US & International Market Report

April 5, 2012

Do you have commercial real estate in other US markets or internationally?  If so, we suggest you contact us for the 2012 Global Market Report produced by NAI Global.  The 150-page Report provides an insider’s view of market conditions and trends in more than 200 commercial real estate markets worldwide including insight into where the real estate opportunities exist.  Using narrative market reports and statistical charts, the report provides market highlights, trends, demographic and business profiles, rental rates, vacancy rates and land prices.

Steve Stroud SIOR, Chairman, NAI Carolantic Realty

Dr. Peter Linneman, NAI Global’s Chief Economist and Principal of Linneman Associates, the leading real estate economics consulting firm, worked with NAI Global to prepare the Outlook portion of the Report.  Linneman Associates also added its expert economic analysis and insights to the detailed local market data from NAI professionals worldwide to deliver the information on commercial real estate costs and market conditions around the world.

For a free copy of the report, please email us at   If we can assist with any current or future real estate requirements anywhere in the world, call us at 919.832.0594.  We look forward to being of service.


C-III Capital Partners Completes Acquisition of NAI Global

January 30, 2012

Jimmy Barnes, SIOR, President of NAI Carolantic Realty

C-III Capital Partners LLC (C-III) announced on January 25th that it had completed its previously announced acquisition of NAI Global, the largest and premier network of independent commercial real estate firms worldwide. C-III is led by CEO Andrew L. Farkas, who founded and was Chairman and CEO of Insignia Financial Group, Inc.  We are very excited about this transaction at NAI Carolantic Realty and believe it will enhance our platform to be the best real estate company in the world.  Our brokers and ultimately our clients will benefit from the additional financial resources, contacts and wealth of knowledge brought to us by C-III.

“The completion of this transaction represents a significant step forward in our strategy to build a fully diversified commercial real estate services company,” said Mr. Farkas. “With the NAI Global acquisition, we are gaining the world’s leading commercial real estate network and a tremendous foundation for future growth.  As we begin a new year, we look forward to partnering with the NAI team to provide enhanced services to the commercial and institutional real estate markets they serve as well as continuing to take advantage of other opportunities to grow and expand our platform.”

“We are thrilled to be joining forces with C-III and excited about the opportunity to deliver an even broader range of services to our members and add greater value to our collective corporate and investment clients. We look forward to tapping into their great resources and expertise to help C-III clients strategically optimize their commercial real estate assets,” said Jeffrey M. Finn, President and CEO of NAI Global. NAI Global will continue to operate as a separate company under its current management.

NAI manages a network of commercial real estate firms comprising 5,000 professionals and 350 offices in the US and 55 countries throughout the world.  NAI’s network members provide a full spectrum of corporate, financial, technology and project management services.

C-III commenced operations with the purchase of Centerline Capital Group’s institutional real estate debt fund management and commercial mortgage loan servicing businesses in March 2010.  Since that time, C-III has successfully launched mortgage origination, investment sales and title insurance businesses, and expanded its principal investment, loan origination, fund management and primary and special loan servicing businesses, including acquiring the special servicing and CDO management businesses of JER Partners in August 2011.  In November 2011, C-III acquired two affiliated multifamily property management businesses – U.S. Residential Group and Pacific West Management – which now operate on a combined basis under the U.S. Residential Group name.

NAI Carolantic Realty on Target with Commercial Real Estate Forecasts

January 19, 2012

At last year’s conference, NAI Carolantic predicted that 2011 would be a painfully slow recovery year, but that we would see bottom.  They were right on target once again.  We finished the year with a drop in vacancy in the multipurpose and office sectors and remained the same in retail.  We also had increases in absorption in all but two submarkets.  That was the message to more than 1,700 business and community leaders who gathered at Raleigh’s RBC Center on January 18th for the 27th Annual Triangle Commercial Real Estate Conference hosted by NAI Carolantic Realty. The Conference is considered the authoritative “state of the market” report on the Triangle’s real estate sector and an accurate bellwether on the health of the region’s overall economy.

Steve Stroud, SIOR, Chairman of NAI Carolantic, welcomed attendees noting NAI Carolantic was celebrating “Forty Years of Forward Thinking.”  He also said he was glad to be there given a tractor accident three months earlier.  He thanked family, his team at NAI Carolantic and friends for their numerous acts of kindness during his recovery.

Jimmy Barnes, SIOR, President of NAI Carolantic Realty

Following Stroud’s comments, NAI Carolantic President Jimmy Barnes, SIOR took center stage to review the past year’s commercial real estate landscape and offered Carolantic’s forecast for 2012.

“Remember, leasing is big business, as it has been reported there is over a trillion dollars nationally in lease obligations for public companies alone.  We are finally making headway, but nowhere near where we were in 2007.  The national capital markets are affecting business here in the Triangle. The primary stories are lots of money available but also billions of dollars of maturing debt.  Local and community banks are trying to work with their customers, but vacancies and declining values are big obstacles. In addition, a lack of institutional grade, Class A product, low interest rates, and an abundant money supply have driven up activity and consequently prices.  The Triangle has benefited from this activity with large transactions in the apartment market ($850 million) as well as the office market.  There is still a lot of political unrest, but we are seeing a national recovery, and our local real estate market is as active as we have seen it over the last 36 months.  Nothing robust, but we are optimistic moving into 2012”, said Barnes. 

NAI Carolantic’s survey and analysis showed that, in a market of almost 240 million square feet of office, multipurpose and shopping center space, nearly 32 million square feet remained vacant at year-end.  “Vacancy decreased slightly in the office and multipurpose sectors, and the shopping center market remained at 6% for the third year in a row.  Absorption improved slightly in 2011 and we expect minimal construction in the first quarter of 2012.  The apartment market continues to be on fire with the vacancy rate the lowest in the past decade,” said Barnes.

When it Comes to Auction, a Seller Has More Than One Option

September 28, 2011

There clearly is no “one size fits all” when it comes to selling distressed properties.  A commercial real estate broker is truly a partner and advisor to a property owner choosing auction as an alternative method of sale.

No two properties are alike and therefore, no one auction solution fits all. Realizing that different properties lend themselves to a specific accelerating marketing approach, NAI Global has designed a program which offers property owners more than one option. Through the program NAI has developed, NAI Carolantic can offer property owners three distinct auction options: Sealed Bid Auctions, Live Auctions and Online Auctions. Sealed Bid Auctions are suitable for individual properties or portfolios over $500,000; Live Auctions deliver quick results for both residential and commercial properties of all values; and Online Auctions are the best choice for properties that have been previously listed and exposed to the market.

In all cases, auctions provide a sense of urgency for buyers to act. Auctions eliminate drawn out negotiations with a process that typically takes no more than 120 days – start to finish.

Jim Adams, Broker, NAI Carolantic Realty

If you are a property owner considering an alternative to traditional marketing, consider the auction solutions provided by NAI. More information about the program can be obtained by contacting me at, or calling 919.832.0594.

Are All Surveys Created Equal?

September 13, 2011

Recently, I assisted in the sale of a building located in Downtown Raleigh.  Since the owner purchased the building in the early 1950s, there have obviously been numerous changes in downtown.  Adjacent properties were sold several times throughout the years, and each time the new buyer needed an updated survey for their closing.  

During this particular transaction, I took the time to sit down with what I consider to be one of the most detailed surveyors in Wake County.  He spent several hours with me digging through piles of paperwork that he had uncovered through his research for the subject property.  Most of the paperwork consisted of recorded neighbor surveys stating a legal description of the property lines and a recorded map.  

I was shocked to see the countless mistakes he discovered from careless survey work. One neighboring property is legally described to be three feet within the right of way along one of the streets of Raleigh.  However, the attached map showed the building to be within the property boundaries.  

In a totally different situation, I was involved in the sale of some land in the Research Triangle Park. After a detailed survey was completed, the buyer discovered the property actually consisted of an additional acre not advertised and shown on an old survey.  This was an immediate return for the buyer.

I also recently heard about an incorrect survey in Cary that led to a $30,000 settlement by the new property owner.  That had to be painful.

Moss Withers, Broker, NAI Carolantic Realty,

If you are buying a property and in the midst of your due diligence, I encourage you to give careful consideration to the quality of the work performed by the surveyor. Obviously receiving the right plat is critical to the process.  But also consider a survey as an insurance policy for the future and it might save you many headaches and countless dollars down the road.  I have come to realize that all surveys are not created equal.


Game Changer

September 1, 2011

Director of Retail Services, NAI Carolantic Realty

Hats off to Dennis Edwards, President  & CEO of the Greater Raleigh Convention & Visitors Bureau, along with his staff for a very successful 24th Annual GRCVB Annual meeting yesterday at the Raleigh Convention Center.  Several of us from NAI Carolantic Realty joined with hundreds of other business leaders in attending the event and were very impressed with the various awards presented to include the John B. Ross Jr. Leadership Award to USA Baseball; the Thad Eure Jr. Memorial Award to the Carolina Hurricanes Hockey Club; and the Lifetime Achievement Award presented to John C. Brantley, airport director at RDU.  The balance of the program included a panel discussion moderated by Tim Schneider, publisher of Association News & SportsTravel magazines.  Panelists included two meeting planners and two sports event planners focusing on how the destination game is changing and how Greater Raleigh businesses can help to continue to attract groups and visitors to our area.  Also impressive was the GRCVB’s donation of five dollars from every luncheon seat purchased to support the Raleigh/Wake Partnership to End and Prevent Homelessness.  

Everyone must have left this meeting with a sense of pride for Raleigh, and an appreciation for those working hard to ensure Raleigh continues to be a ‘Game Changer’…the theme of the GRCVB’s annual meeting.


You learn something new every day!

June 15, 2011

Steve Stroud, SIOR, Chairman of NAI Carolantic Realty

Isn’t it great to learn something new every day…especially as it relates to our Region of North Carolina?  I was reading an article recently from the NC Department of Commerce  and wanted to share it with you.  The article indicated that according to a recent study prepared for the Research Triangle Regional Partnership (RTRP) and funded by NC State University’s Institute for Emerging Issues faculty fellow program found that North Carolina is a hub for smart grid companies.  According to the report, titled Smart Grid: Core Firms in the Research Triangle Region, NC states, “The Research Triangle Region and state of North Carolina have a unique opportunity not only to invent, manufacture and sell smart grid technologies to the world, but also to apply them at home.  The merger of Duke Energy and Progress Energy, creating the nation’s largest utility, may offer economies of scale that can facilitate smart grid deployment.”

The article went on to say the proposed smart grids hold the potential for utilities and customers to manage electrical usage more efficiently.  A smart grid would potentially enable the US power system to avoid power outages and blackouts.  Only California has substantially more facilities that develop, manufacture or service smart grid technologies.

The Research Triangle is home to the headquarters of five lead companies, making it second in the nation, and approximately 59 core smart grid firms with 101 locations that develop or manufacture relevant hardware and software, or perform other smart grid-related services.  These companies employ nearly 3,000 people.  Of the eight smart grid technology categories identified by the International Energy Agency, the Triangle’s largest concentration is in information and communications technology integration.

Knowing this fact about our Region can only help us as we talk with clients around the country and the world about all the advantages of living and working in the Triangle.  Let’s never stop learning.

Think Positive

May 25, 2011

Jimmy Barnes, SIOR, President of NAI Carolantic Realty

New figures were recently released by the NC Employment Security Commission which indicated the state added 2,900 nonfarm jobs during April.  In addition, the state’s unemployment rate held steady in April, remaining at 9.7 percent for the second month in a row.  Not tremendous growth, but at least on the positive side especially considering the disastrous job loss we had in 2009.

Along with this news, the North Carolina Department of Commerce released information that it has been working on 149 new projects with 74 actual projects announced.  Over 7,000 jobs have been created with a capital investment of $1.09 billion between January and May, 2011.

We can also celebrate some local good news with the Lenovo announcement on May 20th that it had signed a contract with Affiliated Computer Services, Inc, a Xerox Company, as part of an initiative to expand its Global Services business. The agreement will create approximately 300 new jobs in the Research Triangle region.

Oh, and I congratulate our hometown boy, Scotty McCreery who is a shining light for the Town of Garner and the State of North Carolina.  Way to go Scotty!

Just a few of the reasons why we have a lot to be thankful for living in North Carolina, and specifically the Triangle region.  Please let us know if we can be of assistance to you and your firm.

Triangle Industrial Market Update

March 18, 2011

At the Annual CCIM Forecast luncheon this past Wednesday, I gave an update on the Triangle industrial market to approximately 300 attendees.  My presentation included a historical look back to 1996 showing vacancy trends over the years with the most recent increase starting in 2006 with 12.5% vacancy to today with 20.8% vacancy.  Sublease space makes up a large portion of the vacancy with over 800,000 square feet on the market at the end of 2010.  It is then no surprise that there has been no absorption and in fact negative absorption since 2008. 

Ed Brown, SIOR, CCIM, NAI Carolantic Realty

The three largest submarkets for leasing activity are the Research Triangle Park, East Wake and North Raleigh/US 1 corridors. Given the high vacancy numbers, one would expect construction to be down and in fact, there was little to no speculative building.  Construction was limited to a few build to suits. Rental rates have been flat since 2000 with most Class A buildings hovering around $4.00-$4.50 per square foot depending on location and ceiling height.  Many companies have taken advantage of current market conditions and traded up to lower their cost to a newer and/or more efficient building.  Industrial building sales were generally in the $41 to $46 per square foot range, and land sales were anywhere from $29,000 per acre in outlying areas, to $100,000 to $200,000 per acre for prime locations.

Today, we see the most industrial market activity in the following sectors: printing, medical, food, electronics and furniture.  I expect our negative absorption will continue through 2011 with several tenants downsizing or moving out of buildings in Keystone Park, Imperial Center, Tri-Center South and Tri-Center North.  Construction costs continue to escalate especially with increasing fuel prices.  Steel has increased 16% this year and concrete is due to increase to $5 per yard in April.

For the future, I expect industrial vacancy levels to be up again this year, and absorption to remain negative.  Rates will be stable and there will be no speculative construction.  Land values will be down, and construction costs will rise.  But, job growth…the engine that drives our economy, should improve which can only help the overall commercial real estate market.

Please let me know if you have any questions or if I can be of service with your real estate needs.

2011 Will Be The Year

February 8, 2011

Jimmy Barnes, SIOR, President of NAI Carolantic Realty

2011 will be the year we begin the recovery for a successful 10 year run. If we can get 5 strong years out of a 10 year real estate cycle, we will have been successful. Historical numbers show we did just that in the 80s, 90s and from 2000 to 2010 and we expect the same trend as we head to 2020. So plan on 5 strong years and work, plan and prepare to make the other 5 ok and not awful. 

We continue to have serious challenges with $1.4 trillion in National commercial debt coming due between 2010 and 2014.  Commercial owners are returning keys to banks (you may have heard the term “jingle mail”), and employment rates that are not expected to improve much this year.  Past downturns have been based on over building, but this downturn is clearly Global, based on over leveraging and record setting job loss. 

But there’s not a better place to be in the country. Our market, as it has in the past, will recover more quickly than other markets, and our State and region give us reason to have confidence in the recovery.  This year expect: 
• Vacancy rates to start trending down
• Could be a supply problem is some submarkets
• Rental rates to hit bottom
• Absorption to remain flat
• No speculative construction anytime soon
• Investment sales up another 40 percent, and
• Land prices to now reflect true values.