Charlotte's apartment market continues to sizzle

The hot Charlotte apartment market shows no sign of cooling, according to the latest report produced by Real Data.

During the past six months, the average vacancy rate for area apartments continued to improve to reach 5.8 percent -- down from a high of nearly 14 percent in February 2010, the report says. Demand also proved to be strong with 2,490 units absorbed between Feb.12 and Aug. 12.

Rental rates also showed solid growth, rising five percent to an average $839 per month. One bedroom rents average $746 a month, two bedroom units average $855 a month and three bedrooms average $995 a month. Average rents recently bottomed out around $646 in February 2005.

New development continues with 1,608 new units finished during the last six months. Currently, there are 4,329 units being built and another 11,217 units proposed. Many of the units are in the Uptown, South End, Northlake and University City areas.

While lending remains subdued for many types of commercial projects, apartment developers have been able to find capital for projects.

Rents are forecast to grow 5 percent in the next year as average occupancy reaches 95 percent.

The apartment industry typically operates on a boom-bust cycle. While the housing market and commercial development in general has been weak, investors and developers have flocked to the Charlotte multifamily market. 

More people are expected to rent thanks to demographics (more younger professionals moving into the market) and the recent housing bust that has scared some would-be buyers.

Demand will wane, the report says, but it will continue to exceed new supply over the next two years.

Rents are projected to grow, but remain cheaper than the cost of owning a home, Real Data research shows.

And rent growth and occupancy rates are expected to see “significant” growth during the next two years. 

Charlotte-based Hawthorne Retail Partners acquires Pinecrest Plaza for $22.2 million

Hawthorne Retail Partners said Monday is has acquired Pinecrest Plaza in Southern Pines, N.C. for $22.25 million. 

The 280,000-square-foot shopping center is 99 percent leased, the company says.

Hawthorne Retail plans a complete renovation, including facade and landscaping enhancements.

The acquisition marks $40 million worth of deals for the Charlotte-based group during the third quarter.

Other deals include Northcross Commons in Huntersville and North Rivers Market in North Charleston.

In all, Hawthorne Retail is seeking to acquire $200 million worth of shopping centers throughout the Southeast during the next few years and anticipates acquiring additional shopping centers through the rest of this year.

Hawthorne Retail Partners operates and invests in shopping centers located in the Southeast on behalf of third party clients, institutional investors and private investment groups.  Hawthorne Retail Partners is a division of The Hawthorne Companies, a diversified real estate investment and management company, whose other division, Hawthorne Residential Partners, is a Greensboro based apartment management and investment company. Collectively, the Hawthorne Companies manages over 90 properties throughout the Southeast.

e2 restaurant in uptown Charlotte earns LEED certification

Celebrity chef Emeril Lagasse's new Charlotte eatery, e2, has become the first Charlotte restaurant to be LEED certified by the U.S. Green Building Council (LEED stands for Leadership in Energy and Environment Design).

The restaurant, located on Levine Avenue of the Arts in uptown, was judged on the sustainability of its site, water efficiency, energy and atmosphere and innovation in design.

"Earning LEED certification shows we're serious about being a sustainable, environmentally focused and local farmer-friendly restaurant," Lagasse said in a statement. "By committing ourselves to LEED principals, we're providing our customers a promise of fresh, high-quality food and sustainable operations."

More commercial developments are seeking LEED status these days.

Local projects that have received LEED certification include Aloft Charlotte Ballantyne, 1 Bank of America Center, Crescent Resources' Circle apartment complexes in South End and South Park and WESCO Distribution Inc.'s Charlotte warehouse.

To plan and build the restaurant, e2 partnered with Wells Fargo, Philadelphia architecture firm Floss Barber and LEED certification expert tvsdesign, along with local firms Balfour Beatty, Barrett Woodyard & Associates, Tobin Starr + Partners and Childress Klein.

Charlotte's Circle at South End sells for near-record price

Crescent Resources has sold its Circle at South End complex for $74 million, a near-record price for an N.C. apartment community.

Circle at South End was sold to an undisclosed buyer, according to a press release from the developer.

“This transaction speaks volumes about the results and differentiation of our multifamily developments,” said Brian Natwick, president of multifamily with Crescent Resources. "Like all our apartment communities, we started Circle at South End with an irreplaceable location and infused it with high-quality products and green features as well as innovative programming."

With 360 units and 8,000 square feet of retail space, the Circle’s buyer paid roughly $205,555 per unit.

The highest price paid for an apartment project was $103.375 million, or $223,755 per unit, for the 462-unit Catalyst, which was sold in March 2011, according to research from Real Data.

Investors and developers have become increasingly bullish on the apartment market as the rest of commercial development remains relatively flat. More people are expected to turn to renting as mortgages remain difficult to get. Other people may be scared of a still-soft housing market.

Circle at South End opened in May 2009, the first 100-percent smoke-free Charlotte community. Located less than one mile from uptown, the project has been 100 percent leased since opening, according to the developer.

Sarofim Realty Advisors was Crescent Resources’ capital partner in the project. CBRE Group represented Crescent in the sale.

Jetton Medical in Cornelius sells for $10.75 million

Merrifield Patrick Vermillion, LLC has sold two medical office buildings in Cornelius for $10.75 million.

Novant Medical Group anchors the the buildings, known as Jetton Medical and located at 19475 and 19485 Old Jetton Rd. 

The buildings were developed by Merrifield Partners and finished in 2007. Mark Newell represented the seller.

Carolinas AGC selling its three buildings in Dilworth

The Carolinas AGC is selling three office buildings in the heart of Dilworth.

The local chapter of the Associated General Contractors of America is selling six parcels bordering Euclid, Lexington and Templeton avenues. The site consists of nearly 40,000 square feet spread over three office buildings on less than 3 acres. The property is one block from Morehead Street and one block from South Boulevard.

Merrifield Patrick Vermillion, LLC has been hired to market the property.

Cynthia Mills, Carolinas AGC President and CEO, said in a statement: "Our association has experienced dramatic changes over the past decade due in particular to advances in technology." 

The group, she said is implementing a new strategic plan that includes disposing of the properties and relocating to a new building in Charlotte.

"As attractive as this site is, it no longer meets our needs," she said.

Bailey Patrick and Stephen Woodard are the lead brokers. Patrick said they are excited about the opportunity the site could present for office users as well as office, institutional and multifamily developers looking for "prime infill real estate."

New apartments planned near Northlake Mall

Developers have announced yet another new apartment complex for the Charlotte area.

Perimeter Lofts, a 246-unit apartment community, is being developed in the Northlake area, about 10 miles north of uptown.

The developer, Wood Partners, is building the complex on 10.6 acres at 10110 Perimeter Parkway. It will consist of two four-story buildings and six carriage buildings and offer a mix of flats, lofts, and what it calls direct access "brownstone" units.

Leasing is expected to start in January and construction will be finished by July 2013.

Wood Partners director Carter Siegel said in a statement the residents will "experience a resort like environment created by the two connected courtyards with multiple pocket parks and lawns" and an oversized pool area.

The apartments will be across the street from Northlake Mall and visible from Interstate 77. Amenities will include a clubhouse, cyber cafe, movie and game room, salt water pool with outdoor cabanas, grilling areas, dog park, pet spa and care center.

A growing number of developers have announced intentions to build new apartments in the Charlotte area. They believe there is a growing number of potential renters as people shy from the weak housing market.