Over the past decade, North Carolina has experienced rapid population and job growth. This growth has made a tremendous impact on real estate pricing in all markets across the state for commercial and residential properties (which includes apartment communities). In particular, Raleigh and Charlotte have been impacted greatly. The economic fundamentals remain solid, and it’s one of the reasons we like investing in both cities. I want to share two recent real estate examples and excerpts from articles we received from CoStar. CoStar is the market-leading provider of information, analytics, and marketing services to the commercial property industry in the United States.
Example 1: Charlotte, NC Apartment Sale
An apartment community recently traded hands in a deal that illustrates the growing value of housing in the Queen City. The Collective sold for just over $72 million or $288,200 per unit. That is one of the highest per-unit prices that a buyer has paid for an apartment complex in Charlotte this year, according to CoStar data. The average apartment in Charlotte typically trades for around $206,000 per unit.
Charlotte led the nation in new multifamily units delivered as a percentage of inventory in the year leading up to the third quarter, according to a recent CoStar analysis. And despite the large inventory expansion, continued strong demand has pushed asking rent growth to historic highs of 16.8% over the past year, according to the analysis.
Example 2: The Tower in Raleigh
A development group is planning to invest $121 million to develop a 20-story, 297-unit apartment building downtown with construction expected to start in April 2022 and doors expected to open in June 2024. The planned 20-story height will be the third tallest among multifamily properties—only bested by the 23-story SkyHouse Raleigh and the 22-story 511 Faye, according to CoStar data.
In recent years, Raleigh has attracted major finance and technology companies, including Apple, which recently announced plans to develop a $1 billion campus. Raleigh benefits from its proximity to the Research Triangle Park, a 7,000-acre complex home to hundreds of biotechnology and life sciences companies. The city is also home to North Carolina State University, which typically has more than 30,000 students enrolled.