Who is going to buy all the Condos, (Part II)

[Desert Power]

23 hours ago, Hushpuppy321 said:

Charlotte Neighborhood Population Saturation.  Based on existing infrastructure, road network, etc - how much Population do you think Close-In neighborhoods (ones listed below) can reasonably handle.  I believe Southend is currently around 10,000 now.

-Southend

-Optimist Park

-Plaza Midwood

-Midtown/Elizabeth

-NODA

Southend, OP, and NoDa continue to be the favorites for strong growth.  Southend has the best established area, is on the light rail, proximity to uptown, and road connectivity.  It is building taller buildings and is an extension of Uptown in a way.

OP has a lot of potential.  By my count, there are over 1750 units in development here or directly adjacent.  There are tons of land that could become even more complexes.  But what is the demand to live there?  How much does the rail yard and lack of connectivity to Tryon limit it?

NoDa still has some space for TOD, but I feel it is limited and more on the Tryon street side.  Hard to see too many large projects in the neighborhood proper without (more) teardowns.  

Plaza Midwood/Elizabeth/Midtown are are nice, but hard to see them getting built up too much more.  I don't consider the Streetcar are realistic option for most people to commute.  

 

[SgtCampsalot]

IMO the value of OP and NoDa is their lack of connection to major thoroughfares. Parkwood/The Plaza is the closest thing to a traffic-heavy arterial.

Central Ave, South Blvd, etc, make it much harder to walk, bike, or even drive around, whereas the other neighborhoods' road system makes it nicer and much safer.

[asthasr]

2 hours ago, Desert Power said:

But what is the demand to live there?

There is no demand to live there. There is, however, demand to live near the light rail. In twenty years, I think the area will be completely unrecognizable. I expect all the SFH between Seigle/Pinckney and the rail corridor to be redeveloped.

[Desert Power]

1 hour ago, asthasr said:

There is no demand to live there. There is, however, demand to live near the light rail. In twenty years, I think the area will be completely unrecognizable. I expect all the SFH between Seigle/Pinckney and the rail corridor to be redeveloped.

Agree it is a question of timing/scale.  There are plenty of places near stations on the initial Blue Line that still are not built up though.  How the area absorbs the 1750+ units currently under construction is a big piece of that.   I think we are a long way from seeing a lot of the SFH east of Davidson being redveloped.   But, yeah, the entire area bounded by Parkwood/Brevard/Davidson/Jordan could and should look like South End if there are that many people to live there.  

4 hours ago, SgtCampsalot said:

IMO the value of OP and NoDa is their lack of connection to major thoroughfares. Parkwood/The Plaza is the closest thing to a traffic-heavy arterial.

Central Ave, South Blvd, etc, make it much harder to walk, bike, or even drive around, whereas the other neighborhoods' road system makes it nicer and much safer.

It makes it nicer, but it does limit the ability to create a South End level of density.

[SgtCampsalot]

3 hours ago, Desert Power said:

It makes it nicer, but it does limit the ability to create a South End level of density.

I hear you, but is this logic based on the market's perception of necessary "auto traffic capacity", or some legitimate functional limitation. Because the way I see it, the entire Belmont, Villa Heights, NoDa, Shamrock, area (within one mile of BLE) would function far more fluidly with higher density than most of South End for the very reason of its lesser auto capacity.

Perhaps I'm thinking with my rosey "Global City" glasses, and ignoring American tendencies.

Edited November 14, 2018 by SgtCampsalot

[Hushpuppy321]

I'll be officially 'amazed' if those approximate 1750 Units under construction throughout Optimist Park rent out pretty quickly over the next 14/16 months as they come online.  Only guessing that they should be more affordable than units in Southend currently are.

[KJHburg]

This is the southeast apartment report from CBRE just released.  Good stats on average rents, vacancy, where people are coming from, demographic age breakdown etc. 

Key stats from the QC apartments built in the last 12 months 7456 completions but the 8835 apartments were absorbed!   Charlotte apartments are cheaper than Nashville and Atlanta and $1 cheaper than Charleston. 

download your own report here 

https://www.cbre.us/research-and-reports/Southeast-Viewpoint---Southeast-Multifamily-A-Story-of-Growth--Opportunity

Edited December 5, 2018 by KJHburg

[Desert Power]

3 hours ago, KJHburg said:

This is the southeast apartment report from CBRE just released.  Good stats on average rents, vacancy, where people are coming from, demographic age breakdown etc. 

Key stats from the QC apartments built in the last 12 months 7456 completions but the 8835 apartments were absorbed!   Charlotte apartments are cheaper than Nashville and Atlanta and $1 cheaper than Charleston. 

download your own report here 

https://www.cbre.us/research-and-reports/Southeast-Viewpoint---Southeast-Multifamily-A-Story-of-Growth--Opportunity

Very good news for Charlotte!  

[Hushpuppy321]

Definitely seems like good amount of growth for the QC but has anyone thought about the amount of Rezonings the city receives as it relates  to the physical growth and development of the city?  Looks like Charlotte is on track to have fewer Rezoning requests in 2018 than it did in 2017.  Can that be a bad sign or signs of a slowdown?

[Guest]

4 minutes ago, Hushpuppy321 said:

Definitely seems like good amount of growth for the QC but has anyone thought about the amount of Rezonings the city receives as it relates  to the physical growth and development of the city?  Looks like Charlotte is on track to have fewer Rezoning requests in 2018 than it did in 2017.  Can that be a bad sign or signs of a slowdown?

I think theres currently a lot of "Wait and see" going on. Multifamily has absolutely hit its peak, and frankly I think a lot of development is being done in previously rezoned by right areas. 

[Hushpuppy321]

This is complete horse sh!t...  Arcadian Village in East Charlotte (Independence Blvd @ Idlewild) is raising the rent $100 above last years lease.  I know that the Aldi's under construction nearby is almost done but my goodness what a crock of sh!t.  

When I saw Arcadian Village in the Charlotte Observer this summer due to a change of ownership I never expected they'd raise rents so fast and without making any significant improvements.  

#needaffordableapartments

[Hushpuppy321]

Anyone else upset by the City Council rejecting the Apartment Project off South Tryon at Nevada Blvd?  Some of these were lined up to be in the 'affordable' range.  Quick check of google earth show other housing units (Apartments & trailers) nearby.  City council objected to how close industrial is to these planned apartments (even though Zoning committee recommended approval) but it seems theirs other existing residential within similar proximity.

[KJHburg]

3 hours ago, Hushpuppy321 said:

Anyone else upset by the City Council rejecting the Apartment Project off South Tryon at Nevada Blvd?  Some of these were lined up to be in the 'affordable' range.  Quick check of google earth show other housing units (Apartments & trailers) nearby.  City council objected to how close industrial is to these planned apartments (even though Zoning committee recommended approval) but it seems theirs other existing residential within similar proximity.

I thought that was bogus and the developer agreed to have some affordable  units in the mix and it is so close to that huge employment center.  Especially that side of Tryon opposite from where most of the industrial stuff is and much of it pure warehouses. 

[CLT2014]

That area is zoned for industrial uses and part of the Steele Creek Area Plan's industrial corridor. I'm sure the industrial businesses in the area were not looking forward to a couple hundred residents being nearby who could complain about noise, light pollution, etc... There would inevitability be some lady calling to complain and say: "Everyday at 7AM they start cutting wood, driving their forklifts around, and their lights shine right into my window!!!"

[KJHburg]

CBRE issued their 2018 apartment report.  Charlotte had 7000 completed apartment units in 2018 and absorbed 6700.   This was a lower absorption rate and it was noted in the report.  However it also noted Charlotte has tremendous in-migration so it should balance itself out.   To me, new  apartment complexes seem to be slowing down which is a good thing and  rent increases have slowed tremendously with the new completions. 

Here is the report you can dowload

https://www.cbre.us/research-and-reports/US-Multifamily-Figures-Q4-2018

[KJHburg]

since this thread now deals more with apartments since condos in any large numbers are not being built.    Despite all the apartment growth in Charlotte metro occupancy is holding steady at 95% which is great.

""Driven in part by a booming economy and surging population, the Queen City is currently outpacing most other major cities in terms of rental-market growth, according to the recently released Yardi Matrix Multifamily National Report. That monthly analysis found rental rates in Charlotte were up 3.4% in April from a year earlier, ranking the city among the top 10 nationwide by that measure.  But for 2019 to date, the growth rates of rents in the state's two largest cities are leading the nation.  "North Carolina metros Raleigh and Charlotte emerged as the fastest-growing rental markets in recent months, with both up 0.5%," the report states. It listed a strong business climate, temperate weather and attractive employment opportunities as factors that "have bolstered housing demand in the Tar Heel State." Raleigh's rental rates were up 3.7% in April from the same time last year.   Meanwhile, local occupancy has remained steady over the past year at 95% — and that's despite a 4% increase in total stock.  Las Vegas led the nation in terms of year-over-year growth in rental rates, at 7.3%. Rents increased in all of the top 30 markets over the past year, with the national average at 3%.""

https://www.bizjournals.com/charlotte/news/2019/05/16/cbj-morning-buzz-growth-in-charlottes-multifamily.html

 

[KJHburg]

Occupancy in the rental market is staying strong in Charlotte according to this report.  94.7% occupancy despite massive construction over the last few years.

https://www.nreionline.com/multifamily/southeastern-cities-experience-strong-job-growth-they-are-also-seeing-rising-demand-new

[kermit]

In hindsight the title of this thread cracks me up. The his thread (part 2 anyway)  began in 2008, and Charlotte has added nearly 300,000 people since then. How quaint that we assumed that new arrivals would all flock to Ballantyne or U City and there would be no growth in demand for intown living — how did we (of all entities) miss that transformation?

Edit: as the thread’s change in focus shows, condos were replaced by apartments (due to the mood of financial markets). Despite the shift in finance, I think the Southend townhouse market shows that there is huge demand for intown condo space (perhaps not high rise) and urban living in general. Comparing in town home prices to suburban ones suggests the market is aware of this demand shift.

Edited May 26, 2019 by kermit

[KJHburg]

Condos have not really come back in terms of new builds.  Still very difficult to get financing for projects and a few boutique projects have gone up in Myers Park with very expensive units.   Other than townhomes. stacked flats still are not being built in Charlotte.    One small project was sold out behind Southbound and Mac's off South Blvd. but I really can't think of any other ones in the area other than Myers Park.  Uptown has had zero new condo builds in the last 5 years.  

I do think a small project as a part of a hotel could work uptown.  with rising construction costs it is just so expensive to build a high rise condo complex uptown.   I still think we will see some apartment to condo conversions first before we see new construction again uptown. 

[KJHburg]

This article from Atlanta shows how difficult it is to get construction financing for condos.  JPX John Portman' son presold 1/3 of his proposed condos and still could not get financing.    

This applies to Charlotte as well as I know many have asked why no condo towers are being started. Only very small condo buildings not towers are being built in Charlotte.  I can think of only 2 behind Macs on South Blvd and the Opus in Myers Park.  Maybe there are a few more but not many.  

https://www.bisnow.com/atlanta/news/multifamily/despite-activity-doubts-swirl-around-citys-tallest-condo-tower-99534

[KJHburg]

this subscriber article story about apartment growth in Charlotte had all kinds of nuggets of information.

 

""Likely coming as little surprise to local renters, metro Charlotte's rent growth has steadily climbed in 2019 and, in August, tied with Austin, Texas, and Riverside, California, as having the fifth-highest annual rent growth at 4.6%. Two other N.C. metros registered above Charlotte in that measure — Raleigh-Durham logged annual rent growth of 5.4% in August, while Greensboro had rent growth of 5.2%. All three N.C. metros posted higher rental growth than the national norm of 3%.  When looking further back toward the start of this current economic cycle, Charlotte rents have increased 40.9% since early 2010 — above the national average of 34.6%.""

In addition to rents growing at a rapid pace, inventory growth has skyrocketed in the Charlotte metro during this cycle. At 31%, that expansion rate tops the nation's largest markets. Nashville, Tennessee; Austin, Texas; and Raleigh-Durham follow Charlotte with respective growth rates of 28.2%, 28.1% and 25.4%.   Charlotte's stock of existing market-rate apartments now totals 186,375 units, with 50,347 apartments completed cycle to date.

Its annual pace of 7,500 new units outstrips peak deliveries seen back in the late 1990s and early 2000s — but is lower than the 9,000 apartments delivered in 2016.   I t's projected that apartment deliveries in metro Charlotte will remain elevated over the near term. Ongoing construction of more than 11,000 units, for instance, is expected to grow the existing stock another 6%. About 7,800 units are scheduled for delivery this year and another 6,009 apartments are slated for completion in 2020, according to RealPage's estimates. DEMAND     Apartment occupancy in the Charlotte market remains healthy — at 96.2%, it nearly mirrors the U.S. average and is up by about a percentage point from a year ago. ""(The) eight-year track record is especially impressive again going back to how much new supply has had to be digested in this marketplace," Willett said.

https://www.bizjournals.com/charlotte/news/2019/09/23/strengths-downside-risks-and-submarket-leaders-the.html?iana=hpmvp_clt_news_headline

Edited September 23, 2019 by KJHburg

[Matthew.Brendan]

Might have to re-evaluate the yearly increase % on my rentals!

[sakami]

Not in the Charlotte market but Grubb is struggling to get 50% of their first condo tower under contract, delaying the start of their entire project in the Perimeter area in Dunwoody (Atlanta). I’m assuming this finance requirement would be a deterrent to condo construction here as well. 
 

https://www.reporternewspapers.net/2019/11/12/financing-slows-groundbreaking-for-900-condo-mixed-use-development-in-perimeter-center/

 

[Guest]

Not in the Charlotte market but Grubb is struggling to get 50% of their first condo tower under contract, delaying the start of their entire project in the Perimeter area in Dunwoody (Atlanta). I’m assuming this finance requirement would be a deterrent to condo construction here as well. 
 
https://www.reporternewspapers.net/2019/11/12/financing-slows-groundbreaking-for-900-condo-mixed-use-development-in-perimeter-center/
 

900 condos! Dang!


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[KJHburg]

Interesting article from UNC Charlotte Urban Institute about single family permits in Meck vs. multifamily and townhome permits.

One thing I would add is most housing in suburban counties is overwhelming single family.   Also look at the cluster of new apartments in the Northlake Mall area and there is still lots of construction in that area too in addition to the other areas mentioned. 

https://ui.uncc.edu/story/charlotte-mecklenburg-housing-permits-apartment-construction