Raleigh market earns high praise from national developers
National development and investment giants touted high expectations for opportunities in the Triangle during recent earnings calls as the region’s profile continues to grow.
Three national real estate investment trusts – Camden Property Trust (NYSE: CPT), Mid-America Apartment Communities, Inc. (NYSE: MAA) and Highwoods Properties (NYES: HIW) – voiced high hopes for opportunities in Raleigh this year and touted their recent achievements in the region.
Houston-based Camden Property Trust has been enjoying the areas high demand for multifamily units and has big plans to boost the number of apartments it delivers in the area by as much as 1,000 units.
“In Raleigh, new developments have been coming online steadily with 5,000 new units delivered last year and another 6,000 expected this year,” said Keith Oden, Camden executive vice chairman of the board. “Job growth has also been strong and 20,000 new jobs are projected for 2020.”
Last quarter, Raleigh was among the company’s top same-property revenue growth performers, coming in at No. 2 with 6 percent growth – just below Phoenix at 6.3 percent and ahead of San Diego at 5.3 percent
Among its acquisitions and investments in the area, Camden recently spent $75 million for The Carolinian apartments, or $403,225 per unit. The company has renamed the property Camden Carolinian.
Meanwhile, Mid-America Apartment Communities Inc. came to similar conclusions about the Triangle. Company representatives said they expect Raleigh to be among the market leaders in the coming quarters, even as other markets appear to be softening.
“The Dallas, Houston and Savannah (Georgia) markets are expected to be the most challenging, based on our pricing progress last year,” said Tom Grimes, the company’s chief operating officer, “Along with current rent and exposure trends, we expect our leading revenue markets to be Phoenix, Raleigh, Austin and Nashville.”
Finally, Raleigh-based Highwoods Properties has continued to see high demand for space in the region. In 2019, Raleigh and Tampa, Florida, saw the greatest gains in sequential occupancy across the company. Highwoods CEO Ted Klinck said Raleigh is among the top markets expected to grow the fastest.
“The higher-end might be even 6 percent or 7 percent in the last 12 months or 6 percent to 8 percent even at Raleigh, Nashville, Tampa, Charlotte and Atlanta,” he said. “And then on the lower end, call it 2 percent to 3 percent, it was probably Pittsburgh, Orlando and Richmond, and I think that’s probably a fair barometer for the next 12 months.”
Last fall, a study by the Urban Land Institute and PricewaterhouseCoopers named the Triangle the No. 2 best market in terms of real estate prospects headed into 2020 – and No. 1 in terms of homebuilding prospects. The study sited the area’s strong higher education institutions, influx of tech companies and jobs as well as the overall economic growth in the region.