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.

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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, mwithers@naicarolantic.com

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.