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Southeast Feature Archive

Conference CoverageDevelopmentFeaturesGeorgiaMixed-UseSoutheastSoutheast Feature Archive

Community Involvement is Necessary for Successful Mixed-Use Projects, Says InterFace Panel

by John Nelson

It’s not just a good idea for real estate developers to engage the surrounding community as part of their due diligence: It’s essential. While on stage at the close of the InterFace Southeast Mixed-Use conference, some of the Southeast’s most prolific mixed-use developers and owners say community involvement can be the difference between success and failure. “Nowadays, if you want a successful mixed-use project, you have to get in deep with the community and all the stakeholders — whether it’s adjacent landowners, homeowners associations, NPUs [neighborhood planning units] or local architecture committees,” said Jeff Garrison, development partner at S.J. Collins Enterprises, an Atlanta-based commercial real estate developer. “We conducted 50 meetings for The Interlock project before we even submitted for zoning. It’s overboard, but that’s what makes it successful.” The Interlock is an upcoming $450 million mixed-use development in Atlanta’s popular West Midtown district. S.J. Collins recently inked WeWork to lease three stories of its office tower, which will also have Georgia Tech as an anchor. Garrison says that the project’s 145-room Marriott Tribute Portfolio hotel was a direct result of feedback that his team heard from the community. “We didn’t have a hotel in our original design,” said Garrison. …

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FeaturesHeartland Feature ArchiveMultifamilyNortheast Feature ArchiveSoutheast Feature ArchiveStudent HousingTexas & Oklahoma Feature ArchiveWestern Feature Archive

Generation Z Renters Reshaping Student Housing Market

by Katie Sloan

With some of the oldest members of Generation Z coming onto the rental scene seeking out their first college and post-college apartments, developers and property owners must start paying closer attention to this new audience. While Gen Z and millennials have quite a bit in common, they also differ in some fundamental aspects and demand different standards of living in residential spaces. Just when owners and property managers are finding their footing with millennials, Gen Z will reshape the rules. Who is Gen Z? Gen Z is the population born in and after 1995. With the oldest members having just graduated college in the last few years, this is the beginning of their descent on the rental market. Since they came of age during the Great Recession and watched their parents struggle to make ends meet, Gen Z has a more conservative approach to spending compared to millennials. They are also less likely to uproot and relocate for a new job, as telecommuting and the freelance career path allows them to create their dream job right where they are. Gen Z is a generation that has grown up with standard two-day delivery, on-demand TV shows, movies downloaded within a minute …

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FeaturesHeartland Feature ArchiveMultifamilyNortheast Feature ArchiveSoutheast Feature ArchiveStudent HousingTexas & Oklahoma Feature ArchiveWestern Feature Archive

Priced Out: Adding Affordable Units to Student Housing

by Katie Sloan

Student loan figures indicate a growing affordability problem in higher education. The Federal Reserve reports that student loan debt in the United States is almost $1.6 trillion today, with 42 percent of people who attended college — which represents 30 percent of all adults — incurring at least some debt from their education.  With a focus on technology-based degree programs, the cost to attend college is rising. But it’s not just tuition that’s going up. According to College Board, the cost of housing exceeds the cost of tuition at four-year, public universities. For the 2017-2018 academic year, students paid an average of $9,970 for in-state tuition while room and board ran $10,800. “There’s a real need to get to the middle of the market and to build quality housing that students can afford,” says Joe Coyle, president of Michaels Student Living. Michaels Student Living is a specialized area of expertise within The Michaels Organization, a leading affordable housing developer in the United States. “Housing is a big part of what contributes to the high cost of attending college. We have to work together to find ways to mitigate this. It’s going to become more and more important.” While the student …

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FeaturesNorth CarolinaOfficeSoutheastSoutheast Feature ArchiveUncategorized

LED Lighting: An Amenity With Immediate Payback for Office Owners

by John Nelson

DURHAM, N.C — The term “environment” is typically thought of as being strictly outdoors, but for office owners, investors and tenants, the interior of office buildings is an environment unto itself. And like planet Earth, an office environment needs investment in order to protect its inhabitants. “We believe the workplace, where employees spend eight hours a day or longer, must provide a healthy and stimulating interior environment,” says Dan Goldstein, managing partner with Accesso Partners LLC of Hallandale Beach, Florida. Goldstein, whose 15-year-old company owns Class A office towers spanning 15 million square feet in major U.S. cities, contends “it makes good business sense to invest capital in an interior environment where employees are productive, efficient and above all, healthy, which cuts down on illnesses and absenteeism and contributes to job satisfaction.” Accesso Partners is doing more than just preaching. In Durham, the institutional commercial real estate fund recently installed a new lighting solution at its 10-building, 690,520-square-foot space within the Meridian Corporate Center, which is adjacent to the famed Research Triangle Park. The result has been brighter offices that are easier on the eyes and more conductive for close-up, meticulously detailed work. There is also a flipside to that …

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FeaturesFloridaNet LeaseRetailSoutheastSoutheast Feature Archive

Collaboration is Key for 1031 Buyers to Avoid Missteps, Tax Obligations for Single-Tenant Net-Leased Retail Assets

by John Nelson

Single-tenant, net-leased properties (STNL) are among the most sought-after investments in the market, and over 40 percent of all STNL properties acquired are purchased by investors in a 1031 exchange. Finding the right properties can be challenging and competitive, and factoring in the time restrictions of a 1031 exchange further complicates the issue, particularly when deals can be derailed for a myriad of reasons. Many of these pitfalls can be avoided or limited by leveraging a team of well-versed experts, from property brokers to tax professionals, reducing the odds of an investor getting shouldered with a hefty tax obligation. An infrequent but potentially catastrophic event that can derail a 1031 exchange is a tenant exercising a right of first refusal (ROFR). Approximately one-in-five leases include such a provision, and most tenants infrequently take advantage of the opportunity. Experienced real estate professionals often know which occupants tend to favor acquiring their buildings when given the opportunity. Corporate-owned McDonald’s restaurants are among the most frequent tenants exercising a ROFR when presented with the chance. Although targeting these deals does not automatically derail a 1031 exchange, having a viable backup property is important in these situations. Other hurdles can derail a flawlessly executed …

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FeaturesMultifamilySoutheast Feature Archive

Dodge Data Economist: Multifamily Development Wave Has Lenders Wary

by Kristin Harlow

ATLANTA — Lenders are understandably exercising caution when it comes to financing multifamily housing development projects, says Robert Murray, chief economist for Dodge Data & Analytics, which tracks construction starts across commercial real estate. “Notwithstanding the pickup in activity we had in 2018 and notwithstanding the fact that millennials are still looking at apartments as opposed to single-family homes, we view multifamily housing as one of the more vulnerable parts of the construction industry right now.” The insights from Murray came during his mid-year outlook presentation before approximately 60 people who gathered at Le Meridien Perimeter in Atlanta on Friday, June 14. The attendees were largely building product manufacturers, with additional representation from financial services and construction staffing services. In 2018, construction starts in the multifamily sector totaled 534,000 nationwide, according to Dodge. The projection for 2019 is 495,000 units, which would equate to a 7 percent decrease. As for 2020, the decline could be as much as 15 percent, according to Murray. The national apartment vacancy rate for the first quarter of 2019 stood at 4.8 percent, up 10 basis points from 4.7 percent a year earlier, according to Reis, which tracks apartment completions and occupancy. Net absorption totaled …

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Conference CoverageFeaturesHealthcareNorth CarolinaSoutheastSoutheast Feature Archive

Medical Office Sales Active in Southeast Despite Slowdown Nationally, Say InterFace Panelists

by Alex Tostado

CHARLOTTE, N.C. — Medical office buildings (MOBs) were trading at steady increases year over year from 2011 to 2017, says P.J. Camp, principal and co-founder of Atlanta-based healthcare real estate investment firm Hammond Hanlon Camp. In 2018, however, MOB transactions started to dip, a trend that bled into the first part of this year. There were $14 billion worth of MOB transactions in 2017 but $12 billion worth in 2018. The first quarter of 2019 saw $1.7 billion worth of transactions in the sector, down 32 percent from the first quarter of 2018 and the lowest quarterly total in five years, says Camp. Camp was a participant on the investment panel at the ninth annual InterFace Healthcare Real Estate Carolinas conference. The half-day information and networking event was held May 30 in Charlotte and was hosted by Southeast Real Estate Business and Seniors Housing Business. Also participating in the panel were Mervyn Alphonso, senior vice president of Anchor Health Properties; Steven Reedy, managing director of CIT Healthcare Finance; Stephen Pandos, director of finance at Insite Properties; Gerald Quattlebaum, senior vice president of Flagship Healthcare Properties; Jim McMahon, senior director at Capital One Healthcare; and moderator Andy Lawler, healthcare development partner …

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Conference CoverageFeaturesNorth CarolinaSouth CarolinaSoutheastSoutheast Feature Archive

Best Deals for Investors, Lenders Lie Outside of Urban Cores, Say InterFace Carolinas Panelists

by John Nelson

CHARLOTTE, N.C. — The urban districts in the Carolinas have a lot going for them: Honeywell is leasing nine floors within downtown Charlotte’s Legacy Union project; The Fallon Co. is building a 20-story office tower in downtown Raleigh; and The Beach Co. and Centennial American Properties are separately building mixed-use developments in downtown Greenville. While these projects only scratch the surface of the new developments in the Carolinas’ urban markets — especially for new apartments — speakers at the 10th annual InterFace Carolinas conference said that for a market to be truly successful, there needs to be “growth in both” urban and suburban districts. Panelists emphasized that some of the best deals for their businesses lie outside of the urban cores in the two-state region. “[Suburban] projects aren’t as expensive to develop,” said Carman Liuzzo, senior vice president of investments at Highwoods Properties. “I hope suburban [developments] don’t go away, our most recent three office developments have been in suburban Nashville, Tampa and Raleigh.” Liuzzo was a participant on the “State of the Market” panel that took place Thursday, May 30 at Hilton City Center in Uptown Charlotte. InterFace Conference Group and Southeast Real Estate Business hosted the conference, which …

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Conference CoverageFeaturesNorth CarolinaSoutheastSoutheast Feature Archive

U.S. Economic Expansion Has Clear Runway to 2021, Says Wells Fargo Economist

by John Nelson

CHARLOTTE, N.C. — The current U.S. economic expansion — 120 months and counting — is poised to become the longest in modern U.S. history come July. Mark Vitner, senior economist at Wells Fargo Securities, says the runway is clear for additional growth until at least 2021 before the start of the next recession. The last time the U.S. economy expanded for such a long duration was from 1991 to 2001. Post World War II, the average length of economic expansions has been 58 months, according to the National Bureau of Economic Research. “We don’t have a recession in our forecast. We put it in 2021 because we won’t forecast 2021 until September,” said Vitner. “We’ll likely put the recession in 2022. It’s hard to predict a recession years out. It doesn’t feel like there’s a recession right around the corner, but it never feels that way.” Vitner’s comments came during the keynote address at the 10th annual InterFace Carolinas, a networking and information conference that took place on May 30 at Hilton City Center in Uptown Charlotte. Hosted by InterFace Conference Group and Southeast Real Estate Business, the event brought together more than 240 attendees and featured six panels on …

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FeaturesGeorgiaHospitalitySoutheastSoutheast Feature Archive

Hunter Conference Recap: Hospitality Industry’s Run on Soft Brands Will be ‘Limited,’ Say Lodging Executives

by John Nelson

ATLANTA — Somewhere between a branded hotel like Holiday Inn and a truly independent hotel lies the “soft-branded” hotel. These properties are pseudo-independent in that they don’t adhere to hotel brand standards but their owners can tap into the networks of established chains for resources like reservation software, loyalty programs and distribution channels. Owners franchise the hotel properties for a fee, but the operations and look more resemble an independent hotel, which is an attractive concept given how many travelers are looking for authentic experiences from their hotel stays. “Soft brands are the hot product in the hotel industry,” said Jeff Higley, vice president and editorial director of Hotel News Now/STR Global. Higley’s comments came during the 31st annual Hunter Hotel Investment Conference, which was held March 20-22 at the Atlanta Marriott Marquis in downtown Atlanta. The conference drew 1,850 attendees. Higley moderated a panel on the first day of the event that included executives from hotel brands and hospitality ownership and development firms. Evolution of soft brands According to lodging research and analytics firm STR, soft-branded hotels comprise a little more than 1.3 percent of all U.S. hotel rooms, but that figure is significant in that 11 years the …

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