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KJHburg

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Banks really got burned with condos in real estate Bust of 2007 2008 and won't lend to them. Only in a few select cities where people have to put 40-50% deposits like NYC or Miami are any high rise condos being built. Atlanta has only built 2 or 3 since the bust and they are much smaller boutique buildings of fewer than 100 units. Apartments are much easier to get financed with reputable developers but even banks are looking more closely at these deals. I believe both Raleigh and Charlotte will see apartment conversions to condos before we see new high rise condo towers. The Vue in Charlotte was that city's biggest example built as a 50 story high rise condo turned into 50 floors of apartments. The Vue the Hue must be those names LOL 

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6 hours ago, RiverwoodCLT said:

From what I have read about apartments growth and not condos is it is easier to get financing for apartments than condos.

I have seen this play out in Charlotte, where high rise condos at the presents is a hard sell.   Hard to get off the ground.

I do see small projects in Southend for town homes.

From Seattle Business Journal

The question of the day among Seattle real estate developers: Why are high-rise apartment buildings going up all over downtown but only one big condo project?

The answer is money and the risk factors, according to two apartment developers.

 

I was an HOA president during the 2007-2008 housing bubble collapse. I believe new building condo financing became 50% of the building had to be presold, and no individual unit would be financed more than 80% of its value (so really a bank would not finance more than 60% of a building overall). Plus the HOA budget had to demonstrate 10% cash setaside in each year's budget. I am not sure if those are still the lending requirements or not but just wanted to weigh in. Also, to my knowledge only the condos at Wade and St Marys have built in Raleigh since 2008 then though I imagine some suburban stuff has slipped past my attention...

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11 minutes ago, Jones_ said:

I was an HOA president during the 2007-2008 housing bubble collapse. I believe new building condo financing became 50% of the building had to be presold, and no individual unit would be financed more than 80% of its value (so really a bank would not finance more than 60% of a building overall). Plus the HOA budget had to demonstrate 10% cash setaside in each year's budget. I am not sure if those are still the lending requirements or not but just wanted to weigh in. Also, to my knowledge only the condos at Wade and St Marys have built in Raleigh since 2008 then though I imagine some suburban stuff has slipped past my attention...

West Condos and RBC Plaza Condos went on the market in 2008.

Edited by RALNATIVE
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One important note about condos and presales in NC. If you are interested in a presale condo that will be delivered way out insist on having the deposit in a NC Trust Account versus an account controlled by a developer where they can spend as need be. In Charlotte hundreds of   people lost THOUSANDS of dollars in deposits because the accounts were not NC Trust accounts when 2 condo towers went belly up. All the deposits were lost. NC Real estate commission makes either way acceptable but insist on putting any of your deposits into NC Trust account and if they developer doesn't want to do it or the listing agent doesn't,  walk away. Especially if there are a lot of sales needed to start. And yes the presale requirement is huge now which further stalls out condos. Small condo buildings are being built in NC and that is what you will see for a while. I believe when you start to see apartment conversion to condos you will then see condos being built again. Notice none of these Raleigh mixed use towers includes condos all have apartments in the mix not condos. 

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I agree with the earlier comment that the only highrise condo development we'll see going up in the near future will be in very large markets such as NYC, San Francisco, Miami, and Chicago. Those markets have the economics that it takes to support meeting the financial requirements for getting one of these developments off the ground.

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5 hours ago, RALNATIVE said:

I agree with the earlier comment that the only highrise condo development we'll see going up in the near future will be in very large markets such as NYC, San Francisco, Miami, and Chicago. Those markets have the economics that it takes to support meeting the financial requirements for getting one of these developments off the ground.

Indeed. You seem more plugged in than me to other city's goings on...how much of this do you think is foreign investors stashing cash?

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46 minutes ago, Jones_ said:

Indeed. You seem more plugged in than me to other city's goings on...how much of this do you think is foreign investors stashing cash?

I'd say about 50/50. There are a lot of individuals in the US who have money to spend, and right now, Raleigh is a very attractive market to buy. Buy cheap now and sell high once real estate values have substantially appreciated, which is almost inevitable at this point.

Without a doubt though, many foreign investors are also looking to protect their assets by investing in the US market. Investment opportunities in a lot of foreign countries are not as plentiful and are not as secure as they are in the US, and for a foreigner who has substantial assets, they are looking at Raleigh the same way as US investors are. In my experience, foreign investors tend to be very savvy...they know what's hot and what's not.

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5 hours ago, RALNATIVE said:

Investment opportunities in a lot of foreign countries are not as plentiful and are not as secure as they are in the US, and for a foreigner who has substantial assets, they are looking at Raleigh the same way as US investors are. 

True. Consider real estate prices in London, which soared largely because of money coming from Russia (and do not appear to have been impacted by Brexit, at least not yet). Same thing happened in Vancouver in the 1990s with Hong Kong money. There are many places around the world where the wealthy can invest in real estate. The U.S. is just one of them and not always the first choice.

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1 hour ago, ctl said:

There are many places around the world where the wealthy can invest in real estate. The U.S. is just one of them and not always the first choice.

Yes, there are many other places around the world where foreign investors can choose to invest there money, but it is easier for most foreigners to invest in the US than in many other countries. Our laws and free market stance in many cases make it easier for someone from another country to buy here.

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Believe me the US is one of the easiest place to buy and sell real estate in the world if not the easiest with the most legal protections. My British friend sold a condo in Canada and they kept his money for a couple months to make sure he did not owe any taxes. Mexico severely limits where and how can people can buy real estate. Hong Kong puts a huge excise tax on buying property there. The UK is fairly easy like the US but many countries the real estate laws are very interesting to say the least. 

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  • 4 weeks later...

Raleigh and the Triangle added 100,000 private sector jobs since the last recession ranking #4 in the nation! https://www.bizjournals.com/triangle/news/2017/09/01/raleigh-area-added-100-000-private-sector-jobs.html?ana=e_ae_set1&s=article_du&ed=2017-09-01&u=oAaDx%2B74FoP4qOJ%2By4AU6dhJPpc&t=1504294468&j=78773941   A 24% growth rate since 2009. 

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19 hours ago, KJHburg said:

Yes I hope that is reversed soon and I think the best site for the Toyota Mazda plant in the Greensboro Randolph county megasite. 

Same here.  It would be a great thing for that area and the state as a whole to gain an auto plant.  I read somewhere that the site's neighbors were opposed to it, though.

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Amazon is looking to find a 2nd HQ in North America. This could be a very huge opportunity for Raleigh if the city could land this.

 

https://www.usatoday.com/story/money/2017/09/07/amazon-plans-second-headquarters-dubbed-hq-2/640861001/

Raleigh is undoubtedly in a very good position to land this, for the following reasons:

  1. Since their HQ1 is on the west coast, they mostly likely will select an east coast location for HQ2.
  2. Raleigh is the most economically cost effective of all of the 8 major tech hubs in the US.
  3. The area has a wide range of demographics that Amazon likes to employ in executive management, technology, logistics, and distribution positions.
  4. Ease of access up and down the east coast and access to the midwest.
  5. Major international airport with nonstops to many major US cities. 
Edited by RALNATIVE
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1 hour ago, RALNATIVE said:

Amazon is looking to find a 2nd HQ in North America. This could be a very huge opportunity for Raleigh if the city could land this.

 

https://www.usatoday.com/story/money/2017/09/07/amazon-plans-second-headquarters-dubbed-hq-2/640861001/

Raleigh is undoubtedly in a very good position to land this, for the following reasons:

  1. Since their HQ1 is on the west coast, they mostly likely will select an east coast location for HQ2.
  2. Raleigh is the most economically cost effective of all of the 8 major tech hubs in the US.
  3. The area has a wide range of demographics that Amazon likes to employ in executive management, technology, logistics, and distribution positions.
  4. Ease of access up and down the east coast and access to the midwest.
  5. Major international airport with nonstops to many major US cities. 

I was immediately skeptical of Raleigh's chances with this when i first heard the news but you do actually bring out some great points that are starting to get me excited about the possibility.  Honestly though i feel Amazon wants to mirror their Seattle HQ as close as possible and im not sure Raleigh could pull that off. It would be a shame to stick them in RTP when Seattle has a twin 500ft+ tower campus.

Regardless, hopefully the city council pursues it aggressively.

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I was a little worried when I read they have a 'campus' in Seattle (I have not been to the South Lake area of Seattle) because I immediately thought Centennial/Weston/RTP and cringed. Jobs sure, but proper urban form lost. But lo and behold their campus is very urban indeed. I bet Kane could find a way to accommodate them along Harrington, Peace, West and all wrapped up in and around an MLS stadium. I'm only coming up with 50-ish acres in the area and they are looking for 100, but if say, you sold them most of the area around Halifax green, including the Revenue Building (State has discussed moving Revenue out of downtown anyway), which they could use as-is, demolish everything else except Education (build a new LOB behind admin facing Lane St) then by my count that's another 10 acres, plus several other parcels adjacent (but not in a perfect rectangle) like the parking lots along Wilmington and the area around where the fire was, and you're getting close to 100 acres. No more dead State Government zone downtown! (I work for them btw). The Seattle campus has 24 restaurants and cafes!  And it'd be integrated nicely into downtown as Raleigh already surrounds this area with other amenities...future park, food and nightlife on the borders plus grocery stores coming soon, and improved traffic patterns. How much would they love an MLS stadium in the center of their campus? Not sure, but off the cuff it seems like a winning setup and could be a yin/yang sort of pitch (pitch Amazon and MLS off of each other) 

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No doubt the Research Triangle Foundation is hoping that Amazon will buy the 105 acres in RTP formerly owned by Nortel. The property has an existing 500,000 square foot building that is empty and probably not reusable... a tear-down.  And it's adjacent to the NCRR tracks.

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1 hour ago, Trent Y said:

I was immediately skeptical of Raleigh's chances with this when i first heard the news but you do actually bring out some great points that are starting to get me excited about the possibility.  Honestly though i feel Amazon wants to mirror their Seattle HQ as close as possible and im not sure Raleigh could pull that off. It would be a shame to stick them in RTP when Seattle has a twin 500ft+ tower campus.

Regardless, hopefully the city council pursues it aggressively.

They are looking to invest around $5 billion. That can build a lot of buildings.

They could potentially build a tower in downtown Raleigh to serve as the HQ2 tower, a distribution facility in a town like Clayton or Knightdale, and a large IT campus in RTP with this large of an investment. The possibilities are enormous and I do believe that the Triangle is poised to make it happen.

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