SOUTHEAST SNAPSHOT, MARCH 2005

Charlotte Multifamily Market

Although development in Charlotte, North Carolina, is at its lowest level in more than 10 years, multifamily occupancy rates are slowly improving. Many developers are in a holding pattern for a myriad of reasons — waiting for better market conditions, building costs and the weather. Even so, there are nearly 4,800 units currently in the planning stages in Charlotte.

The Class A market is performing relatively well with a vacancy rate under 8 percent, whereas Class C properties in some moderate income areas have vacancies above 15 percent.

Merry Land Properties is scheduled to begin construction on The Renwick this spring. The Renwick is located in downtown Charlotte on N. Davidson Street beside the Carole A. Hoefener Community Services Center. Upon completion, it will house a total of 190 units. The Renwick, along with other residential developments that are for sale or for student housing and other projects such as the new NBA Arena, Johnson & Wales University and the trolley line, continue to increase the demand for downtown living.

With nearly 700 units under construction, the Northeast accounts for a large portion of the development activity in Charlotte. This fall, Birmingham, Alabama-based Colonial Properties Trust expects to complete all 252 units of Colonial Grand at Mallard Creek, located at Mallard Creek and Mallard Creek Church Road. Charter Properties expects the final 213 units of the 266-unit Greenway Village, located at 8520 Greenway Village Dr., to be complete in May.

Around Lake Norman, the northern portion of Mecklenburg County has the most planned development in the area with nearly 1,300 units proposed. Later this year, HH Hunt plans to begin the second phase of 192 units at Auston Woods. Charter Properties expects the first units at Harborside Commons to be delivered in the fall of this year; there will be a total of 264 units when complete. State Street is working on plans for a 473-unit community on Mount Holly-Huntersville Road, and Forest City Land Group hopes to begin construction on 267 units at Summers Walk this year.

Biltmark Corporation/Tribute Properties of Wilmington, North Carolina, currently has planned three projects in the Charlotte area. Ivy Hollow, located at Interstate 77 and Sunset Road in northeast Charlotte, is a 288-unit community scheduled for completion in June. Heather Ridge, a community of 192 units located on East W.T. Harris Boulevard, will also have its first units delivered in June. The third property, 264 units at Arbor Trace, is located on S. Tryon Street and Choate Circle in southwest Charlotte.

Several new investors have recently made purchases in the Charlotte area. Colonial Properties Trust recently purchased 300 units at the Montclair Parc apartments for $23 million. Transwestern Investors of Chicago recently purchased three properties: Waterford Lakes (694 units) for $35.75 million, Woodway Point (392 units) for $21.95 million and Reserve at Waterford (140 units) for $8.35 million.

Keep your eyes on the areas around the newly opened and proposed areas of Interstate 485. The western leg of I-485, connecting Interstates 85 and 77, opened this year. Charlotte’s newest mall, North Lake Mall, is under construction along I-77 North, which is spurring additional development in the area.

The Ballantyne area experienced a development boom in the last 12 months, sending vacancy rates higher. It will be interesting to see how quickly this high growth area can absorb those units.

— Engle Addington, multifamily analyst, Real Data

©2005 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.