Triangle Economic News

[DwnTwnRaleighGuy]

NH's or RTP/Wake county is where most relocations occur and probably will in this case as well. Although I would love to see a trend towards downtown. Maybe we just need another large company to move downtown first, like Red Hat to get the ball rolling again? Also, for many reasons I think that if we could get First Citizens Bank to move it's headquarters back downtown it would be the best endorsement that could be made...imho! :-)

[RALNATIVE]

26 minutes ago, Jones_ said:

Also the 4th Ward will be 100% gentrified in a year. The economic boom of the area being driven by an industry full of people of prefer downtown (or just a generation that prefers downtown) is/has fully enveloping ours. 

It's crazy seeing how quickly the 4th Ward and Boylan Heights are changing. I predicted they would. It's the perfect area for techies and millenials who want to be downtown and close to Dix park.

[RALNATIVE]

29 minutes ago, DwnTwnRaleighGuy said:

Also, for many reasons I think that if we could get First Citizens Bank to move it's headquarters back downtown it would be the best endorsement that could be made...imho! :-)

That may eventually happen. Right now their headquarters is that bizarre cylindrical building at North Hills and the adjacent 8-10 story building. That just doesn't seem to be enough Class A office space for a growing company the size of FC.

[ctl]

FCB spent a lot of money on that building to install the art and history collection of the bank and the Holding family. That's not to say they will never move, but the building is more than just ordinary floor space. 

[DPK]

That and I think at one point I read how they were extremely stubborn on moving from that location.

[DwnTwnRaleighGuy]

From my understanding FCB bought the land that there current round building is located for a future hq's. At the time they stated that they were leaving downtown Raleigh to be nearer their clientele...

Sine that announcement, a number of years ago they have gotten some younger family members in management. But most important and shockingly they have become much more aggressive with buying other banks. All makes me wonder if they would ever re-consider moving back downtown Raleigh? Hopes and dreams! :-)

[RALNATIVE]

The Raleigh housing market is red hot: 

http://wunc.org/post/more-institutional-investors-scoop-homes-raleigh?utm_content=bufferb8bc3&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer#stream/0

 

 

[Jones_]

6 hours ago, RALNATIVE said:

The Raleigh housing market is red hot: 

http://wunc.org/post/more-institutional-investors-scoop-homes-raleigh?utm_content=bufferb8bc3&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer#stream/0

 

 

Yeah but institutional investors artificially make it go from red to white hot and this hurts people that want to own a house to live in. 

[DPK]

46 minutes ago, Jones_ said:

Yeah but institutional investors artificially make it go from red to white hot and this hurts people that want to own a house to live in. 

* raises hand *

Tell me about it.  Makes my heart hurt.

Edited August 1, 2017 by DPK

[InitialD]

It is because we need more supply. We need to get rid of any zoning that hinders development of more residential units, including height restrictions, parking requirements, a limits to density/number of units and any other zoning that is restrictive. 

[RALNATIVE]

5 minutes ago, InitialD said:

It is because we need more supply. We need to get rid of any zoning that hinders development of more residential units, including height restrictions, parking requirements, a limits to density/number of units and any other zoning that is restrictive. 

Exactly. Instead of developers focusing on building all of these apartment complexes in the core of the city, the focus should be on more highrise condos, townhomes, and other for sale dwellings.

[Green_man]

50 minutes ago, RALNATIVE said:

Exactly. Instead of developers focusing on building all of these apartment complexes in the core of the city, the focus should be on more highrise condos, townhomes, and other for sale dwellings.

There's nothing currently stopping them from doing the latter.  What do you specifically mean by "the focus"?  

[jtmonk]

36 minutes ago, InitialD said:

It is because we need more supply. We need to get rid of any zoning that hinders development of more residential units, including height restrictions, parking requirements, a limits to density/number of units and any other zoning that is restrictive. 

Yeah, because screw zoning and it's intended purpose of protecting people, property, etc.  I mean really!?!?  I understand that there are a lot of problems in the zoning code that hinders development but to say to get rid it is a little naive.  I do think that downtown Raleigh and a few other select locations around town  should have very little in terms of restrictive zoning such as height restrictions, parking, and density but also believe that there are a lot of places around town that should have these restrictions. As a city planner I hear the good and bad from both sides and can relate to both sides as well.  I want to see my city grow and encourage smart growth in the core but also do not want and would not recommend a 50 story highrise adjacent to a historic district of single family homes or a bunch of highrises that would block sun from reaching adjacent park land or plazas.  Yes, Raleigh has some restrictive zoning but you should really consider the intent of some of this zoning before saying that it should all be thrown out. 

[RALNATIVE]

39 minutes ago, Green_man said:

There's nothing currently stopping them from doing the latter.  What do you specifically mean by "the focus"?  

There has clearly been a concerted effort by the city and local developers to increase the supply of for rent units in the core of the city. This has been in response to the projected demand of 20 and 30 year olds wanting to live in or close to downtown and changing trends in home ownership versus renting. I'm not saying that anything is stopping developers from building units for sale, but they clearly have been more interested in building apartments. Mainly because apartments tend to be more lucrative for developers and can also be easier to gain city approvals and permits for.

Since Raleigh is considered one of the top tech hubs in the country and has attracted attention far an wide, it is understandable that the market would shift towards being a seller's market. This will continue for the foreseeable future. Based on recent studies that I have read, out of all of the top 8 tech hubs, Raleigh has the lowest average cost of living but has the 4th or 5th largest number of tech jobs. This is making Raleigh an even more attractive buy for outsiders looking to invest, as well as those seeking to relocate and are looking for a home to buy.

All of these things signal that the time is now for developers, and the city, to think about increasing the inventory of for sale dwellings. This will undoubtedly require some additional rezoning in certain areas.

Edited August 1, 2017 by RALNATIVE

[Jones_]

1 hour ago, InitialD said:

It is because we need more supply. We need to get rid of any zoning that hinders development of more residential units, including height restrictions, parking requirements, a limits to density/number of units and any other zoning that is restrictive. 

Or how about put crippling restrictions on institutional investors? Like say massive capital gains taxes on non-primary residence sales. I'm talking like 75%. Also severe limits on depreciation. 

This is the stuff of bubbles and economic collapses. 

[RALNATIVE]

5 minutes ago, Jones_ said:

Or how about put crippling restrictions on institutional investors? Like say massive capital gains taxes on non-primary residence sales. I'm talking like 75%. Also severe limits on depreciation. 

This is the stuff of bubbles and economic collapses. 

I'm all for placing limits on investors who artificially inflate market prices, but unfortunately, this dilemma is fairly new to the state of NC. California, for example, has been dealing with these issues for decades and has a better handle on what can be done to regulate these activities.  But as we see in San Francisco, there is only but so much the state and local governments can do to control price inflation in real estate. And most governments simply believe in free markets. To a certain extent they hesitate getting involved.

[Green_man]

56 minutes ago, RALNATIVE said:

There has clearly been a concerted effort by the city and local developers to increase the supply of for rent units in the core of the city.

The city has been pushing apartment construction instead of condos???  Pretty sure that just want the developers have been proposing.  City can only review/ approve what is proposed.  Maybe with 301 Hillsborough they could have added condo ownership stipulations?  But can't imagine them rejecting Edison, Skyhouse, Lincoln, Elan, Dillon, etc. just because the developers proposed renting the units.  With most gripes, (like with the "height limits"), seems like most people unfairly direct it at the city.  Therefore, expecting changes to come from the city is unfounded.

Simply put, what we are seeing with current downtown growth is the result of the current market.  Maybe in 3-5 years, we'll see the market swing to condo towers?  Who knows.  Not the city's or the zoning's fault.

[RALNATIVE]

9 minutes ago, Green_man said:

The city has been pushing apartment construction instead of condos???  

Yes, you read my statement correctly. The city of Raleigh has been pro apartment development for a while now. They may have no been directly requesting developers to build more apartments, but through their policies and other actions have tipped the scale in favor of developers who desire to build these units.

[Green_man]

Seems to be a national trend, so not exactly sure which Raleigh policy you are referring to.  

[CHGuy]

It all comes down to financing.  Since the great recession, it has been much easier to finance apartments than condos.  Condos required a certain percentage of pre-sales before a project can get under construction.  Apartments can get under construction as soon as they are approved.  I assume that the developers only have to show that they will be able to rent them out.  Right after the recession hit, banks stopped all loans associated with condos.  I don't believe that they have loosened up much since.

[RALNATIVE]

14 minutes ago, CHGuy said:

It all comes down to financing.  Since the great recession, it has been much easier to finance apartments than condos.  Condos required a certain percentage of pre-sales before a project can get under construction.  Apartments can get under construction as soon as they are approved.  I assume that the developers only have to show that they will be able to rent them out.  Right after the recession hit, banks stopped all loans associated with condos.  I don't believe that they have loosened up much since.

In this market, I think that the debacle with the Hue also made some local developers nervous about going the condo route. The Hue started out as condos, but because of sales and financing issues with that project, the developers were foreclosed on and the building was sold to a bank that eventually converted the building to apartments.

[RALNATIVE]

In other news, Raleigh-based INC Research has completed its mega-merger with Boston-based inVentiv Health. The interesting news is that the combined company will retain its headquarters in Raleigh. It's a very positive sign that they chose Raleigh over Boston, which is a bigger market for biotech and medical research.

https://www.bizjournals.com/triangle/news/2017/08/01/done-deal-inc-research-inventiv-health-complete.html

 

 

[DanRNC]

The Triangle is the epicenter of CRO work in the world.

[RiverwoodCLT]

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.

 

Edited August 2, 2017 by RiverwoodCLT

[RALNATIVE]

18 minutes 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.

 

Yes we saw this play out in Raleigh with the Hue, when it was originally slated as condos. After the bank foreclosed on the property, they converted the units to apartments and it seems to be doing just fine now.