RealPage Reports Rent Increases for Triad

RealPage released its rent report for the first quarter of 2019 which showed that the Triad had the fourth highest increase in the country. From an article in the Triad Business Journal:

Rent prices in the Greensboro/Winston-Salem metro area saw a 5.2 percent increase in the first quarter, with an average rent price of $830.

Greensboro/Winston-Salem ranked No. 4 in rent price increase among large metros, according to a first quarter apartment market report by RealPage Inc. (NASDAQ: RP). Phoenix, Arizona (up 8 percent), nabbed the top spot, followed by Las Vegas, Nevada (up 7.9 percent), and Atlanta, Georgia (up 5.3 percent). Charlotte ranked No. 11, with a 4 percent increase in rent prices.

Greensboro/Winston-Salem outpaced the national average, with U.S. apartment rents increasing by about 3.2 percent on an annual basis. 

Sale of Winston-Salem Apartment Community Continues Trend

The recent sale of Towergate Apartments continues a trend of apartment purchases by companies from outside the region. From the Winston-Salem Journal:

Another Forsyth County apartment complex has been sold to an out-of-region buyer, this time Towergate Apartments in Winston-Salem for $10.94 million.

The buyer is Ginkgo Towergate LLC of Charlotte, and the seller is Towergate Associates LLC of Winston-Salem, according to a Forsyth County Register of Deeds filing Tuesday. The deal closed Tuesday….

The complex was built in 1985 and has 259 units within 25 buildings on 14.65 acres.

The sale is the latest of a recent spree of apartment complex purchases in the county…

Other recent apartment complex sales include: the 209-unit Carolina Woods in Winston-Salem for $11.5 million; 213-unit Loxley Chase in Winston-Salem selling for $16.25 million; 234-unit Morgan Place in Clemmons for $14.3 million; 204-unit Twin City Townhomes in Winston-Salem for $10.15 million; 144-unit Salem Crest in Winston-Salem for $7.5 million; 96-unit Woodlawn in Winston-Salem for $3.5 million; and the 49-unit apartment complex at 1976 Maryland Ave. in Winston-Salem for $1.45 million.

PTAA Members Briefed on Planned Business 40 Closure in Winston-Salem

Representatives from NCDOT met with PTAA members in Winston-Salem to provide them with information about the closure of Business 40 for construction. While work on the project began last year, the closure of all lanes of traffic between Peters Creek Parkway on the west, and US 52 on the east, isn’t expected until Fall of 2018.

 

At that point, the major access points to downtown Winston-Salem will include:

From the east:

  • MLK Jr. Blvd exit off of Business 40 east of US 52
  • US 52 north to MLK Jr. Blvd or Liberty St
  • US 52 south to Research Parkway

From the west:

  • Peters Creek Parkway
  • Main Street north from Silas Creek Parkway
  • Academy from Peters Creek Parkway

NCDOT’s representatives were able to answer questions from attendees about the anticipated impact the construction will have on downtown businesses and residents; address concerns about whether the project will be completed on time; advise them on how to educate their prospects and residents about the project.

You can request a full copy of NCDOT’s presentation slides by emailing PTAA staff at info AT piedmonttaa.org.

Is Condo Conversion Early Sign of a New Trend?

Since the great recession the primary residential real estate story has been the conversion of, well, everything to apartments. Historic buildings, existing commercial, condos, etc.  We have not, however, seen any apartments converted to condos over the last 10 years, but that might be getting ready to change.

The Triad Business Journal reported that the Oak Street Lofts apartments in Winston-Salem will be converted to condos as existing leases begin to expire. From the story:

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 experiencing a boom of new housing, retail, restaurants and entertainment with the growth of the Wake Forest Innovation Quarter, including the Bailey Power Plant, and the office renovation projects at the GMAC tower.

Bloodworth said the one- and two-bedroom condos, each of which has a unique layout, is planned to sell for between $165,000 and $275,000.

“This is irreplaceable real estate and we are excited to offer these updated condos for sale at this price point,” Bloodworth said.

So is this the first indication that we might be seeing a shift in the local multifamily market? There’s no way to tell, but this 2011 article from Multifamily Executive might help explain why it’s worth watching:

But simple economics also points to an emerging cost-of-housing dichotomy that has traditionally been the undoing of the apartment operator: Rents are going up, and condo prices are coming down. If the cyclical nature of multifamily construction proves out, the endgame of that dichotomy means renters will slowly leave apartments to purchase condo units, and builders and investors will chase them down, attempting to convert rental buildings into condos along the way. 

Interestingly, the article, which was written just as the apartment industry was entering into its historic growth period, accurately predicted that a trend towards condo conversion wasn’t likely to happen in the near future. Seven years later, with the cost of ownership solidly below the cost of renting, we might finally see the chilling of the apartment market. But, given the fact that the apartment boom has consistently defied historic precedents over the last seven years that’s not a sure thing at all.

Report Shows Triad Rents Up, Vacancies Down in Past Four Quarters

According to a report from Marcus & Millichap, rents in the Triad have risen over the past four quarters thanks in part to investors looking for fertile territory after the Charlotte and Raleigh markets became a bit saturated. From the Triad Business Journal:

Rent for apartments increased 7.7 percent in the improving Triad market over the past four quarters, according to a Third Quarter 2017 report released by Marcus & Millichap (NYSE: MMI), a California-based, commercial real estate firm that provides research and advisory services in the U.S. and Canada.

The effective rent — the remaining cash after paying operating expenses — for landlords in the market was up 8.3 percent to $811. The vacancy rate dropped from nearly 6 percent to 4.5 percent over the past year.

By comparison, effective rents in Charlotte averaged $1,090 and in Raleigh they averaged $1,109

West End Station is Newest Addition to Downtown Winston-Salem

Source: Winston-Salem Journal

Much of Winston-Salem’s downtown apartment development has been concentrated near the Innovation Quarter and the central downtown area, with the notable exception of the Link Apartments Brookstown, which is across the street from BB&T Ballpark on the west side of downtown. That’s about to change with the addition of West End Station, which should deliver 229 apartment units to Winston-Salem’s West End within 24 months. From an article in the Winston-Salem Journal:

The $35 million development will provide 229 apartments in a block that’s close to both the center of downtown and the BB&T Ballpark, said Porter Jones, the president of DPJ Residential, a Charlotte-based developer doing its first project in Winston-Salem…

DPJ Residential and Chaucer Creek Capital of Raleigh are going 50/50 on the development. Chaucer Creek Capital owns the Gallery Lofts apartment community in downtown Winston-Salem, but the West End Station is the first development here for DPJ Residential…

Jones said West End Station will have a saltwater swimming pool and a fitness center, a two-story clubhouse with an outdoor terrace and gas grills, and two elevated courtyards above the parking deck on the lower floor of the building that faces Brookstown Avenue. In all, there will be 300 parking spaces.

Offering a mix of one- and two-bedroom apartments, the development will have rent ranges from $1,200 to $1,300 per month for the one-bedroom units, Jones said, to $1,600 to $1,650 for the two-bedroom units.

Apartment List Data: Winston-Salem Had Fastest Nationwide Median Rent Growth Last Month

According to data released by Apartment List, median rents (July,2017) in Winston-Salem and Greensboro were among the lowest in the 100 largest US metro areas, but they are growing. Winston-Salem came in at the 94th slot, with median 1BR rents of $640 and 2BR rents of $780. Greensboro came in at the 85th slot, with median 1BR rents of $710 and 2BR rents of $840.

Source: Apartment List

While the rents are low in the Triad, Winston-Salem’s rent growth is actually among the strongest in the country. Median rents there grew 1.8% from June to July (1st in the country), and 4.6% from July, 2016 to July, 2017 (26th in the country). Greensboro’s rent grew 0.5% from June to July (50th in the country), and 3.3% from

Greensboro’s rent growth wasn’t as spectacular as its neighbor to the west, but 0.5% from June to July (50th in the country), and 3.3% from July, 2016 to July, 2017 (43rd in the country) still beats a stick in the eye.

You can read the full report here.

 

A Look Inside Winston-Salem’s 757 North Apartments

757 North Apartments in Winston-Salem are due to open on July 1, but you can get a sneak-preview by checking out a slideshow on the Triad Business Journal’s site. Here’s some more info from the accompanying article:

“The amenities are typical of new construction for multifamily communities,” Nelson said. “We tried to create all the amenities we think working professionals use.”

Nelson said Laurel Street worked for more than a year on the development with Goler Community Development Corp., which is also an investor in the 2.2 acre project, and the city of Winston-Salem.

Laurel Street bought the property from Goler, which is trying to revitalize the Goler neighborhood, once considered the downtown for the city’s black community.

Rents at 757 North range from $740 to $1,550. Nelson said 25 percent — roughly 29 units — are set aside for renters making 80 percent or less of Winston-Salem’s median income, with rents ranging from $740 to $850, Nelson said.

The city of Winston-Salem approved a $1.25 million subsidized loan to be repaid over 20 years as well as a $325,000 land grant.

New Student Property Proposed Near Wake Forest

An Ohio-based developer is proposing an 82-unit student housing development near Wake Forest University:

Signet Enterprises this month completed its $1.9 million purchase of 11 acres at University Parkway and Long Road in Winston-Salem, and will break ground on the 12-building, 82-unit Deacon Place complex in May…

[googlemaps https://www.google.com/maps/embed?pb=!1m18!1m12!1m3!1d3221.9625990950353!2d-80.27975208461744!3d36.14312391210852!2m3!1f0!2f0!3f0!3m2!1i1024!2i768!4f13.1!3m3!1m2!1s0x8853b209f1492dcb%3A0x2634496763e24867!2sWinston-Salem%2C+NC+27106!5e0!3m2!1sen!2sus!4v1457643555370&w=205&h=201]The community will be made up of 11 residential buildings and a clubhouse, which will feature a fitness center and common areas. The campus will include a pool and ample green space, Perry said.

Each unit will include four bedrooms and four bathrooms, with a mix of townhouse and flat layouts.

 

Winston-Salem Dishes an Assist for 115 Unit Apartment Development

The Winston-Salem City Council voted at it’s last meeting in December to provide financial assistance for a 115-unit apartment development:

An proposed 115-unit apartment project downtown received an assist from the city Monday when the Winston-Salem City Council approved $1.25 million in loan financing…

Laurel Street Residential LLC of Charlotte and Goler Community Development Corp. based here are teaming up to develop the site, which is on a dead-end section of North Chestnut Street just south of Martin Luther King Jr. Drive.

A key part of the plan is a provision for what is called affordable or workforce housing: Dwellings for households that make 80 percent of the average area median income.

The complex is planned to have 14 studio units, 83 one-bedroom units and 18 two-bedroom units.

Rents on the market-rate units will range from $1,045 to $1,445 a month. Rents will be lower on the affordable housing units: $757 a month for the studio units and $841 a month for 15 one-bedroom units…

The developers are agreeing to set aside 25 percent of the apartments for affordable housing during the first 10 years of the life of the development, and 15 percent of the apartments for a 20-year period after that.