Charlotte September 2022 – Key Take Aways
Matthew Martin – Reserve Bank of Richmond –
• Matt Martin – Federal Reserve Bank of Richmond – Matt states the next Federal Open Market Committee (FOMC) meeting will be held on September 20-21, 2022. This meeting is associated with a summary of new economic projections, where all members of the FOMC share their forecasts. He believes this is one to watch given the recent CPI number, which moved equity markets, bond markets and federal funds trading markets considerably.
• Joe Marek – Johnston Allison Hord – Joe provides notice of Mecklenburg and Gaston Counties’ upcoming 2023 Property Revaluation. The counties will use prior sales information from 2020, 2021 and 2022 to determine the new values. He predicts a significant increase in commercial and residential new values considering the market has seen unprecedented highs within the last couple of years.
• Gates Grainger – Investors Title – Gates keeps it short and sweet by reporting an increase in orders and activity since Labor Day.
• Mark Fletcher – Bohler Engineering – Mark sees a massive increase in RFI’s and RFQ’s for advanced manufacturing. The corridor from the I-85 down to the 65 is extremely busy with cold storage and data centers. Approximately 30 different data projects to be announced somewhere between fourth quarter of this year all the way through second quarter of next year. Microsoft only adds to this growth with the upcoming build of a massive complex west of Charlotte. Mark continues by describing multi-family affordable housing. He claims Charlotte has a much better approach to where affordable housing needs to go than a lot of other major cities. Finally, he concludes with noting a boom in life sciences. Eli Lilly’s project outside of Charlotte will create a small life science cluster, Greenville is beginning to fire up and Huntsville, Alabama, will also have its own cluster.
• James LaBar – Charlotte Center City Partners – James is the Senior Vice President for Charlotte Center City Partners. He is focused on retaining, expanding, and attracting businesses, talent, and investment primarily in Uptown, South End and somewhat Midtown. Charlotte Center City Partners is 501(c)(4) that serves the municipal service districts that are in Uptown and South End. In addition to that, the organization has a 501(c)(3) piece, the Community Trust. Through those two legal entities, the organization operates tactical events and programs, such as the market at 7th Street and CLT Joyride. As for economic development, Uptown’s combined “announced” and “under construction” data includes 2.65 MM sf office, 314 K sf retail, 1,950 residential units and 852 hotel rooms. For South End, 3.1 MM sf office, 287 K sf retail, 5,688 residential units and 3 hotel projects (approx. 580 rooms). The Queen’s Bridge Collective, set to be completed in 2025, will further connect these two very different locations. It’s quite clear the money and investment interest in these areas are only “bounding forward” since 2019, according to James. He moves on to discuss the frequency of people working from the office or in a hybrid arrangement within these two areas. The data reveals Uptown in 2022 is at 70% of pre-pandemic levels, whereas South End in 2022 is at 115% of pre-pandemic levels. South End is doing so well thanks to it being adjacent to Uptown and offering convenient, quality-driven workspaces. Planning, mobility, and community development further increase connectivity with Center City.
• Joe Kinsey – CoStar – Joe recently spoke with an office landlord client who stated a recession would not be such bad news in their world because it would push the people working remote back into the office long-term. The pendulum of power would swing back in favor of the employer versus the employee. It’s unclear, however, how this will play out.
• Chuck McShane – CoStar – On the multi-family side, Chuck has seen the first, monthly decline in asking rents overall in the US. This is good news for the broader economy and tougher news for some developers. Charlotte is still one of the top year-over-year rent growth numbers, however Charlotte has gone from 18% in Q421 down to 10%. He doesn’t expect to see the type of rent growth we saw in 2021 going forward. Industrial, on the other hand, even with the pullback from Amazon, is still seeing record low vacancy rates.
• David Turner – BankFinancial – David’s company is a Chicago-based lender, handling real estate acquisitions and refinancings predominantly in the multi-family sector. He is the leader of this region, although the organization spans up the east coast all the way to Denver. Although this region has still been doing very well, he claims a slow down due to interest rates rising.
• Ron Thompson – Thompson Consulting and Analytics – Ron is the owner and Principal Consultant of Thompson Consulting and Analytics, LLC (TCA). TCA is an economic and commercial real estate holding firm which offers economic impact analysis, disparity research, econometric forecasting, and other economic consulting services on behalf of developers, contractors, and other various commercial real estate clients. Ron recently finished a project as a subcontractor in a housing affordability study. He provided almost a year of market analysis, survey and messaging that evaluates and provides guidance regarding affordable housing. This report will be made available in the near future.
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