News
IS CHARLOTTE BACK? (PART TWO)
August 13, 2012
| Last week we reported on the capital markets panel at our BisnowState of the Market conference at the Charlotte Ritz Carlton, and how they said some of the financial spigots were being at last turned on again. Today our report on the perspective of the owners panel. (The bad news: There is so much good news, traffic may come back, too.) | ||
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| Wells Fargo EVP and director of real estate strategy Bob Bertges reminded the audience that at the time of the Wachovia acquisition, there were fears 5-8,000 jobs might be lost. In fact, he says Charlotte has become ?a winner all the way around,? turned into a core market for the bank, and can expect Wells will put ?more and more people here.? He noted that transplants they bring from NY like the quality of life so much they become ?our biggest recruiters.? | ||
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| Bank of America Global Corporate Services' Tony Perez, who manages his firm's 7.5M SF of HQ space here, says the fact development stopped and large blocks of space are now available is an advantage in continuing to lure out-of-town companies like Chiquita into the market. Meantime, he says his bank is seeking to use its own space more efficiently, a point which Bob echoed. | ||
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| Grubb Properties SVP Andrea Howard, who's responsible for its 3,000 units of multifamily and is looking for lots more opportunities, says that sector is on fire not just for the short-term but most likely for the coming decade. She says demand continues to outstrip supply especially if you focus on the metric of ?net completions,? i.e., old space going out of use, in which case there will be negative net completions across the country for the next three years, as well as rents and occupancy expected to stay well above historical trends. Although low job growth doesn?t help demand, she says the decline in home ownership does, pointing out that it's expected to drop from 70% to 65% or less, and that each 1% represents 1.2 million more renters. | ||
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| Childress Klein's David Haggart, who's responsible for 15 strip shopping centers, says retail is much better off than it was, and that the fact that no new construction occurred in the last three years is a good thing because it moves the market toward equilibrium and occupancy is now creeping back up to where it was in 2008. In fact, he reports there is actually talk of new development for delivery in 2014 and 2015 for chain retail tenants. His frustration is that tenants that get good deals on mall space due to co-tenancy clauses think they can get those deals even with new development. | ||
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| Merrifield Patrick Vermillion managing partner Jim Merrifield says it's been a great year on the office and industrial front with inward corporate migration, but that homebuilding is still a problem: it was 15% to 20% of the local economy; where there used to be 12k single-family permits a year, now there are just 2,600 and average prices of houses are just 60% of peak. His biggest frustration: corporations that are slow to make decisions until they're desperate for space, and government regulators who require so much documentation and process that real estaters joke now they?d prefer to be paid by the hour. | ||
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| Reznick Group office managing partner Josh Northcutt had good news for job creation: He says his firm's pending merger with JH Cohn will not only make their combined entity the 11th largest accounting firm in the US, but will bring more jobs to Charlotte. | ||
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| Following the event, we walked a couple blocks to Grandbridge and found its Charlotte production team discussing various aspects of the market with the use of dramatic aerial pictures around the room that give a bird?s eye perspective to lenders and investors. | ||
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| We would say this was taken by the Bisnow chopper, but it's in the shop, so we admit this is just one of the aforementioned aerials. | ||
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| Grandbridge?s Michael Ortlip and Keith Medlin show us an aerial of Ballantyne, not surprisingly ending up by both pointing to the golf course. A good place to know as you seek to make more deals and personally help sustain Charlotte's recovery. |
