Archive for August, 2012

Too Much of a Good Thing?

In an article titled “The Age of Multifamily” there’s some ink dedicated to the question of whether or not there’s a possibility of too much multifamily construction in the offing:

With development still well below historic levels, it’s hard to imagine that there could be excess multifamily construction any time soon. Yet, a wave of construction projects that were planned and permitted before the downturn may cause a brief oversupply in some markets starting in 2013, notes Emily Goodman, CPM, regional property manager for CORE Realty Holdings Management in Greensboro, N.C. She estimates that at least 2,200 new multifamily units are either under construction or proposed in the Piedmont/Triad area of North Carolina. That’s a lot in a market with only about 59,000 existing conventional units, according to Charlotte-based research firm Real Data. Once these “legacy” projects are complete, however, the time needed to plan, approve, and finance projects may create a temporary dip in building, says Willett. That could temper oversupply risks. So could continued difficulty obtaining financing. “Equity providers have pulled back on new development deals, and construction lenders, while aggressive on the best projects with the best borrowers, remain cautious,” says Witten…

Longer-term threats to multifamily prosperity are more likely to come from unrealistic rent-growth projections, says Willett. Unless wage growth picks up, rents that rise too fast could outpace residents’ ability to pay and fuel a flight to home ownership. Add inflation to the mix, and “rent growth could be a challenge later in the decade,” he says.

While uncertainty about jobs and financing may slow apartment expansion, the same uncertainty makes renting a good alternative for consumers who aren’t confident in their future, says Greenblatt. “As long as the market doesn’t get too overheated,” he says, “multifamily prospects are very strong.”

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August 31, 2012 at 12:51 pm Leave a comment

2,482 Units Receive LIHTC Reservations in NC

A quick item from Affordable Housing Finance:

Forty-two affordable housing developments that will provide 2,482 units have received low-income housing tax credit reservations from the North Carolina Housing Finance Agency.

It is believed to be the highest number of units in a single cycle in the state. The developments will provide affordable homes in 30 counties.

Here’s a link to a list of funded projects:

http://www.nchfa.com/Forms/Forms/Rental/2012Awards.pdf

 

August 30, 2012 at 5:32 pm Leave a comment

200 Unit Development Proposed Next to Shops at Friendly Center

Lomax Properties is proposing to build a $20 million, 200 unit, four story apartment community by the Shops at Friendly Center:

Patrick Woods, vice president for Lomax Properties, said an affiliate of the company is seeking to rezone the 4-acre property at the corner of Hobbs Road and Northline Drive and increase density that would allow for 200 apartment units in a four-story building. The city’s Zoning Commission will hold a public hearing for the project Sept. 10 in the City Council Chambers, he said…

Plans for the high-end apartments are a response to a “sea change” in the market and demand for rental units, Woods said.

“People want nice homes but they want the flexibility of renting if they are uncertain where they will be in the future,” he said.

August 28, 2012 at 9:55 pm Leave a comment

AANC Legislative and Regulatory Successes Result in Real Apartment Industry Dollar Savings

The collective strength of the Apartment Association of North Carolina has saved the apartment industry many millions of dollars in recent years, as the attached “AANC Legislative and Regulatory Successes” spells out. We estimate that AANC advocacy resulted in:

  • Over $9M in savings in moderating swimming pool fence requirements;
  • $24M in annual savings associated with fending off elevator requirements in new apartment construction;
  • Nearly $6M in savings by tempering the new Statute for lithium battery smoke alarms;
  • Over $4M in annual savings associated with aspects of the new Landlord-Tenant Law Changes;
  • $3.5 M in annual savings associated with the new Residential Rental Property Inspections, Permits, and Registration Statute implementation at the local level;
  • Annual cost reductions of nearly $9.5 M associated with the Hot Water/Cold Water submetering Statute

Read more here.

August 22, 2012 at 5:01 pm Leave a comment

Wilmington Apartment Market Outpaces Other NC Cities’

Apparently things are good down on the coast:

Overall, Wilmington’s apartment market continues to trump occupancy rates in all of North Carolina’s major cities, including Charlotte, Raleigh and Greensboro.

In a July report released by Apartment Index, Wilmington’s average occupancy rate now sits at 93.8 percent. That’s slightly lower than the 94.3 percent rate reported last quarter…

Rents also remain healthy.

Despite seeing occupancy rates drop slightly, metro Wilmington’s average rents have increased from $715 per month last quarter to $760 per month this quarter. That’s up $90 from $670 per month in 2009, according to the report. 

“I do expect over the coming year the occupancy rate may fall to 93 percent, but that’s still a pretty healthy number,” Addington said. “Rents should continue to grow at 3 percent annually in Wilmington.”

August 21, 2012 at 3:13 pm Leave a comment

Apartment Industry a Contributor to More Robust Triad Construction Industry

According to analysis done by the Triad Business Journal the apartment industry is a contributing factor to the Triad’s improving construction employment numbers:

So just what’s going on in the Triad? Construction experts across the region point to number of factors that collectively contribute to the growth, such as institutional construction at colleges and universities, health care systems investing in new facilities, apartment construction going gangbusters, public projects such as the Guilford County jail and theGreensboro Aquatic Center, and numerous highway and bridge projects across the region.

The growth could also be reflective of the hit the Triad took in the recession. UNC-Charlotte banking professor Tony Plath says it’s difficult to give definitive data, but his sense is that the Triad suffered pronounced losses, particularly in commercial construction, in the recession.

“The Triad suffered a little bit more. The downturn was a little harder there in 2007 and into 2008,” Plath says. “Then the trajectory out of the downturn was a little bit better.”

August 10, 2012 at 4:04 pm Leave a comment

WGHP – Residential Building Boom in Downtown Winston-Salem

WGHP has a story about the 600 residential units (condo and apartment) in the pipeline for downtown Winston-Salem. The money quote comes from Downtown Winston-Salem Partnership’s Jason Thiel:

“When the apartments are built, they are being almost automatically absorbed into the market,” Thiel said.

August 10, 2012 at 3:39 pm Leave a comment

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