Why Capital Markets are Booming in North Carolina
By Rob Cochran, Team Leader, Cassidy Turley Carolinas Capital Markets
According to Real Capital Analytics, as of the end of Q3, Cassidy Turley is leading 2011 Office and Industrial Sales in the state of NC with 43% of all brokered deals. In Q3 alone, our Capital Markets Carolinas Team closed seven deals valued at a total of $200M with more in the works. Three of seven were all industrial by Duke Realty in the Raleigh/Durham area representing nearly a million square feet and $62 million. This is no fluke. It’s long term, hard work paying off and collaboration between Cassidy Turley offices.
This amount of activity contradicts national stats that showed sluggish investment sales during the summer months which may leave my fellow brokers in other markets unfamiliar with the Carolinas scratching their heads. But, it’s a great reminder that good quality real estate never goes out of style. Buildings that are selling are QUALITY with good tenants which of course, reduces risk. And the trend continues. Two timely Q4 example of this are:
- The Grinnell Water Works Building, a historic warehouse on W. Morehead, purchased by Insite Properties for $6.9 million.
- The Keith Corporation’s sale of the Walking Company Distribution Center in Lincolnton, a 229,000 s.f. Class A facility to Exeter Properties for $9.4 million.
Who’s buying? Private investors priced out of the major markets such as NY and DC are coming to secondary markets seeking safe cash flow alternatives. Public REITs have also been very active in the industrial sector in Charlotte and Raleigh. The I-85 Corridor between Raleigh and Charlotte has become really attractive to many.
Why sell now? We’re seeing strong demand for high quality office and industrial product where investors have been willing to accept aggressive in-place yields. We expect this to continue well into 2012.
As demand continues, we predict an even greater deal flow and much tighter market in 2012. What do you think? Post a comment below or email me directly at rob.cochran@cassidyturley.com.
Panthers, Politics and Predictions for Charlotte’s Commercial Real Estate Market
by Steve Gassaway, Regional Managing Principal, Cassidy Turley Carolinas
Like the Panthers and politics, commercial real estate seems to always be a hot topic in the Carolinas. At Cassidy Turley Charlotte, we want to lead that conversation by sharing our perspective from the 34th floor of the Duke Energy Tower in the form of a blog. Starting now and at least each month going forward, members of our leadership team will offer timely, relevant CRE insights along with some general Charlotte commentary.
To kick things off, for this post, as the Quarterback of Cassidy Turley’s Carolinas operation, I want to point out some Q3 trends and Q4 predictions.
Remember Q3 encompasses two full summer months which usually means slower times for most businesses but there was a lot of CRE activity in Charlotte. Some observations and Cassidy Turley highlights during this period:
- Bank-owned real estate continued to be a booming business segment. In July, Cassidy Turley Charlotte launched a land brokerage unit, with the addition of Bill Simerville and Sam Shumate, to capitalize on their combined expertise in distressed and foreclosed land positions.
- Ballantyne became the largest office park in the nation. In August, Cassidy Turley had a big competitive win out in that neck of the woods directly across the street in Toringdon.
- While word of impending BOA layoffs had many companies, especially those who work with the bank, in wait-and-see mode, others made a statement with long-term lease renewals. A great example is Law Firm Alston & Bird’s September announcement of a ten-year re-commitment to the top four floors at BOA Plaza totaling 90,000SF making them the building’s second largest tenant after BOA.
Looking ahead to Q4, if the recent spike in downloads of the business relocation package from the economic development page of the Charlotte Chamber website is any indication (hundreds since the DNC was announced), I predict the following:
- Leasing and Capital Markets will outperform other business segments.
- Office vacancy will gradually decline.
- Even modest economic growth will very much be tied to the resolution of European financial crisis.
- The Panthers will “almost win” five more games.
- Charlotte will see a Foxx victory and some meaningful changes to City Council and School Board.
Next month, Cassidy Turley’s Rob Cochran, who leads the Capital Markets Group in the Carolinas, will tell us why capital markets is booming in the Carolinas.
