Student housing is very management intensive, and it’s very unforgiving for those who aren’t prepared, DTZ’s senior managing director Justin Glasgow tells GlobeSt.com. We spoke exclusively with Glasgow and several other student-housing experts about the most pressing issues the sector is facing. Stay tuned for a complete feature story about the student-housing sector in GlobeSt.com’s sister publication Real Estate Forum.
GlobeSt.com: What should our readers know about this sector?
William Talbot, CIO, American Campus Communities: The student-housing sector is going through a dynamic period as the sector experiences the continued maturation and institutional acceptance of the space. During the ’60s, ’70s, ’80s and early ’90s, student housing was neglected by mainstream investors as not a desirable property type in which to invest based on incorrect stereotypes of an “animal house” tenant base and the incorrect belief that students and parents would not pay for quality product near campus. As a result, there was barely any modern student-housing product delivered to students during that period. By the mid-’90s, developers discovered the need for purpose-built off-campus student housing, and the market easily absorbed new developments due to pent-up demand and a lack of quality product available to them, which increased investor interest. The stability of cash flows became more evident after ACC became the first student-housing company to go public in 2004, and our investments further exhibited the strong demand through strong rental-rate growth and occupancies.
In the net lease world, Walgreens has ranked as the most desirable retail asset for decades. Investors like the chain’s dominant position, long-term leases, and investment grade credit. The recent announcement that Walgreens plans to close 200 U.S. stores won’t diminish investor interest, but it will compel investors to be more thorough in their due diligence, net lease experts say.
“I do not see this announcement affecting investor interest, given that Walgreens is still an investment-grade tenant and held in very high regard … not to mention Walgreens still commands some of the best loan terms in the market if an investor is considering debt,” says Chris Schellin, president of St. Louis-based Westwood Net Lease Advisors LLC.
The plan to shutter 200 stores is part of previously announced cost-cutting initiative. “After a rigorous analysis, the company has identified additional opportunities for cost savings, primarily in its Retail Pharmacy USA division,” Walgreens said in its second quarter 2015 earnings report. “These additional opportunities will increase the total expected cost savings program by $500 million to a projected $1.5 billion by the end of fiscal 2017. Significant areas of focus include plans to close approximately 200 USA stores; reorganize corporate and field operations; drive operating efficiencies; and streamline information technology and other functions.”
South State Corp. said today that it plans to purchase 12 S.C. branch locations and one Georgia branch location from Bank of America.
The deal will give South State entry into six new markets and three existing markets that the company already serves, the Columbia-based company said.
The acquired branches are located in Florence, Greenwood, Orangeburg, Sumter, Newberry, Batesburg-Leesville, Abbeville and Hartsville, as well as Hartwell, Ga.
The acquisition will place South State among the top 10 banks in market share in all the markets, and South State anticipates it will assume about $580 million in deposits and purchase approximately $3 million in loans from the acquisition.
Buyers need to move a bit faster this year in order to snag their dream house, even in some of the slowest-moving markets. Homes are going especially quick in the San Francisco Bay Area, Southern California, Seattle, and Salt Lake City.
Housing inventory remains tight, and one of the questions on the minds of many homebuyers this spring is just how fast they will have to move to get the home they want and can afford.
To find out how long homes are staying on the market, we calculated the share of homes for sale on Trulia over a two-month period. We first looked at homes listed on February 5, then counted how many were still for sale on April 5. Faster-moving markets had a lower percentage of homes still on the market after two months, while slower-moving markets had a higher percentage.
Our two-month measure is similar to a common housing statistic: days on market (DOM). In general, housing markets with more inventory and fewer buyers will have a higher share of for-sale homes remaining on the market after two months and a higher median DOM. But we prefer our two-month measure over the widely watched DOM as a way to determine how quickly homes are moving in a market.
The now-void space that once held the Myrtle Beach Hospital may finally be developed soon. It’s hard to imagine because it is so overgrown, but plans are in motion to build 78 residential units on the space right on 79th Avenue North and Ocean Boulevard.
Some of the buildings would be quad-plexes; some, duplex townhomes. It’s prime real estate in Myrtle Beach: right on Ocean Boulevard and a mere block from the ocean.
The space has been empty since the early 2000s when the hospital was demolished. Neighbors wish something had been done before now.
“You never know what might be hiding out, or sleeping in, or whatever,” said Patsy Hunt, who lives across from the empty space. “And it would just be nice to see it be pretty again.”
The average vacancy rate for apartments in the Triad is now 6.9%, according to the latest report published by Real Data.
The development pipeline remains active with more than 3,000 units under construction throughout the region and another 2,000 units proposed. Downtown Greensboro is the most active submarket, having more than 500 units currently under construction.
Apartments in the Triad now rent for $741 per month on average. The Guilford-Central submarket, which includes downtown Greensboro, has the highest average rent at $995 per month.
The fourth attempt to sell the Port of Port Royal has fallen through, according to the buyers and the S.C. State Ports Authority. The authority accepted a $15.42 million offer from The Furman Co. of Greenville on Nov. 19.
According to a statement from authority spokeswoman Erin Dhand, the contract with The Furman Co. was terminated “despite the good efforts of the proposed purchaser” and because the contract would expire with requirements incomplete.
The authority intends to seek new purchase offers “without delay,” Dhand said.
Company president Steve Navarro originally hoped to bring documents and information to the public by late February, but that kept being delayed while the developers worked on due diligence. In a statement, Navarro said the developers met with the Ports Authority last week to advise the agency there was not enough time to complete that work before the contract expires.
Greenville, South Carolina: Jake Van Gieson, Bill Sims, and Gaston Albergotti of NAI Earle Furman represented NLJ Ventures in the purchase of 1,936 SF retail investment property at 117 State Park Road.
Greenville, South Carolina: Keith Jones, CCIM, Jake Van Gieson, and Bill Sims of NAI Earle Furman represented the seller in selling a 1,900 SF office property at 900 Pendleton Street.
Clemson, South Carolina: Jimmy Wright, Ted Lyerly, CCIM, and Brendan Gower, CPM of NAI Earle Furman represented the seller in selling a 3,351 SF retail property at 1070 Tiger Boulevard.
Greer, South Carolina: Robert Schmidt, of NAI Earle Furman represented the Buyer in purchasing a 5,280 SF office property at The Village at Thornblade.
Greenville, South Carolina: Hunter Garrett, CCIM, SIOR and John Staunton of NAI Earle Furman represented the seller in selling a 5,256 SF office property at Keys Crossing, Building 100, 429 Roper Mountain Road.
Greenville, South Carolina: Scott Jones, SIOR and John Baldwin, CCIM of NAI Earle Furman represented the seller in selling a 9,240 SF office property at 217 East Stone Avenue. John Gray, CCIM and Drew Stamm of NAI Earle Furman represented the buyer.
Piedmont, South Carolina: Peter Couchell, CCIM, and Robert Schmidt of NAI Earle Furman represented the seller in selling a 56,600 SF self-storage investment property at 2531 River Road
Travelers Rest, South Carolina: Alex Campbell, Ross Kester, and Tyson Smoak, CCIM, of NAI Earle Furman represented the seller in selling 49.32 acres of land on Painter Road.
Anderson, South Carolina: Tyson Smoak, CCIM and Ross Kester of NAI Earle Furman represented the buyer in purchasing 2.13 acres of land at 3416 Highway 81 North.
Easley, South Carolina: Tyson Smoak, CCIM and Ross Kester of NAI Earle Furman represented the buyer in purchasing .78 acres of land at 708 North A Street.
Greenville, South Carolina: Kay Hill of NAI Earle Furman represented the seller in selling 3.1 acres of land at 9 & 13 E. Parkins Mill Road.
Pickens, South Carolina: Peter Couchell, CCIM, and Robert Schmidt of NAI Earle Furman represented the Buyer in acquiring a Dollar General in Pickens, SC
A seven-tenant retail building across from the Azalea Square Shopping Center in Summerville was recently sold for $5.2 million, according to the real estate firm that represented the seller.
The Shoppes at Azalea, a nearly 12,000-square-foot building, was fully leased to Moe’s Southwest Grill, Chicken Salad Chick, Great Clips, UltraSkin, TCBY, Which Wich and Noodle Nerd when it was purchased by a family partnership based in New York. The company name was not disclosed.
Mark Cothran, president of Greenville-based Cothran Properties LLC, sold the newly built facility and was represented by Andrew Margulies, associate vice president of Marcus & Millichap. The commercial real estate investment service firm has nearly 80 offices in the United States and Canada, including a site on King Street in downtown Charleston and on Main Street in Columbia.
Multi Housing Advisors (MHA) has arranged, in separate transactions, the sales of five South Carolina apartment communities for a total of $52.6 million. Marc Robinson, Jordan McCarley and Watson Bryant of MHA’s Charlotte office represented the sellers in the transactions.
Details of the deals are below:
- Greystone & Co. sold the 152-unit The Reserve at Cavalier and the 130-unit Hampton Forest, located in Greenville, to two separate funds controlled by Monument Capital Management.
- Applegate & Co. sold the 312-unit Polo Village, located in Columbia, to an affiliate of EBSCO Income Properties, LLC.
- LNR Partners sold the 176-unit Pocalla Springs, located in Sumter, to an undisclosed buyer.
- Southwood Realty sold the 132-unit Heather Heights, located in Rock Hill, to Varden Capital Properties.
These transactions come after a very busy 2014 for MHA. Last year, the 13-year-old firm closed 129 multifamily investment sales in the region, more than any other brokerage firm, according to CoStar data. MHA’s transactions totaled $1.09 billion in sales volume and included 21,500 units.
These are good times for self-storage, Marcus & Millichap says in its new report on the sector. For starters, says MMI, the sector will see a 50-basis point decline in vacancy nationwide this year, driven by “a more robust pace of economic growth” that will also fuel rent increase as high as 4.2% for climate controlled product. Already in several markets, notably California’s major cities as well as Atlanta, bp declines in vacancy last year were in the triple digits.
MMI’s report, prepared in collaboration with Richard A. Bird, who heads the firm’s national self-storage group, notes that payrolls are growing steadily. Meanwhile, real disposable income, “a broader measure of spending power than wages that takes inflation into account,” is rising. Accordingly, says MMI, “purchases of consumer goods suitable for stowing continue to climb, creating potential new requirements for space in existing self-storage properties nationwide.”
Even as growing space demand appears to justify building new facilities, “construction remains anemic,” according to MMI. There’s fierce competition for development sites, “with multifamily builders in the midst of a building boom that is pushing up land prices and shutting out self-storage developers.”
William C. (Bill) Cantey, Jr., CCIM, CRE, of Columbia, SC, was recently honored with an endowed scholarship through CCIM Foundation. The endowed scholarship was created to recognize Cantey for his ongoing contributions to the commercial real estate industry and the South Carolina CCIM Chapter.
Cantey has been active in the commercial investment real estate business on a full-time basis since 1969. He has been involved in a myriad of real estate transactions representing buyers, sellers, landlords, tenants and owners. He has also been the sole owner or general partner in numerous real estate ventures including office buildings, shopping centers, apartments, duplexes, single-family houses, warehouses, and undeveloped land. Cantey graduated from Davidson College with a B.A. degree in Economics and from Harvard University Graduate School of Business Administration with a M.B.A. degree in Finance. He is a Senior Instructor on the national faculty of the CCIM Institute, and has been teaching courses required for the CCIM designation since 1987. He also teaches for the South Carolina Association of Realtors in the GRI program. Cantey has served as President of the South Carolina Association of Realtors and as President of the South Carolina CCIM Chapter.
The William C. Cantey, Jr., CCIM Scholarship, announced recently during CCIM Institute’s 2015 Spring Governance Meetings, was funded by CCIM Foundation and members of the South Carolina CCIM Chapter. With this new scholarship, the South Carolina CCIM Chapter will award an annual recipient with $1,000 toward the tuition cost for one of the four core courses of CCIM Institute: CI-101 Financial Analysis, CI-102 Market Analysis, CI-103 User Decision Analysis, or CI-104 Investment Analysis.
Publix Super Markets Inc. and Lowes Foods, LLC, have announced the companies have entered into an agreement under which Publix is expected to purchase two closed and vacant Lowes Foods stores in North Carolina:
- 1949 Hoffman Road, Gastonia and
- 3480 Kildaire Farm Road, Cary.
The transaction is projected to close later this month and includes two leased store locations and one leased fuel station. Financial terms of the transaction were not disclosed.
“We’ve opened eight stores in North Carolina within the past year, solidifying our commitment to growth within the state,” said Publix CEO Ed Crenshaw. “Our associates continue to provide customers with premier service, quality products and an enjoyable shopping experience. As the largest employee-owned supermarket in the nation, our associates are passionate about serving customers, and meeting and exceeding their expectations. Our service-oriented culture is continuing to foster a loyal customer following in North Carolina and across all our market areas.”
“As a homegrown grocer serving our guests in the Carolinas since 1954, we continue to be excited about the future of Lowes Foods,” said Lowes Foods President Tim Lowe. “The sale of these closed and vacant store locations is part of our comprehensive growth strategy that includes accelerating investment in rebranding existing stores, building new stores, and evaluating strategic marketplace opportunities.”
Grand opening dates for the two locations will depend on the scope of the remodels. Publix does not intend to operate the fuel station.
Avison Young commercial real estate has announced that Alan Bolduc, CCIM, SIOR, Christopher B. Fraser, CCIM and Todd P. Garrett, CCIM, SIOR represented the seller, The Charleston Area Regional Transport Authority in the sale of approximately 36 acres of land located at 4894 Dorchester Road in North Charleston, South Carolina to Rushmark Properties, LLC for $6,500,000. The asking price was $7,590,000.
According to Showcase.com, the property carries three different zoning classifications; CRD (commercial re-development), B-2 (business) and M-1 (light industrial). Today the site has had extensive work completed in the way of infrastructure, water, sewer and other. It also has a number of tenants providing some income, to include several industrial bldg users as well as 2 billboards and 1 cell tower.