Thank you Justin. And thank you for your support of the Chamber and sponsorship of this event.I want to point out all this data is from the Triangle Multiple Listing Service and the company it uses for analysis. The data isn’t perfect, it also isn’t complete, but it’s as good as we can get. Anyway, if you see something that looks wrong (as has happened in the past) let me know, and I’ll let them know.No more broken record.Aaron, how many years have I been doing this? I know, too many.I wish the real estate market acted more like that old adage about the weather: One thing you can count on about the weather, it’s going to change.Well, each year it gets harder to find something new to say, because it hasn’t changed much, and I’m not sure when it’s going to.Take a look at this headline I pulled from Bloomberg Sunday:
Pessimism was an optimistic termTax credit fading memory
Last September headline
What a difference a year makes.Housing has led economy out of most recessions historically.
Smiling faces? – Realtors!More realtors here – can now afford the $25
How many of you saw the beautiful rainbow over the area at sunrise last week?Another indicator, that we are on the road to recovery
Have buyers returned?Yes they have!In fact, Triangle wide, increase in sales every month this year so far vs YA. Trend takes 3 data points. Nice to have 8!
How long is it taking to sell your home?Still about 4 months on average
How much competition?How much choice?Less!
Whose market?Toss up – Even playing fieldRule of thumb – 6 months supply More is buyers market, less is sellers market Getting close to equilibrium
Describe chart400-600 sellers marketGood movement from 600-800Above 800 still languishingCondos moving, but still taking a whileVerdict still out on condos in CH green, 54, 140Different database so numbers don’t exactly matchSoft spot in what used to be sweet spot. 600-800Higher end finally moving. Why? Jumbo loans now available and affordable rates. Ave price up – skewed by this phenomenon. That’s why I don’t like to show it.Condo. Financing problems. Cash. Inventory, months supply.Policy implications: forcing each project to be mixed use (rather than looking holistically just making the community mixed use) condos often residential choice. Not a good one right now.?% under $600last year - detached766 listings 614 Sales 10 Months supplyNext new construction.
Movement in same price pointNegligible part of market – not a lot coming on
After all what could go wrong?
Long way to go to return to pre-recession sales
To orient you, here is a map of the Carolina North property in the Chapel Hill jurisdiction.The outlined area shows the Development Agreement boundary.Highlighted in blue are the proposed sites for the first 800,000 square feet.Those programs will include research and academic uses, the Law School and housing. This map also identifies the infrastructure, transportation, pedestrian, and bicycle improvements associated with the first 800,000 square feet at Carolina North.
The first building at Carolina North, the Collaborative Science Building, is now under design. Located close to the eastern end of the current runway at Horace Williams Airport, the Collaborative Science Building is projected to be approximately 265,000 square feet in seven stories . This new building will offer a unique environment currently not available in either the local rental market or on campus.It will create a community of researchers to foster collaboration and synergy and benefit from the efficiencies of shared space.Many of these units are currently housed in off-campus rental space, and these rents will be redirected to fund the construction of the building.Leers Weinzapfel Associates of Boston, who designed the FedEx Global Educations Center on campus, will design this building.To support the initial development, we are also in the project of designing infrastructure for the new campus. This will included an entry road to the new building, associated bicycle and pedestrian improvements, utility services, and striping of already paved areas to create surface parking. The initial entrance will be located at the intersection Estes Drive Extension and Airport Drive. The end of Airport Drive will be re-aligned , and a sidewalk extended to complete a sidewalk between Estes Drive and MLK Boulevard. The infrastructure project will also include a small central utlity plan that will eventually house the landfill gas electric generator.
2012 Orange County Development Briefing
Welcome to the2012 Orange CountyDevelopment Briefing
2012 – Road to Recovery• Days on Market – YTD, August, 2012 – Triangle • 121 Days (126 YA -4.0%) – Orange County • 129 Days (124 YA +4.3%) – Chapel Hill/Carrboro • 132 Days (126 YA +4.6%) – Hillsborough • 110 Days (125 YA -12.2%)
What Could Go Wrong?• Economic downturn – Slow drift into recession – European crisis – Fiscal Cliff• Self Inflicted Wounds – Taxation Reform • NC Tax on Services • Federal Loss of Mortgage Deduction
Summary – Road to Recovery• Put the housing recession behind us• 2012 – Strong, consistent growth – Buyers Back – Inventory/Supply under control• Future - Not there yet – Long way to go to return to pre-recession sales – Some potential bumps in the road ahead
Commercial Real Estate Michael Clayton, Managing Director, BIC
MARKET TRENDS FORCOMMERCIAL REAL ESTATE IN ORANGE COUNTY, NC
Overview of:• 2011 4TH QUARTER COMPARISON;• COMMERCIAL REAL ESTATE CATEGORIES, I.E. OFFICE, RETAIL, INDUSTRIAL, AND FLEX SPACE;• AVAILABILITY OF SQUARE FOOTAGE BY CATEGORY;• VACANCY RATES AND PRICING BY CATEGORY;• TRENDS IN COMMERCIAL REAL ESTATE VACANCY, PRICING, AND CONCESSIONS
2011 4th Quarter Review Source: The KARNES Report
Steve BrantleyORANGE COUNTYECONOMIC DEVELOPMENT
Members of Economic Development Board• Delores Bailey, EMPOWERment, Inc.• D.R. Bryan, Bryan Properties, Inc.• Lori Eichel, Harrington Bank• Jim Kitchen, JimKitchen.org• Karen McAdams, McAdams Farm• Eric Pate, GE• Mark O’Neal, Pickett-Sprouse Real Estate• Mark Sherburne, Aloft Hotel• Nicholas Thomas, FilmLab LLC• Tom Underwood, PHE, Inc.
Physical Context Carolina North Research and Innovation Campus Corporate Partnerships Faculty/Employee/Grad Housing Service/Retail/Civic Main Campus Flagship Research University Hospitals/Health Care Centers Student Life and Housing Mason Farm Outreach Intercollegiate Athletics Recreation Research
Purpose Caudill Labs Photos by Dan SearsCarolina North will be a mixed-use academic campus that:• Houses key academic programs;• Attracts talent to the University;• Enhances the University’s delivery of world-class research, teaching, outreach, and service for the people of North Carolina;• Contributes to economic development, locally and beyond; and• Delivers a planned, sustainable development that can adapt the latest technologies.
Carolina North Development Agreement• Agreement between University and Town of Chapel Hill: a contract that defines certain – Rights For each party – Obligations• Authorizes development of up to 3 million ft2 over 20 years on a defined 133 acres of the Carolina North property• Defines 228 acre development area over 50 years at Carolina North• Establishes 311 acres for conservation• Establishes development standards for transportation and parking, stormwater, energy and water, noise, and lighting• University to submit an Annual Report each year
Projected Development: First 800,000 square feetResearch Building One 225,000 sfSmall Central Utility Plant 5,000 sfLaw School 250,000 sfResearch Building Two 120,000 sfHousing 200,000 sf 6
Collaborative Science Building & Infrastructure Phase 1/Central Utility Plant Infrastructure………………………………. Design: June 2011 – May 2013 Construction: June 2013 – April 2014 Central Utility Plant……………………….. Design: July 2012 – Aug. 2013 Construction: Sept. 2013 – Jan. 2015 Collaborative Science Building……………. Design: March 2012 – Nov. 2013 Construction: Dec. 2013 – Nov. 2015
• Scope: 140 new homes, 26,000 SF of 1st Class Retail, 2 levels of Parking• Vision: Unify East & West Franklin St. and act as a catalyst for economic revitalization Downtown by following Downtown Revitalization Plan• Timeline: Begun Planning in 2005, Selected as Developer in 2006, Weathered economic Crisis & Broke Ground in January 2011
• Home Sales: – 93 of 140 residences sold, including 18 for the Community Home Trust – Starting delivery of residences early in 2013• Retail Leasing: – 4 Tenants Committed – Retail openings also targeted for early 2013• Parking: – 337 space underground parking will open first
• Chapel Hill & Orange County Development is resurgent• 123 West Franklin is on its way!• Between 123 and 140 West Franklin, more than $200 million of fresh investment at this intersection alone.
• Own, Redeveloping, and purchasing existing and new properties across the Triangle• Own and Redeveloping properties throughout the Charlotte Region• 140 West Franklin and our Chapel Hill partnerships are the flagship developments for our efforts throughout the State
Overview• Economic Impact for Community $20 million project $309,058 property tax revenues at current rates $177,000 occupancy tax revenues• Support for Village Center Third anchor for the community with Weaver Street Market and The Lumina Supports our restaurants and shops
Orange County Bus and Rail Investment Plan Damien Graham Triangle Transit www.OurTransitFuture.com
So what’s the plan? The plans has three stages of investment• Stage #1 – New and enhanced bus service buses can be ordered and operating within five years after a positivevote• Stage #2 Amtrak Rail station in Hillsborough sales tax will provide local revenue for future matching funds to buildan Amtrak station• Stage #3 Light Rail connection from UNC to Durham planning will continue to construct a high frequency rail connectionbetween Chapel Hill and Duke and downtown Durham
Step #1 Bus Service Improvements• Significant new funding available for additional bus service available within the first five years.• Improve connectivity locally, within Orange County and Regionally• Increase frequency of peak hour service• Improve weekend service, night service (off peak)• Service enhancements to rural transit service in unincorporated Orange County• Bus Service amenities such as better signage, shelters, and park ’n ride lots
STEP #2HILLSBOROUGH AMTRAK STATIONAMTRAK SERVICE INCLUDES CONNECTIONS TOCHARLOTTE, RALEIGH, RICHMOND, WASHINGTON DC, AND NEW YORK
A Healthier Environment• Transit Oriented Development around station locations• More dense development provides greateropportunity to preserve Open Space• Cleaner, healthier options to travel throughout thecounty
How are we going to pay for the plan?The Plan will be financed by a balance of revenue options: ▫ ½ cent sales tax (depending upon referendum) ▫ Increase in vehicle registration fee ▫ State and Federal Funding • Basically, an additional 5 cents on a $10 purchase buys over $1 billion in transit investment for the next 25 years. • Our local investment of $268 million by 2035 could leverage as much as $661 million in state and federal matching funding NC Law requires - All revenue from ½ cent sales tax and vehicle registration fee must be dedicated to the transit elements specified in Orange Bus and Rail Investment Plan
Exceptions from the tax • The One-half Cent • Food Transit Sales Tax does not apply to the • Medicine following… • Utilities • Housing • Gasoline“. . . the more the base of the sales tax excludes necessities (such as food andprescription drugs) and includes luxury or nonessential goods andservices, the less regressive the tax is likely to be”. 125Robert D. Lee, Jr., Ronald W. Johnson and Phillip G. Joyce (2008). Public Budgeting Systems, 8th 125Edition (Boston: Jones Bartlett).
Thank you to sponsors of the2012 Orange CountyDevelopment Briefing