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March 5, 2014
Multifamily's Maximal Momentum
Multifamily in Charlotte and the Carolinas still has its mojo--lenders are still willing to lend for it, and investors are still looking to buy it because they both believe in the sector's upside for years to come. (We believe the children and Charlotte are our future.)
Demand for multifamily loans in the Carolinas continues to be strong in all sectors, as job growth strengthens and population growth expands, Grandbridge Real Estate Capital SVP Michael Ortlip tells us (snapped at a Bisnow event last year). That doesn't mean that they're throwing money at any deal that comes their way, however. “Lenders may be more circumspect about certain submarkets in 2014,” he says. (We all get a little picky at the buffet.) Still, financing will be readily available throughout the year for good deals--and there will be a good number of those.
Recently Grandbridge closed on a $33M fixed-rate first mortgage for the 325-unit Boulevard Apartments in Mount Pleasant, SC (pictured), and a $23M fixed-rate first mortgage for the 184-unit Apartments at Quarterside in Charlotte. “A variety of lenders were interested in providing first mortgage financing for the Boulevard,” says Mike. “The Beach Co did a great job of developing a property with institutional appeal.”
Investors are still keen on the sector as well. Legacy Partners Residential senior managing director Timothy O'Brien tells us that, with continued demand growth and low apartment supply, the company's optimistic about the Charlotte area, especially the Concord submarket. Fueled by growth in the banking and energy sectors, Charlotte is projected to add 25,000 jobs in 2014, he says, citing ISI Group's February 2014 report. Recently California-based KBS Legacy Partners Apartment REIT acquired the 240-unit Legacy Grand at Concord in Concord, which is 91% occupied, for $28M. The REIT also owns the 301-unit Wesley Village in Charlotte. (Doesn't that pool look nice after the winter we've had?)
Investors Dig for Net Lease Gold
Think net lease, and deals for corner-located pharmacies and banks with drive-thrus come to mind. Schools, not so much. But net lease is a big tent, as shown by the recent sale of a 29k SF facility leased by Corvian Community School, a charter school in University City. Even though the property is 100% occupied by the school on a long-term lease with rental increases built in, it was a challenge finding a buyer comfortable with the deal, says Stan Johnson Co's Zach Harris, who repped the seller--Charlotte-based RJS Properties--and the private buyer in the deal, along with colleague Brad Pepin.
Still, Zach and Brad did find a buyer, one who'd had experience in buying net lease properties leased to schools. "Investor appetite for net lease properties continues to be strong at a nationwide level, and the Charlotte area is no exception,” Zach tells us. “We've been involved in several net lease transactions in the Charlotte MSA in the past 12 months, representing both buyers and sellers. We expect additional net lease deals, as investor demand remains strong in this market."
Real Estate Love Story
Snapped at GreerWalker and Katten Muchin Rosenman's Commercial Real Estate Overview event last week at the Ritz Carlton Charlotte: Katten Muchin Rosenman's Dan Huffenus, UNC Charlotte Prof. John Connaughton, Bank of America's Mark Cagley, TIAA-CREF's Bill Lane, Proffitt Dixon Partners Stuart Proffitt, and GreerWalker's Jonathan Mangels. The panel posed the question: Does commercial real estate growth, especially the kind Charlotte is seeing, lift the rest of the economy, or does the economy lift all those real estate boats? It turns out the relationship between the two is complicated (which is also the plot of every romantic comedy ever). Photo: Joseph Martin.
Baker Audio Visual Hears (And Sees) You
Baker Audio Visual is turning it up to 11. The Atlanta-based, large-scale audio/visual solutions giant is announcing new locations across the US, including Charlotte, Miami, Boston, and New Orleans. There's a corporate rebranding, too. The company's new logo, website, social media presence, and revised name (formerly Baker Audio) reflect its continued commitment to providing clients with the latestcustomized A/V technology. CEO Keith Hicks tells us that the company last year celebrated its 60th anniversary of providing service to corporations, college and pro stadiums, mission critical areas, training and educational facilities, transportation systems, performance venues, hospitality spaces, and houses of worship. Technology is never 100% reliable, but Baker Audio Visual is. For more info on our sponsor (check out its new, improved website), click here. Or take a look at Baker Audio Visual's video here.
YOU TELL US: Should E-Cigs Be Allowed?
E-cigarettes. Some say they're a welcome innovation that will make smoking obsolete; others view them as equally dangerous and bothersome to nonsmokers nearby. Our question: Should they be welcome in non-smoking multifamily properties/floors? Could that attract a larger pool of renters? Tell us your thoughts by clicking on our survey.
Happiness is February in the rear-view mirror. Send ideas and suggestions to dees.stribling@bisnow.com
