Game Changer

September 1, 2011

Director of Retail Services, NAI Carolantic Realty sbull@naicarolantic.com

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.

 


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.


Emerging Perspectives/Part I

January 16, 2011

Steve Stroud, Chairman of NAI Carolantic Realty, gave the following ‘perspective’ at the 26th Annual Triangle Commercial Real Estate Conference held on January 12th at the RBC Center in Raleigh, NC.  This is Part I of his remarks.

Steve Stroud, SIOR, Chairman of NAI Carolantic Realty

“Last year, I talked about essentials to continued growth: the importance of funding our flagship universities to maintain our competitive edge; educating our residents to establish a metropolitan agency to plan for infrastructure, water, sewer, and public services providing efficiency and economies of scale; and finally asking for a good-faith effort between commercial lenders and their mortgagees to extend performing loans and avoid making calls that trigger domino effects throughout the local economy.

Today, I still hold to my recommendations from last year, but I think there is more at stake right now.  I believe our leaders in Washington are playing a dangerous game. Perhaps they should read again what Thomas Jefferson reminded his fellow citizens in his First Inaugural Address, that happiness and prosperity rested upon,

“A wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned.”  This, he thought, was “the sum of good government.” Thomas Jefferson

Today, government borrowing has created a staggering national debt – now an incredible 94% of GDP. That not only threatens our stability now, but it will be a burden to our children, and our children’s children.  The so-called stimulus did nothing, except create problems we’ll encounter further down the road.  Our national debt has increased by 86%. Unemployment is stuck at more than 9%, and we all know the real number is much, much higher than that.

Obviously our local economy remains at the mercy of decisions made in Washington.  So tonight I’m going to take a broader perspective, and talk to you about our legacy as a nation, and then focus in on what I perceive to be our best hope for getting out of this situation – a greater involvement by all of us in the education of our children. 

We need to return to teaching American history in a way that will renew their appreciation for this country’s greatness and its unique position as a beacon of freedom in the world….by teaching our children the principles put in place by our founding fathers.”


Signs of Improvement in Retail

November 16, 2010

Last week at the Atlanta International Council of Shopping Centers (ICSC) convention, one of the speakers asked for a show of hands if the recession was over or not. Needless to say, the large majority raised their hands to show that no, it’s not over.  While I agree that we are far from out of this recession, there are some signs of improvement in the retail industry.

In the first nine months of 2010, same-store sales, year-over-year, rose by 3.4 percent. Yes, it’s anemic, and yes we are comparing this to the lack luster 2009, it’s still an increase!

At the same convention, ICSC forecasts that holiday retail sales will increase by 3 to 3.5 percent over 2009 levels, the largest jump since 2006.  Again, it’s anemic, but it’s also an increase!

Joaquin Canals, Broker, NAI Carolantic Realty

While there are many reasons for this increase, one of the factors that is often overlooked is the flexibility and creativity that brokers/leasing professionals, and owners have demonstrated in negotiating new leases, lease renewals, and options.  Is it a coincidence that waiving the standard 3% annual rent increase helped a retailer’s bottom line, and kept “the lights burning”?

The bright spots on the horizon are the discounters and the luxury sector, while the middle sector will be the last to show improvement. Other constant bright spots will be the recession-proof sectors such as fast-food, cosmetics, hair-cutters, and home improvement stores.   


Maintain Optimism…Jobs Are Returning

October 18, 2010

John Hibbits, Broker, NAI Carolantic Realty, jhibbits@naicarolantic.com

Generally I’m an optimistic guy and this time I don’t have to worry about reality being disconnected from my fantastic view of it.  The numbers speak for themselves when it comes to a recovering market.  

The recent October issue of the Research Triangle Regional Partnership Report was filled with information on job growth for North Carolina and specifically the Triangle region. Among the long list of companies locating or expanding included: EMC Corp., Medicago, Cree, Novo Nordisk, GE, BioCryst, SuperValu, and Siemens.  Job growth is especially strong for alternative energy firms.  According to the North Carolina Sustainable Energy Association, they forecast a 22% increase in jobs this year, and a projected 20% increase for 2011.   

Our area gets great national attention in various publications. Forbes magazine continues to dole out awards to North Carolina, ranking our state as the third best state for business in the US.  That is up two spots from last year.  Forbes indicated the key reasons to be regulatory environment, labor supply and growth prospects. 

According to Federal Bureau of Labor and Statistics, North Carolina is the third best state for declining unemployment and fourth in the nation for job creation. Unemployment is down from 11.1% in January to 9.7% now.  No surprise as Manpower recently ranked the Raleigh-Cary metro area as the number one strongest job market in the nation in September. 

Are we seeing an end to the recession? The Kiplinger report said yes over a month ago.  I remain pragmatically optimistic and look forward to working with you in the future.


Nothing Could Be Finer…

September 24, 2010

We can’t say it enough…the Raleigh/Durham region is one of the best places in the US to live, work and play.  This was reconfirmed this week when I attended the Greater Raleigh Chamber of Commerce Board meeting and heard the latest Economic Development report.  From May 15-September 15, Wake County Economic Development has assigned 12 new projects, had 7 client visits and had 104 existing industry interactions.   Twenty projects are actively being worked on by staff and will represent a potential total of $305,625,000 in new investment and 3,293 new jobs.  There have also been 18 companies who have relocated or expanded in the area since May.  They include:  BB&T, Deere & Co., Kyma Technologies, Inc., Rex Healthcare, WakeMed Health & Hospitals, Inspire Pharmaceuticals, and Pensk Truck Leasing Co.  These 18 companies account for 267 new jobs and over $167.9 million in new investment.

Jimmy Barnes

Jimmy Barnes, SIOR, President of NAI Carolantic Realty, Jbarnes@naicarolantic.com

Despite the sluggish commercial real estate market, we do see some activity.  One of our brokers, Scott Hadley, just completed a large lease renewal and expansion for FMI.  Another broker, Gray Creech, closed on two office condos, and I recently completed at 25,000sf lease with BeavEx in RTP. We continue to work with several clients in locating new sites for their operations. In addition, we are helping several banks dispose of excess real estate with closings occurring in North and South Carolina.

Let us know if we can be of assistance to you.  As the song goes, “Nothing could be finer than to be in Carolina!”

NOTE:  Be sure to mark your calendar for our 26th Annual Triangle Commercial Real Estate Conference scheduled for January 12, 2011 at the RBC Center in Raleigh.  This invitation-only event continues to be one of the most unique gatherings of Triangle business and community leaders.


Industrial Market Update

September 2, 2010

Ed Brown, SIOR, CCIM, NAI Carolantic Realty

The Triangle’s industrial warehouse market with over 23 million square feet has shown positive net absorption during the 2nd quarter of 2010. This is significant since the previous seven quarters have reflected negative absorption. Stagnant job growth, a slowdown in the construction industry, and a decrease in manufacturing have all contributed to the negative warehouse absorption. This past quarter was a positive sign for us, but we still have a long way to go before the market reaches equilibrium. 

Additional good news is that due to a limited supply of available buildings to purchase, existing buildings are maintaining their value in Wake and Durham Counties.  We recently had the good fortune of selling an 80,000sf building by RDU airport for $45/psf and a 16,000sf warehouse for $44/psf.  Prices significantly drop in the surrounding rural counties as the Hohn building in Louisburg, (Franklin County), sold for $7.50/psf.  The Purolator building in Vance County sold between $7.00 – $8.00/psf.  The Lenox building in Oxford traded for $19/psf due to an existing tenant in the building wanting to purchase the property. 

Industrial land sales in the Raleigh/Durham area continue to be slow.  We did recently sell an eight acre site on the south side of Raleigh at I-40 and Hwy 70 for $2.45/psf. This is representative of current market values for industrial land.   

If I can assist with any industrial properties in Wake, Durham or surrounding counties, please give me a call at 919-832-0594 or email ebrown@naicarolantic.com.  The Triangle industrial market has been my focus for over 24 years and I would welcome an opportunity to meet with you.


Market Activity

August 12, 2010

Many of you may know that NAI Carolantic has researched and reported on the commercial real estate market for over 25 years as it relates to vacancy, absorption, new construction, etc.  However, you may not know we also track market ‘activity’ in several ways.

One of the ways we study activity is by the number of prospects in the market looking for property to buy or to lease.  In the first quarter of 2010, we saw an increase in activity, followed by a decrease in the second quarter.  Recently, however, we have started to see an upswing in activity. Things are not getting better as quickly as we might hope, but they ARE getting better.  I’m thankful I am living in the Research Triangle area and so are many of my clients. 

Richard Hibbits, Vice President, rhibbits@naicarolantic.com

As an example, despite being hammered for the last two years, most of my retail clients have survivied thankfully.  None of them expect a quick return to a buoyant economy, but they would be the first to tell you they are also glad to be in the Research Triangle area instead of almost anywhere else in the country.


Job Recovery

August 6, 2010

In a recent report by the NAI Global national economist, Dr. Peter Linneman, he stated all major industries except for the information sector have registered employment gains.  He noted, “Aside from the government sector (591,000), the largest absolute job increases were in professional and business services (314,000), manufacturing (108,000), leisure and hospitality (95,000), and trade, transportation, and utilities (74,000)”.

In our market, the Raleigh-Cary metropolitan area gained 22,100 private-sector jobs between June 2005 and June 2010, the fifth best total among the 100 largest US metros according to the US Bureau of Labor Statistics.  This was the biggest job gain of any metropolitan statistical area outside of Texas.  Eighty-four major markets suffered declines in private-sector employment during the half-decade, while only 16 finished on the upside as reported by the Triangle Business Journal.

Just this week, additional positive job growth news included Caterpillar’s plans to expand its manufacturing facility in Lee County adding 325 jobs to its operations in Sanford over the next four years.    A Caterpillar supplier is also expected to locate 160 workers at the Sanford site bringing the expansion’s job total to 485 new positions.  Triangle Business Journal reported Caterpillar was offered almost $5 million in economic incentive grants from state and local governments to pick Sanford over a competing site in Florence, South Carolina.

Jake Plotkin, Broker, NAI Carolantic Realty, jplotkin@naicarolantic.com

I think you would agree we live in a unique area.  We have an educated workforce, a strong housing market, low cost of living and a high quality of life.  These traits are just a few reasons why Wake County has experienced such strong job growth since 2005 (rated #5 by Manpower out of all US Cities).


Job Creation Planned-Economic Growth Predicted

June 18, 2010

According to Manpower’s quarterly employment outlook survey, 19% of employers in the Raleigh-Cary area plan to hire new staff.  Jobs in construction, goods manufacturing, transportation and utilities, education and health services, leisure/hospitality and government are the top areas for growth.  John Connaughton, a prominent economist for UNC Charlotte predicts output increases in nine of the state’s eleven economic sections combining for a total of 2.2% overall growth by the end of 2010.  This would be the first sustained positive growth in two years according to the Triangle Business Journal.

Internationally, according to the Wells Fargo Securities Economics Group, most countries reported positive GDP growth in the first quarter.  The report stated, “Recent monthly indicators suggest that global economic activity has continued to expand.  Although China may be slowing from the super-charged pace of growth earlier this year, the Chinese economy still has plenty of momentum behind it.  Moreover, recent monthly data from Japan, Korea and Taiwan indicate that the expansion in Asia, which began about a year ago, remains intact.”  

Scott Hadley, Broker, NAI Carolantic Realty

With over 325 offices worldwide, including China, Taiwan and Korea, we can help you there or here at home with a market analysis of your real estate position.  Please give us a call at 919-832-0594 or send us an email at questions@naicarolantic.com.  We look forward to an opportunity to be of service.