Commercial Real Estate Buyers Bumped from "Major" Markets Looking to North Carolina
Wall Street Journal reports: North Carolina’s commercial property market is beginning to show signs of life, reports the Wall Street Journal (WSJ), after nearly two years of anxiety over lack of activity and the state’s dependence on the down-and-out banking sector. According to Real Capital Analytics, “the total value of office deals valued at $5 million and more that were under contract or completed in North Carolina rose to about $321 million through September of this year, compared with about $175 million for all of 2009.”
This activity corresponds to Real Capital’s latest analysis that revealed, with yields on high-quality properties in top-tier markets such as New York and Washington, DC falling to as low as 5.0% in the third quarter, buyers seeking core/stabilized assets have begun to look to other cities. “It likely helps that the expected return on many office sales in New York has fallen into the 5.0% range, while anticipated returned can be in the 8.0% range and above in smaller markets,” stated Real Capital’s managing director, Dan Fasulo. The WSJ stated that, “Until the recession hit, North Carolina was a growth machine,” with cities such as Charlotte, Raleigh, and Durham each posting several healthy years of economic diversification and growth. Now, North Carolina is back on buyers’ radar.
The WSJ also relies on Real Capital’s property transaction-level data in citing the presence of recent large deals in North Carolina’s markets: “…a fund sponsored by Hines of Houston also completed its acquisition of a 12-story Durham office building known as Hock Plaza for about $97.9 million. At about $299 a square foot, the Hines deal markets the highest price-per-square foot price fetched by a single large office building in the state since the end of 2008, according to Real Capital…”
View the full article on Wall Street Journal: Commercial Real Estate Buyers Bumped from "Major" Markets Looking to North Carolina
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Posted by: Nina Turner