Fiscal cliff weighing on Charlotte commercial real estate

Two experts from commercial real estate firm Cassidy Turley say the ongoing negotiations to avoid the "fiscal cliff" are weighing on Charlotte's commercial real estate market.

U.S. lawmakers are trying to work out a compromise to avoid to so-called fiscal cliff, a term used to describe the automatic spending cuts and tax increases scheduled to take effect unless lawmakers reach a budget deal.

Sarah Godwin, a senior analyst in the firm's uptown office, said sales of commercial properties could be delayed until 2013 as buyers and sellers wait to see how their taxes could be impacted.

Uptown has seen a record year in terms of dollars for sales of uptown office buildings.  Some more closings of major properties in or near uptown are pending, say brokers involved in the deals.

But "in the rush to the finish line by the end of 2012, deals that are held up for whatever reasons will likely have buyers and sellers that hold tight until Congress brings clarity to its fiscal cliff decisions," Godwin says. "This could delay some closings indefinitely and hamper local and national investment sales activity in the first half of 2013."

Also likely delayed - industrial relocations and expansions, she says. That's because manufacturing firms, particularly those that do business internationally, are especially sensitive to tax rates.

In general, companies and investors have been postponing decisions recently as they watch various events unfold -- such as the U.S. Presidential election or the European economic crisis. The fiscal cliff is just one more issue that will postpone decisions, says Steve Gassaway, Cassidy Turley's regional managing principal.

Crescent starts construction on U City apartments

 Crescent Resources is set to build Circle University City, a 546-bed apartment community for college students near the UNC Charlotte campus.

Construction on the $36 million Circle University City project will begin this week, and the first of the 187 units will be ready by the start of the fall 2014 semester.

The project will offer amenities targeted to students, including a study and lounge area, game room, and rooftop terrace overlooking the campus,  tanning beds, a salt-water pool and outdoor fire pits.

“UNC Charlotte is experiencing soaring enrollment, an elevated profile and surging momentum with the addition of a football team, which makes it an ideal location for our successful brand of student housing, ” said Ben Collins, regional director for Crescent Resources. “Circle University City will offer a unique student-living experience that isn’t typically found in campus housing. The community’s targeted amenities will provide a great environment for both study and recreation.”

UNC Charlotte enrolled the largest freshman class in its history for the fall 2012 semester with 631 more students than expected, and university officials noted that campus housing has become an issue. To accommodate the influx of students, the school increased the number assigned to double rooms and delayed the demolition of an aging residence hall.

Crescent Resources targeted the University City Area, in part, because of the increase in students at UNC Charlotte and subsequent rising demands for housing.

Crescent Resources also developed the student housing community Circle West Campus near The University of Texas at Austin. 

With Circle University City, Crescent has more than 2,906 multifamily units in communities valued at $442 million under construction throughout the Southeast. The company has developed more than 20 apartment communities.

Circle University City is financed by equity from Crescent Resources, with a construction loan from Regions Bank. The project team includes development partner Carbon Properties, architect BB+M Architecture, interior designer Vignette Interior Design, civil engineer and landscape architect LandDesign, general contractor Adolfson & Peterson Construction, and property manager Greystar.

In addition to Circle University City, other Crescent multifamily communities under construction include Circle SouthPark and Circle Alexander Village in Charlotte; Circle Bayshore and Circle Crosstown in Tampa, Fla.; Gallery at Cameron Village in Raleigh, N.C.; Circle Ninth Street in Durham, N.C.; and Circle Terminus in Atlanta.

Crescent Resources developed Circle at South End in Charlotte; Circle at Concord Mills in Concord, N.C.; and The Venue at Cool Springs in Nashville, Tenn.

Charlotte's A M King Construction wins award

The southeast chapter of the Design-Build Institute of America has awarded Charlotte-based A M King Construction the Best Project Renovation/Rehabilitation/Restoration award for its work on the ALDI Corporate office building expansion in Batavia, Illinois.

Winning projects must show early collaboration, be completed on time and on budget with no litigation, and demonstrate "total integrated project delivery and finding unique solutions to challenges during the project," the institute says. 

"We are proud of both the process of designing and building the ALDI Corporate office building, and the product we achieved," A M King Construction partner Brian King said in a release.

ALDI, Inc., called on A M King Construction to add a 95,000-square-foot, class-A office building to its U.S. Corporate Headquarters Campus, and provide renovations throughout its existing buildings. The project involved incorporating the new office building into a crowded campus, which included multiple existing adjacent office buildings. A M King also added 58,000 square feet of parking, relocated roadway and site structures, and provided numerous site improvements.

“We were up against several challenges with this project, including multiple labor strikes and a harsh Chicago-area winter,” A M King Construction’s Operations Director Dan Crist said. “We were constantly revising schedules and plans to overcome these obstacles. Not only did we achieve a level of quality well above traditional construction projects, we did this on time and even realized cost savings for our client.”

Founded in 2004, A M King Construction is a full service design-build and construction services company serving the food manufacturing, food distribution and clean manufacturing industries. The company has won numerous industry awards for projects it has completed across the United States. A M King has designed and built more than seven million square feet of industrial, manufacturing and office space in the past seven years.

New apartments planned near Park Road Shopping Center

Selwyn Property Group is planning to build a four-story boutique apartment complex near the corner of Park and Woodlawn roads, the Observer has learned.

Selwyn Property Group closed on the Park Road land about two weeks ago and plans to build Park at Drexel, which will include 42 residential units, 4,500 square feet of commercial space and 58 surface parking spots.

Developers are betting that its location -- near popular restaurant row on Montford Drive and across the street from Park Road Shopping Center -- will attract younger professionals who like to walk to their shopping and entertainment.

The land had been rezoned for luxury condominiums before the recession. But plans fell through.

Park at Drexel will offer 15 lofts from 450 square feet to 650 square feet, about two dozen one- and two-bedroom units, and one three-bedroom unit with 1,700 square feet. Amenities will include an outdoor grilling area and cyber cafe.

Projected monthly rents are less than $1,000 for the one-bedroom units and under $1,500 for the two-bedroom units.

E. Morehead St. building sells for $5.25 million

An entity sponsored by Beacon Partners of Charlotte has closed on its purchase of 500 East Morehead St.

The group paid $5.25 million for the 43,000 square-foot office building on 2.4 acres.

The three-story building was built in two phases, one in 1960 and one in 1963, and sits adjacent to the Dowd YMCA. The YMCA is the anchor tenant of the property, which had 25 tenants and was 95 percent occupied at the time of the sale, according to a press release.

SYNCO and its investing properties bought the property in 1982 for $1.3 million. Beacon plans to continue to lease and manage the property and serve existing and new tenants, the release says.

Activity has increased along East Morehead Street. The Duke Endowment, for example, is building its new headquarters on the street.

Tim Hose, President/CEO of SYNCO Properties, Inc. handled negotiations for the seller.  Mike

Harrell, office principal of Beacon Partners, led the Beacon buyer team.

Construction to begin on new industrial space

Construction is set to begin on new, speculative industrial space in Concord.

A joint venture between The Nolim Group, CM Black Construction Co. and CESI Land Development Services announced Thursday that it is moving forward with plans to build a 88,527 square-foot Class A speculative industrial building at 4541 Enterprise Dr. in the International Business Park in Concord.

The building, which developers say fills a void for manufacturing and warehouse space, is expected to be finished in May. 

“In today’s economy, very few developers are constructing speculative buildings, making inventory of available manufacturing and industrial space scarce throughout Cabarrus County and the region,” stated Anne Johnson with CBRE, who is marketing the building on behalf of the ownership.  “We are excited to be completing this project and believe that 4541 Enterprise Dr. will be appealing to a wide variety of businesses looking to relocate to the International Business Park, helping create needed jobs in the area.”

The International Business Park is a 500-acre park located 20 miles from downtown Charlotte and along the I-85 corridor. The park is home to roughly 30 companies, including five international firms.

S.C. posts 5th highest foreclosure activity in November

Fewer U.S. homes faced foreclosure filings in November compared to the previous month and the same time last year, according to the U.S. Foreclosure Market Report.

Annual foreclosure filings rose sharply in the Carolinas, however. 

South Carolina posted the fifth-highest foreclosure activity in the country, the data shows.

One out of every 728 U.S. housing units had a foreclosure filing in November, down 3 percent from October and a 19 percent drop from November 2011 - the 26th consecutive month showing an annual decrease in foreclosure activity, according to the report, released Thursday by analytics firm RealtyTrac. 

In North Carolina, one in 1,254 homes faced foreclosure activity - up 27 percent compared to November 2011 and down less than 1 percent from the previous month.

In South Carolina, one in 455 homes faced foreclosure activity, an increase of 17 percent for the year and up 32 percent from the previous month.

Foreclosure filings include default notices, scheduled auctions and bank repossessions.


RealtyTrac said that while the U.S. housing industry is past the worst of the foreclosure crisis, "...foreclosures

are continuing to hobble the U.S. housing market as lenders finally seize properties that started the process a year or two ago — and much longer in some cases," said vice president Daren Blomquist. 

"We’re likely not completely out of the woods when it comes to foreclosure starts, either, as lenders are still adjusting to new foreclosure ground rules set forth in the National Mortgage Settlement along with various state laws and court rulings,” Blomquist said.

The national decrease in foreclosure activity was driven largely by big year-over-year drops in California, Georgia, Michigan, Texas and Arizona. Foreclosure activity meanwhile rose in 23 states and the District of Columbia. 

South Carolina was one of nine states posting a 12-month highs in November for foreclosure activity. 

Lenders completed the foreclosure process on more than 59,000 U.S. homes in November, up 11 percent from the previous month and up 5 percent from November last year.  This is the first annual increase in bank repossessions since October 2010, when the practice of robo-signing foreclosure documents came to light and sparked a moratorium on foreclosures, slowing activity for months.

To view the report, go to  http://www.realtytrac.com/content/foreclosure-market-report/november-2012-foreclosure-activity-report-7514