Spaces & Places: 2016 Regional Development Briefing

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On August 25, 2016, the Chapel Hill-Carrboro Chamber of Commerce hosted a regional development briefing, called Spaces & Places.

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  • Aaron said I should plan to share what seems important to 150-200 business people in Chapel Hill.
  • The world is not flat…
  • It is actually round…
  • No man ever steps in the same river twice, for it's not the same river and he's not the same man.
    You could not step twice into the same rivers; for other waters are ever flowing on to you. Chapel Hill is different today than it was 30 years ago and we are different people. Perhaps the Chapel Hill of tomorrow will become far greater than the Chapel Hill many of us remember in our past.
  • Just to highlight a few developments that prepare for that future.
  • Carolina Square, home to Target and under construction.
  • Glen Lennox currently seeking equity with hopes of beginning their redevelopment in 2017.
  • South Creek in a marketing mode and we hope to see them come out of the ground in 2017.
  • Many projects under construction and many others in the planning stage.
  • In for their Zoning Compliance Certificate for Phase 1 and in a national marketing effort for commercial users.
  • Projects in downtown….
  • Approved SF…
  • Thinking of our current views of Chapel Hill and how we begin to see ourselves into the future…
  • Began as a way to help Council understand the market of retail development and evolved to a Commercial Development Strategy to replace the Economic Development Strategy.
  • US Universities
  • Taking our place on the map….
  • Grow jobs for Chapel Hill
  • Target companies that seem to fit as an out-growth of research, and applied sciences ( includes technology).
  • Create jobs from innovation, entrepreneurs and companies that desire to locate here.
  • Commercial Development Strategy
  • Create an improved relation that leads to retention of talent.
  • The Town becomes a key facilitator of space for doing business and providing the necessary infrastructure.
  • Can you tell the Chapel Hill story? Boulder’s is :“Boulder always seems to be the perfect storm of everything,” he says. It has 300 days of sunshine a year, Flatirons mountain views, a foodie culture with a killer craft beer scene, universities, a tech-savvy government and, according to a 2013 New Engine/Kauffman Foundation research report, the highest density of tech startups in America.
    We have to better develop our business and quality of life story and include our trees, rock walls and graciousness…
  • Pride: Recognized center of knowledge, Prosperity: More jobs and businesses, a place for you children to do an internship, People: Stop the brain drain that we have seen in the past
  • storytelling
  • storytelling
  • MLS - most, but not all sales.
    Used 12 month rolling when appropriate to account for seasonality
    Chapel Hill/Carrboro? On most measures, more extreme. In school district, even more extreme.
    SFD for apples to apples. Chatham - most inventory. Durham and Chapel Hill more diverse, but trends same.
    Just don’t have a good database for rentals, as important as they are to these markets
  • Single Family Detached (used unless noted). Healthy and steady growth. Shows last 18 months. Used 12 month rolling data to smooth out seasonality. 9% YTD - very good, but not so fast as to get overheated.
  • Last ten years. Pre-recession. Durham very close to highs. Chathamand Orange exceeded them a while ago.
  • Despite listing growth, sales have kept inventory down.
    6 is considered balanced market. All areas “seller’s markets.” Durham crazy low. = fewer days on market, multiple offers, disappointed buyers, higher prices.
  • You may be curious how supply works by price point. More supply for higher prices, but coming down. Orange $450+ nearing equilibrium, dropped by a third. $300-$450 real sweet spot - down 43%
  • Chatham still working through high end backlog - also adding a lot of new construction (more on that later). Lower price points low inventory
  • Durham is basically just very hot across the board.
  • Orange and Chatham very close - Orange milestone - broke the $400,000 barrier - will make homeowners in room happy, but not affordable housing advocates
    Orange = +1.9% higher than Chatham and +63.3% higher than Durham
  • What do you get for your money? Equalize things using price per square foot.
    Still costs healthy premium to by in Orange.
    Orange = +8.3% higher than Chatham and +32.5% higher than Durham
    But Orange much higher PPSF
  • New Construction - Chatham and Durham very active. Chatham new construction driver for a while (less increase). Durham accelerating.
  • Chatham 2.5 times, Durham 5.5 times
    The introduction of brand new construction means competition for older homes, which must drop price to be competitive
  • Chatham County is a largely rural county in central North Carolina. According to Census estimates, Chatham County was the fastest growing county in the state between 2014 and 2015.

    In spite of a steadily low unemployment rate, the County faces challenges with providing well-paying jobs for its educated and skilled workforce.

    There are more than 33,000 residents in the workforce, and fewer than 14,000 jobs. Those jobs, on average, pay well below the state average.
  • Near the Walmart on 15-501, a $2.1 million, 54,000 square foot two-story storage facility recently opened.
  • Three years ago, a Charlotte development group purchased Cole Park Plaza. Now called North Chatham Village, developers are overhauling the entire center.
  • Several buildings have been demolished and remaining buildings are being upfitted with modern facades.
  • The owners are working to attract national chains, including a McDonald’s and Dollar Tree.
  • Polk Village has a day care, medical facility, and an assisted living facility. Its multi-tenant commercial space has an Asian restaurant, salon, and physical therapy space.
  • Briar Chapel broke ground on the commercial portion of its development.
  • The 17,000 square foot commercial building next to Lowe’s Home Improvement in Pittsboro’s Bellemont Station was recently completed.
  • Four new apartment buildings with 76 units at Bellemont Station increases the diversity in housing options for residents.
  • Progress continues on the new conference center, slated to open this fall.
  • Spaces & Places: 2016 Regional Development Briefing

    1. 1. Welcome!
    2. 2. Aaron Nelson President & CEO Chapel Hill-Carrboro Chamber of Commerce
    3. 3. Thank you, briefing sponsors! René Hendrickson Real Estate
    4. 4. Join the Conversation @carolinachamber #SpacesPlaces
    5. 5. Our Presenting Sponsor
    6. 6. Our Breakfast Sponsor
    7. 7. Our Q&A Sponsor
    8. 8. Our Community Supporter René Hendrickson Real Estate
    9. 9. Thank you to our 2016 Major Investors! Community Champions
    10. 10. Thank you to our 2016 Major Investors! Community Investors
    11. 11. Thank you to our 2016 Major Investors! Platinum Sponsors
    12. 12. Thank you to our 2016 Major Investors! Platinum Sponsors
    13. 13. Thank you to our 2016 Major Investors! Gold Sponsors
    14. 14. Thank you to our 2016 Major Investors! Gold Sponsors
    15. 15. Thank you to our 2016 Major Investors! Gold Sponsors
    16. 16. Dwight Bassett Economic Development Officer Town of Chapel Hill
    17. 17. ___ ___ Dwight Bassett, Economic Development Officer
    18. 18. [share info…]
    19. 19. “No man ever steps in the same river twice, for it's not the same river and he's not the same man. You could not step twice into the same rivers; for other waters are ever flowing on to you.” Heraclitus
    20. 20. ___ Approved ___
    21. 21. Carolina Square > 300 Residential Units > 159,000 SF Office > 55,000 SF Retail
    22. 22. Glen Lennox > 1,500 Residential Units > 600,000 SF Office > 150,000 SF Retail > 150 Hotel rooms
    23. 23. South Creek > 600 Residential Units > 600,000 SF Office/Civic > 475,000 SF Retail > 130 Hotel rooms
    24. 24. Ephesus- Church/Fordham > 1,000 +/- Residential Units > 350,000 +/- SF Office > 250,000 +/- SF Retail > 150 +/- Hotel rooms
    25. 25. Carraway Village (Eubanks Road) > 400 Residential Units > 100,000 SF Office > 120,000 SF Retail > 150+/- Hotel rooms
    26. 26. Hotel Mixed-use Mixed-use Residential 415 W Franklin
    27. 27. ___ Commercial Development Strategy ___
    28. 28. MISSION: Support opportunities to put Chapel Hill’s people to work, and create economic prosperity for all, now and in the future.
    29. 29. TARGETS: Output of Medical School, Pharmacy School (and research), Applied Sciences and Technology
    30. 30. 1) Strengthen the Town-Gown Relationship 2) Work becomes part of The Life of The Town 3) Tell our Story
    31. 31. 1) Strengthen the Town-Gown Relationship For 200 years, this has been the place people go to college and then leave. The downtown has become a place to dine, but not to shop or work. The town and the university need to coordinate their growth, so that this becomes one lively and diverse place.
    32. 32. 2) Work becomes part of The Life of The Town People want to start companies here, but there is not enough room for them to grow, especially downtown, where they can walk to coffee. Skilled and creative people need not only offices and labs to design and make things, but workshops and studios as well.
    33. 33. 3) Tell our Story The name “Chapel Hill” is nationally recognized. To locals, this is still “The Village”, with stone walls and the shade of stately trees that beckon for conversation. It offers something different than Boulder, Berkeley or Cambridge. For the post- doc looking to settle down, this can be their new hometown.
    34. 34. For Pride: Chapel Hill is nationally recognized as an intellectual center, but it lacks the local jobs and business that translate new ideas into new products and services that have impact on the world. For Prosperity: More jobs and business will create community wealth and build the tax base. For People: Recent graduates will be able to start their careers and families here, filling out the middle of the generations.
    35. 35. ___ Market conditions Office – 8-9% +/- vacancy (approximate 2.4 million SF) Retail – 6% +/-vacancy (approximate 2. million SF) ___ Room for growth!
    36. 36. ___ Marketing ___ Follow us @CHEconDev
    37. 37. Tell our Story![ ]
    38. 38. Tell our Story![ ]
    39. 39. ___ Market Demand Office > In walkable environment > Changing the regional development perspective of Chapel Hill > Up to 1,000,000 SF of demand Retail >To meet growing demand of existing businesses > To capture more of our own demand (up to 1,000,000 SF by 2020) ___
    40. 40. ___ ___
    41. 41. Mark Zimmerman Owner RE/MAX Winning Edge
    42. 42. Places and Spaces The Residential Real Estate Market August 25, 2016 Mark Zimmerman Broker/Owner - RE/MAX Winning Edge
    43. 43. Please note: All data from Triangle Multiple Listing Service & 10K Research and Marketing All data through July, 2016 County review, not cities Focused on single family detached Not multi-family (townhouse/condo) No rentals/apartments
    44. 44. 2016 - The Year that Just Keeps Giving 2016 builds on 2015 success Momentum continues through 2nd quarter Reaching or surpassing historic highs
    45. 45. Closed Sales Continue Steady Climb YTD July: ● Orange ○ +9.0% ● Chatham ○ +9.0% ● Durham ○ +9.2%
    46. 46. Closed Sales - Closing in on Historic Peaks
    47. 47. 2016 - The Year that Just Keeps Giving Shortage of listings Particularly in Durham Multiple offers Lower inventory at all price points
    48. 48. Month’s Supply of Homes for Sale July: ● Orange ○ 4.6 months ○ -27.0% ● Chatham ○ 5.4 months ○ -8.5% ● Durham ○ 2.1 months ○ -27.6%
    49. 49. Month’s Supply by Price Point - Orange July: ● $459,000+ ○ 7.3 months ○ -33.0% ● $290,000 - $459,000 ○ 3.1 months ○ -43.6% ● $179,000 - $289,000 ○ 2.8 months ○ -30.0%
    50. 50. Month’s Supply by Price Point - Chatham July: ● $475,000+ ○ 11.3 months ○ -4.2% ● $325,000 - $475,000 ○ 4.3 months ○ -10.4% ● $204,000 - $325,000 ○ 1.7 months ○ -52.8%
    51. 51. Month’s Supply by Price Point - Durham July: ● $246,000+ ○ 3.3 months ○ -19.5% ● $175,000 - $246,000 ○ 1.5 months ○ -25.0% ● $125,000 - $174,000 ○ 1.3 months ○ -45.8%
    52. 52. 2016 - The Year that Just Keeps Giving Limited Supply + High Demand = Increasing prices It’s a Seller’s Market Frustrated Buyers Orange reaches milestone Chatham & Durham = more price value
    53. 53. Average Sales Price 12 months thru July: ● Orange ○ $401,063 ○ +5.2% ● Chatham ○ $393,573 ○ +8.1% ● Durham ○ $245,470 ○ +8.7%
    54. 54. Average Sales Price per Square Foot 12 months thru July: ● Orange ○ $155 ○ +4.7% ● Chatham ○ $143 ○ +5.9% ● Durham ○ $117 ○ +9.3%
    55. 55. 2016 - How has Market Reacted? Durham & Chatham adding new homes Orange living off existing homes New construction helps keep older home prices more affordable
    56. 56. New Construction Listings 12 months thru July: ● Orange ○ 177 ○ +9.6% ● Chatham ○ 588 ○ +15.7% ● Durham ○ 600 ○ +42.5%
    57. 57. New vs Resale - Price per Square Foot 12 months thru July: ● Orange ○ $160 vs $154 ○ -3.7% ● Chatham ○ $151 vs $137 ○ -9.2% ● Durham ○ $142 vs $113 ○ -20.4%
    58. 58. 2016 - The Year that Just Keeps Giving Sales up Inventory down Prices up Chatham & Durham responding to demand Orange staying the course
    59. 59. Kyle Touchstone President Chatham Economic Development Corporation
    60. 60. Chatham County SPACES & PLACES: 2016 REGIONAL GROWTH AND DEVELOPMENT BRIEFING
    61. 61. Chatham County • Overview • Governors Village • 15-501 Corridor • Briar Chapel & Veranda • Chatham Park • Pittsboro
    62. 62. Overview SPACES & PLACES: 2016 REGIONAL GROWTH AND DEVELOPMENT BRIEFING
    63. 63. Who We Are Kyle Touchstone President Jamie Vaughn Vice President Ben Townsend Business Services Manager Alyssa Byrd Communications Specialist
    64. 64. About Us Chatham Economic Development Corporation (EDC) is the lead economic development agency for Chatham County. The EDC is a 501(c)3 economic development non-profit that provides support to businesses throughout the county and markets Chatham County as the preferred location for emerging growth companies.
    65. 65. Economic Indicators • Population: 70,928 (July 2015) ◦ Fastest growing between 2014-2015 • Labor Force: 33,331 (June 2016) • Jobs: 14,179 (Q1 2016) • Unemployment: 4.4% (June 2016) ◦ 4th lowest in NC • Average Weekly Wage: $643.27 (Q1 2016) ◦ State Average: $927.78
    66. 66. Population Growth 2010- 2015 13.7% 11.7% 11.5% 5.7% Wake Chatham Durham Orange
    67. 67. Governors Village SPACES & PLACES: 2016 REGIONAL GROWTH AND DEVELOPMENT BRIEFING
    68. 68. The Commons at Governors Village
    69. 69. The Bold Building
    70. 70. 15-501 Corridor SPACES & PLACES: 2016 REGIONAL GROWTH AND DEVELOPMENT BRIEFING
    71. 71. ExtraSpace Storage 2015 2016
    72. 72. North Chatham Village 2011 2015 2016 Formerly Cole Park Pl
    73. 73. North Chatham Village 2015 2016
    74. 74. North Chatham Village 2015 2016 2011
    75. 75. Polks Village
    76. 76. Briar Chapel & Veranda SPACES & PLACES: 2016 REGIONAL GROWTH AND DEVELOPMENT BRIEFING
    77. 77. Chatham Park SPACES & PLACES: 2016 REGIONAL GROWTH AND DEVELOPMENT BRIEFING
    78. 78. • 7,100+ acre mixed-use development • 22,000 residential units (60,000 people) • 22 million square feet of non-residential development ◦ Targeted businesses: Technology, biotech, clean tech, and medicine
    79. 79. Bellemont Station 2015 2016
    80. 80. Bellemont Pointe Photo: Town of Pittsboro 2015 2016
    81. 81. Chatham County Agriculture and Conference Center
    82. 82. Connect Kyle Touchstone President, Chatham EDC ktouchstone@chathamedc. org 919-542-8274 www.chathamedc.org
    83. 83. Laurie Paolicelli Executive Director Chapel Hill/Orange County Visitors Bureau
    84. 84. Spaces & Places Orange County Travel and Tourism August 2016
    85. 85. Name City Rooms Open Date Holiday Inn Express Hillsborough 83 April 1997 Microtel Inn & Suites by Hillsborough 70 May 2000 Hampton Inn & Suites Carrboro 142 August 2013 Autograph Collection The Siena Hotel Chapel Hill 79 October 1987 University Inn Chapel Hill 132 June 1966 Days Inn Chapel Hill 50 January 1999 Quality Inn Chapel Hill 119 January 1987 Residence Inn Chapel Hill 108 January 2007 Curio Collection Franklin Hotel Chapel Hill 67 January 2007 The Carolina Inn Chapel Hill 185 June 1924 Aloft Hotel Chapel Hill 130 April 2010 Courtyard Chapel Hill 169 September 2004 Sheraton Chapel Hill 168 June 1980 TOTAL: 13 Hotels 1502
    86. 86. 358 new rooms (21% increase in supply) Hyatt Place 110 Rooms Chapel Hill 5 Stories AC By Marriot 123 Rooms Chapel Hill 4 stories Hilton Garden Inn 125 Room 10,000 sq. feet meeting space Carrboro 5 stories
    87. 87. HiltonGardenInnCarrboro Open Date: 2nd Quarter 2019 10,000 sq. feet meeting space 150 rooms
    88. 88. ACByMarriott 214 Rosemary Open Date: October 2017 Excavation complete November 2016
    89. 89. AC by Marriott Rosemary Street
    90. 90. HyattPlaceSouthernVillage 110-room hotel 1,700 square feet of meeting space 1,680 square foot third-floor outdoor function space.
    91. 91. Hillsborough • Sportsplex: • Sportsplex hosted 553,000 people in 2015. • Consistently ranks in top 5 visitor destinations • Opportunity for overnight accommodations • Near growing Hillsborough assets • SOCCER: • Soccer.com has 5 full size fields that can be reconfigured for many more smaller fields for younger teams. • OC may be adding anywhere from 2-4 new fields (two if they are synthetic turf, four if they are not). •
    92. 92. Why Hotel Investment Here? • A typical hotel investor, when evaluating this market, looks for both specific property and comp set evidence of hotel performance levels approximating the following: • Full service hotels: Occupancy: 70% or higher ADR: $150 or higher RevPAR: $105 or higher • Select/focused service hotels: Occupancy: 70% or higher ADR: $115 or higher • RevPAR: $80 or higher • RevPAR is the key indicator here.
    93. 93. Orange County Tourism Focus • The entry of these new rooms coupled with slower growth on the demand side will continue to create a relatively uncertain transient market landscape during 2017 as the market continues to absorb the new inventory. • The focus of the Chapel Hill/Orange County Visitors Bureau is two-fold: ▫ Marketing the assets of our communities ▫ Feasibility study to look at new demand generators
    94. 94. Durham and Wake Counties • Durham currently has 8,712 hotel rooms--21% growth in supply in 2017 to 9,135 rooms. • Wake County has 15,500 hotel rooms and will see 11% growth in 2017 to 17,601 rooms.
    95. 95. • Durham: • November 2014 the 128-room Hilton Garden Inn at Medical Center opened, followed by 125-room 21c Museum Hotel & 54-room Durham Hotel. • Starwood opened the 134-room Aloft Hotel at DPAC and Marriott opened the 147-room all suites Residence Inn McPherson/Medical Center. • In addition to these 588 new rooms, the following properties will add an additional 423 rooms. ▫ JB Duke Hotel (January 2017) 198 rooms ▫ Graduate Hotel (Spring 2017) 150 rooms ▫ Unscripted Hotel (April 2017) 75 rooms
    96. 96. Economic Development Panelists Dwight Bassett Economic Development Officer Town of Chapel Hill Steve Brantley Director of Economic Development Orange County Annette Stone Econ. & Community Development Director Town of Carrboro Kyle Touchstone President & CEO Chatham Economic Development Corporation
    97. 97. Upcoming Events Face Time Sept. 15, 5:30-7:30 p.m. Rizzo Conference Center Performance Golf Classic Oct. 10, 8:30 a.m.-5 p.m. Chapel Hill Country Club Economic Outlook Briefing Oct. 20, 8-10 a.m. Sheraton Chapel Hill Hotel PRIMETIME Business Expo Nov. 10, UNC Friday Center www.carolinachamber.org/events
    98. 98. Explore the latest local, state and national trends in our economy. Visit carolinachamber.org/events for more information! Economic Outlook Briefing 7:30-9:30 a.m., Thursday, Oct. 20 at the Sheraton Chapel Hill

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