reduce footprint to grow store numbers. For QSRs, they are building small kiosk drive-throughs to secure frontage.
• Stephanie Sparrow of GFD Management considers the effect of interest rate movement and high construction costs; Burlington is reducing buildout numbers, but Marshalls and TJ Maxx are not.
• TradeMark Properties’ Vijay Shah introduced new Marketing Coordinator Taya Mishin, who has her license and plans for a long-term CRE career.