Development activity has picked up in the Greensboro/High Point/Winston-Salem, North Carolina, multifamily market, according to Lorraine Klein, vice president of apartment research with Carolinas Real Data. "The Triad apartment market will probably continue to grow at a moderate pace," she says.

Citing the number of units started this year as proof, Klein says starts between March and September 2000 only reached 405 units. During the same period this year, starts reached 1,074 units. Starts for the full year 2000 (September to September) reached a total of 1,113 units while starts from September 2000 to September2001 totaled 1,843 units. Additionally, permit activity for both single and multifamily dwellings is up 13 percent in the Triad for the first half of 2001 compared to the first half of 2000.

"Overall, there are currently 1,217 units under construction and 1,433 units planned in the Triad. As of September, the vacancy rate was 8.3 percent. If the economy remains somewhat buoyant, the vacancy rate should remain within the current range, staying somewhere between 7 and 9 percent," predicts Klein.

At present, the majority of units under construction are in Greensboro: 711 units. This is not surprising to Klein, who says the Greensboro submarket "already maintains 52 percent of the apartment inventory in the area. Greensboro has outperformed its nearby neighbors as this market has been able to maintain and attract new, higher-paying jobs. The hottest areas seem to be southwest Greensboro and the adjoining east High Point area." High Point has 298 units under construction, and Winston-Salem follows with 208 units. Greensboro also leads the way in proposed construction with 759 units planned, 699 in southwest Greensboro. In Winston-Salem, 382 units are planned; 188 units are slated for Burlington; and High Point is expected to get 104 new units.

The largest apartment community that started construction recently is Broadstone Village; Carroll Investment Properties is developing this 298-unit complex in eastern High Point. An additional 104-unit phase is proposed for this community. Other fairly large communities are also underway, including Chuck Forrester's 192-unit Blackthorn Apartments in eastern Greensboro and 192 units in the first phase of Morgan Ridge, being built by Bostic Brothers in southwest Winston-Salem. An additional phase of 216 units is proposed for Morgan Ridge. Aside from these developments, the largest planned communities include West Market Apartments, the 344-unit project to be built by Signature Property Development, and another site in southwest Greensboro where Blue Ridge Development is planning to build 240 units.

Projects being developed in the Triad are, for the most part, fairly basic with few super deluxe amenities. The average overall rent is $609 based on quoted rents. The average rent for a one-bedroom is $537, two-bedrooms average $623 and three-bedrooms, $778. Of all the submarkets in the Triad, the average rent is the second highest in Greensboro at $629. The overall vacancy rate in the Triad is 8.3 percent as of September. Between September 2000 and September 2001, 1,844 new apartment units were completed in the Triad, which currently sustains a total of 47,544 units. This moderate growth correlates to a nearly 4 percent inventory increase in the past year. Only 984 units were absorbed during the same one-year period that the 1,844 units were completed, resulting in a rise in the vacancy rate from 6.7 percent recorded in September 2000. The vacancy rate for one-bedroom units is 8.4 percent, two-bedroom units are at 8.3 percent and three bedroom units, 8.2 percent. As for vacancy rates by subareas, Winston-Salem is posting 9.0 percent; Greensboro, 7.3 percent; High Point, 11.2 percent; Kernersville, 11.5 percent; and Burlington, 7.5 percent.

"The southwest Greensboro/east High Point corridor is the most active in terms of development activity at this time. Winston-Salem, on the other hand, has sustained significant economic losses in recent years. It has lost the headquarters of six New York stock exchange companies since 1979. The area has endured ongoing cuts in the tobacco industry -- the mainstay around which the city was built," says Klein. She also adds that the city has lost the Wachovia headquarters "as a result of the merger between Wachovia and First Union. The bank will keep the Wachovia name but move its headquarters to Charlotte, the location where First Union is currently headquartered."

The Triad, being a fairly small MSA, has a handful of prolific developers, none of which are at the national level. Major players include Brown Investment Properties, Bostic Brothers, Carroll Investment Properties, Signature Property Development and partnerships formed by local individuals.

Lorraine Klein is vice president of apartment research for Carolinas Real Data.


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