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North Carolina Triad Greensboro High Point Winston-Salem
Multi-Family Market Summary: Fall 2014
Presented By:
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NC TRIADIntroduction
CAPSTONE APARTMENT PARTNERS prides itself on the continual value contributions we are able to offer our industry, and thus we produce periodic Multifamily Market Summaries to further inform the clients and industry we serve. Capstone believes that this market snapshot will be beneficial to current owners, operators, investors, and other industry professionals who are active in the NC, Triad MSA, as well as others who are looking to break into this market.
Charlotte Office1600 Camden Rd. Suite 100
Charlotte, NC 28203
Raleigh-Durham Office401 Harrison Oaks Blvd. Suite 210
Cary, NC 27513
Austin GreenInvestment Advisor
Andrew KlenkPartner
Beau McIntoshManaging Partner
Alex McDermottInvestment Advisor
Brian FordManaging Partner
ContentsIntroduction 2
Market Commentary 3
Economic Overview 4
Sales Transactions 5
Development Pipeline 8
Why Choose Capstone? 9
Link Apartments Brookstown
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Central and Successful
The Piedmont Triad is in the north-central region of North Carolina, and consists of the area within and surrounding the three major cities of Greensboro, Winston-Salem, and High Point. The Triad has gained importance as a regional hub in the Southeast, and continues to attract many companies and residents to the area. The market’s centrality to both Charlotte and Raleigh, as well as the four major interstates that run through the region, have caused an unprecedented amount of economic development. In 2014, the unemployment rate hit its lowest point in five years at 5.7% and has averaged 6.5% throughout the year. Moreover, there are over 20 colleges in the area with students who require housing. Given the increasingly well-educated and employed population, the demand for multi-family units is outpacing supply market-wide.
Terrific Quality of Life
Greensboro’s population is drawn to the area by its diverse economy, cultural and family-friendly activities, and low cost of living. All of the amenities found in a major metropolis are located nearby, which include an array of living options ranging from modern apartments, downtown condominiums, to farmhouses situated on rolling acres of land. Greensboro’s downtown district offers vibrant nightlife, bars and restaurants, boutique retail, and plenty of outdoor recreational
activities. The city has demonstrated a strong commitment to providing parks, gardens, and other green spaces for its residents—Greensboro has over 170 parks and gardens on 3,500 acres and 80 miles of trails in both urban and natural settings.
Moreover, the city is incredibly situated for access to excellent healthcare. Cone Health can be found locally, but located only an hour or less to the west and east of Greensboro are Duke Health, UNC Health Care, and Wake Forest Baptist Health: all national leaders in healthcare and have research scientists and physicians in a variety of disciplines in close proximity.
Multi-Family Fundamentals
Nearly 1,557 units were absorbed over the past year given the economic success and employment opportunity increases market-wide. As a result, the average vacancy rate has improved to 6.1%, which is the lowest rate reported in more than a decade. Despite 694 new units coming online during the past six months, the region still posted rent growth of 2.1%. The market currently has 2,101 total units under construction, with another 3,400 proposed. Capstone anticipates the Triad’s average vacancy rate will remain around 6.0-6.5% over the next twelve months given the active development pipeline; however, we expect owners to see rent increases between 2.5-3.5% annually. The Triad will continue to thrive as the economy and regional quality of life continue to drive a sizable and well-educated workforce.
Apartment Comparison by ClassClass Units Vacancy Rate Avg. Sq. Ft. Avg. Rent Avg. Rent/Sq. Ft.
Lease-up 2,373 15.1% 986 $866 $0.88A (1-5 Years in Age) 3,650 6.0% 1,101 $1,070 $0.97B (6-15 Years in Age) 14,603 6.1% 1,009 $825 $0.82C (16-30 Years in Age) 20,208 6.0% 902 $693 $0.77C- (30+ Years in Age) 20,303 6.3% 895 $616 $0.69Stabilized Averages 58,764 6.1% 939 $722 $0.77Totals/Averages 61,317 6.5% 940 $728 $0.77
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In September of 2014, the Greensboro-High Point unemployment rate was 6.3% and the Winston-Salem MSA’s was 5.6%. Both markets are below the state average of 6.7% and on par with the national average of 5.9%.
Greensboro-High Point Major Employers (non-government)Rank Company Industry Employment
1 North Carolina State University Education 8,0802 U.S. Postal Service Mail Processing 2,8003 Wells Fargo Bank Financial 2,8004 Bank of America Financial 2,0005 UPS Mail Processing 2,000
Winston-Salem Major EmployersRank Company Industry Employment
1 Wake Forest Baptist Medical Center Healthcare 12,8372 Forsyth Medical Center and Affiliates Healthcare 8,1453 Winston-Salem/Forsyth County Schools Education 6,6924 Reynolds American Tobacco Products 3,0005 Wells Fargo Bank Financial 2,800
Wages & Population
There are 344,640 employees in the Greensboro-High Point MSA who earn a mean hourly wage of $19.59 and an average annual income of $40,750. The 205,340 employees in the Winston-Salem market earn an annual salary of $42,780 and an hourly wage of $20.57 on average. In comparison, the state and national annual income averages are $42,420 and $46,440, respectively.
Historical Population2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
High Point 93,222 95,245 98,368 100,340 102,266 103,368 104,627 105,753 106,586 107,741
Winston-Salem 213,463 216,961 220,126 223,532 227,834 229,828 230,077 232,385 234,349 236,441
Greensboro 233,359 236,449 240,553 245,767 251,179 255,124 270,364 273,425 277,080 279,639
Triad MSA 1,110,025 1,126,544 1,148,615 1,168,284 1,187,248 1,199,686 1,366,454 1,374,924 1,383,762 1,388,286
North Carolina 8,553,200 8,705,400 8,917,300 9,118,000 9,309,400 9,449,600 9,561,600 9,656,400 9,752,073 9,848,060Source: U.S. Census Bureau
Recent Employment Announcements
Ralph Lauren Corp. is adding 900 jobs at its facility in High Point.
Heritage Home Group is adding 300 jobs at its headquarters in High Point.
Conduit Global is adding 300 jobs at its call center in McLeansville.
APAC is adding 800 jobs at its call center in High Point.
Honda Aircraft has hired 300 assembly technicians and plans to add 150 production jobs at its headquarters at Piedmont Triad International Airport in Greensboro.
United Furniture Industries is adding 200 jobs at its facility in Winston-Salem.
BuzziSpace, a furniture manufacturer, is adding 113 jobs at its plant in High Point.
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SSales Transactions: 2013 and 2014
Community YOC City Sale Date Units Sale Price Price Per UnitWendover at River Oaks 1985 Greensboro 9/30/2014 216 $9,600,000 $44,444
Fieldstone 1999 Mebane 8/18/2014 240 $18,580,000 $77,417
Fox Hollow 1987 High Point 8/14/2014 184 $8,500,000 $46,196
Brannon Park 1985 Greensboro 7/25/2014 299 $11,400,000 $38,127
Beacon Glen 1980 Greensboro 7/25/2014 304 $10,100,000 $33,224
Brittany 1971 Burlington 7/18/2014 214 $8,390,000 $39,206
Gallery Lofts 2009 Winston-Salem 7/8/2014 82 $14,210,000 $173,293
Avalon Trace 1966 Greensboro 6/27/2014 176 $2,750,000 $15,625
Four Seasons 1969 Greensboro 6/23/2014 98 $2,500,000 $25,510
Salem Crest 1996 Winston-Salem 6/10/2014 144 $4,250,000 $29,514
Swathmore Court 2001 High Point 4/30/2014 104 $5,850,000 $56,250
Parkway Place 1982 Winston-Salem 4/25/2014 103 $2,300,000 $22,330
Falcon Pointe 1986 Winston-Salem 4/10/2014 120 $3,900,000 $32,500
Alamance Reserve 1998 Burlington 2/3/2014 240 $19,700,000 $82,083
Mill Place 1973 Greensboro 2/3/2014 50 $850,000 $17,000
Holly Hill 1974 Thomasville 1/16/2014 72 $2,500,000 $34,722
West Pointe Burlington (FORMERLY CREEKWOOD VILLAGE) 1985 Burlington 1/3/2014 100 $3,200,000 $32,000
Carden Place 2011 Mebane 12/16/2013 240 $21,500,000 $89,583
Beechwood 1985 Greensboro 12/9/2013 208 $8,717,000 $41,909
The Crossing at Chester Ridge 1987 High Point 11/25/2013 156 $6,100,000 $39,103
Collegiate Courtyard 1999 Greensboro 11/22/2013 48 $2,100,000 $43,750
Lakeside Villas 1970 Winston-Salem 9/30/2013 347 $5,150,000 $14,841
Chatham Wood 1986 High Point 9/23/2013 208 $6,300,000 $30,288
Ashley Woods 1975 Greensboro 9/13/2013 180 $4,000,000 $22,222
Pinecroft Place (FORMERLY ASHLEY CREEK) 1973 Greensboro 8/29/2013 225 $2,600,000 $11,556
Deerfield Crossing 1998 Mebane 8/1/2013 144 $6,700,000 $46,528
Serenity 1986 Greensboro 7/19/2013 276 $7,800,000 $28,261
SALE
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NC TRIADSales Transactions: 2013 and 2014
Community YOC City Sale Date Units Sale Price Price Per UnitLexington Commons 1967 Greensboro 7/5/2013 106 $3,400,000 $32,075
Lemans at Lawndale 1972 Greensboro 7/5/2013 108 $2,700,000 $25,000
Collegiate Commons 2001 Greensboro 6/25/2013 108 $8,125,000 $75,231
Ashley Park (FORMERLY HUNTER’S GLEN) 1972 Greensboro 6/1/2013 260 $7,050,000 $27,115
Summit Station 1988 Greensboro 6/1/2013 100 $2,200,000 $22,000
Retreat II (FORMERLY MISTY CREEK II) 1989 Greensboro 5/30/2013 158
$10,500,000* $32,813*Retreat III (FORMERLY MISTY CREEK III) 1984 Greensboro 5/30/2013 177
Retreat I (FORMERLY MISTY CREEK I) 1988 Greensboro 5/30/2013 168
Clemmons Trace Village (FORMERLY WILLOW TRACE) 1972 Clemmons 4/30/2013 152 $6,200,000 $40,789
Cloisters & Foxfire 1973 High Point 4/16/2013 226 $3,500,000 $15,487
Yorktowne 1972 Greensboro 3/26/2013 314 $10,000,000 $31,847
Terrace at Old Battleground 1994 Greensboro 2/6/2013 156 $8,950,000 $57,372
Waterford Place 1997 Greensboro 2/1/2013 240 $20,300,000 $84,583
District at West Market (FORMERLY CASCADES GRANDVIEW) 1967 Greensboro 1/18/2013 230 $5,000,000 $21,739
* Part of a Portfolio Sale
The Crossing at Chester RidgeCarden Place
SALES TRA
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$12,421,250
$8,526,158
$4,765,000
$7,382,615
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
Class A Class B Class C AVERAGE
Average Transaction Sales Price
$98,589
$44,257
$25,917
$42,305
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
Class A Class B Class C AVERAGE
Average Price Per Unit
134
175186
176
0
20
40
60
80
100
120
140
160
180
200
Class A Class B Class C AVERAGE
Average # of Units Per Transaction
2006
1990
1973
1984
1950
1960
1970
1980
1990
2000
2010
Class A Class B Class C AVERAGE
Average Year of Construction
Class A represents properties built from 2000-2014, Class B includes properties constructed from 1985-1999, and Class C signifies properties constructed in 1984 or earlier.
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EVEL
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ECommunities Proposed (100 Units and Above)
Developer Community Units Road/Intersection Submarket
Brad Whitmore University Dr./Rural Retreat Rd. 244 University Dr./Rural Retreat Rd. Alamance County-Burlington
D3 Development Fifth andCenter St. 157 Fifth andCenter St. Alamance County-Burlington
Chatham Mill Ventures LLC Chatham Mill 166 800 Chatham Rd. Forsyth- County-Central
Keystone Group Keystone at Walkertown Landing 198 Highway 66 and 158 Forsyth County-East
Parr Investments Reserve at Smith Crossing 224 Union Cross Rd./Kenosha Dr. Forsyth County-East
Parr Investments Stafford Place 152 100 Stafford Village Blvd. Forsyth County-East
Parr Investments Clemmons Town Center 104 (208 U/C) Lewisville Clemmons Rd./I-40 Forsyth County-West
Blue Ridge Companies Country Park at Tall Oaks 200 Lawndale Dr. Forsyth County-North
Trinterra Four Farms at Horse Pen Creek 288 Horse Pen Creek Rd. Guilford County-North
Lomax Properties North Elm St. /Pisgah Church Rd. 288 North Elm St. /Pisgah Church Rd. Guilford County-Northeast
Lomax Properties Somerset at Friendly 200 West Friendly Ave. Guilford County-Northwest
Tom Holderby Woodland Heights of Greensboro 360 Wolfetrail Rd. Guilford County-South
BSC Holdings Lafayette Landing 203 1209 Guilford College Rd. Guilford County-Southwest
Communities Under Construction (100 Units and Above)
Developer Community Units Road/Intersection Submarket
Deboer & Gabriel Builders Oak Pointe 60 (40 COMPLETE) 131 Salvet St. Alamance County-Burlington
Vision Development The Edge 171 (60 COMPLETE) 1212-D Oakland Ave. Forsyth County-Central
Grubb Properties/Samet Corp. Link Apartments Brookstown 105 (100 COMPLETE) 150 Peters Creek Pkwy. Forsyth County-Central
C.A. Harrison Companies Plant 64 123 (119 COMPLETE) 545 Power Plant Pkwy. Forsyth County-Central
Barry Siegal Lofts at Little Creek 71 (126 COMPLETE) 1315 Creekshire Way Forsyth County-West
Signature Property Group Cityview at Southside 90 (355 COMPLETE) 311 King St. Guilford County-Central
Koury Corporation Village Lofts at North Elm 100 309 -G Pisgah Church Rd. Guilford County-Northeast
Brown Investment Properties Piedmont Place 100 Old Oak Ridge Road Guilford County-Northwest
Berkley Hall Plantation at Pleasant Ridge 192 1198 Pleasant Ridge Rd. Guilford County-Northwest
Signature Property Group Signature Northpoint 264 (24 COMPLETE) 4375 Regency Dr. Guilford County-Southwest
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The People Sell the Deal
Capstone’s Southeast & Mid-Atlantic Investment Sales Team is among the market leaders within our industry sector and respective region. We place client service above all else, and can guarantee that no one else will work smarter and harder in achieving the highest level of results for our clients. We don’t rely on a logo to sell the deal, but rather utilize the industry expertise and investment acumen, tremendous drive and work ethic, and unbeatable salesmanship of the team members assigned to each project. At the end of the day, it’s the individuals that drive value and sell the deal, and we know the capabilities of our individual team members are second to none.
Market Expertise & Product Niche
Capstone sits atop the private capital sector of multi-family investment sales for multiple reasons. Our deliberate and concentrated focus and expertise in not just the primary markets of the Southeast & Mid-Atlantic, but also the secondary and tertiary markets within our region, identifies us as the ideal candidate for such assignments. Capstone’s investment sales team has completed a multitude of transactions across the primary, secondary, and tertiary markets of the Southeast & Mid-Atlantic, and our track record of success can be attributed to our comprehensive coverage and expertise among these markets, as well as our relationships with the owners and investors who remain active in this environment.
National Exposure via Cutting Edge Technology
Capstone has developed and maintains industry leading national databases, expansive information delivery methodologies, and various proprietary activity tracking systems. These tools are utilized daily by the investment sales team, analysts, and back-office support staff allowing for optimal operational efficiency. This enables Capstone’s investment brokerage team to spend nearly all of its time servicing clients, interacting with industry players and active asset traders, and promoting transactions.
Reputation and Results
Capstone prides itself on its impeccable industry reputation and the core values and behaviors of the firm that drive daily operations. The firm possesses an unblemished reputation and track record industry-wide, and, as such, the firm’s trusted relationships among the apartment investment community continue to facilitate seamless, fluid, and successful sales transactions.
* Information in this report has been provided by the following: Greensboro-Winston Salem-High Point Real Data Report October 2014, REIS Report, Costar, Business Journals, LoopNet, Bureau of Labor Statistics, county tax records, and various multi-family industry contacts.-