Real Data just released their March, 2019 survey report for the Piedmont Triad and the results show that the apartment market continues to be very strong here in the Piedmont Triad. They report that the average vacancy rate is 3.7%, down from 5.5% in March of 2018, and average rent is $898 ($0.943/SF) versus $842 ($0.888) this time last year. From their market summary:
The Triad apartment market continues to tighten with an average vacancy rate at just 3.7%. Over the last year demand has been strong with 2,595 units absorbed, easily offsetting the 1,487 units added to the supply over the same time period.
The development pipeline included 2,081 units under construction and another 4,462 units proposed. Guilford County is the most active with 1,183 units under construction and an average vacancy rate at 3.3%.
The region has posted strong rent growth of 4.5% over the past twelve months…
With demand expected to remain strong, the average vacancy rate should hold close to 4.0% over the next year. Rents will continue to grow an an annual rate of 4% to 4.5%.
You can buy a copy of Real Data’s full report here.
Over 500 members and guests of The Piedmont Triad Apartment Association (PTAA) gathered to celebrate individuals, communities, and supplier partners from their membership who were nominated and won recognition for achievements in the multifamily apartment industry in 2018.
professionals and apartment community on-site teams were nominated by peers and
supervisors, then submitted applications which were evaluated by multiple
judges in the apartment industry in areas outside of North Carolina. Finalists
were chosen using a scoring matrix comprised of financial performance,
community composite, personal performance, professional development and
recommendation letters. Leasing Professional and Community finalists were
subject to additional evaluation in the form of a secret or scheduled shop.
Supplier Partners were voted on by PTAA members who are apartment owner/operators. The companies receiving the highest number of votes in each category submitted applications and recommendation letters for review by impartial judges spanning multiple operational roles in the multifamily industry. The number of votes and a quantitative score from the applications were weighted equally to determine the winner. The Piedmont Triad Apartment Association has been recognizing member organizations with the annual Diamond Awards ceremony for more than 20 years.
following awards were presented for this year:
and Supplier Partner of the Year 2018 Awards
Rookie Supplier Partner of the Year:
Emergency Restoration Xperts
Rookie Maintenance Technician:
Chad Arndt | Addison Point
Rookie Leasing Professional:
Megan Sizemore | The Village Lofts
Advertising & Promotions Supplier:
Fast Signs High Point
The Gardens at Country Club |
Blue Ridge Companies
Briarleigh Park | Blue Ridge Companies
Campus Crossing | Signature Property Group
The Village Lofts |
Hawthorne Residential Partners
Additionally, PTAA also announced at the ceremony that their membership raised a record number of 419,057 meals in their 2018 summer food drive for Second Harvest Food Bank of Northwest North Carolina. Each year, PTAA members collect canned food and financial donations in a friendly competition between apartment communities. This year Phillips Management Group and their communities collectively raised more than 78,000 meals. They were awarded the Clyde Fitzgerald Owners Cup, named for the late former CEO of Second Harvest Food Bank, for 2018.
Chatham Wood Apartments at 856 Lakecrest Ave. sold Tuesday for $14.8 million, according to a deed on file with the Guilford County Register of Deeds. The complex is off Johnson Street south of U.S. Highway 311.
ARWC-808 Lakecrest Avenue LLC of Atlanta sold the 19-acre complex to Gastonia-based MAAC Legacy Chatham Woods LLC.
Built in 1985, Chatham Wood last sold for $9.4 million in 2015.
Across the U.S. rent and occupancy rates rose in the third quarter, although not at the same rate they were rising a few years back. From the Wall Street Journal:
Apartment rents rose 2.9% in the third quarter from a year earlier, up from 2.5% annual rent growth in the second quarter, according to real estate analytics firm RealPageInc. A strong economy with better wage growth helped boost demand for apartments. So did a weak home-sales market, as tight supply may have prompted more renters to put off buying.
“There definitely doesn’t seem to be the pressure to buy that was there a little bit earlier,” said Greg Willett, chief economist at RealPage.
The rental market has still slowed significantly from a few years ago, when rents grew by 5.2% in the third quarter of 2015. But Mr. Willet said that “an upward blip rather than a downward blip” shows at least that the slowdown isn’t accelerating.
The share of occupied apartments during the third quarter rose to 95.8% in the third quarter from 95.4% in the second quarter, according to RealPage.
Interestingly, one factor that might be contributing to the stronger than anticipated rental market is the tax cut passed last year:
Barbara Byrne Denham, a senior economist at Reis, attributed stabilization in the rental market to the tax bill that passed last December. That bill almost doubled the standard deduction for individual and joint filers, making it less advantageous for most homeowners to itemize and take the mortgage interest deduction.
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.
The Texas Apartment Association (TAA) announced Monday that it is making a $10,000 donation to the American Red Cross to assist with Harvey relief efforts. NAA also has pledged $10,000 to the Red Cross. If you’re interested in helping, NAA and TAA encourage their members and friends to consider a monetary donation to the Red Cross. To give to Harvey relief efforts, text REDCROSS to 90999 to donate $10 to American Red Cross Disaster Relief or visit The American Red Cross.
This episode of Not a Complex podcast features an interview with Ras Fenger, President of Disaster One and a member of PTAA’s Board of Directors. Among other things, we talked about how he came to own Disaster One, how technology is impacting his business, the Chips for Children fundraising event he organizes each year to benefit The Boys and Girls Club, leadership and his favorite books and movie.
Over the coming months you’ll see (hear?) more interviews with members of PTAA’s Board of Directors. There are multiple reasons we’ve kicked off this series, but the two big ones are:
1. These folks have a wealth of knowledge to share
2. We hope this will allow PTAA’s members to get to know their leadership a little better.
So, sit back and enjoy the show. If you have any questions or comments please feel free to email them to us at firstname.lastname@example.org
The National Apartment Association’s Board of Directors has announced who will succeed Doug Culkin as President and CEO upon his retirement at the end of 2016. Here’s the text of the announcement from NAA Chairman Marc Ross:
As you know, the Doug Culkin, our current President and CEO, announced some time ago that he intended to retire at the end of this year. As a result, National Apartment Association (NAA) formed a CEO Search Committee to secure the next staff leader of the organization. The Committee selected Spencer Stuart, an international executive recruiting firm, to conduct a nationwide search. Hundreds of candidates expressed interest in the position, and the Committee culled the applicants down to a final recommendation.
I am happy to announce that on August 30, 2016, the NAA Board of Directors approved the Committee’s recommendation that Robert “Bob” Pinnegar, the current Executive Vice President and COO, be selected as the new President and CEO of the NAA. Bob brings more than 20 years of experience and commitment to the apartment housing industry. In his role as an association executive with a strong local affiliate and nearly 5 years with NAA, he is uniquely positioned to lead the Association and the industry forward.
The transition will occur during in November and December of this year allowing adequate time to ensure NAA’s smooth transition into 2017.
Additionally, I would like to thank the members of the CEO Search Committee:
Tom Beaton, CAPS, CPM®, Search Committee Chair, 2015 NAA Chairman, Dolben Company
Ever wonder what it would be like if all the leases in town expired on the same day? Well, for over a century that’s what happened every year in New York City:
It’s hard to believe, but for more than a century, all New York City leases expired and started on the same day of the year, May 1. This meant thousands of families loading up the entirety of their belongings onto carts and maneuvering them through the cramped city streets to new apartments.
The origins of this unfortunate practice are hazy — some say it began with English celebrations of May Day. But by 1820, the New York State legislature signed a law stating that unless you worked something out with your landlord or renewed your lease, all leases were up on the first of May.
Landlords would inform their tenants of any rent increases for the coming year on February 1, giving tenants three months to find a new place or decide to stay. With the new rent due on May 1, most families elected to remain in their old abodes until the very last moment, moving en masse using horses and carts.
And you thought doing turns in August on student properties was wild.
Much of the problem is attributable to simple supply and demand. The job market has improved and millennials are entering the labor pool in force, boosting household formation. But in a structural shift for the real-estate market, new households are much more likely to be renters than buyers.
So there are more renters which is putting pressure on the current housing stock and that means rising rents.
“Rents have skyrocketed so much and incomes haven’t kept pace, so we have an affordability crisis in some of our major metropolitan areas for the middle housing market,” said Kenneth Rosen,chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley.
The squeeze is tighter in some of the “usual suspect” markets like San Francisco and New York, but even markets like Nashville are seeing it too:
Nashville is one city “getting meaningfully more expensive,” saidGreg Willett, vice president for research and analysis at MPF.
Rents there were up 5.1% in the second quarter from a year earlier, well outpacing incomes. According to separate Labor Department data, average weekly wages rose 2.4% in the Nashville metropolitan area between 2013 and 2014.
While builders have been adding new units to the market, most are luxury apartments. In response, the Nashville Metropolitan Council passed a bill July 21 ordering the local planning department to devise a zoning plan that would increase the supply of affordable housing.
If the affordability crunch isn’t addressed soon then we’ll start to see more and more cities try to do what Nashville is doing, but they might find themselves fighting an uphill battle when confronted by NIMBYism from neighborhood groups. This article about San Francisco’s struggle to find a solution to its affordable housing crunch is an excellent primer on difficult a nut this can be to crack. Private sector development is critical to this process, and hopefully cities will work with developers to address these issues, but even if they do there will still be a steep hill to climb with interest groups.