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


monsoon

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Not condos for sale but high end apartments to rent.  Charlotte has the highest percentage of expensive apartments built in the last few years.

https://www.nreionline.com/multifamily/us-cities-most-flooded-high-end-apartments/gallery?slide=31

""The following gallery takes a look at the top 30 cities in RentCafe's rankings based on total percentage of new construction that high-end units accounted for in 2017 and so far in 2018. ""

https://www.nreionline.com/multifamily/us-cities-most-flooded-high-end-apartments

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  • 2 weeks later...

I can't read the rest of the article "Is there a site downtown that could be premier enough", but I think if any site has a chance within 277 (currently) it would be along the Stonewall corridor, specifically the LU site.  The only other premier spot I can think of would be the lot boarded by the ball park and Romare.  1st ward has the empty lots, but it's not built up enough to warrant the high prices they would be looking for.  1 Brevard for example, even though I think that was technically 2nd ward.  In the future, yes...now, I dont think quite yet.

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I think a mixed use tower could be the answer like a hotel with condos on top like the W in Atlanta.   I would think Legacy could be a good site or as I think what will happen you will see an apartment tower convert to condos.  

and no David Furman did not mention any specific sites other to say 10 Tryon on far N Tryon by the skyhouses would not be it. 

Edited by KJHburg
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  • 2 weeks later...

I would like to temporarily make this thread about "Who is going to rent all the apartments?":

We have a half dozen apartment projects about to come on line this late-Winter/early-Spring in Uptown and along the BLE. I find this notable because these are great markets, but with so many new units across the city I wonder whether the market will be saturated when it comes to filling them up? For this exercise I am less interested in South End.

Which communities do we think will lease-up quickly? And which ones may struggle (Cadence Music Factory, anyone?...)? I like to follow occupancies and renter interest, so what do we think of each?
We've got:

UPTOWN:

1> 550 on Stonewall (Northwood Ravin): 550 units

Pros: High-rise portion, Stonewall is a hot market; Whole Foods, retail
Cons: Lots of Uptown competition; high-rises are more expensive

2> Savoy (Proffit Dixon / Greystar): 302 units

Pros: Stonewall is a hot market, mid-rises are less expensive
Cons: Lots of Uptown competition; Stonewall is somewhat isolated this far down (all these new retail spaces will be important to fill that void)

BLE:

3>Alexan Highland Mill / Optimist Hall (Trammell Crow / Matrix Residential): 250 units

Pros: Directly adjacent to Optimist Hall and Area 15
Cons: Potentially perceived as isolated in between two BLE stops

4> Parkwood Station Lofts (NRP Group): 335 units

Pros: Right on Parkwood Station, great building design
Cons: Somewhat isolated, no retail, may seem too far/uncomfortable of a walk to Optimist Hall until Parkwood diet is completed

5> Alta Warp + Weft (Wood Partners): 260 units

Pros: Right on 25th St station, ground floor retail
Cons: Somewhat isolated, no 25th St connection to N Davidson St (yet)

HONORABLE MENTION:

6> The Lofts at Hawthorne Mill (Clachan Properties): ??? Units

Pros: Historic building, next to new Belmont retail and Plaza-Midwood
Cons: Perception of Belmont may not help


Which will find the easiest success, and which will find difficulty? Am I wrong about any of these pros/cons?

 

Edited by SgtCampsalot
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3 hours ago, SgtCampsalot said:

I would like to temporarily make this thread about "Who is going to rent all the apartments?":

We have a half dozen apartment projects about to come on line this late-Winter/early-Spring in Uptown and along the BLE. I find this notable because these are great markets, but with so many new units across the city I wonder whether the market will be saturated when it comes to filling them up? For this exercise I am less interested in South End.

Yea, I have the same reaction when I see all these buildings going up in a relatively small area. But when I do the math the conclusion I always reach is that developers just are building enough urban product.

The back of the envelope math:

Charlotte growth rate is generally above 2% per year -- this is 53,000 people per year (145 per day)

Where will these people choose to live? Its hard to say but the majority of these new arrivals are 20 somethings just entering the job market. A minority of these arrivals are two earner households with kids (this cohort is less than 25% of the US households now). If just 25% of Charlotte's new arrivals would consider living in an 'urban' place then that suggest that 36 units per day will be consumed by new arrivals. If the new construction totals 2,000 units (just guessing) that could be absorbed in less than two months by new arrivals alone. 

The other metric to keep in mind is that less than 5% of Charlotte's population lives in the 3 mile radius of Tryon and Trade. I would think that a significant portion of that 95% would choose to move closer to Uptown if they had the right opportunity.

TLDR: I dunno the answer, but I don't think that overbuilding is a problem.

 

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I think we construction of new apartments already slowing (new starts) that the market through higher construction costs and tighter lending standards is helping correct any huge oversupply.  Northwoods pulled the plug on their Polk building project for the time being.   I think after Lennar's new high rise which of course is very expensive to build you will see a pause for awhile maybe 9-12 months before anything starts again.  

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32 minutes ago, kermit said:

Where will these people choose to live? Its hard to say but the majority of these new arrivals are 20 somethings just entering the job market. A minority of these arrivals are two earner households with kids (this cohort is less than 25% of the US households now). If just 25% of Charlotte's new arrivals would consider living in an 'urban' place then that suggest that 36 units per day will be consumed by new arrivals. If the new construction totals 2,000 units (just guessing) that could be absorbed in less than two months by new arrivals alone. 

I think part of the problem for the Uptown market is many of the arrivals ARE 20 somethings just entering the job market. A significant amount of people in this age group are also living in suburban apartments with cheaper rent where they are trying to get the cheapest unit possible because their entry level pay is low. A sub-cohort of 20 somethings land a job at Wells Fargo Securities and are ready for their luxury apartment - but not all. 

The $1,200 a month units Uptown are getting gobbled up. It is the premium units that are sitting and need to be filled by people in their 30's and older that can afford $3,500 a month rent (and chose to rent over buy). Novel Stonewall Station is a perfect example. Almost all the sub $2,000 a month units are leased. There are numerous premium units on corners and higher floors sitting empty where they want $2,000 - $12,000 a month. 

In addition to young people moving to town, America is getting older and elderly. Most of the apartment buildings in Uptown are pretty clearly targeting young millennials, and thus missing out on a growing empty-nester demographic that might be more interested in urban living feel like "the building isn't for them." This is also a demographic with wealth and income that can more often afford a $6,000 a month unit. This demographic is picking apartments and townhomes in Dilworth, Myers Park, Elizabeth, etc... though because the buildings are being designed more to that generation's aesthetic tastes (and unsurpringly lease up premium units much quicker than Uptown) and doesn't scream Miami nightclub. 

Edited by CLT2014
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1 minute ago, CLT2014 said:

I think part of the problem for the Uptown market is many of the arrivals ARE 20 somethings just entering the job market. A significant amount of people in this age group are also living in suburban apartments with cheaper rent where they are trying to get the cheapest unit possible. A sub-cohort of 20 somethings land a job at Wells Fargo Securities and are ready for their luxury apartment - but not all. 

The $1,200 a month units are getting gobbled up. It is the premium units that are sitting and need to be filled by people in their 30's and older that can afford $3,500 a month rent (and chose to rent over buy). Novel Stonewall Station is a perfect example. Almost all the sub $2,000 a month units are leased. There are numerous premium units on corners and higher floors sitting empty where they want $2,000 - $12,000 a month. 

Yea, I agree with you about entry level employees not being able to afford most of these units. But that is where I get confused about this thread. If units are being built at the wrong price point then we should see the oversupply lead to reduced rents -- thus putting urban living within the reach of these folks. We haven't seen that yet.

Since I am not a developer, or banker, I don't see any threat from an oversupply of urban multi-family units. If what is being built gets rented, great. If developers need to take a haircut on current projects and rents fall, also great. I just don't see a downside to building more units  given our current growth trajectory.

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One dichotomy I'm getting from this is what I was originally wondering:

>While high-rises do cost more in general, they also offer that standard of living (security, noise abatement) that older people with higher incomes will prefer

>Though mid-rises are more likely to have cheaper rents, so will be more appealing to younger folks who can't afford more.

So the question arises, will 550 on Stonewall struggle more than its mid-rise competitors, or vice versa?

Edited by SgtCampsalot
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6 hours ago, TheOneRJ said:

I know just as many mature people living in those units Uptown as I do millennials. 

Agreed on this. I live in one of the mid-rises and I'd say the median age is around 29 or so and average age is probably mid 30s. For as many on my end of the age spectrum there are late middle-aged couples or even a few near-retirement-aged tenants.

South End is a much different story, depending on the complex.

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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

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25 minutes 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, NODA and Optimist Park can handle a lot more, because they are on the light rail. Our light rail stations are astoundingly underutilized, so essentially any node along them could be massively intensified and provide amenities sufficient for tens of thousands more people to live comfortably along the length of the line. There is, in essence, a tipping point: there will be a period of pain as the city grows because owning a car is still a necessity. The streets cannot and can never handle a massive influx of new traffic; but at some point, that becomes moot, because owning a car will become unnecessary in order to live there.

Plaza-Midwood and Elizabeth, on the other hand, are not within comfortable use radius of the light rail and thus other serious transit must be considered before they are heavily intensified.

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12 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

The population density of Washington DC is around 10,500 per square mile*. Given the low-rise nature of DC, there is no reason why Charlotte's transit accessible neighborhoods can't reach that number (or higher). I would argue that any less than that density would mean our transit investments were wasted in intown neighborhoods. Of course zoning will need to change....

If I calculated correctly  achieving this density would require doubling Southend's population -- not a big deal given the huge amount of underutilized land in the hood.

* The actual population density of DC is higher than this since so much land is used for parks (The Mall, Rock Creek, etc.) and federal office space which houses no one

Edited by kermit
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37 minutes ago, asthasr said:

Although I'm a die-hard transit proponent, streetcars, to me, are a joke. More of a tourist amenity than a genuine transit option.

Aren't the Gold line streetcars going to be replaced by light rial, similar to the Blue line, once the construction ends? Then these areas will be serviced by a genuine transit option.

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1 minute ago, stw52 said:

Aren't the Gold line streetcars going to be replaced by light rial, similar to the Blue line, once the construction ends? Then these areas will be serviced by a genuine transit option.

They will be replaced by modern rolling stock (e.g. more contemporary street cars), but the fundamental problems of shared traffic lanes, frequent stops, and limited speed will remain.

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21 minutes ago, asthasr said:

They will be replaced by modern rolling stock (e.g. more contemporary street cars), but the fundamental problems of shared traffic lanes, frequent stops, and limited speed will remain.

I agree with all of your comments.  However, commuting from Elizabeth or PM on the new streetcars is more reasonable than places further away.  Plus, I'm hopeful that they eventually go to Traffic Signal Priority on the line to cut times.  If I lived in Matthews I definitely wouldn't take a streetcar Uptown.  Elizabeth or PM, I definitely would.

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21 hours ago, JBS said:

  Plus, I'm hopeful that they eventually go to Traffic Signal Priority on the line to cut times. 

This!

There is no reason they can't implement this technology (its not particularly expensive). CATS and the city just need to have enough sack to not worry about ticking off car drivers.

Toronto’s experience with removing cars from previously mixed-traffic streetcar routes (which is a step beyond signal priority) has been very positive https://usa.streetsblog.org/2018/11/13/toronto-cleared-cars-off-a-major-transit-corridor-and-it-worked/

 

Edited by kermit
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10 hours ago, kermit said:

This!

There is no reason they can't implement this technology (its not particularly expensive). CATS and the city just need to have enough sack to not worry about ticking off car drivers.

If they don't make a scene about it then I doubt most people would even notice.

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