Raleigh October 2022 Key Take Aways
- Wyrick Robbins’ Eric Vernon’s team is busy; examples include representing buyers with raw land, apartment complex transactions and a potential hotel transaction.
- Anna McLamb of Wyrick Robbins notes an uptick in merger activity in the last few weeks as well as purchase and sale activity. Deals are happening but are fragile.
- Lee-Moore Capital’s Kirk Bradley is seeing balance sheet issues with larger banks; he remains bullish on the area, thanks to Vinfast, Toyota and Wolfspeed, all to be online 2024-2025. Kirk expects apartment and retail rate growth flattening in 6-12 months.
- Kevin Scanlon of Lee-Moore Capital said LMCC surveyed 7-8 banks for Pittsboro multifamily project; many still have lending appetite, with 60-65% loan-to-cost for most.
- Terracon’s Joe Starr said the EDPNC put forth an RFQ to consultants to find new megasites within the state.
- New Member Andy Lawrence of Olive Architecture inquired about the Global Transpark in Kinston. Members commented on its current growth. One example is Fly Exclusive, moving from 700 to 1200 employees. Joe Starr said DOT and DOD are building a $3M hangar at the park.
- Federal Reserve Bank of Richmond’s Matt Martin reported inflation is persistent, so the Fed must work harder to control. Interest rate sensitive sectors are feeling it, but not the general economy yet. Labor markets are not as frenzied.
- Beth Harrelson of First Horizon said rates are up with 10 yr. at 3.90%, and fixed rate, 10 yr. term loan is 5.5-6% across the board offered by life insurance companies. Most life companies have met their goals, so have slowed down. Beth has helped customers place construction loans and works with borrowers with loan issues. Borrowers are getting used to new rate environments.
- NC State’s Tom White spoke about the need for federal investment in workforce development and expressed the importance of collaboration of public and private universities with community colleges to produce talent. NC State launched a 60-hour credit course called NC Workforce Development Leadership Initiative. Tom agreed that NC needs at least six new megasites.
- Lee & Associate’s Scott Hadley noted Kinston and Goldsboro are growing. He said some manufacturing companies look outside Triangle because not receiving incentives inside Triangle. He said companies can use internship programs to develop talent. Scott thinks we may see an industrial pricing reset. 3-4M SF of industrial are under construction in Raleigh and 2M SF in Durham/Orange. Industrial vacancy is 2%. Office market activity is good, with Raleigh vacancy at 8%. Institutional and corporate are still buying residential land, but small developers are out.
- President, CEO Michael Landguth of Raleigh-Durham International Airport provide an RDU update:
- RDU was named 2022 Top 5 Large Airport.
- During COVID, RDU lost 9 concessions in building and is rebuilding.
- Leisure travel came back before business travel. We’ve recovered 90% of 2019 travel.
- Corporate ticket sales are still down 25%. RDU currently has 7 international flights.
- RDU will add an E-commerce platform, starting with parking. RDU added touchless service REEF Virtual Food Hall. RDU is adding 4 new local concepts.
- Vision 2024 is a $4 billion long-term airport plan, with improvements in airfield, terminals, ground transportation and general aviation. The plan was halted during COVID.
- RDU is recruiting Mexico City, Central America, Hawaii, Alaska, and another European hub.
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