SOUTHEAST SNAPSHOT, DECEMBER 2006

Charlotte, North Carolina Multifamily Market

Job growth, coupled with extraordinary population growth in the entire Charlotte MSA continues to fuel renter demand. Despite the growth spurt, Charlotte’s expansion maintains a healthy balance. Uptown is seeing tremendous growth, SouthPark and South End continue to see high-end development and areas along the outer beltway such as Ballanytne and University City continue to boom. 

Charlotte’s supply pipeline will increase next year relative to the last few years, balancing the growth among all of its submarkets. Charlotte is beginning to see the development of ultra high-end product in infill locations such as SouthPark, South End (transit-oriented development zoned sites along a new mass transit line) and uptown (primarily ground-up condo construction). National developers such as the Morgan Group, Hanover and Crescent will develop these high-end, high-density mixed-use products along the light-rail path, which is scheduled to open in fall 2007.

High-growth areas such as the Southwest and Northeast corridors continue to see the most multifamily development as demand is strong, fueled by strong employment. This is also the path of least resistance for new development as land is more readily available for developers.

The emergence of the Southwest submarket will be interesting to follow as development at Lake Wylie will bookend the area between Uptown and far southwest Mecklenberg County. The light-rail will serve this area and retail and residential development have already begun to flourish in this market.

Currently, rental rates for a class-A garden product are in the $.85 to $1.05 range, but the new high-end infill projects will see rents as high as $1.60 to more than $2.00. Vacancy rates are between 5 and 6 percent.

— Dean Smith and Blake Okland are partners for Apartment Realty Advisors in Charlotte, North Carolina.

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