US Office Sector Steady During First Quarter, Bodes Well for New Construction: JLL

U.S. office market performance in the first quarter of 2019 showed resilience, with roughly 14 million sq. ft. of absorption and dropping vacancy, despite increasingly cautious economic sentiment, reports real estate services firm JLL.

Even with the delivery of 6.8 million sq. ft. of new office space to the market, vacancy dropped 30 basis points during the quarter to 13.0 percent, and asking rents rose 3.2 percent year-over-year, mostly due to expensive new space coming on-line, according to a Newmark Knight Frank’s first quarter 2019 National Office Report.

But with 110.4 million sq. ft. of new space under construction, according to JLL’s office report, and a slowing marketplace, leasing activity is unlikely to keep up with new office supply delivered over the next couple of years. As a result, vacancy is expected to rise, especially for older office product, as some tenants move to new office space.

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LUESA Proposes Phasing In Higher Land Development Fees

Following meetings with REBIC and the HBA of Greater Charlotte, Mecklenburg County LUESA has proposed to phase in, over two years, a series of dramatic increases to its Land Development, Zoning and Floodplain Permitting Fees. The increases result from LUESA’s plan to end a longstanding practice of supporting Land Development Services with excess stormwater fee revenue.

The fees apply to any projects in the Towns of Davidson, Matthews, Mint Hill, Pineville and Cornelius, along with any projects in the ETJ. The City of Charlotte handles its own land development permitting, and the Town of Huntersville is leaving LUESA and starting its own land development permitting operation this summer.

Both REBIC and the HBA voiced our strong opposition to the proposed fees, which represent year-to-year increases of nearly 400% in some cases. We appreciate LUESA’s willingness to propose a phased approach to the increases, and will encourage the Board of County Commissioners to adopt their recommendation.

The fees are part of the FY 2020 budget, which is scheduled for adoption on June 4th. A public hearing on the budget was held on Thursday, May 9th.

New SiteIndex Feature: Moody’s Commercial Location Score (CLS)

Recently, Catylist partnered with Moody’s to offer what they refer to as Moody’s Commercial Location Score (CLS) in SiteIndex.  This score essentially is a numeric rating between 400 and 1000 that provides a quick overview of the desirability of a property based on its location with respect to several factors.  Each listing will have the score shown at the bottom of the main listing page.  There are also options to link out to Moody’s to obtain more detail.  Below is the new information.

Leadership Class Member Spotlight: Benjamin E. Bivens

Name: Benjamin E. Bivens

Company Name: MedSouth Healthcare Properties LLC

Current position/Industry Specialty: Managing Partner – Healthcare Real Estate

Years in the industry: 16

Hometown: Dillsburg, PA

Most satisfying part of your job: Coaching and encouraging people and seeing them succeed

Last book(s) you read: How to Win Friends and Influence People by Dale Carnegie, Think and Grow Rich by Napoleon Hill and The Millionaire Booklet by Grant Cardone

Favorite vacation spot: Anywhere in the Caribbean

Favorite restaurant in Charlotte: Heirloom

Hobbies/Interests: Coaching Youth Sports, Outdoor Activities, Golf, 4×4 Trucks

One thing on your bucket list: I’d love to train and participate in an MMA sparring session

If you could have lunch with anyone (living or dead) who would it be and why? I would have lunch with my Grandfather, Samuel Tornatore, and this time I’d remember to bring my wallet…  When I was 10 years old or so I proclaimed that I was taking him and my Grandmother out to lunch and would proudly pay for it with my own hard earned money.  They took me up on it but I forgot my wallet and my Grandfather never let me forget about it.

What you like best about CRCBR: The thing I like the best about CRCBR is the people and supportive network of the staff and members involved.  We always seem to have an outlook of “How are you doing” and a genuine interest in seeing others succeed.

What else should we know about you: I graduated college with a BFA in Furniture Design from Savannah College of Art and Design.  I caught the real estate bug in early 2000 and had the itch because of family involvement growing up so it was a natural career path.  My wife and I lived in the Washington DC metro when 9-11 happened as well as the DC sniper.  We moved to Charlotte in the summer of 2006 where I joined Marcus and Millichap.  I started in multi-family then formed a team focused on retail, eventually burning the ships and going all in on healthcare real estate starting in late 2009.  My wife and I have been married for 16 years this May 2019 and we have three children ages 13 (oldest son), 9 (middle son) and 6 (baby girl going on 16).  Our family saying is “Never a dull moment….”!

Members on the Move – May 15, 2019

Send us your News and Transactions
Did you know that the Members on the Move post is our most viewed and reaches over 1,000 CRCBR members in our Voice Highlights newsletter? We are always looking to recognize our members for their achievements. Please send any recent news or transaction information to thevoice@crcbr.org.

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Congratulations to the following CRCBR members on their recent achievements:

CBRE – Patrick Gildea
Congratulations to CBRE’s Patrick Gildea on being named one of Charlotte Business Journal’s 40 Under 40. Read more here.

Flagship Healthcare Properties – Cliff Berryman
Flagship Healthcare Properties (Flagship), a Charlotte-based healthcare real estate firm, has announced its acquisition of a 121,741-square-foot portfolio featuring six Class A medical office buildings (MOBs) in the Charlotte metropolitan area. Three of the MOBs are located in Concord, N.C., with the remaining three in Kannapolis, China Grove, and Locust. The portfolio, which is 91% occupied, is anchored by Cabarrus Family Medicine, part of Atrium Health. The network of family practices and its sub-specialty offices, including sports medicine, orthopedics and rehabilitation, leases over 75% of the total square footage. Atrium Health is one of the leading healthcare organizations in the Southeast and one of the most comprehensive, not-for-profit systems in the country. Cliff Berryman, vice president of investment sales for Flagship represented the buyer. First National Bank provided financing for the transaction.

Legacy Real Estate Advisors – David Tschirhart
Legacy Real Estate Advisors has assisted Traust Brewing Company in securing a new location in the emerging FreeMoreWest area near Uptown Charlotte. Traust Brewing, which will be located directly across from the Lucky Dog Bark and Brew on Thrift Road in Wesley Heights, will feature a Nordic theme. The location will feature a planned 130-space parking area, which is rare among local breweries. The large lot will enable Traust to host large events featuring beer and music. The prospective large outdoor patio will offer an excellent view of Uptown Charlotte. The 10,600 square-foot brewery will also feature a full kitchen and private event space.

Legacy Real Estate Advisors – Greg Godley and Andrew Blumenthal
Legacy Real Estate Advisors brokered the property acquisition at 4237 Raleigh Street in the NoDa area, a 33,000-square-foot warehouse at the Sugar Creek Lynx Blue Line (light rail) station for $5,000,000. Legacy’s Greg Godley and Andrew Blumenthal represented the Buyers, who utilized the recently-enacted Opportunity Zone legislation to close. This is Legacy’s largest Opportunity Zone deal completed to date, and one of the first in the Charlotte market. The Buyer, FOZ 4237 Raleigh LLC, intends to utilize the existing building as an adaptive reuse project, partnering with the existing Station House and Trail Head developments to create a unique mixed-use neighborhood at the Sugar Creek Lynx Blue Line station.

Legacy Real Estate Advisors – Andrew Blumenthal and Scott Fuller
Scott Fuller and Greg Godley with Legacy Real Estate Advisors have collaborated with 5 Point Realty’s Michael Doney on a major residential project in Villa Heights, just north of Uptown Charlotte. The 12.38-acre property sits one block north of The Plaza. Legacy Real Estate Advisors and 5 Points Realty, who have collaborated together multiple times in the past, represented the seller, a private group of investors. Central Living by David Weekley Homes, the high-density division of David Weekley Homes offering luxury living in prime locations, will soon be building new homes in Villa Heights. Located in northeast Charlotte, and priced from the mid $300s, Villa Heights will feature three types of homes: townhomes, paired homes and single-family homes.

Proposed Mecklenburg County Budget Would Produce Higher Taxes for Most Property Owners

A significant number of Mecklenburg County property owners will see an increase in their tax bill this year under a budget proposal unveiled recently by County Manager Dena Diorio, which would adopt a tax rate almost 2 cents, or 3.3 percent, above revenue-neutral.

With an average property value increase of more than 50% following a countywide revaluation, the tax rate at which the County would collect the same amount of total revenue (known as the ‘revenue-neutral’ rate) is 59.7 cents per $100 of assessed value. The manager’s budget proposes a rate of 61.69 cents per $100, or 1.99 cents above revenue neutral. The impact of the higher rate means more than 65% of all Mecklenburg County homeowners, and more than 71% of all commercial property owners, will see higher tax bills this year.

The manager’s budget totals $1.9 billion dollars, an increase of $158 million or 9.1% over FY 2019. It hikes spending on a number of county services, from the Health Department (up $4.4 million) and Social Services (up $4.7 million) to Affordable Housing, which would see an increase of $15.7 million — with $11.2 million funding a new Rental Subsidy program. Another $6.3 million would go toward initiatives to reduce racial disparities in Mecklenburg County, including $250,000 to  provide training on advancing racial equity to all County employees.

Separately, the budget would dramatically increase County Land Development, Zoning and Floodplain Permitting Fees by as much as 300% in some cases, although LUESA recently revised its proposal to allow those fees to be phased in over 2 years. These fees are paid by developers in five of the Mecklenburg County towns (excluding Huntersville) and the ETJ.

Other notable items in the budget include:

• $30 million dollars in capital funding to meet the County’s goal of completing 30 miles of greenway trails by 2023;
• $21 million in new funding for continued support of our early childhood education initiatives, including countywide Pre-K;
• $15 million for a 5.5% percent across-the-board salary increase for all County employees; and,
• $534.7 million dollars, or an 10.2% increase of $49.6 million dollars, for Charlotte-Mecklenburg Schools. The increase, though less than requested by CMS, includes $8 million to increase the local supplement for teachers. The manager says this increase would make CMS teachers the highest paid school district in the state by one percentage point.

The Board of County Commissioners will hold a public hearing on the proposed budget next Thursday, May 9th at 6 p.m. Budget workshops will follow on May 28th and 29th, with adoption of the budget and tax rate scheduled for Tuesday, June 4th. The Board has the final say on the budget, and can adopt a tax rate higher or lower than what the manager proposed.

REBIC has concerns about the impact the proposed tax rate will have on homeowners, commercial property owners, and small businesses, and plans to speak at the public hearing. Anyone wishing to speak needs to sign up on the County website.

Six on Six Volleyball Classic is on May 9

Childress Klein and Beacon Partners will host the 12th Annual Six on Six Volleyball Classic on May 9th, 2019. The event will pit teams from the Charlotte commercial real estate industry in a head to head competition that promotes camaraderie and networking while raising awareness and support for local charities.

May 9, 2019 11am-5:00pm
VBGB 920 Hamilton Street, Charlotte NC
100% of the proceeds will benefit  Freedom School Partners

Click here to register and for more information.