Six affiliates of the New Jersey-based WG Portfolio are the new owners of Twin City Townhomes in Winston-Salem. The companies paid $10.15 million for the apartment community, according to records on file with the Forsyth County Register of Deeds…
The companies owned the complex for less than a year, paying $7.8 million on Nov. 29, 2017, according to Forsyth County property records. The property occupies about 40 acres and has 27 buildings…
In Greensboro, Margate on Cone Apartments also has new owners.
According to the Guilford County Register of Deeds, Margate CGC LLC of New York and Beth Cone LLC of California paid about $10.6 million for the apartments at 900 E. Cone Blvd…
Real Data’s October survey results show that the apartment market remains very strong in the Piedmont Triad. Their market summary says it best:
The Triad apartment market is tightening with an average vacancy rate at just 4.0%. Over the last year demand has been strong with 2,348 units absorbed, easily offsetting the 1,595 units added to the supply over the same time period.
The development pipeline includes 2,814 units under construction and another 2,141 units proposed…
The region has posted strong rent growth of 3.8% over the past twelve months. The average rental rate is now $876 per month, as compared to $832 just twelve months ago. One bedroom units average $769, two bedrooms rent for an average of $869 and three bedrooms rent at $1,093 on average.
The report also indicates that the average vacancy rate should hold close to 4.0% for the next year and rents will continue to grow at a yearly rate of 3.5-4.5%.
So which submarkets are the hottest in the Triad?
Occupancy – Guilford Northeast (97.5%)
Average Rent – Guilford Central ($1,091)
Average Rent per SF – Forsyth Central ($1.172)
Units Under Construction – Forsyth Central (573)
To get a full copy of the Real Data October, 2018 report go to aptindex.com.
Those of us who were around pre-Great Recession can remember a time when it was relatively commonplace for apartment communities to be converted to condos. Then the mother of all recessions happened and rental housing became the most lucrative, and safest, real estate game in town and we stopped seeing those conversions – if anything we saw condos converting to rental units.
That’s what makes the news of this move in Winston-Salem pretty interesting. From a story in the Triad Business Journal:
Winston-Salem investors Ben Bloodworth and Taylor Williams purchased the 836 Oak Street Lofts apartments in downtown Winston-Salem for $2.75 million with plans to convert the 26 apartments in the former mill facility into condos.
The purchase included 1.22 undeveloped acres adjacent to the apartments.
Bloodworth told Triad Business Journal that all current leases would be honored, and the units would be upfitted and sold as the leases expire.
Downtown Winston-Salem is a particularly hot market in the Triad right now, so this might portend a larger trend across the region, but it will be interesting to see if other investors follow suit, especially in the downtown markets of the Triad’s cities.
Interurban Properties of Centennial, Colo., has purchased Loxley Place Apartments in Winston-Salem for $16.25 million from Graycliff Capital of Greenville. Loxley Place is at 3736 Kings Row in the Mt. Tabor neighborhood, just north of Robinhood Road.
The Triad Business Journal recently published an article on luxury apartments in the Triad, and it contained some good information:
In the Triad area, the average rent price for a two-bedroom apartment falls around $800.
In Winston-Salem, the price is slightly lower, at $777, according to apartment search platform RentCafe. Greensboro’s average rent price for a two-bedroom, is $812, according to RentCafe…
A few apartment complexes that are currently under construction in the Triad include The West End in downtown Winston-Salem. Construction began on the $35 million project in April 2017 and the 229-unit building is set to open in 2019.
A newly-formed investment group in Winston-Salem is finding some happy hunting for apartment communities…in Burlington. From an article in the Triad Business Journal:
Luke Chung and his new Winston-Salem-based VIP Syndicate have purchased the first of what he hopes will be several multifamily communities in the Triad.
Chung started in the city where he hopes to acquire many more properties: Burlington. VIP paid $4.48 million for Clifton Place Apartments at 2575 Eldermont St. to a Burlington LLC managed by Jason DeBoer and Jeffrey Gabriel.
“I’m looking to buy as much as I can in that area,” Chung told Triad Business Journal. “I’m very bullish on the Burlington market. I think there’s potential for a boom there in the near future.”
As the article points out, Burlington is one of the highest growth areas for apartments in the Triad. In fact, according to Real Data’s latest report (Oct, 17) Alamance-Burlington has more units under construction (628) than any other sub-market in the Triad. The next two closest are downtown Greensboro (372) and downtown Winston-Salem (344). With it’s proximity to both the Triad and the western edge of the Triangle market, Alamance-Burlington is uniquely positioned for immediate growth.
Blackfin Real Estate Investors of Arlington, Va., and Capital Solutions of Blue Bell, Pa., have purchased one of the Triad’s largest apartment complexes.
Westborough Apartments, a 502-unit, Class B community with entrances off West Friendly Avenue and Guilford College Road in west Greensboro, was sold for $28.1 million by MCAP Westborough LP of New York City.
In the article the new buyers mentioned that they like what they see in the Triad market:
Andrew Buchanan, a Blackfin managing partner said, “We are excited to expand our portfolio to Greensboro and to improve our economies of scale in the region. The Triad continues to see steady job growth we really like the overall risk/return profile of this market relative to what we are seeing in other East Coast markets.”
Blackfin and Capital Solutions are just the latest of a wave of new investors and management companies from outside the Triad who have entered the market over the last couple of years. These include companies like Greystar, Kettler, Peak, Wilkinson, Matrix, and Pinnacle.
The National Apartment Association (NAA) and National Multifamily Housing Council (NMHC) recently commissioned a study by Hoyt Advisory Services on the housing market in the Piedmont Triad and concluded that almost 19,000 new apartment units will need to be constructed by 2030 in order to meet the region’s housing needs. The study also found that this new construction will require all types of apartments at all price points.
The study found that the Piedmont Triad currently has an estimated 101,020 apartments with residents of all ages and income levels. Of those units, 66% were built before the year 2000, which is a key factor in addressing housing affordability; as new housing units are built they free up older housing stock for workforce housing.
While multiple factors contribute to the need for new apartments, including shifting lifestyle preferences, such as delayed homebuying, as well as the aging American population, a critical component to increased demand for all housing in the Triad is an influx of 25,000 new residents from other parts of the country.
PTAA’s 2017 Industry Forecast Breakfast, held November 28 at Revolution Mill in Greensboro, featured a panel of three speakers: Mark Vitner, Managing Director & Senior Economist at Wells Fargo; Brian Ford, Managing Partner at Capstone Apartment Partners; Colin Wolfe, President of Real Catalyst Group. Vitner provided a regional and national economic update and forecast; Ford addressed the Triad apartment market from a transactional standpoint; Wolfe reviewed the PTAA Supply and Demand Dashboard that he developed in 2017.
Some key takeaways included:
Vitner(National and Regional)
Greensboro apartment activity has slowed in 2017 after the highest amount of absorption on record to close 2016. As a result of slower supply growth, rents have increased each quarter this year.
North Carolina continues to see solid economic gains across most major metro areas.
Pace of job growth in the Triad trails that of the state.
Ford (Piedmont Triad Apartment Transaction Outlook)
52% of Triad Multi-Family Owners are based outside of NC.
Since 2016, 78% of buyers in the Triad are new to the area.
Number of transactions this year in the Triad is 31 YTD. In all of 2016 there was 54.
Triad had almost as many transactions in 2016 (54) as the Triangle (58) did.
Cap Rates in the Triad are on average 0.5%+ higher compared to Charlotte and Raleigh MSAs, thus providing for higher returns for investors.
Wolfe (Triad Supply and Demand Dashboard)
Completions and Demand in the Triad have been largely balanced over the last four years.
Completions as a percentage of overall apartment stock in the Triad has been about the same as the national average over the last four years (1.5% to 2.6%) while Raleigh has ranged from 3.4% to 5% and Charlotte has been in the 4.2%-5.1% range.
Following their presentations, the panelists took questions from the audience for 30 minutes, and the conversation was lively and informative. One fun takeaway from that discussion: Vitner is of the opinion that Charlotte and Atlanta are frontrunners for Amazon’s second HQ.
For more information about the session please contact Jon Lowder.