Construction underway on luxury Stonewall Street apartments uptown

Construction is under way on Fountains Uptown, a luxury apartment complex at East Stonewall and McDowell streets.
Work on the the six-story, 230-unit complex began in early January, after Charlotte-based Proffitt Dixon Partners bought the 2-acre site from the city of Charlotte for $3.8 million last year. It will feature a two-level clubhouse, an elevated saltwater pool and a rooftop patio with skyline views. The project’s first units will be completed by mid- to late-summer with full completion in 2015, said Wyatt Dixon.

The project comes amidst an apartment complex building boom, with 14 projects under construction in uptown and South End, according to Center City Partners.


“We certainly see a lot of competition out there over the next 18 to 36 months,” Dixon said. “While we don’t have plans to begin pursuing other infill opportunities right now, we believe that quality urban living in Charlotte is here to stay. This will bode well for Charlotte’s long-term prospects. It will certainly be more challenging in the short term, however.”

More apartments planned for Charlotte

The multifamily sector continues to run hot with yet another player entering the Charlotte apartment market.

Orlando-based Global Growth Trust, Inc., a real estate investment trust, has entered into a joint venture with an affiliate of Woodfield Investments, LLC to buy 13 acres in the Queen City. The groups plan to develop a 297-unit, Class A garden-style apartment community.

When complete, the $30 million community will include amenities such as a club room, cyber cafe, fitness center and resort-style pool.

The joint venture expects to purchase the land within 30 days.

"We are excited to expand our relationship with Woodfield Investments who has the local market knowledge and expertise to develop exceptional new communities," Global Growth Trust president Andy Hyltin said in a statement.

This would be Global Growth's second multifamily partnership with Woodfield Investments. Last May, the two companies announced a partnership to build a new 258-unit multifamily development in Mount Pleasant, S.C.

The groups haven't disclosed the exact Charlotte location, yet. But in a release, they praised the southwest corridor's large amount of workers and proximity to other employment centers.

Global Growth Trust is sponsored by CNL Financial Group, a private investment management firm that has become more active in the Charlotte market.

Last year, CNL Financial Group provided $100 million in capital to Crosland Southeast, a development firm formed by former Crosland veterans.

Woodfield Investments has developed local apartment complexes including Elizabeth Square off Hawthorne Lane, which sold for a premium last year to institutional investors advised by J.P. Morgan Asset Management.

Investors snapping up Charlotte apartment properties

Highlighting the popularity of multifamily complexes, three Charlotte-area properties were recently sold to investors.

Chicago-based investment firm Westdale Investment Partners LLC purchased Galleria Village Apartments for $18.5 million. The 210-unit complex, located at 1616 Galleria Club Lane in Charlotte, was built in 2005.

"Galleria Village has been extremely well-maintained...," said Mark Isaacson, a principal with Westdale. "...We are extremely satisfied with the condition of the asset."

Dean Smith of ARA in Charlotte represented the seller.

And Atlanta-based Cortland Partners made its first mark in the Charlotte market. The real estate company bought Cameron at Hickory Grove at 5625 Keyway Blvd., and Delta Crossing at 6000 Delta Crossing Lane. Both are garden-style communities. The deals closed in late October.

Cortland Partners paid $7.54 million for the 202-unit Cameron at Hickory Grove. Cortland Partners said the owner had given the property back to its lender in December.

The company paid $7.3 million for the 178-unit Delta Crossing.

When talking about the acquisitions, both real estate companies mentioned the expected shortage of Charlotte-area apartment units in the future.

"With new supply for apartments slowed to a halt, Charlotte has recorded big revenue growth in 2011," Cortland Partners chief acquisition officer Brad Brown said in a statement. "We hope to complete multiple transactions in the Charlotte market in 2012."

Economist praises investors interested in N.C. apartment buildings

A report released this week by research firm Costar Group highlights a growing trend that local real estate companies are already tapping.

Apartment complexes have attracted a lot of attention lately thanks to promising demographics and available financing. While financing for office and retail buildings has largely dried up, Fannie Mae and Freddie Mac are still loaning money to investors and developers interested in multifamily buildings.

Titled "The Coming Rental House Wave," Costar's report talks about how the apartment market has become one of the real estate industry's - and the overall economy's - "best hopes for a return for the good old days, with robust property values attracting keen investor interest."

And Costar senior real estate economist Erica Champion applauds those interested in the Tar Heel state.

"Investors and developers that have been in love with North Carolina and Oregon can congratulate themselves for jumping on the right bandwagon," she wrote in the report.

Nationally, renters now make up more than 40 million households - or one-third of U.S. households, according to Costar and Freddie Mac.

During recent boom times, U.S. home ownership hit 69 percent. That's since fallen to 66 percent. Each 1 percent drop equates to one million new renters entering the market.

Locally, developers and investors have been active.

Last year, two new Charlotte apartment properties sold for premiums.

And a growing number of developers have found new footing developing, buying or managing multifamily properties.

Northwood Ravin LLC, for example, was formed last month by Ravin Partners and Northwood Investors to focus on multifamily properties in the Southeast. Ravin Partners was created by David Ravin, former multifamily president at Crosland, who bought Crosland's residential development and construction department earlier this year.

Northwood Ravin, which has 95 employees, is building a 200-unit complex in Richmond, Va., a 134-unit project in Raleigh and a 345-unit complex in Atlanta.

And in September, Charlotte-based developer Pappas Properties announced its plans to build multifamily housing in new markets in the Southeast.