What We Learned at PTAA’s 2017 Industry Forecast Breakfast

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.