314 Apartments Included in Whitaker Park Development Plan

For the second time a former Reynolds American building is slated to be redeveloped into apartments, and it’s being done by the same company that redeveloped the first. From an article in the Winston-Salem Journal:

Plans for Whitaker Park in Winston-Salem include 314 apartments or lofts, a hotel and retail space, the Whitaker Park Development Authority Inc. announced this morning…

Whitaker Park, a former R.J. Reynolds Tobacco Company property that the tobacco giant began developing in 1937, is on Reynolds Boulevard, south of Wake Forest’s BB&T Field.

The apartments will be the second renovation of a former Reynolds property by developer Christopher Harrison, who was behind Plant 64 in the Wake Forest Innovation Quarter.

Creating the residential communities at Whitaker Park — in two buildings that were recently named historic sites — will be the first step in Harrison’s project, according to this morning’s announcement.

Piedmont Triad Apartment Market’s Rent Growth Continues to be Strong

According to Yardi-Matrix’s report on September rental trends, the apartment markets in the Triad, Charlotte, and Raleigh continue to be in the top tier of year-to-year rent growth in the country. The two tables below tell the story:

Tiny Co-Living?

Co-living has been a growing trend in rental housing for a few years now and tiny houses have been a thing for a while now too. Now it looks like tiny co-living is becoming a thing and the Wall Street Journal has the story:

But as the popularity of co-living has grown among young professionals over the past half-decade, the cost of those amenities and spending on new construction have made these living quarters less than cheap. Bedrooms in big cities typically start at more than $1,500 a month, pricing out nearly all except workers making at least $70,000 a year.

A few startups are hoping to change that with rents about half the price, making them affordable to workers in the service sector or artists and other creatives starting out.

Of the several startup companies pursuing this line of business, the one that really caught our eye was this one:

UP(st)ART’s properties are rich with amenities, including recording and photo studios, theaters and free acting, dance and music classes.

UP(st)ART compensates for the added costs by packing residents in like crew members on a cruise ship in 30-square-foot pods. They rent for about $750 a month.

PTAA’s 2019 High Point Election Voters Guide

The primaries for municipal elections in High Point are October 8, so please be sure to get out there and vote if you live in High Point. Over the last few weeks, representatives from PTAA have participated in interviews with candidates in every race, and the following recommendations are made based on the results of those interviews and past public service history of the candidates.

High Point City Council
Mayor – Jay Wagner (Incumbent)
Ward 1 – Cyril Jefferson
Ward 2 – Chris Williams (Incumbent)
Ward 3 – Monica Peters (Incumbent)
Ward 4 – Wesley Hudson (Incumbent)
Ward 5 – Vic Jones (Incumbent)
Ward 6 – Jason Ewing (Incumbent)
At-Large (Vote for up to two seats, two seats to fill):
Patrick Harman
Britt Moore (Incumbent)

Critical Metrics to Consider for Your Budget Prep

It’s budget season and Units Magazine has a well-timed article about which metrics are important to focus on during your budget prep:

To be a successful operator, one must often focus attention on organizational data beyond the traditional metrics of physical occupancy, exposure and revenue growth. “By the Numbers: Calculating Critical Metrics” session panelists at NAA’s Apartmentalize discussed big data in property management operations and how operators should leverage data to be proactive instead of reactive.

Jared Miller, COO at property management company Red Peak, stressed using data to look forward and to use the market to define the KPIs that matter to your organization.

“When you do your budgets, you look at numbers through July, so you’re comparing to that data,” Miller says. “But we need to focus and shift our mindset to a year-over-year perspective. Focus on what will really move the needle. The market impacts what KPIs you should look at. If the market is strong, you might not look at occupancy. The critical thing is to measure what matters and what is actionable.”

Panelists agreed that operators should redefine the metrics they use to make decisions. Instead of focusing on physical occupancy, operators should focus on closing ratio, revenue per unit and year-over-year metrics. If operators can look at their performance over an extended period and set a goal based on improving performance over the same period during the next year, they will make impactful improvements.

Richard George, NOI Coach, says the “Measure, React, Measure” concept should be a recurring theme. “Do something different tomorrow based on what you measured today,” he says.

Operators should use data to track unexpected revenue drivers such as customer retention as well as employee engagement. While this data isn’t readily stored in a property management system, Clio Barker, President and CFO for The Associated Management Company, says operators should pull these metrics from third-party sources such as Yelp, Apartment Ratings and Google Reviews.

“[It costs] between $1,000 and $5,000 to turn a unit,” Barker says. “We know that the resident makes the decision to renew on the day they move in. So, the process of transferring that prospect to the resident and the handoff from the leasing team to the maintenance team is critical. We can learn how we did by checking third-party review sites.”

The New Rentonomics

The September issue of Units Magazine has an interesting article about understanding the emerging trends that will affect the apartment industry in the near future. Based on a panel presentation at the 2019 Apartmentalize conference, the article looks at ” who the new renter is, how amenities need to change to meet new renter demand, government involvement and their predictions for the future of renting.” Here’s an excerpt:

“The multifamily housing industry is more dynamic and more diverse than ever before,” said Igor Popov, Ph.D., Chief Economist for Apartment List. “Seniors are entering at 40 percent and high-income renters have been growing at almost 50 percent.”

Adding to that dynamic is that renting no longer carries a negative stigma, says Jennifer Staciokas, Senior Vice President of Marketing, Training and Pricing for Pinnacle. Citing a New York Times article, Millennials like that they rent. It is becoming the option of choice, she said...

Choice and mobility were common themes throughout the conversation with much of the discussion evaluating how the subscription economy plays into both.

“It’s sexy to not own anything and not be tied down to anything,” Staciokas said. “This new generation saw their families lose their housing and clothing. They want it and enjoy it but they don’t want to have to buy it.”

You can read the full article here.

The Lodge at Lakeshore Sold to Gastonia-Based Company

Signature Property Group has sold The Lodge at Lakeshore, a 132-unit community in Greensboro, to Triangle Real Estate/Southwood Realty of Gastonia. The purchase price was $13.25 million, or $100,379 per door. More details from an article in the Triad Business Journal:

Built in 2006, The Lodge at Lakeshore offers one- and two-bedroom apartments. It was approximately 95 percent occupied at closing. The community’s amenities package includes a pond with kayak rentals, grilling areas, fitness center, clubhouse, business center, car washing station, and a one-acre pet park. ..

With the purchase, Triangle/Southwood added to its Triad apartment portfolio, which includes Alamance Reserve in Burlington, Ambassador Court in High Point and The Reserve at Regents Center in Lexington. Triangle/Southwood paid $25 million for Alamance Reserve in March 2018.

Apartment Industry’s Economic Impact on North Carolina, Triad

The National Apartment Association and National Multifamily Housing Council released updated results from a study they commissioned Hoyt Advisory Services to conduct. Here are the key takeaways for North Carolina:

  • There are 889,200 apartment residents in the state – Spending from North Carolina’s apartment residents contributes $62.5 billion to the local economy each year (including $5.3 billion in taxes), creating 358,000 jobs.
  • There are 517,800 apartment homes in North Carolina – The operation of North Carolina’s apartment homes contributes $3.2billion to the local economy each year (including$799.4 million in property taxes), creating 6,000 jobs.
  • 25% of North Carolina apartments were built before 1980; 41% were built between 1980-1999; 33% were built in year 2000 or later.
  • The renovation and repair of apartments helps preserve North Carolina’s older more affordable units, contributing$1Bto the local economy annually and creating 7,000 jobs.
  • North Carolina needs to build16,000 new apartment homes each year to meet demand. Apartment construction contributes $5 billion to North Carolina’s economy annually, creating 27,000 jobs.

While the Triad’s metro area numbers aren’t included in the report, they do have numbers for each Congressional district and the three districts that include the Triad break down as follows:

NC -5

  • 60,700 apartment residents – Spending from North Carolina 5th’s apartment residents contributes $4.6 billion to the local economy each year (including $392.3 million in taxes), creating 26,000 jobs.
  • 31,800 apartment homes – The operation of North Carolina 5th’s apartment homes contributes$211.8 million to the local economy each year (including$52.4 million in property taxes), creating 424 jobs.
  • 42% of apartments in NC-5 were built before 1980; 38% were built between 1980-1999; 20% were built in year 2000 or later.
  • The renovation and repair of apartments helps preserve North Carolina 5th’s older more affordable units, contributing$90 million to the local economy annually and creating 486 jobs.

NC-6

  • 46,600 apartment residents – Spending from North Carolina 6th’s apartment residents contributes $3.5 billion to the local economy each year (including $297.5 million in taxes), creating 20,000 jobs.
  • 25,600 apartment homes – The operation of North Carolina 6th’s apartment homes contributes $160.6 million to the local economy each year (including $39.7 million in property taxes), creating 322 jobs.
  • 41% of apartments in NC-6 were built before 1980; 41% were built between 1980-1999; 18% were built in year 2000 or later.
  • The renovation and repair of apartments helps preserve North Carolina 6th’s older more affordable units, contributing $68 million to the local economy annually and creating 368 jobs.

NC-13

  • 87,600 apartment residents – Spending from North Carolina 13th’s apartment residents contributes $6.0 billion to the local economy each year (including $509.9 million in taxes), creating 34,000 jobs.
  • 44,200 apartment homes – The operation of North Carolina 13th’s apartment homes contributes $275.4 million to the local economy each year (including $68.1 million in property taxes), creating 551 jobs.
  • 25% of apartments in NC-13 were built before 1980; 48% were built between 1980-1999; 27% were built in year 2000 or later.
  • The renovation and repair of apartments helps preserve North Carolina 13th’s older more affordable units, contributing $117 million to the local economy annually and creating 631 jobs.

Piedmont Triad in Top 5 Rent Growth Markets

According to this piece on NAA’s website, the Piedmont Triad’s annual rent growth in July was in the top five in the country:

The leaderboard of rent growth leaders shuffled slightly, but the markets remained about the same. Las Vegas took the top spot for annual rent growth in July at 8.4%. Phoenix (8.3%), Sacramento (5.2%), Raleigh/Durham (5.1%) and Greensboro/Winston-Salem (5.0%) rounded out the top five. Austin, Nashville, Riverside, Charlotte, Atlanta, Milwaukee and Cincinnati all saw between 4.0% and 4.8% annual rent growth.

The article also points out that national occupancy rates hit 96.2% in July, the highest they’ve been in 20 years:

Strong leasing activity in this year’s peak season has continued to cause apartment vacancies to drop, with July’s occupancy rate reaching 96.2 percent. That rate, the highest rate since 2000, was up 0.4 points year-over-year.

As usual, occupancy was tightest in the Northeast region, at 97 percent. The West and Midwest were 96.5 percent and 96.4 percent occupied, respectively. Occupancy landed at 95.7 percent in the South. Those rates were up 0.2 points to 0.5 points from a year ago.

Of the nation’s 150 largest apartment markets, 91 meet or exceed the national norm for occupancy and 135 hit the effectively full mark of 95 percent. Only four markets register occupancy below 94 percent, including some supply challenged Texas markets like College Station and Lubbock.

Research Shows Mismatch Between Renters’ Searches and Reality

NAA’s Units Magazine has an interesting piece from Apartments.com about some research they’ve done on renters’ searches. Here’s an excerpt:

Searches on Apartments.com indicate renters are usually looking for a deal that may not exist, according to a new analysis of that search data. On average, the typical user searches for a maximum rent that is less than the actual average rent for a given area. In fact, there is roughly a 12 percent premium between average one-bedroom rents and the average maximum rent for which searchers on Apartments.com look. Searchers want the best price—and who can blame them? …

Indeed, the more expensive an area is, the more searchers look for lower rental costs. Areas that have average rents between $2,000 and $2,500 have an average premium of real, over searched-for, rents of 22 percent. The premium for areas that average $1,000 to $1,500 is only 8 percent. No area that averages more than $2,500 in one-bedroom rents has renters searching for maximums above the market average.

Furthermore, the overshooting and undershooting of rents correlates to the percentage of income spent on rent. The more expensive an area as a share of income, the less likely a renter is to overshoot rents with their max search. Linear regression predicts that in areas where a renter pays about 25 percent of their income on rent, searchers will plug in a rent that is only 83 percent of the average. At about 11 percent of income spent on rent, they match their max search with the average (Note: These rent-to-income ratios purposely exclude any instance of affordable, discounted, or reimbursed housing).

You can read the full piece here.