Charlotte January 2023 – Key Take Aways
Dena Diorio – Mecklenburg County – Dena has been a leader in local government for 35 years. In her role as County manager, she executes policy decisions, works closely with the community and what members want, and runs the day-to-day operations of the organization. In response to Covid, the U.S. Treasury provided Mecklenburg County $215 million rescue dollars, $180 million of which was placed into the community. The County asked the community via its Annual Community survey which issues were most important, and the results included:
A. Behavioral Health & Health Equity – The County launched MeckHope which offers behavioral health services for the uninsured and underinsured who may not be eligible for other resources. The Mecklenburg County Funding Plan was created to assist in the treatment and housing of opioid abusers.
B. Parks, Environment, and Infrastructure – The Board of County Commissioners adopted an updated Environmental Leadership Policy consisting of ecosystem management, $50 million approved land acquisitions for parks and nature preserves and an electric vehicle/charging station & solar panel plan to reduce carbon emissions.
C. Affordable Housing & Homelessness – The rate of increase in home prices has not been equal across price points. Less expensive homes receive higher tax assessments compared to their market values than more expensive homes do. Projects such as Peppertree and A Home for All promote access to permanent housing for those struggling with homelessness and home ownership.
D. Workforce & Economic Development – Partner with HIRE Charlotte, Queen City Collaborative, Charlotte Executive Leadership Council and Bloomberg Foundation to improve online employment access and offer high quality credential for employers and job seekers.
E. Childcare & Early Childhood Development – The County’s Early Childhood Education action plan has two components: MECK Pre-K, a free pre-kindergarten program for eligible Mecklenburg County four-year-olds (with the vision to expand this offering to voluntary, universal public pre-k for all four-year old children by 2024), and subsidies to help eligible families with children birth to age five afford access to high-quality child care.
John Culbertson – Cardinal Partners – John has published insights on commercial real estate, development, and his overall experiences within the industry in his newsletter every other week for the past 5 years. If interested in joining the mailing list, please reach out to him directly or on LinkedIn. His focus, however, is in the development of various projects including 3D manufacturing for Mitsubishi. He adds commercial real estate has become more complex since the demand has grown so much.
Russell Hughes – Hughes Realty Advisors – Although Russell claims December was a very quiet month for business, in contrast, more calls have occurred at the start of this new year in preparation for spring buying. He predicts an upcoming bidding war, yet is not quite certain of the exact cause for it. He believes the people that can make moves will secure a solid stance in commercial real estate.
Gates Grainger – Investors Title Company – Gates states residential new home buys are increasing, whereas refinances are decreasing. After experiencing a temporary slowdown, Gates notices a spike in commercial new deals. Just this past week he has had about 3-5 incoming new deals. He finishes by mentioning the 1031 market is going well but not wild.
Joe Marek – Johnston Allison Hord – Joe asserts North Carolina is on everyone’s mind by referring to CoStar’s recent tracking of the top growth for U-Haul moves in 2022. North Carolina moved up to No. 4 from No. 19. Texas, Florida, South Carolina, Virginia, New York, and California all made the list as well.
Tanna Thomas – Terracon – Tanna notes how busy Terracon’s due diligence side has been. In multi-family and mining, there has been no slow down yet industrial has lessened quite a bit. She has heard contrasting messages from professionals in the field – some are extremely busy and some are not. It’s hard to tell the exact state of things when the responses have been so bipolar.
Joe Donlevy – Filmore Capital – Joe and his team are creating affordable, 100-unit multi-family housing in Gaston and Concord. His recent closings include cash-out refinances and acquisitions. He believes the rate reset will be a concern/challenge for small business, considering even a $500 payment is currently hard for most to meet.
Clyde Nelson – Medalist Capital Advisors – Clyde is involved in multi-family acquisitions. He describes a freeze in deals within these last months but are now seeing a move here in 2023. He claims inflation is declining. Life insurance loans are down, which is great news, yet banks are exclusively lending to previous borrowers only.
Dennis Quick – Town Capital Management – Dennis is the Chief Financial Officer at Town Capital Management, an investment management affiliate of Middleton Meyers. He has extensive experience in accounting and finance and seeks more opportunities in multi-family investments.
Brent Kubitschek – Waterstone Multi-Housing Advisors – Waterstone Multi-Housing Advisors is a full-service investment advisory brokerage firm focusing exclusively on the multifamily housing industry. Brent specializes in commercial real estate debt. He notes smaller deals are getting done with smaller folks looking at new ways to refinance but predicts this will rise if the Fed pivots wage growth. The market doesn’t have as much fear as 2008 but he foresees “extend and pretend” will rear its ugly head.
Shaun McCutcheon – Zonda Home – Shaun declares that current national headlines do not reflect Charlotte’s situation. Price declines are a myth. People refuse to sell with a golden interest rate under 3% and refuse to buy with an interest rate any higher than that. Builders have enormous pockets since Covid and therefore can buy down these rates. He cites Zillow’s recent article discussing how Charlotte will be the nation’s #1 hottest housing market for 2023. He continues stating Texas, Florida and the Carolinas are the biggest markets. Unlike Texas and Florida’s 1,000-unit masterplans, the Carolinas have supply constraints and less land available. This explains the smaller, 60-unit type builds surrounding single family homes seen developed in the Carolinas.
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