Charlotte, NC

Charlotte, NC
Multi-Family Market Summary: Fall 2014
Presented By:
CHARLOT TE
Contents
Introduction
Introduction2
Market Commentary
3
Economic Overview
4
Sales Transactions
5
Proposed Development
8
Communities Under Construction
9
Why Choose Capstone?
10
CAPSTONE APARTMENT PARTNERS prides itself on the continual value contributions we
are able to offer our industry, and thus we produce periodic Multifamily Market Summaries to
further inform the clients and industry we serve. Capstone believes that this market snapshot
will be beneficial to current owners, operators, investors, and other industry professionals who
are active in the Charlotte, NC MSA, as well as others who are looking to break into this market.
Charlotte Office
1600 Camden Road  Suite 100  Charlotte, NC 28203
2
Austin Green
Alex McDermott
Investment Advisor
704.962.7454
[email protected]
Investment Advisor
704.533.4865
[email protected]
Beau McIntosh
Brian Ford
Managing Partner
704.877.5681
[email protected]
Managing Partner
704.962.9462
[email protected]
CHARLOT TE
BUSINESS is BOOMING
Moving Economics
Tightening housing supply and increased unit demand have
accelerated multi-family construction market-wide; however, this is
especially evident in neighborhoods near the expanding LYNX Light
Rail system. $1.6B in development has already occurred along the
existing light rail corridor. The trendy and artistic North Davidson
(NoDa) neighborhood is a prime example of the role the light rail
has played in recent economic development. In addition to an evergrowing variety of trendy shops and restaurants and NoDa’s 50+
bars, NoDa is home to a number events like gallery crawls, outdoor
movies, and arts and farmers markets. Even prior to completion, this
neighborhood has flourished and reaped the benefits of the city’s light
rail and greenway plans.
Multi-Family Fundamentals
Charlotte has historically been a suburban, commuter city; however,
tremendous development, public investment in infrastructure, and
cultural enhancement in recent years have driven strong population
growth and job increases within the CBD as well as its outlying
neighborhoods. Existing developments continue an upward trend with
a posted rent growth of 2.6% over the past twelve months while the
average vacancy rate remains healthy at 4.3% market-wide. In 2013, the
city of Charlotte experienced an annual population increase of 2.6%,
which is more than double the state of North Carolina’s average of
1.0%. People continue to flock to Charlotte given the attraction among
various socioeconomic groups, current employment announcements,
and phenomenal infrastructure and community development efforts.
Apartment Comparison by Class
Vacancy Rate
Avg. Sq. Ft.
Class
Units
Lease-up
A (1-5 Years in Age)
B (6-15 Years in Age)
C (16-30 Years in Age)
C- (30+ Years in Age)
Stabilized Averages
6,769
11,234
31,253
37,870
24,557
104,914
20.5%
4.3%
4.0%
4.3%
4.7%
4.3%
Totals/Averages
111,683
5.3%
Avg. Rent
Avg. Rent/Sq. Ft.
1,000
1,013
1,001
925
916
955
$1,255
$1,253
$988
$837
$711
$897
$1.26
$1.24
$0.99
$0.91
$0.78
$0.94
958
$919
$0.96
MARKET COMMENTARY
Charlotte is the largest city in North Carolina and the 17th largest in the
U.S. The Charlotte MSA is driven by broad-based job growth, and has
emerged as the primary energy, transportation, and healthcare hub
of the region. Although Charlotte is still the second largest banking
center in the country behind New York City, insurance, healthcare and
technology companies have reinforced the local economy. In fact, in
2014, Yahoo Finance named Charlotte the number 1 best city for high
pay and low expenses.
3
CHARLOT TE
Employment
ECONOMIC OVERVIEW
Recent Employment Announcements
 Giti Tire will hire 1,700 employees at its new
manufacturing facility in nearby Chester County.
 Sealed Air Corp. is moving its headquarters to
Charlotte and bringing 1,262 jobs.
AvidXchange to add 603 jobs to Charlotte
corporate headquarters.
 Red Ventures is adding 580 employees to its
offices in Charlotte.
 Alevo will add 500 jobs in Concord by end of
2015. Business could grow to 6,000.
 AIG is hiring 230 employees at its new technology
center in uptown Charlotte.
 Cognizant plans to create 150 jobs in Charlotte by
2018.
Eclipse Automation will create 50 jobs at its
operations in Charlotte.
Major Employers (non-government)
Company
Industry
Rank
Employment
1
Carolinas HealthCare System
Healthcare
32,500
2
Wells Fargo
Banking
20,500
3
Wal-Mart Stores Inc.
Retail
16,100
4
Bank of America Corp.
Banking
15,000
5
Novant Health Inc.
Healthcare
10,700
6
Duke Energy
Energy
8,500
7
Food Lion
Grocery
8,700
8
U.S. Airways
Transportation
7,436
9
Kroger
Grocery
5,200
10
Belk
Retail
2,600
Wages & Population
There are 877,070 employees in the MSA who earn a mean hourly wage of $22.51 and an average annual income of $46,820. In comparison, the
state and national annual income averages are $ $42,420 and $46,440, respectively.
Historical Population
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Charlotte
601,245
614,446
631,160
652,202
669,690
687,971
704,422
734,216
751,087
772,627
79,862
Mecklenburg County
755,018
774,432
800,486
833,791
865,573
892,456
913,639
923,141
944,373
966,160
990,997
Charlotte MSA
1,453,816
1,500,338
1,545,348
1,594,799
1,626,694
1,676,495
1,725,759
1,758,038
1,812,317
1,857,624
2,335,358*
North Carolina
8,422,500
8,553,200
8,705,400
8,917,300
9,118,000
9,309,400
9,449,600
9,561,600
9,656,400
9,752,100
9,848,060
Source: U.S. Census Bureau (* Charlotte MSA boundary change in 2013)
4
The Charlotte MSA’s unemployment rate hit its lowest point since May 2008 at 6.2% in
September 2014. Moreover, the unemployment rate is well below the state’s average of
6.7% and on par with the national average of 5.9%.
CHARLOT TE
Sales Transactions: 2013 and 2014
Community
City
Sale Date
Units
Sale Price
Price Per Unit
2013
2001
2000
1992
1979
1972
1989
1972
2014
1974
2003
1978
1987
2010
1974
1971
2010
1970
1971
2012
2009
1970
1974
1971
2013
1962
1964
1985
2012
2007
2004
1986
1998
2009
2012
2011
2001
1975
Charlotte
Fort Mill
Charlotte
Cornelius
Charlotte
Charlotte
Charlotte
Charlotte
Mooresville
Charlotte
Rock Hill
Charlotte
Mooresville
Charlotte
Charlotte
Charlotte
Concord
Charlotte
Charlotte
Charlotte
Charlotte
Charlotte
Gastonia
Charlotte
Charlotte
Charlotte
Charlotte
Charlotte
Mooresville
Charlotte
Charlotte
Charlotte
Matthews
Charlotte
Charlotte
Fort Mill
Denver
Charlotte
9/16/2014
7/18/2014
7/17/2014
6/24/2014
6/16/2014
6/6/2014
6/3/2014
6/2/2014
4/25/2014
3/27/2014
3/20/2014
3/17/2014
3/14/2014
3/13/2014
2/27/2014
2/27/2014
2/18/2014
2/1/2014
2/1/2014
2/1/2014
2/1/2014
2/1/2014
1/23/2014
1/15/2014
1/3/2014
1/2/2014
12/16/2013
12/4/2013
12/4/2013
12/1/2013
12/1/2013
11/27/2013
11/19/2013
11/14/2013
11/14/2013
11/14/2013
10/31/2013
10/25/2013
53
40
288
192
311
214
277
102
232
196
124
232
110
274
136
138
240
310
176
287
184
136
250
100
281
276
243
349
227
267
166
240
212
306
264
248
144
252
$7,700,000
$2,500,000
$33,770,000
$20,050,000
$11,850,000
$3,255,000
$32,300,000
$2,400,000
$26,300,000
$6,140,000
$9,700,000
$17,700,000
$5,850,000
$36,700,000
$1,612,500
$1,637,500
$27,968,000
$9,800,000
$6,000,000
$38,300,000
$31,200,000
$6,400,000
$9,100,000
N/A
$59,000,000
$8,000,000
$4,850,000
$19,525,000
$29,513,000
$27,200,000
$21,000,000
$22,535,000
N/A
$35,800,000
$32,200,000
$28,000,000
$12,850,000
$6,300,000
$145,283
$62,500
$117,257
$104,427
$38,103
$15,210
$116,606
$23,529
$113,362
$31,327
$78,226
$76,293
$53,182
$133,942
$11,857
$11,866
$116,533
$31,613
$34,091
$133,449
$169,565
$47,059
$36,400
N/A
$209,964
$28,986
$19,959
$55,946
$130,013
$101,873
$126,506
$93,896
N/A
$116,993
$121,970
$112,903
$89,236
$25,000
SALES TRANSACTIONS
The Edison
Lake View
Thornberry
One Norman Square
Sun Valley
Teal Point
Arboretum
East Coast
The Venue
Windgate Place
University Place
Quail Valley on Carmel
Country Club
Ansley Falls
Colonial Place
Park Fairfax
Legacy Grand at Concord
Hampton Commons
Highlands
Madison Square at Northlake
Quarterside
Stratford
Bella Vista
Woodlands
Junction 1504
Oak Park at Briar Creek
Grand Oaks
Beacon Hill
Fountains at Mooresville Town Sq.
Alpha Mill
Highland Mill
Arium Pineville
Matthews Reserve
Century Northlake (FORMERLY LONG CREEK CLUB)
Century Northlake (FORMERLY LONGVIEW)
Century Springfield Meadows (FORMERLY PADDOCK AT SPRINGFIELD)
Riverwalk Apartment Homes
Woodland Hollow
YOC
5
CHARLOT TE
Sales Transactions: 2013 and 2014
SALES TRANSACTIONS
Community
6
YOC
City
Sale Date
Units
Sale Price
Price Per Unit
The Apartments at Blakeney
2008
Charlotte
10/10/2013
295
$53,180,000
$180,271
Fountains Southend
2013
Charlotte
10/1/2013
208
$34,000,000
$163,462
Retreat at McAlpine Creek
1989
Charlotte
10/1/2013
400
$42,250,000
$105,625
Hanover Landing
1972
Charlotte
9/26/2013
192
$3,600,000
$18,750
Windsor Harbor
1971
Charlotte
9/25/2013
200
$3,500,000
$17,500
Country Club Apartments (FORMERLY THE PARK)
1969
Charlotte
9/13/2013
454
$12,300,000
$27,093
Pines at Carolina Place
1997
Pineville
8/1/2013
200
$11,775,000
$58,875
Cielo
2010
Charlotte
7/9/2013
205
$41,500,000
$202,439
Landmark at Monaco Gardens
1991
Charlotte
7/2/2013
276
$20,880,500
$75,654
Arwen Vista
2010
Charlotte
7/1/2013
296
$36,200,000
$122,297
Forrest at Chasewood (FORMERLY BEACON EASTCHASE)
1985
Charlotte
6/18/2013
220
$8,325,000
$37,841
Arbor Steele Creek
2003
Charlotte
5/28/2013
384
$23,750,000
$61,849
Nottingham
1994
Monroe
5/9/2013
279
$11,719,000
$42,004
Wendover Walk
1984
Charlotte
5/3/2013
86
$5,910,000
$68,721
Preserve at Lake Forest (FORMERLY LAKE POINT)
1983
Charlotte
4/5/2013
296
$10,013,000
$33,828
Berkeley Place
2001
Charlotte
3/25/2013
368
$34,600,000
$94,022
Paces River
1989
Rock Hill
3/7/2013
470
N/A
N/A
Barrington Place
1998
Charlotte
3/1/2013
348
N/A
N/A
Landmark at Brighton Colony (FORMERLY ASHLEY COURT AT PINNACLE POINT)
2009
Charlotte
2/28/2013
276
$30,000,000
$108,696
Landmark at Greenbrooke Commons (FORMERLY ABBINGTON PLACE)
2005
Charlotte
2/28/2013
279
$34,000,000
$121,864
Woodland Estates (FORMERLY FOREST RIDGE)
1988
Charlotte
2/9/2013
330
$10,200,000
$30,909
Emerald Bay
1974
Charlotte
2/7/2013
250
$6,667,500
$26,670
Oakbrook
1985
Charlotte
2/1/2013
162
$12,473,000
$76,994
Bridges at Mallard Creek Ph1
1988
Charlotte
1/29/2013
184
$12,934,000
$70,293
Bridges at Mallard Creek Ph2
1997
Charlotte
1/29/2013
288
$26,924,000
$93,486
Paces Commons
1988
Matthews
1/29/2013
336
$25,990,000
$77,351
Central Pointe
1972
Charlotte
1/15/2013
336
$8,568,000
$25,500
Hamptons at Southpark (FORMERLY THE HAMPTONS AT QUAIL HOLLOW)
1986
Charlotte
1/9/2013
232
$20,100,000
$86,638
Oak Crest
1997
Kannapolis
1/1/2013
100
$3,525,000
$35,250
Stone Creek
1997
Mooresville
1/1/2013
100
$3,163,000
$31,630
CHARLOT TE
Average Price Per Unit
Average Transaction Sales Price
$140,000
$35,000,000
$30,000,000
$123,612
$30,054,679
$120,000
$100,000
$25,000,000
$61,330
$14,394,567
$15,000,000
$10,000,000
$60,000
$40,000
$6,933,500
$30,922
$20,000
$5,000,000
$0
$0
Class A
Class B
Class C
AVERAGE
Class A
Average Year of Construction
Class B
Class C
AVERAGE
Average # of Units Per Transaction
2020
2010
$78,601
$80,000
255
253
250
2008
245
2000
240
1991
1991
237
237
235
1990
230
1980
225
1973
SALES TRANSACTIONS
$18,797,703
$20,000,000
222
220
1970
215
1960
210
1950
205
Class A
Class B
Class C
AVERAGE
Class A
Class B
Class C
AVERAGE
Class A represents properties built from 2000-2014, Class B includes properties constructed from 1985-1999, and Class C signifies properties constructed in 1984 or earlier.
7
CHARLOT TE
PROPOSED DEVELOPMENT
Developer
8
Levine Properties
ARK Group
Tivoli Properties
Campus Works
Clachan Properties
Levine Properties
Pollack Shores
Proffitt Dixon Partners
Goode Properties
Brookline Residential
David Drye
Silver Companies
Woodfield Investments
The Housing Partnership
Certus Partners
Charter Properties
Phillips Development & Realty
Levine Properties
Southern Apartment Groups
Marsh Properties
Levine Properties
Marsh Properties
Forestar Group
Goldberg Companies
Trotter Builders
Marsh Properties
Forestar Group
New Forum
Goldberg Companies
Camden Management Partners
Triangle Real Estate
RL West Properties
Charter Properties
Warren Norman & Company
Charter Properties
The Assured Group
Flat Iron Group
Tom Holderby
Communities Proposed (100 Units and Above)
Community
Units
Road/Intersection
10th Street Apartments
NC Music Factory Blvd.
College St./Sixth St.
Central Ave.
Hawthorne Mill
Commonwealth Ave./St. Julien St.
Central Ave.
Fountains at Matthews
Meridian Place
Brookline
Caldwell Station
Silver Collection at the Park
Woodfield Northlake
Atando Apartments
Kings Grant
Pavilion Pointe
Phillips Mallard Creek
Metropolitan
W. Morehead St./Summit Ave.
Euclid and Lexington Avenues
Metropolitan
Sedgefield
Morehead
Legacy Ballantyne
North Community House Residences
Sedgefield
Morehead
Loft at Charleston Row
Legacy Concord
Loray Mill
Wilkinson Blvd.
Langtree
Legacy Village
Gateways at Galleria
Gibson
Riverwalk
Waterford Park Dr.
Windsor at Cushendall
262
200
330
340
150
105
240
258
260
324
176
335
309
130
357
295
160
155
300
235
155
300
380
248
200
300
380
138
344
100 (190 U/C)
192
300 (136 COMPLETE)
230
230
330
150
262
168
Brevard St.
NC Music Factory Blvd.
College St./Sixth St.
Central Ave./Hawthorne Ln
1101 Hawthorne Ln.
Commonwealth Ave./St Julien St.
Central Ave.
Matthews Township/Northeast Pkwy.
6423 Monroe Rd.
Reames Rd.
Old Statesville Rd./Sam Furr Rd.
Reese Blvd./Gilead Rd
Northlake Center Pkwy.
Newland Rd.
Mallard Creek Rd./Carolina Lily Ln.
Highway 29/I-485
655 Mallard Creek Church Rd.
137 Kings Dr.
W. Morehead St./Summit Ave.
Euclid/Lexington Ave.
137 S Kings Dr.
215 Poindexter Rd.
Morehead St./Kenilworth Ave.
Lancaster Hwy.
Johnston Rd./Endhaven Ln.
215 Poindexter Rd.
Morehead St./Kenilworth Ave.
Ayrsley Town Blvd.
George Liles Pkwy.
West 2nd Ave.
Wilkinson Blvd.
150 Landings Dr.
Legacy Blvd.
Galleria Blvd.
Highway 160/Dave Gibson Blvd.
Cherry Rd./Herrons Ferry Rd.
Waterford Park Dr./Dave Lyle Blvd.
Ivy Ln./Springdale Rd.
Submarket
Downtown
Downtown
Downtown
East-1
East-1
East-1
East-1
East-3
East-3
North
North
North
North
Northeast-1
Northeast-2
Northeast-3
Northeast-3
Southeast-1
Northwest
Southeast-1
Southeast-1
Southeast-1
Southeast-1
Southeast-3
Southeast-3
Southeast-1
Southeast-1
Southwest-1
Cabarrus County
Gaston County
Gaston County
Iredell County
Iredell County
York County
York County
York County
York County
York County
CHARLOT TE
Northwood Ravin
JLB Partners
The Charlotte Housing Authority
Gvest Partners
Tynes Development
Northwood Ravin
Kenton Place Partners
Covington Reality Partners
Silver Companies
Crescent Resources
Sanctuary Companies
Crescent Resources
Southern Apartment Group
Lomax Properties
Cambridge Development Group
Lennar Corporation
Camden Property Trust
Camden Property Trust
Crescent Resources
Crescent Resources
Faison
Woodfield Investments
JLB Partners
NRP Group
Terwilliger Pappas Multi-Family
Woodfield Investments
Pappas Properties
Childress Klein
Sterling Group/Braxton Development
Ram Real Estate
Contravest
Meridia
Lucas Building
Davis Development
Camden Management Partners
Triangle Real Estate
SWH Residential
Charter Properties
Assured Group
Communities Under Construction (100 Units and Above)
Community
Units
Road/Intersection
Morningside Village
Venue
Vista 707
Yards at NoDa
Ashton Reserve
Holly Crest
Reserve at Kenton Place
Vanguard Northlake
Waterford at the Park
Crescent Alexander Village
Arcadia
Circle University City
University House Charlotte
Morehead West
1100 South Boulevard
Astoria at Metropolitan
Camden Gallery
Camden Southline
Crescent Dilworth
Crescent South Park
District Flats at Summit & Church
Encore Southpark
Carnegie Boulevard
Quarters at Morehead
Solis Dilworth
Silos South End
Solis Sharon Square
Element South
Enclave at Bailes Ridge
Piper Station
Addison at South Tryon
Tryon Park at Rivergate
Afton Ridge
Waterstone at Weddington
Loray Mill
South Fork Village
Grove at Morrison Plantation
Plantation Pointe
Riverwalk
401
151
152
342
151
400
106 (104 COMPLETE)
204
84 (142 COMPLETE)
240 (80 COMPLETE)
52 (150 COMPLETE)
117 (70 COMPLETE)
300
211
331
261
323
266
296
321
200
280
350
298
84
111 (115 COMPLETE)
133
277
246
120
121
152 (50 COMPLETE)
72 (48 COMPLETE)
253
190
88 (264 COMPLETE)
181 (100 COMPLETE)
61 (199 COMPETE)
144
McClintock Rd./Iris Dr.
7th St./Weddington Ave.
Seigle Ave.
East 33rd St.
10320 Grobie Way
Sam Furr Rd./Statesville Rd.
17110 Kenton Dr.
Northlake Centre Pkwy.
11920 Joleen Ct.
9224 Graham Ridge Dr.
707 Sanctuary Pl.
9010 University City Blvd.
University City Blvd.
West Morehead St.
1100 South Blvd.
137 South Kings Dr.
West Blvd.
South Blvd./Iverson Way
East Morehead St./Harding Pl.
Carnegie Blvd.
Church St.
Barclay Downs Dr.
Congress St.
135 Morehead St.
Kenilworth Ave.
131 Poindexter
4905 Ashley Park Ln.
Johnston Rd./Marvin Rd.
Highway 521/160
7810 Spindletop Pl.
7000 Modern Way
12620 Toscana Way
410 Starmount Park Blvd.
Weddington Rd./I-85
West 2nd Ave.
1005 South Fork Dr.
156 Capital Ave.
103 Plantation Pointe Loop
Cherry Rd./Ferry Rd.
Submarket
East-1
East-1
East-1
East-1
North
North
North
North
North
Northeast-2
Northeast-3
Northeast-3
Northeast-3
Northwest
Southeast-1
Southeast-1
Southeast-1
Southeast-1
Southeast-1
Southeast-1
Southeast-1
Southeast-1
Southeast-1
Southeast-1
Southeast-1
Southeast-1
Southeast-1
Southeast-3
Southeast-3
Southeast-3
Southwest-1
Southwest-1
Cabarrus County
Cabarrus County
Gaston County
Gaston County
Iredell County
Iredell County
York County
COMMUNITIES UNDER CONSTRUCTION
Developer
9
CHARLOT TE
Carolinas
Georgia
Virginia
Tennessee
Kentucky
Alabama
Florida
West Virginia
WHY CHOOSE CAPSTONE?
The People Sell the Deal
Capstone’s Southeast & Mid-Atlantic Investment Sales Team is among the market leaders within our industry sector
and respective region. We place client service above all else, and can guarantee that no one else will work smarter
and harder in achieving the highest level of results for our clients. We don’t rely on a logo to sell the deal, but
rather utilize the industry expertise and investment acumen, tremendous drive and work ethic, and unbeatable
salesmanship of the team members assigned to each project. At the end of the day, it’s the individuals that drive
value and sell the deal, and we know the capabilities of our individual team members are second to none.
Market Expertise & Product Niche
Capstone sits atop the private capital sector of multi-family investment sales for multiple reasons. Our deliberate and concentrated focus and
expertise in not just the primary markets of the Southeast & Mid-Atlantic, but also the secondary and tertiary markets within our region, identifies
us as the ideal candidate for such assignments. Capstone’s investment sales team has completed a multitude of transactions across the primary,
secondary, and tertiary markets of the Southeast & Mid-Atlantic, and our track record of success can be attributed to our comprehensive coverage
and expertise among these markets, as well as our relationships with the owners and investors who remain active in this environment.
National Exposure via Cutting Edge Technology
Capstone has developed and maintains industry leading national databases, expansive information delivery methodologies, and various
proprietary activity tracking systems. These tools are utilized daily by the investment sales team, analysts, and back-office support staff allowing
for optimal operational efficiency. This enables Capstone’s investment brokerage team to spend nearly all of its time servicing clients, interacting
with industry players and active asset traders, and promoting transactions.
Reputation and Results
Capstone prides itself on its impeccable industry reputation and the core values and behaviors of the firm that drive daily operations. The
firm possesses an unblemished reputation and track record industry-wide, and, as such, the firm’s trusted relationships among the apartment
investment community continue to facilitate seamless, fluid, and successful sales transactions.
* Information in this report has been provided by the following: Charlotte Real Data Report September 2014, Area Image Provided by James Willamor (pg. 1, 2) via https://creativecommons.org/
licenses/by-sa/2.0/, REIS Report, Costar, Business Journals, LoopNet, Bureau of Labor Statistics, county tax records, and various multi-family industry contacts.
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