Friday, February 28, 2014

Charlotte's commercial real estate outlook brightening

The commercial real estate market in Charlotte looks set for continued improvement in 2014, according to industry insiders participating in a panel discussion on the subject Thursday evening.

Mark Cagley, Bank of America's credit products executive for the eastern U.S., said banks are looking to increase commercial lending again after having weathered the economic downturn. "The market is very active. We're at a place now where there's an awful lot of debt capital of all sorts, not just banks ... We frankly haven't come close to absorbing all the pent-up demand."

He later added, however, that impending regulatory changes could drive up lending costs. "I think we're fine this year and our clients are fine, but there are a lot of headwinds coming at the banks in terms of how they're going to be financed and how capital for construction loans is going to be financed."

Bill Lane, senior director for real estate finance with TIAA-CREF, said he too sees increasing competition among lenders. Still, he said the Southeast's strong job and population growth should keep the commercial real estate market strong.

Stuart Proffitt of multifamily development firm Proffitt Dixon Partners said financing opportunities for apartment complexes remains strong despite fears areas such as the South End are getting overbuilt with multifamily projects. "The terms are much more favorable, and there are more options," he said.

UNC Charlotte economist John Connaughton told the crowd at the conference that the country has regained 86 percent of the jobs lost during the recession, and the improving residential housing construction market should help boost the recovery. The loss of good-paying blue-collar jobs in construction and manufacturing remains a problem, he added, but things aren't as dire as some of the media reports would suggest. "It's better than you think it is," he said. "I honestly believe 2014 is likely to be the best year of this recovery."

The panel discussion, held at the Ritz, was sponsored by GreerWalker accounting and the Katten Muchin Rosenman law firm.


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