Charlotte and the surrounding areas continues to look promising for real estate investors and Real Estate IRA owners, according to experts in a recent panel sponsored by the North Carolina Chapter of the CCIM Institute, held earlier this year at the Carmel Country Club.
Real Estate IRA owners should note that Ely Portillo of the Charlotte Observer covered the proceedings, but we can summarize the major takeaways:
- The booming real estate market in Charlotte should continue for the time being.
- We appear to be rather late in the expansion cycle, rather than in the very early stages. This is a mature market.
- Construction will continue to surge ahead.
- Denser, walkable developments will be increasingly popular, with neighborhoods designed around local higher-end grocers and other shops like the area around the Sharon Road Whole Foods in SouthPark. This will drive development even in lower-density areas outside of town.
- The overall trend favors mid-rise apartments rather than the more sprawling developments as consumers continue to focus on walkability as a desirable feature.
- Think suburban-urban developments.
This creates a lot of potential opportunities for Real Estate IRA investors local to Charlotte, who understand the terrain. Charlotte was named the least walkable big city in America, according to a University of Oklahoma study: Just 6.9 percent of people commute in Charlotte without a car.
But as Charlotte developers work to create more and more walkable communities, there is a real opportunity for Real Estate IRA investors to add value – and for self-directed IRA investors to act as lenders to them.
Meanwhile, shopping malls and centers are having trouble as Amazon and other online retailers consume more and more of the consumer dollar at their expense. Clothing is particularly hard hit, but even standard mid-range restaurants are falling prey to reduced business lunch traffic, better grocery options and meal delivery services which are getting increasingly popular. The restaurants that will have an edge are the ones closely plugged in to walkable communities.
Real Estate IRA investors may want to look at focusing their attention on up and coming walkable neighborhoods while we still have time in the cycle to realize some capital appreciation, while being cautious about retail space and restaurant space that will be increasingly difficult to keep occupied with tenants – especially without making big concessions, such as offering several months rent-free to attract new commercial occupants.
Charlotte’s Most Walkable Communities
Hendrix Properties has published a list of Charlotte’s most walkable communities:
- Plaza Midwood
- NoDa (North of Davis)
- South End
Some of these areas are nearer to the complete walkable neighborhood transition than others. But Real Estate IRA investors that can identify neighborhoods that are moving towards increasing their walkability appeal may find some terrific opportunities.