Despite last week’s media reports hinting at a June rate hike after the Federal Reserve’s May meeting, expect Janet Yellen and company to wait until March 2017 for an interest rate increase, according to Rajeev Dhawan of the Economic Forecasting Center at Georgia State University’s J. Mack Robinson College of Business.
“The Federal Open Market Committee dot charts are of interest to the press for their noise potential,” Dhawan wrote in his quarterly “Forecast of the Nation,” released (May 26). “These are submitted weeks in advance of the meeting and as such are purely opinions and not policy projections, resulting in confusion.”
Dhawan points to comments in the April FOMC that contradict the idea of a June rate hike.
“The FOMC said consumer sentiment was high, which is true, but it has been moderating since last fall,” Dhawan said. Combined with extreme volatility in the stock market and the political uncertainty surrounding the presidential primaries and upcoming elections, “the momentum indicator for confidence is not up, but down.”
Greenville, South Carolina: Earle Furman, SIOR of NAI Earle Furman represented the landlord, NTM Properties, LLC, in leasing a 33,783 SF industrial space at 23 Old Mill Road. Grice Hunt, SIOR; Ford Borders, SIOR; and Clay Williams, also of NAI Earle Furman represented the tenant, Siroflex, LLC, in the lease.
Greenville, South Carolina: Scott Jones, SIOR of NAI Earle Furman represented the landlord, 401 Brookfield, LLC, in leasing 8,322 SF of office space at 401 Brookfield Parkway. John Gray, CCIM and Drew Stamm, also of NAI Earle Furman represented the tenant, OB Hospitalist Group, Inc, in the lease.
Greenville, South Carolina: Keith Jones, CCIM and Kelly Sullivan of NAI Earle Furman represented the landlord, Rajaman 01, LLC, in leasing 4,180 SF of office space at 274 Commonwealth Drive to DBKH, LLC.
Duncan, South Carolina: Stuart Smith of NAI Earle Furman represented the landlord, Bright & Smith Development, in leasing a 40,860 SF industrial building at 315 Tucapau Road. John Staunton & Hunter Garrett, CCIM, SIOR, also of NAI Earle Furman, presented ROFA North America, Inc., the tenant.
The Columbia area’s vacancy rate has remained virtually unchanged over the past two years and is currently 7.5%. Developers are currently focused on the Central (Downtown) submarket with nearly 900 units under-construction and almost 1,900 units proposed in that submarket alone. The current average monthly rent is $931 which has increased by 3.5% over the past twelve months.
With over 1,700 units expected to come on-line over the next six months, vacancy rates are expected to rise to 8.5% to 9.5%. There will likely be an 1.5% to 2% upturn in rental rates over the next twelve months.
For some time now the regional mall market has been dividing into two starkly different camps consisting of the “haves” and the “have nots.” Prime assets, such as the 324,000-square-foot Shops at Crystals on the Las Vegas strip, continue to command sale prices of more than $1 billion. However, investor interest in failed malls is meager at best by comparison.
Consider the following string of regional shopping malls that sold in the past few weeks. The three properties – all located in outlying, sparsely populated areas and all hit with major store closures — join the list of 76 other malls of 100,000 square feet or larger that have sold for less than $10/square foot in the last two years:
- The 503,626-square-foot Gadsden Mall in Gadsden, AL sold for $9.85/square foot ($4.96 million) after trading for $58.8 million in 2005.
- The 358,057-square-foot Aiken Mall in Aiken, SC sold for $8.45/square foot ($3.03 million). In 2007, the same mall carried an appraised value of $26.3 million.
- The 746,410-square-foot Fairgrounds Square Mall in Reading, PA sold for a ridiculously low $1.54/square foot ($1.17 million). In 2007, the mall carried an appraised value of $50.7 million.
The buyers of these properties all employ strategies aimed at turning dust into diamonds. Hedge fund investor Farallon Capital Management, which acquired the Gadsden Mall, has acquired a number of failed or under-performing malls after raising $375 million in a real estate investment fund in 2014.
NAI Avant’s Director of Retail Services Patrick Palmer, CCIM, and broker John Metts, recently represented the seller in the transaction at 2515 Broad River Road in Columbia, SC.
The ±6,248 square foot building, located just off I-20, was built in 1985. It is the former Hawley’s Bicycle shop, which reportedly closed in late 2014. The property sold for $360,500, or $57.70 per square foot.
Boiling Springs: Dan Dunn of NAI Earle Furman represented the seller, Creal Family Ltd Partnership, in selling 7.62 acres of vacant land on Candlenut Lane to Dhirubhai Patel.
Easley: Towers Rice, CCIM of NAI Earle Furman represented the seller, TSW Properties, in selling a 3,200 SF industrial building at 250 Enterprise Drive to 711 Properties, LLC.
Spartanburg: Jake Van Gieson, Bill Sims, Gaston Albergotti and Graham Mullikin of NAI Earle Furman represented the seller, Kalclay Properties, LLC, in the sale of a 10,000 SF retail property at 2932 Reidville Road to Carl Fraley, Jr.
Piedmont: Glenn Batson of NAI Earle Furman represented the seller, Ron’s TV, in the sale of a 25,000 SF industrial property at 141 Country Manor Road to Country Manor Holdings.
Greenville: Scott Jones, SIOR of NAI Earle Furman represented the landlord, Three J PED, LLC and The Garrison Group, Inc., in the sale of a 8,200 SF of office building at 3527 Pelham Road. Ford Borders, SIOR; Grice Hunt, SIOR; and Clay Williams, also of NAI Earle Furman represented the buyer, JDG Holdings, LLC.
Greer: Edward Wingate of NAI Earle Furman represented the seller, Pointer Properties, LLC, in the sale of a retail investment property at 903 South Suber Road. John Gray, CCIM and Drew Stamm, also of NAI Earle Furman, represented the buyer, NV, LLC.
Moore: Edward Wingate of NAI Earle Furman represented the seller, Roebuck DG, LLC, in the sale of a retail investment property at 1790 East Blackstock Road. John Gray, CCIM and Drew Stamm, also of NAI Earle Furman, represented the buyer, NV, LLC.
Anderson: Kay Hill, Tony Bonitati and Bern Dupree of NAI Earle Furman represented the seller, Bailey Court, LLC, in the sale of Bailey Court, a 100-unit multi-family property, to Morrison Avenue Capital Partners, LLC.
Travelers Rest: Alex Campbell and Jake Van Gieson of NAI Earle Furman represented the seller, SC Tool Corp, in the sale of a 20,900 SF industrial property located at 1 Tungsten Trail to RRC USA Corp.
NAI Avant’s Director of Retail Services, Patrick Palmer, CCIM, recently represented the seller, First Palmer Trust, in the sale of ±5.75 acres of land at Trenholm Road Extension and Oneil Court in Columbia, SC for a memory care facility, which is scheduled to open in the spring of 2017. The sale of this site, in addition to a new Richland School District Two elementary school which is currently under construction, completes one of the four quadrants of this master planned section of Trenholm Road Extension. An additional +67 acres is slated to have a mix of assisted living, medical office, multifamily and retail.
On May 6, 2016, Builder Magazine released their annual survey of the Top 100 Builders nationally and Great Southern Homes, headquartered in Irmo, SC, moved up 26 spots to the 74th largest builder in the nation (2015) from the 100th largest the previous year.
Builder Magazine reports that last year Great Southern Homes achieved over $100 million in new homes closed with 544 unit closings. Moreover, Great Southern Homes was recognized in a feature article by the noted magazine as the 6th Fastest-Growing Private Builder in the nation having grown from 386 home closings in 2014 to 544 home closings in 2015, an impressive year-over-year increase of 41%.
According to Builder’s industry experts, this year’s BUILDER 100 list depicts a home-building industry that is well into a multi-year recovery from the housing crash of 2007. In 2015, total residential closings among the top 200 builders reached $99 billion in sales with a total of 261,372 homes closed and projections are that the positive trajectory of housing should continue in the coming years, as low unemployment rates typically foster household formation.
Great Southern Homes has recently been on an exceptional run with awards and industry recognitions. In addition to the Builder Magazine recognitions as the 74th largest builder in the nation and the 6th fastest-growing private builder, the company recently achieved the milestones of building and closing its 5,000th home, passing the $100 million mark in sales, and recognition as the largest home builder in the Midlands of South Carolina for 2015 as measured by permits and closings. As it continues to grow, Great Southern Homes is expanding into other rising housing markets within the Carolinas and Georgia and plans to build over 1,000 homes this year.
Berkadia has brokered the $24.5 million sale of The Crossroads Apartments, a 622-unit apartment community located at 716 Zimalcrest Drive in Columbia. Built in 1979, the property was 95 percent occupied at the time of sale. Apartment units include fully equipped kitchens, carpeting, hardwood floors, cable and wireless internet access and fireplaces and washer and dryer connections in select units. Community amenities include two swimming pools with sundecks, four tennis courts, two picnic and playground areas, a clubhouse, fitness center and a laundry facility.
David Oakley, David Etchison, Mark Boyce and Blake Coffey of Berkadia brokered the transaction between the buyer, Asia Capital Real Estate Management LLC, and the seller, AMAC I Crossroads LLC.
When it comes to demand for multifamily communities, there are usually two demographics that come to mind: millennials and baby boomers. What most people don’t realize, however, is that even though both groups drive demand for multifamily properties, there’s a third subset of individuals doing the same—divorced people.
According to the Census Bureau, there are approximately 107 million single people 18 or older living in the United States. Of that 107 million, 24% are divorced. This equates to 25.7 million individuals.
In addition to this 25.7 million, approximately 876,000 new divorces occur each year, or one every 36 seconds. This number doesn’t imply that there isn’t a significant amount of happy and successful marriages throughout the U.S.; it simply indicates that divorce is a reality and one that shouldn’t be ignored, especially by multifamily owners and investors.
Elevation Financial Group, LLC has announce the disposition of Serenity Apartments® at Greenville. The 200-unit multifamily community, located near downtown Greenville, South Carolina, was acquired for a purchase price of $9.25 million or $46,250/unit. For Elevation Real Property Fund IV investors, the disposition delivered a project Internal Rate of Return (IRR) of 77.8% and a Multiple of Invested Capital (MOIC) of 6.6x. The transaction was brokered by the South Carolina office of Berkadia Real Estate Advisors, LLC.
Elevation purchased the multifamily apartment community in 2014 for $3.8 million and immediately initiated its Serenity rebranding process. This involved significant capital renovations and upgrades throughout the property, including replacement of all windows and the creation of a new leasing office. Through the strong oversight of Elevation Property Management, the community increased its Net Operating Income by over 320% in only 15 months. With over 2,400 units in the management portfolio, Elevation Property Management manages multifamily apartment communities and senior towers throughout the Southeast United States.
Elevation Financial Group, through its subsequent fund, continues to own and operate the nearby 419-unit Serenity Apartments at Three Rivers, located in Columbia, South Carolina, as well as the 152-unit Serenity Apartments at Spartanburg, located in Spartanburg, South Carolina.
JLL’s latest research indicates the multifamily sector’s first quarter of 2016 was the strongest first quarter ever recorded, with figures reaching $34.5 billion.
The power of private equity is one reason multifamily is continuing its more than six-year boom period. The investor group accounted for more than $8.2 billion in activity during the first quarter, more than doubling comparable activity from the first half of 2015. Suburban, garden-style properties are the primary target of the group.
“Private equity in particular has demonstrated an appetite for suburban, garden-style assets, and it largely boils down to a play for yield and the strategy to diversify investments,” David Williams, JLL’s leader of multifamily capital markets, told MHN.
“Compared to CBD product, suburban, garden-style assets deliver higher yields and often have lower rents, which mirror renters’ preference toward more affordable rents,” he said. “In addition, the REITs have been net sellers of their older suburban assets evidenced by an increase in portfolio activity which has tripled year-over-year. The suburban value-add play on the transit corridors and in the best school districts are highly sought after by renters [who] are being priced out of the core.”
Holliday Fenoglio Fowler, L.P. (HFF) announced today that it has closed the sale of and secured acquisition financing for a six-property, grocery-anchored retail portfolio totaling 535,252 square feet in Georgia, Alabama and South Carolina.
HFF marketed the properties on behalf of the seller, InvenTrust Properties Corp. Preferred Apartment Communities, Inc. , through its retail subsidiary New Market Properties, LLC, purchased the assets. Working on behalf of the new owner, HFF also placed four separate fixed-rate acquisition loans. Two properties were purchased in all-cash transactions.
The 96-percent-occupied portfolio comprises Anderson Central and Fairview Market in Greenville-Spartanburg, South Carolina; Rosewood Shopping Center in Columbia, South Carolina; East Gate Shopping Center and Fury’s Ferry in Augusta, Georgia; and Southgate Village in Birmingham, Alabama. Five of the properties are anchored by Publix and one property is anchored by Walmart Supercenter.
The HFF investment sales team representing the seller was led by senior managing directors Jim Hamilton and Richard Reid.
The HFF debt placement team representing the borrower was led by senior managing director Ed Coco.
“The portfolio allowed the buyer to acquire a critical mass of six well-positioned, high-volume, grocery-anchored centers with an established tenancy located throughout the southeast,” Hamilton said.
Benbrooke Realty Investment Company has announced that it has acquired the Evanston Plaza Shopping center on Dorchester Road in North Charleston, South Carolina.
Evanston Plaza is a 71,050 square foot shopping center that was originally constructed in 1968. Currently 87% leased, it is anchored by a Rose’s Express department store, and located on the vibrant Dorchester Road corridor. Benbrooke will embark upon substantive property improvements, including façade and building modernization, and tenant repositioning to enhance the property’s visual appeal and commercial success. In anticipation of major enhancements to the nearby Charleston Airport, including the primary access shift to Dorchester Road, Benbrooke expects increased vehicular traffic and consumer demand for the Evanston Plaza property.
Substantial equity financing for the acquisition was provided by Chestnut Development Partners of Chattanooga, Tennessee. Chestnut is focused on making investments alongside experienced partners in development, redevelopment and value-add commercial real estate projects.
Drayton Calmes of the Norvell Real Estate Group facilitated the transaction and will serve as the property’s leasing agent. Pretium Property Management has received the property management assignment from the new owners.