As the largest city in North Carolina, the 17th largest city in the country, and home to Bank of America, Charlotte is a financial center of global significance. And, like many Southern cities, it is growing rapidly—15.1% between 2010 and 2016 to reach 842,000 within the city limits and 2.5 million in the metropolitan area.
Charlotte’s growth has revamped its social structure and economy, and nowhere more than in the multifamily construction market. With 23,500 units in the pipeline or under construction at the beginning of 2017, the local media has been using the word “boom” often to describe apartment development in recent years.
In November 2016, the city annexed nearly 1,400 acres of largely untouched land that is now known as the River District. It will be developed into a new section of the city. Within a 15-minute drive to downtown, it will contain 2,350 apartments, as well as nearly that many houses and office, retail, and hotel spaces.
Gentrification is being carried out with gusto in Charlotte. The affordable Silver Oak community was torn down in 2014 to accommodate more expensive housing. Since then, developers have applied for permits to replace five more affordable communities with more expensive housing.
Rising Population and Rent Show Where to Invest in Charlotte
Over the past five years, the average rent in Charlotte has grown by 35%. Charlotte’s Uptown neighborhood is seeing the most activity. The population there has grown to 16,500 in recent years, from 5,500 20 years ago. There were 2,000 more apartments under construction there in June 2017, with more coming. Rent in Uptown was approximately 50% higher than the citywide average and the vacancy rate was 8.4%, compared to 6.1% citywide.
The share of renters in Charlotte’s Mecklenburg County is about 43% of households at the beginning of 2016, up from 36% in 2005, according to the U.S. Census Bureau. Ken Szymanski, executive director of the Greater Charlotte Apartment Association, told The Charlotte Observer that the increase was “unprecedented.”
Growing City Sparks Apartment Development
Newly arrived Charlotteans are pressuring the city for better commuting options, such as bike lanes, in the heavily car-dependent city, and long-time residents complain of the poor design and repetitiveness of the new housing, much of which is wood-framed. In response, the city is revising its zoning laws. The new code should be ready by 2019. Its light rail system is growing rapidly as well.
It is projected that the city will need a total of 71,523 new apartments between mid-2017 and 2030 according to a study by the National Multifamily Housing Council and the National Apartment Association. That increase—43% over the current number—will be the fourth highest in the country, the authors say.
Investment Expertise and Property Management in Charlotte
There are a variety of potential real estate investment strategies that could be implemented in Charlotte. More than two-thirds of the apartments in Charlotte were built before the turn of the century, so there is a market for Class B communities for repositioning.
At CWS Capital Partners, we are experts in investment and property management in Charlotte. Our experienced staff can help you with all aspects of your multifamily property investment strategy in the city, whether you are looking to acquire existing properties or seeking to identify opportunities for development. We can also guide you through the 1031 exchange process. Contact us today to learn more about the opportunities for multifamily real estate investment in Charlotte.
To learn more about our North Carolina properties, please visit our affiliated CWS Apartment Homes website.
The information provided here is for your general informational purposes only. It should not be considered a recommendation or personalized advisory advice. CWS has made this third party information available from authors it believes are knowledgeable and reliable resources. However, its accuracy or completeness cannot be guaranteed and sentiment may change due to legal or economic conditions.
All investments involve risk including the possible loss of principal. You should familiarize yourself with all risks associated with any investment product before investing.
Advisory services are provided by CWS Capital Partners LLC, a registered investment advisor.
Securities offered by CWS Capital Partners LLC are through an affiliated entity, CWS Investments. CWS Investments is a registered Broker Dealer, member FINRA, SIPC.