HOT MARKETS: THE CAROLINAS
There’s a sense of excitement across the US. We’re ready to get back to work, and we don’t mean from home or the office, but rather from which state and which city—it matters. What factors attract businesses to expand or even relocate to a new state? We are looking at the hottest markets across the U.S. and the drivers behind their boom. To start this new Hot Markets series, let’s examine what’s driving businesses to locate in the Carolinas.
There’s investor appetite for the Carolinas. With recent and estimated future job growth across the region well above the U.S. average—and with many businesses flocking from tax-burdened states to the area—the economic outlook across the Carolinas appears bright. Most businesses assessing locations in Raleigh and Durham are also considering Charlotte as well as Greenville and Charleston in South Carolina.
Between North and South Carolina, historically, there is competition for inward investment. Raleigh and Durham in North Carolina are two cities but often thought of as a single market and a haven for institutional office investors. Charlotte and Fort Mill, just across the border in South Carolina, are their biggest competitor. For the office market, it’s all about these two MSA’s, with a large amount of demand spurred by headquarters relocations.
Raleigh-Durham is a tech and life sciences hub, with Duke University, Chapel Hill, and NC State all within a 30-minute radius. Access to talent drives demand for office space, housing, and amenities in those areas. Charlotte represents financial services and more recently we have seen inward investment from a growing number of fintech companies like Movement Mortgage and Red Ventures. On the banking side, Wells Fargo has a large presence and Bank of America is headquartered in Charlotte; most of the big banks have a presence in the city. Interest is growing in Charleston too—it’s a destination for retail and hospitality but also for industrial assets with significant demand now coming from a lot of institutional investors as opposed to local/regional investors and private equity groups who have historically controlled the market. The ports in Charleston are a hub for manufacturing, as are other parts of South Carolina like Greenville.
Cost of Living:
San Francisco, median house cost $1.41 million (Zillow)
In Raleigh-Durham, a four-bedroom house is around $322K or less
We have seen significant life science and tech company expansions, as well as an influx of major corporations to the Carolinas, from the northeast in the last five years. Corporate relocations out of the northeast to the sunbelt are driven by lower taxes, business incentives, and exemptions, and lower cost of doing business generally. A more affordable and higher quality of life, an arts scene, proximity to beaches and mountains, plus good old fashioned southern hospitality, attracts professionals to move here; that added to the existing home-grown talent means easy access to an educated and skilled workforce—a strong incentive for companies to expand or relocate here.
Durham-based BioAgilytix invest $61.5 million to expand Durham facilities creating 878 jobs
Charlotte to host Fortune 100 tech giant Honeywell new 23-store HQ creating 750 jobs.
Thinking Bigger: Cross Market Coordination
With such a high level of inward investment—and companies or investors undecided on an exact location—these firms need insight and unbiased coordination across markets to help them make and seamlessly execute evidence-based decisions.
The demand for a coordinated approach is there. There are cost savings for analysis when firms work with one coordinated company, not to mention the trust that comes from a single source relationship, and time savings when there is one coordinated effort. Data gathering, location and business environment analysis, statistics on labor, and demographics are research tools available to most of the larger CRE firms. But understanding when and how these tools are used, and under what criteria the data is gathered and analyzed, makes the difference to the outcome for firms and investors. With a coordinated approach across the region, firms must evaluate the precise advantages or drawbacks for a specific location among the many locations they are considering. The ability to qualify and evaluate options, to negotiate and coordinate across multiple markets provides efficiency, reduced risk, plus time and cost savings for firms and investors.
Incoming businesses are historically either partnering with a small local firm with connections limited to one geographic area (and an interest in their clients locating in that area alone), or large firms with global practices, who are often so large and bureaucratic and consequently slower and more inflexible in the way they staff an assignment and execute on the client’s behalf.
Expanding Stream’s Reach Across the Carolinas
Because Stream Carolinas is focused regionally rather than anchored within one market, we can provide unbiased evaluations with continuity of research, resources, and a single point of contact—across multiple markets. We have a local presence and national reach, meaning our services appeal to both smaller clients and large institutional firms. Because of our regional reach, we see the opportunities others don’t and advise clients from a more objective perspective.
Based in Dallas, Stream is supported nationally and growing its footprint city to city. This year, with a focus on a strategic and coordinated client approach across the region, Stream Carolinas is rapidly growing our reach for clients. Our main regional office is located in Charlotte, and with offices opening up soon in Raleigh-Durham and Charleston, our ability to coordinate and collaborate on our clients’ behalf across the Carolinas is unrivaled by any other CRE firm.
Our menu of services includes office and industrial agency leasing, tenant rep, property management, construction management, and investment sales; we offer the full suite. We are actively seeking the right people to align with, and the right partners to strategically grow our business across the region. Stream Carolinas: A single focus across multiple markets.
Jared Londry serves as the Co-Market Leader of Stream Realty Partners Carolinas. Jared is responsible for leading the strategic direction and day-to-day operations in Charlotte, as well as the growth of Stream’s platform across the Carolinas.