3/27/23 South Carolina Mastermind Group Meeting

South Carolina March 2023 – Key Take Aways

Josh Lonon of Wyche, P.A. says he is a little more optimistic than he was at last meeting. They have a long timeline of projects. He shared that the Play Advocate Live Well walking trail is moving forward in Spartanburg. The goal is to connect it to the Palmetto Trail. There is a huge boom in development along the trail. He also said that the skyline is changing in downtown Spartanburg. Megan O’Neill of Wyche, P.A. shared exciting news about helping a client close on a LIHTC deal – 116-unit affordable housing development. Most multifamily development clients are looking to do deals with essential bonds – not much going on with traditional financing. Laura Turner of Cherry Bekaert said that they are in the middle of their busy season. She shared some highlights in the tax world: 1) Rules around research and experimental expenditures in section 174 and the potential to be reimbursed. Some clients are choosing to extend. 2) Employee retention credit – cracking down on fraudulent claims. Reviewing clients ERC claims to be sure they are all legitimate. 3)Their state credit incentive team is very busy. There are clean energy credits in the inflation reduction act. They can help you maximize those credits. Mark Cooter recently hosted a podcast: What the Inflation Reduction Act Means for 45L. JR Charles of City of Mauldin said that inspection rates are going crazy. They are having to outsource and have doubled their inspection budget. They expect complete occupancy of Bridgeway Station by Thanksgiving 2024. David Lewis of Context Design Group mentioned the Scout project and the growth that it will bring to the 1-26 area. He said that there is a lot of activity in Chester. They remain busy – new projects not coming in as fast as they were (interest rates). Projects still taking longer because of supply chain issues. AJ Abston of CoStar said that Columbia has been in the spotlight recently on the industrial side of things. Albemarle Corp. is planning a new $1.3 billion lithium hydroxide processing plant in Chester County, S.C. Carolina Pines spec development delivered in Blythewood. Lots going on in the Carolinas! Ed Wilson of Wilson Kibler said that the market is still strong. They are seeing many deals on leases in flex space. He shared that there has been a good bump in the market on the light industrial market. Still see a lot of office demand. Multifamily deals are slowing down – interest rates affecting that. Josh Workman of Tax Credit Marketplace knee deep in project tax returns. Investor demand remains strong. They are projecting 20 projects for this year. He shared that the supply chain is still an issue – electrical switches are creating big delays on multifamily projects. They are watching the IRS on solar credits – new rules. Also, the are interviewing for a marketing manager and overhauling their website. He also shared that Banker Exchange is very steady coming up on their 30th anniversary. Corey Memmott of Tax Credit Marketplace shared that institutional equity investors from the Midwest were intown and were impressed by the Upstate. He has also been busy watching all that is going on with the banking world. Tice Wellborn of Terracon seeing ups and downs in environmental due diligence. He said that clients are capitalizing on tax credits with some more risk averse projects. They have not seen slowdown in industrial, logistics or manufacturing. SC Best Brownfield Program – Million-dollar funding pool – officially kicking off in April. It is a 1-year pilot program. Alita Webster of Young Office is approaching 90 days into acquisition of McWaters. They are still actively recruiting talent across all disciplines and locations. They remain busy across all verticals – education and healthcare remain very strong. Office and industrial are busy as well. They are relocating next to One Spartanburg and hope to be in by late April. Alita says to expect to see more mergers and acquisitions in their industry. Clay Driggers of Aline Capital Investment Real Estate advising clients that if the project is within the lanes, pull the trigger. He reported that they have a strong influx of capital. They are investing in good fundamentals. Multifamily is constricted by capital markets. He believes that all need to be talking about density and educating the public about why growth is good for everyone. Grow Well! The areas that feed Greenville and Spartanburg need to be looked at for density. Consumer confidence and spending is strong in the upstate. Gracie Law of Lima One work on a sales team with Cortney Newmans. They lend and finance new construction projects and small projects. Danielle Clark of Lima One says that there is volatility in the residential market. They are seeing many built to rent communities going up. Ron Gooding of First Bank of the Lake said that growth in Greenville is astounding. He is an appraiser and environmental manager. Caitlin Steelman of Graycliff Capital shared that they are a real estate investment firm specializing in multifamily. Capital is their biggest issue. Returns are not where they were a year ago but still strong. They are hiring asset managers. Robert Moore Home Trust Bank said that the attractiveness of the upstate has had us insulated from the highs and lows others have seen. He is a little wary of the future. Brian Rogers of Home Trust Bank shared that they are in 5 states after a merger. They are currently working on a residential project in Mauldin. Marcel Summermatter of TD Bank still going through acquisition of First Horizon. They are still very bullish on their outlook on the Upstate. Commercial rates have come up – more difficult as rent has not come up.