Amid the barrage of economic headlines and heated debates, people often ask us about our perspective on the current CRE market.
Being rooted in the commercial real estate (“CRE”) markets stretching from the Carolinas to Texas and up to Pennsylvania, we’re uniquely positioned to offer insights based on firsthand experiences. Conversations with our clients and colleagues lately have swirled around sentiments of a slowdown, a recession-like climate that’s hard to ignore despite the Fed and most economists resisting the ”R” word.
Look, there are real threats on the horizon: auto strikes, student debt, government shutdowns, and war in the Middle East. The recent auto strikes have caused disruptions in the manufacturing sector, which could ripple throughout our regional economy. The impacts clearly extend beyond Michigan; workers recently joined the picket lines at a GM warehouse in the Steele Creek submarket of Charlotte.
Indeed, any of these threats could be the infamous straw that breaks the camel’s back, triggering the next recession.
But it’s essential to remember that perceptions do not always align with the data at hand, and the broader picture might not be as bleak as it first appears.
In fact, the business leaders we interact with are bullish about the outlook of their own companies yet bearish towards the overall economy.
Last week, I participated in a small group discussion at our last Real Professionals Network (RPN) meeting with Richmond Fed’s Charlotte Branch Executive, Matthew Martin.
Matthew discussed the strengths he sees in our regional economy, particularly in Charlotte, Raleigh, and Charleston, which he describes as being some of the best markets in the nation. From the booming job market to population growth and a diverse range of industries, there are many reasons to be positive about the economic outlook of cities like Raleigh, Charleston, Greenville, and Charlotte.
We also learned that Charlotte’s and Raleigh’s population growth remains twice the national average, unemployment is a scant 3.1%, and businesses invested over $2.1 billion into Charlotte’s economy last year. Raleigh’s investment was only slightly lower.
And when it comes to housing in this region, momentum shows no signs of abating. As frequent readers know, we’ve partnered with BRD Land & Investment to supply national home builders with shovel-ready lots. With a pipeline of over 20,000 lots, mainly within a 500-mile radius of Charlotte, BRD Land is poised for growth.
National home builders like Ryan, Mattamy, and D.R. Horton, continue to see steady demand for their product in the area, even with higher interest rates. As such, their appetite for BRD’s lots seems insatiable as long as we are within an hour’s radius of Carolina’s urban cores.
It seems to me we’re currently living in something of a “Taylor Swift Economy.” Everyone wants an experience, and they are willing to pay handsomely for it. Those Swifties affluent enough to see her live spend a small fortune for concert tickets or high-end experiential trips to Europe and the Caribbean. The rest of us will just have to wait and see the movie. Or go into debt to pay for it.
Wrapping your head around financial data can feel like decoding hieroglyphics while riding a roller coaster. It’s dizzying, disorienting, and downright daunting. But the next time you feel overwhelmed by the deluge of data, remember that not all numbers are created equal.
If you’re interested in joining me to hear interesting speakers like Matthew Martin, just let me know. I’m happy to take you to an RPN meeting.*
And if you want timely, boots-on-the-ground economic insights from your local commercial real estate professionals, I’m always willing to get lunch and chat.
*A bit more about what RPN is: Real Professionals Network (RPN) is a community of industry professionals – investors, brokers, architects, engineers and others – who gather together to share insights, opportunities, and challenges and to learn from each other’s experiences. It’s not just a network; it’s a learning hub where information flows freely, and everyone’s voice is heard. If you’re looking for an enriching and enlightening experience, RPN could be just the ticket. Besides, who wouldn’t want to keep their fingers on the pulse of our ever-evolving industry? Get in touch to secure your spot at our next meeting. 🙂