Friday, January 30, 2015

Homebuilder betting on Blue Line, Belmont area

Modern homebuilder Dialect Design is betting that the light rail extension will spur interest in Charlotte's Belmont neighborhood with a plan to build custom houses in the area.

Dialect's design
Belmont, wedged between uptown, NoDa and Plaza Midwood, has remained largely immune to gentrification, even as the neighborhoods around it are taking off. Dialect has five lots in the neighborhood ready to build on, said Toby Witte, the company's co-founder. One has been sold and is ready to start construction.

"It's light rail, to put it bluntly," said Witte, asked why he's pursuing this market now. "Our office is in NoDa. We've been driving through Belmont, not trying to linger so long...It will be a desirable neighborhood in no time."

The neighborhood's Parkwood stop is the first Lynx Blue Line extension stop north of uptown.

Witte said the houses his company plans to build will appeal to a "hip, urban" set, people who want to live near the city's center.

The "S-series" houses will:

  • Be 2,030 to 2,450 square feet
  • Feature an open floor plan, with 4 bedrooms, 2.5 baths, and a "second floor roof terrace with skyline views of uptown for selected sites." 
  • Start at $305,000

Thursday, January 29, 2015

Solis Sharon Square apartments 70 percent leased

Terwilliger Pappas' newest apartment development  - Solis Sharon Square - is about 70 percent leased, developer Peter Pappas told me on a recent tour of the property.

The upscale mixed-use development has also leased about half of its retail space, with restaurant Dogwood Southern Table open and Corkbuzz and Rusty Bucket to follow by June. The development also includes Charlotte's first Whole Foods and SunTrust's regional headquarters.

The "Perk Lounge"
Solis Sharon Square is the first Solis development in Charlotte. Terwilliger Pappas is building a second Solis Dilworth and a third Solis Waverly in southeast Charlotte, and just got rezoning approval for a fourth Solis in Ballantyne. The company is also building Solis developments throughout the Southeast, including in Raleigh, Durham and Atlanta.

Solis Sharon Square has leased 167 out of 239 units. Pappas said two-bedrooms have been especially strong. The Latham building is fully leased, and the Graham building is still leasing as workers finish the final common spaces.

"It's good, very good," said Pappas. A 1-bedroom starts at $1,615 a month, while a 2-bedroom starts at $1,985.

A model apartment in Solis
The upscale features at Solis Sharon Square offer a window into what the demographics Pappas is targeting (Millenials, executives and empty nesters) have in mind.
  • High-end common spaces: The apartment complex features spaces such as "Boost" (a fitness center with nice equipment), "Savor" (tricked out demo kitchen that will have cooking classes), the "Perk Lounge" (free Starbucks coffee, TV, tea) and "Break" (a room with a pool table, poker table and TVs).
  • Attention to finishes: From granite counters that have become standard in high-end apartments to higher-quality wood flooring and art in the hallways, Pappas said his company paid special attention to the details to create apartments that meet renters' expectations.
  • Outdoor gathering areas: Solis Sharon Square has a pool and outdoor decks featuring bocce ball and grills. The apartments also have a pet walk for dog owners to let their dogs go for a run.
  • The "Boost" fitness center
  • Working closely with surrounding businesses to create a real mixed-use experience: Pappas' thesis is that people are willing to pay a premium to rent places closer to their jobs with more amenities and a walkable lifestyle. To help create that lifestyle, the complex is working with businesses. For example, Whole Foods will deliver groceries to Solis residents if they buy more than $25 (which isn't a challenge every time I go to Whole Foods), and a cooking school will hold classes for residents in the demonstration kitchen.

Wednesday, January 28, 2015

Charlotte boom likely to continue, real estate panel says

Banktown is a boomtown these days. Apartments are sprouting everywhere, office tower construction is back uptown and rents are rising as people continue to flock to Charlotte. And a panel of experts said this week that they expect the growth to continue.

The eighth annual commercial real estate forum sponsored by accounting firm GreerWalker LLP and law firm Katten Muchin Rosenman LLP was held Monday at the Ritz-Carlton. The almost 500 attendees and the buoyant mood were themselves indicators of how well things are going right now - no more talk of cliffs and our falling off them.

"It's been really remarkable to watch how Charlotte has progressed," said DTZ chief economist Kevin Thorpe. "We're actually starting to see the local commercial real estate markets thrive."

Here are some of the panel's key points:

  • Eye opening chart of the night: This graphic totally surprised me. Charlotte's office absorption tracks the growth of travelers at Charlotte Douglas International Airport almost perfectly. Both likely reflect the health of the local economy and business travel.  
  • Apartments look like a bubble, but aren't yet: The panelists agreed that Charlotte is building a ton of apartments (all you have to do is look around on any drive in Charlotte and you're sure to see a few under construction). So is it a bubble? Thorpe said no. "Multifamily will overbuild briefly. Vacancy will hit 9 percent," said Thorpe. That's almost double the current rate. But with population growth estimates strong  - especially Millenial renters - there will soon be enough demand to tighten vacancy rates up quickly. "Most of those apartments will be rented," said Thorpe. The real question: What happens when all those Millenials (myself included!) hit prime home-buying age in five to seven years? That's when things could get interesting.
  • There's still plenty of unmet need for office space: Demand for office space has been growing in Charlotte faster than new deliveries for four straight years, Thorpe said. Vacancies have tightened up and rents have moved up. But Walker Collier III, a partner at Trinity Capital Advisors, said his firm doesn't have much of an appetite for spec offices. They're looking for an anchor tenant to kick off Trinity's planned 14-story tower at S. Tryon and Morehead streets. Collier also said his firm is looking for suburban office parks to invest in, which he said have been underbuilt in recent years as people flock to center city areas.
  • Charlotte needs way more industrial space than it has: "Charlotte is way under-building industrial right now," Thorpe told the audience. "Severely under-building." Rents for industrial space jumped 5.1 percent last year and could grow by double digits this year, Thorpe said. 

Tuesday, January 27, 2015

Still waiting on apartments on Kenilworth

When Forestar Group bought a prime parcel of land at Kenilworth Avenue and Morehead Street, the company demolished an old, vacant building that had become an eyesore to make room for a high-end mixed use development featuring 379 apartments and up to 25,000 square feet of retail.

But since that demolition and others nearby, the site has sat mostly quiet, fenced off and vacant. On the same block, Solis Dilworth and Crescent Dilworth have come out of the ground, with 196 and 296 units respectively. Both of those upscale complexes are set to be finished this year.

On Monday, I called Texas-based Forestar to see what the latest news is and whether the company has any more information on its project, or a timeline. Spokeswoman Anna Torma said Forestar doesn't have any updates at this time on when the company might move on the site.

A check of county building permits showed no permits have been pulled for most of the site since the demolitions. But one set of permits, for "Mega East Morehead Apartments," was issued in December for $1.9 million worth of work on the site.

Another complicating factor could be Forestar's corporate situation. The company is in the midst of a fight with an activist investor group seeking changes to the board, and recently announced it is "exploring strategic alternatives" for its oil and gas exploration business. That usually means a sale or breakup of the company - a pretty turbulent position for any corporation.

So where does all of this leave those Charlotte apartments? For now, on the drawing board. We'll follow up and keep track if that changes.

Thursday, January 22, 2015

Industrial building sold in SW Charlotte for $52 million

A major distribution center in southwest Charlotte has sold for just over $52 million, according to the seller and real estate records.

The 1.1-million square-foot Logistics Pointe facility had been vacant when Westmount Realty Capital purchased it in 2006. Winn-Dixie had used the buildings as a distribution center for its supermarkets before declaring bankruptcy. The facility sits on 66 acres of land on a rail spur off Tryon Street and south of I-485.

Westmount invested in modernizing the facilities and bringing in new tenants. The center, which includes refrigerated space and is served by rail, is now about 90 percent leased.

“As challenging as it was to lease space in the wake of the economic downturn, we are very pleased with the turnaround we have made with this property, bringing it up to a high quality, well-maintained institutional grade complex with strong credit tenancy and stable in-place cash flow,” said Westmount partner Steve Kanoff, in a statement.

The company sold the facilities to a joint venture of LRC Opportunity Fund and New York Life Real Estate Investors. New York Life also recently bought the 525 N. Tryon office tower uptown, along with local developer Grubb Properties.

Wednesday, January 21, 2015

One Solis, two Solis, three Solis, four: New apartments approved

Charlotte will soon get its fourth Solis-branded upscale apartment complex, with the approval Tuesday night of a rezoning request from developer Terwilliger Pappas.

The newest complex, Solis Ballantyne, will total 194 units at the corner of North Community House and Bryant Farms roads, along with 15,000 square feet of retail. This complex will join Solis Dilworth (corner of Kenilworth and Morehead streets), Solis Waverly (Providence Road south of I-485), and Solis Sharon Square (SouthPark, next to Whole Foods).

In all, Charlotte will soon have about 1,000 Solis units.This is in line with other upscale apartment developments being built this year around Charlotte, such as The Fountains (complexes in Matthews and Uptown) and Crescent (SouthPark and Dilworth).

City Council also approved a rezoning petition from developer Spectrum Properties that would allow the company to tear down a 48-year-old apartment complex on Abbey Place, just south of Park and Woodlawn roads. The current complex is 128 units; Spectrum plans to build 265 upscale apartments on the 9-acre site.

Council member John Autry, a Democrat, said the plan to tear down the less expensive existing units and build new apartments spotlights the issue of affordable housing. The new units will be 1- and 2-bedroom apartments renting for $1,100 to $1,300 a month.

"It puts a magnifier and a hot light on the disparities we have in this community," said Autry, who voted for the petition. Council approved Spectrum's request unanimously.

Tuesday, January 20, 2015

Cotswold Publix, and other rezoning decisions Tuesday

Charlotte City Council is set to hear rezoning petitions Tuesday night. If rezoning were a chore, it would probably be something like brushing your teeth - vital to do, but not exactly the most exciting thing in the world. Still, rezoning can arouse some strong passions (Anybody remember the Dilworth Walgreens Battle of 2012?).

Here's a look at what's on the agenda Tuesday night:
  • New Publix in Cotswold: This is probably the most interesting petition up for a vote Tuesday. Cotswold Partners LLC is hoping to rezone a 2.2-acre site near Randolph and Greenwich roads from neighborhood business to mixed-use development. The developer would demolish the existing office building and construct a new Publix grocery store (see part of the rendering below). This would be an aggressive move - the site is directly across from a large Harris Teeter - but Publix has been upfront about challenging Harris Teeter. Neighbors have expressed concerns about increased traffic, but staff recommend the petition for approval. 
  • A Terwilliger Pappas apartment complex, Solis Ballantyne, has garnered a protest petition, but staff recommends approval. The complex, on 10 acres of vacant land at the corner of North Community House and Bryant Farms roads, would have 194 units and up to 15,000 square feet of retail space. Terwilliger Pappas is building other Solis-brand upscale apartments in Charlotte, such as the Solis Dilworth complex under construction at Kenilworth and Morehead streets.
  • A developer is trying to rezone 1.2 acres at Woodlawn Road and Montford Drive to allow an 8-unit apartment building on the site. With one bedroom units estimated to rent at $1,050 a month, the units are targeted at young professionals. The plan has picked up a protest petition from the neighborhood. It's up for a hearing, not a vote, on Tuesday.
    Proposed apartment building
  • There's a proposal in Plaza Midwood to rezone the land of the historic Vanlandingham Estate on The Plaza. The rezoning petition would allow the construction of up to 19 single-family attached houses for sale around the perimeter of the historic property, along with a private pool and spa. The main estate would still be used as a hotel and small conference center. The townhouses would be $340,000 to $420,000. The rezoning is being sought because the Vanlandingham Estate isn't sustainable in its current form, one of the developers said at a community meeting. Staff is not recommending approval of the plan as is, because the increased density, parking issues and inward-facing orientation of the townhouses are inconsistent with the neighborhood. This is also up for a hearing, not a vote.
    Rendering of the proposed townhouses

Wednesday, January 14, 2015

Construction underway on 670-acre Belmont development

Construction has begun on a 670-acre development in Belmont, adjacent to Daniel Stowe Botanical Garden, the company behind the project said Wednesday.

The master-planned McLean development will cover miles of Lake Wylie shoreline, and will include a marina, a public park and commercial development. Plans call for it to have just over 800 homes.

The master plan for McLean
“This is a special piece of property with an incredible legacy and breadth of natural amenities including its shoreline, access to the lake, trail system and scenic landscape. There is nothing else like it on Lake Wylie,” said Steven Hinshaw, principal of developer NW Lake Wylie LLC. The company is affiliated with Northwood Investors, a privately held investment firm with $4 billion of assets under management. “Our intent is to develop it in a manner respectful of its beauty, creating neighborhoods and homes fitting to this environment.”

The property has been re-zoned and annexed into Belmont since Northwood purchased it in August 2013. The developer is refurbishing the historic McLean family home on the property and will open it as a sales and information center in the spring. The specific custom and neighborhood homebuilders will be announced later this year.

Tuesday, January 13, 2015

Update: Faison buys 511 Queens Rd. property for apartments

Developer Faison has purchased a vacant 1.4 acre parcel at 511 Queens Road, Mecklenburg County property records show, and the land could soon see a six-story building with 62 apartments.

A deed filed Dec. 30 shows a Faison-affiliated corporation purchased the land from Five-Eleven Partners for $3 million. The property is next to Theatre Charlotte, and had been originally slated for a condo development before the economy crashed.

Update: Kris Fetter, Faison's managing director of construction and residential development, said the company's plans are still in the design phase. There's no timeline yet for construction on the site, Fetter said.

Rush Dunaway, a broker with Sperry Van Ness Percival Partners, represented the seller, a Columbia-based company. He said the land is zoned for up to 62 residential units, and Faison could build a six-story structure (including one story of underground parking).

Dense, infill development is making a comeback after the recession, Dunaway said.

"It dried up for about eight years," Dunaway said. "It's back now."

Charlotte-based Faison is a major apartment developer, and from 2012 to 2014 the company developed about 2,000 apartment units throughout the Southeast. Last year, Faison divested two of its business lines - spinning off its advisory business and selling its property management division - to focus more on investing its own capital.

"Today, Faison is focused on investments for its own account and multifamily developments utilizing the entrepreneurial spirit of its founder" Henry J. Faison, the company says in its self-description.

(Hat tip to the guys at Urban Planet for spotting this first!)