Short sales and other pre-foreclosure sales on the rise

More than one-quarter of all U.S. home sales in the first quarter involved homes that were either in some stage of foreclosure of were bank-owned, according to real estate research firm RealtyTrac. Twenty-six percent of 1st quarter home sales involved distressed properties, up from 22 percent during the fourth quarter 2011 and up from 25 percent of sales from a year ago.

Distressed homes sold for an average price of $161,214 in the first quarter, 27 percent less than what homes that were not in foreclosure sold for, according to RealtyTrac.

Pre-foreclosure sales including short sales ­- where the homeowner is selling a house for less than the amount owed  - also hit a three-year high in the first quarter as lenders were more willing to approve such deals, said RealtyTrac chief executive Brandon Moore.

Home sale data released recently suggest the housing market is improving. The S&P/Case-Shiller Home Price Index, for example, showed average home prices in Charlotte increased 0.4 percent in March compared to a year earlier.

Foreclosure sales were the highest proportionately in Nevada, California and Georgia, accounting for 56 percent, 47 percent and 46 percent of sales, respectively.

In North Carolina, foreclosures accounted for 12 percent of sales and in South Carolina foreclosures made up 16 percent of home sales in the first quarter.

Blue Heron Capital buys raleigh apartment complex

Charlotte-based Blue Heron Capital LLC has acquired Pine Winds Apartments in Raleigh. The real estate investment company paid $13.9 million for the 216-unit multifamily community.

The purchase demonstrates the company's confidence in the Triangle market, said Blue Heron managing partner John Trotter in a statement.

"Raleigh is projected to lead the nation in job growth and we are excited about the opportunity to enter the market with the acquisition of Pine Winds," he said.

Blue Heron owns and operates properties in Mooresville and Columbia, S.C.

Updated information on rents at The Edison

An article I wrote last week about a new apartment complex in Plaza Midwood mixed up some important numbers.

The Edison, to be built at Pecan and Commonwealth avenues, will feature 53 apartments that are smaller and less expensive than the city average and cater to renters who like to walk and enjoy the eclectic east Charlotte neighborhood.

Rents on the units will start at $800 per month for a 500-square-feet apartment. A two-bedroom unit with upscale finishes will start around $980 a month.

The project is being developed by Lat Purser & Associates Inc. of Charlotte. The firm, which bought the land a few months ago, is focusing on smaller, in-fill projects.

VUE Charlotte foreclosure auction set

The luxury condominium tower The Vue is set to be sold at public auction at 10:15 a.m. June 12 on the first floor of the Mecklenburg County Superior Courthouse.

Clerk of Superior Court Martha Curran signed an order Monday clearing the way for the lender to foreclose on the 409-unit building at Fifth and Pine streets.

The entire building and its contents will be sold at once, excluding the condos and parking spaces that have already been sold to individual buyers. Buyers have closed on less than two dozen units on the luxury highrise.

Neither the borrower nor a representative of the Vue attended the roughly 20-minute hearing.

The Vue's developer, MCL Cos. of Chicago, defaulted on its loan, and the current owner of the debt, New York-based Northwood Investments, accelerated the loan and started foreclosure proceedings in April, according to court filings.

The current debt holder, identified in court papers as NWSF LLC, lists its address as Northwood Investments in New York.

Northwood Investments paid around $100 million for the project's $195 million construction loan, it has been reported.

The tower has struggled since it was finished in 2010. When sales started in the mid-2000s, the building was touted as one of uptown's most luxurious residences, offering the highest-quality amenities, an Olympic-sized swimming pool and tennis courts.

The Vue's condos started selling from just under $200,000 to more than $2 million. Buyers paid 10 percent of the contracted sales price as a deposit. Developer Dan McLean has said that more than half the building was pre-sold but agents struggled to close sales. Some buyers couldn’t get financing because appraisals came in under contracted sales prices. Others simply wanted out of their contracts.

Some people have successfully sued the Vue to return their deposits but are now less likely to get their money back, attorneys say.

Real estate professionals say the building could be ripe for a conversion to apartments. Other uptown condo projects have been changed into rentals after the real estate market fizzled.

As the Charlotte housing market has struggled, more people have turned to renting versus buying a home, fueling interest in the apartment market.

Charlotte's office vacancy rate falls while the warehouse vacancy rate rises

The vacancy rate for Charlotte’s office market in the first quarter ticked down to 17.9 percent from the annualized 18.4 percent in 2011, according to the latest report by research firm Karnes.

Demand outpaced supply during the quarter, despite the addition of nearly 22,000 square feet of new space in the Honda Financial Building in Ballantyne.

Charlotte’s suburban market dominated the demand during the quarter, while the Midtown area also posted strong gains as 17,000 square feet of space was removed from the market.

The largest new tenant moves occurred in Ballantyne, thanks to Mitsubishi Nuclear moving into 25,175 square feet of the Hayes Building and Honda Financial Services opening a new building in Ballantyne Corporate Park.

At $21.95 a square foot, average rents are creeping up from lows of $21.77 in 2010. Rents hit a recent high of $22.38 in 2008, according to Karnes.

The Charlotte area has more than 49.25 million square feet of office space in buildings that are 15,00 square feet or larger.

The warehouse and industrial market vacancy rate, meanwhile, rose slightly to 13.4 percent from 13.3 percent reported for the end of 2011. Average rents also dipped to $4.04 from $4.05 for warehouse space and to $8.22 from $8.26 for flex space. The market has more than 43.3 million square feet of warehouse and flex buildings.  

North Carolina golf course up for auction

Interested in buying a golf course? There's one coming up for auction
next month.

The owners of Pine Knolls Golf Club in Kernersville are putting their
18-hole golf course and club up for sale.

Nestled between Winston-Salem and Greensboro, the Pine Knolls Golf
Club features a public 151-acre  course, driving range, swimming pool,
pavilion, clubhouse, pro-shop, bar and grill. The starting bid is
$600,000.

An increasing number of golf clubs have closed or changed hands since
the recession. Some have shuttered because of falling revenues. Fewer
people are joining clubs and existing members are playing fewer rounds
and spending less on services, according to national trade
associations. Other clubs have been targeted for foreclosure because
the owners defaulted on loans or couldn't refinance.

In the Charlotte area, Firethorne Country Club in Marvin was scheduled
to be sold after the club defaulted on its loan. The club later filed
for Chapter 11 bankruptcy protection. More recently, real estate mogul
Donald Trump bought The Point Lake and Golf Club near Mooresville.
Club members say the club was financially sound but in need of costly
renovations. Trump has said he plans to pump millions into the Greg
Norman-designed course and club to make it a world-class facility.

The bank started foreclosure proceedings against Pine Knolls' owner,
Hibernia Holdings, and its principals, last year, according to court
filings.

Mark Troen, chief operating officer with the company hired to sell
club, said the entire recreation industry is struggling. His firm,
Racebrook Marketing Concepts, a private equity firm based in New
York, has sold golf courses, ski areas and marinas.

"Every one of these venues has experienced an upheaval and change and
golf courses are clearly part of it," he said. "There was tremendous
investment in the first part of the last decade, and now they are
paying the price for that over-investment."

Troen said his firm has found there are three types of buyers
interested in golf clubs: The entrepreneur who loves golf and wants to
turn a hobby into a job; institutional buyers and large corporations
that already own golf clubs that want to expand their holdings; and
local businesses that want to own a golf course so they can brand the
course and market themselves.

The public auction will be held June 13 at the Marriott Winston-Salem,
460 N. Cherry Street, Winston-Salem. Registration begins at 10 a.m.
and the auction starts at 11 a.m.  For more information go to
http://www.golfcourseauction.com/.

Staff researcher Maria David contributed.

Nonresidential construction posts 'surprising weak performance'

Nonresidential construction posted a surprising weak performance during the first quarter, according to the economic gurus at Wells Fargo Economics Group. 

Most of the 12 percent annual decline came from a sharp pullback in natural gas exploration and production, according to the bank's Commercial Real Estate Chartbook Quarter 1, released today. The office, retail, power, lodging, amusement and recreation sectors also posted declines, the authors reported.

Despite the large drop in nonresidential spending during the quarter, the economists remain "somewhat optimistic that nonresidential construction will make a positive contribution to economic growth in the coming quarters," the report says.

Nuclear power plant construction is expected to boost construction, including such projects underway in South Carolina, the authors say.

On a more positive note, demand for income-producing properties continues to increase, particularly for apartment and warehouse properties, the report says. 

Apartment rents are rising fastest in the areas benefiting from growth in mobile computing and social networking, such as San Francisco, San Jose and Austin.  Chattenooga saw significant rent increases because of a Volkswagen assembly plant that opened last year, as did Charleston thanks to the Boeing assembly plant that is drawing skilled workers to the area.